Archive for 2001

Candidate recruiting and employee retention, especially in a field fighting for diversity, must be aligned with each other.

Otherwise, you might be interviewing a lot of candidates with diverse backgrounds, and possibly even hiring some of them, but you won’t be retaining them for very long.

Your technical co-founder will tell you things you don’t understand because they are difficult to understand but you think you understand them.

And that’s okay, because you need to be exposed to things you don’t understand.

How do you determine ideal product-market fit?

Identify problems.

Apply the most minimal, and most focused solution you can to each one.

Repeat.

They say that practice makes perfect.

Your day job is not practice.

Your day job is the performance.

What you do outside of your day job is practice.

Make sure you do a lot of it.

And make sure it is deliberate practice.

A user interface should be like a really good joke.

You shouldn’t have to explain it.

But I repeat myself.

Treat each new customer like a guest that has traveled far to see you.

And treat each returning customer with the exact same respect.

They returned for a reason, make sure you repeat that reason for them.

If you are building an e-commerce application or website, look for the fat in the product vertical before you jump in with both feet.

How do you do that?

Go talk to the people selling the product directly to the customer.

Are they making a profit?

And how much of a percentage of the cost of the overall price is profit?

You don’t want a co-founder in name only.

Every day of the lifecycle of the business, the co-founders must re-earn the right to have that moniker.

When they aren’t earning it, they no longer deserve it.

The best business plan is when you close your first sale.

By embracing failure we get to a point where we keep the good solutions and throw away the bad solutions.

When people look at an iceberg from the railing of the boat they are on they see a large piece of sharp ice that is going to seriously put a dent (pun intended) in their vacation plan.

Just out of sight of what can be seen is all the ice that’s keeping the small bit on top afloat. That hidden part is the real danger.

Oddly…

This is the exact same viewpoint people have when they see that your start-up is being acquired or you are about to exit.

“You are so lucky!” they say. Not seeing all the hard-work that went in to the business to get you to the payoff.

Your best bet to get to a quick product-market fit is to focus on problems, not features.

Everyone is chasing VC money these days it seems.

The mistake I see repeatedly is that entrepreneurs, especially first time entrepreneurs, chasing money – especially VC money – far too early in business lifecycle.

Not all start-ups are going to fit a particular mould.

The point about pursuing VC money is fuelling your start-ups growth not just paying your bills. These are two very distinctive points.

It is in a start-ups interest to bootstrap for as long as possible. A start-up needs to prove their business model, build an MVP, and acquire early customers, before chasing a large capital investment from a VC fund.

Bootstrapping permits business growth by 5% or 10% or 20% per annum. VC funding permits business growth by 100% or 500% or 10,000% per annum, year after year.

It’s that mythical hockey stick we see in various projections and hope that will be us. It is a rare start-up that will hockey stick in the first few months.

There is a “long head” (as opposed to the long tail) of hard work, small amounts of angel investment, and yes, bootstrapping that takes place before you can hit that inflection on the graph.

Bootstrapping is hard. Really hard. I’ve bootstrapped all of my start-ups before raising investment, and I’ve helped bootstrap other start-ups before raising investment.

It is long hours for very little money and a constant pursuit of customers. But bootstrapping gives you a singular focus for your vision – get profitable fast.

The times when a start-up I have been involved with pursued VC money and failed is going after VC money right out of the gate.

Where is the sweet spot for pursuing VC money?

That’s difficult to call because each start-up is different.

Any generic advice offered can be thrown away because you have to be involved with the start-up quite heavily for “when it feels right” (which comes through experience) not just because you need money.

Your ability and willingness to put yourself back in the game, even after you have suffered one of your biggest defeats, is what sets you apart as an entrepreneur.

It shows you are not just an employee with an unfulfilled dream.

A good rule of thumb is never ask your users “What do you want?”

That’s like handing an artist an unlimited budget and an infinite canvas and saying to them “Make some art for me!”

Rarely do you want to figure out what users “want.”

You really have to focus on what users “need.”

And to figure out what someone needs, you never ask what they want.

What is the user trying to achieve?

How are they achieving that (if possible) at this time?

And are there opportunities to improve their results (higher yield, faster yield, better quality yield)?

