Archive for 2002

Customers will give entrepreneurs evolution.

“I want a faster horse.”

Entrepreneurs must give customers revolution.

“You don’t want a horse, you want a car.”

“Craigslist but prettier” is not a product worth pursuing.

If that is your pitch, you are missing the point.

The user interface of Craigslist may be broken, but that isn’t why people use it.

The art of shipping a product is that you should never bother regretting the fact that you shipped. Where people go wrong is getting wrapped up in the regret of shipping before they actually ship. So then they never ship.

You agree that this candidate is perfect, but you still want to see a few more.

“A few more” usually means “We’re price shopping, not quality shopping.”

Rome was not built in a day.

And neither was eBay.

A good web application or service takes time to mature and grow.

Don’t expect to achieve in a few months what major enterprises have taken years to reach.

I’ve seen the tip of this iceberg with small efforts by a few start-ups trying to deliver products or supply services in an on-demand fashion.

I don’t think we are there yet.

The technology, the connectivity, doesn’t provide for it.

But within a decade, you will be able to order up a limo, fresh groceries, a house cleaner, or someone to run an errand for you as easily as you order up a pizza or a taxi today.

We’re just waiting for the technology to catch up to us.

Customers have an acquisition cost in almost every business.

Most small businesses, and even a few large ones, don’t bother figuring out what it costs to acquire a customer.

The cost is just buried in some other detail but never fully articulated.

But for a business to survive and thrive, as a start-up, you need to know that cost to you.

Customers also have a long-term value, and so long as the LTV outweighs the acquisition cost, you’ll make money.

All the perks in the world will not compensate your employees for one occasion of poor treatment.

Your customers can be found in lots of places where they are communicating.

As a brand, you need to be owning that communications channel for your product.

Because if you aren’t, conversations will take place without you.

And those conversations may not be pleasant.

To be an early hire in my startups, you have to be better at whatever you do than I am.

To get fired at my startups (before we grow too large for it to matter), I have to be better at whatever you do than you are.

My goal is to be better at your job than you are.

Once I can do your job better than you, you’re surplus to requirements.

How do you keep your job?

Keep learning. Keep training. Keep getting better.

Otherwise, I will replace you with someone better than me.

It sounds harsh, but in a small startup where every piece is critical, there’s no place for an also-ran employee.

This is also the very essence of what people mean when they say “work with a co-founder with a complimentary skill set.”

If you think this is bravado, I will put money down that you’ve never been a founder frustrated by early hires that are just warm bodies where you constantly have to double-check work or send it back for a second pass.

Corporations like to spend big dollars and big advertising campaigns, because it makes them feel secure.

Would a $10,000 marketing campaign for Coca Cola move the needle for them?

Probably not.

But it would give people something to talk about.

It is easy to quickly assess whether someone is really committed to the idea of an MVP by determining whether they care about presentation details.

If they’re fussing over a few pixels, the right shade of grey for the underline, or individual edge cases of functionality, they are most definitely not focused on an MVP.

You’ve just closed your Series A!

Great!

Before that afterglow fades, literally, within days, write your Series B pitch deck.

And when you close your Series B?

Within a day or two, write your Series C pitch deck.

It puts you in the mindset that you are always raising, and you are prepared at any time to raise.

Your dogged perseverance is what will set you apart from all the other entrepreneurs who never made it.

Success as an entrepreneur isn’t based on where you went to school.

The subject you studied.

Who you shared a house with.

Who you got an internship with.

It’s based on one thing, and one thing only.

How persistent are you?

Those who do not learn from history are destined to try and patent it.

In every business I have found that persistence is the least common resource to be found.

And half-arsedness to be the most abundant.

To be good at something isn’t a singular act.

It’s a habit.

To be good, is to be habitual about the thing we want to be good at.

The one thing I see entrepreneurs fail at all the time, is that they are terrible at shipping.

They cling to their idea – whatever the idea may be – until they smother all the life out of it.

They show it off to everyone that will pay attention, but they never set it free, they never let their creation run wild for others to interact with, play with, experience, become delighted with and then tell other people about.

When you get habitual about letting your product, service or creation get out there in to the hands, and more importantly, the minds, of other people, you get better, and then you get good, and then you get great, at shipping your ideas.

Before you try and patent it, ask an engineer if it already exists.

It will save you a lot of time, trouble and money.

Also, “plugging something in” is not patentable.

Always do things by the book.

But be the author.

But I paraphrase myself.

I have always loved this quote by Aristotle: “We are what we repeatedly do.”

Paraphrased of course.

The point is, of course, that if we do something repeatedly, if we make a habit out of it, we get better at whatever it is we do; write code, draw art, raise funds, network with people, ship product.

That last point, shipping product, getting the ideas out of your head, releasing it in to the wild as a product or service, and then in to the hands of people, is what we need to do as entrepreneurs.

As a procurer of services have you ever retained the services of a mid-sized or larger company to work on an aspect of a project?

I am very specifically talking about a project that doesn’t require the vendor to be co-located with you, e.g. they aren’t painting your office or laying new carpet or assembling new desks.

Can you imagine what the CEO of the company would say if you demanded that his entire staff show up at your office each day and work 9-to-5 at your premises?

Let’s take your 120 person company and integrate them with our 2,000 person company, for six months, and have them work at our office Monday through Friday.

Sounds ridiculous?

Why then do we adhere so vociferously to the notion that other individual contributors must be co-located to perform tasks that have no requirement to be in the same location as everyone else?

Your integrity as a leader will last you longer than all the money you make from your start-up.

I meet many an entrepreneur with a false epiphany about how amazing their start-up is going to do.

Passion is good and will get you through the days when everything appears to be falling apart.

But passion makes for lousy product-market fit.

If you attempt to lock up proprietary items, e.g. a well-known brand of clothing, by becoming a middleman to supply that proprietary item, when you don’t have exclusive distribution rights, you will lack what is commonly known as