Finally, do we want to improve what they have (faster horses) or replace what they have with something else (flying cars)?

The more you make a habit of working on your product or service that your startup offers, the more often people will demand your product or service.

Every day you do one little thing that has a positive outcome; a blog post, a new feature, a tweak to the UI, a phone call to an existing customer to ask “what can we do better?”, a personal email directly from the CEO to a customer with a problem.

Every single small act that we make a habit of doing will build demand for your startup’s offerings until you won’t be able to keep up with that demand.

That’s when your startup’s growth begins to look like a hockey stick.

Little thing.

Nothing.

Little thing.

Nothing.

Little thing.

Nothing.

Little thing.

Hockey stick.

My basic formula for getting shit done is pretty simple.

It’s also a formula that seems to have proven to work over the two decades I’ve been applying it.

1) There’s urgent work.
2) There’s necessary work.
3) There’s important work.

The number in front of each type of work is how many hours you should perform that type of work.

Stupid simple formula that lets you time box everything that gets thrown at you when running a business and stops you from being bogged down in stuff that is “only” urgent.

If you want your SaaS to be a success, build community, not code.

When you are considering an e-commerce start-up the trick is figuring where the fat is, i.e. where you can cut out a pricing inefficiency, and where you can make your money by moving the manufactured item (or service) closer to the customer.

Get as close to your customer as you can, by going one step further up the chain.

There may be many steps between the customer and the manufacturing of the product.

You need to figure out which one has the fat (or maybe they all do), and then target that part of the supply chain first.

I deride the concept of wannapreneurs.

The people who want to be entrepreneurs, for whatever reason never seem to be what they want to be.

And the reason I deride them is that the wannapreneurs are the ones with ideas that never ship.

You can want all you want, but until you take action and ship, your want remains just that, a want.

And wants don’t pay the bills.

My unhappiest customers teach me so much about where I went wrong.

I know you don’t think you’re in sales.

But you’re in sales.

And the one thing you need to do, above all other things, when you are in sales, is:

“Ask for the order.”

Get your prospect to say “yes.”

Whether you’re raising funding, selling a SaaS service, or launching a product, getting the prospect to say “yes” by asking them to place the order is the most critical part of the conversation.

If your conversation with your prospect ends without you asking for the order, you wasted the time of both your prospect and yourself.

I’ve generally found that if your website is slow, your sales and conversions of your service, software or product are sharply slower.

I repeatedly see entrepreneurs making the exact same mistake I have made myself.

We rush out to hire a VP of sales, and assemble a sales team, way before we have determined that the product we are building actually fits what the market wants.

You might not have many sales without having an all-star sales person on your team.

But it could be worse, you might not have many sales and be paying cold hard cash (and equity) to have an all-star sales person your team trying to sell a product that is still in flux.

Physical retail locations will be the disruptive force of eCommerce.

A full-circle experience of retail and commerce?

Yeah, I know, go figure.

But you know it’s true.

Too afraid to reveal your idea to the world because you think someone will steal it?

Too late!

Someone already has.

Or rather, you stole your idea from someone else.

That is the thing about ideas, they are “of their time” meaning that the same idea will occur independently multiple times when the time is right.

And there is nothing you can do (legally) that will prevent someone else from arriving at the same idea.

If you are a start-up, the easiest way to gain traction is to build a product for your customers, rather than trying to build a customer for your product.

Leave the building of customers to your product to the larger enterprises who can dedicate years of throwing spaghetti at the wall to see what sticks.

The single worst decision you can make when launching your start-up is building a product (or service) that nobody wants.

The rarest event you will see in any start-up ever is when the founders drive relentlessly for a product-market fit with their minimum viable product.

They iterate fast, often, and don’t care (too much) about details until they are sure they have a killer product idea.

This event is rare because founders are too busy cramming in every feature they can think of to “compete with the other guys.”

In every good co-founder relationship there are three foundational aspects you  must have: like, respect, trust.

You need to like you co-founder because why work with an arsehole?

You need to respect your co-founder otherwise you won’t listen to their opinions.

And you need to trust your co-founder to do the right thing, for others and for the business and for you.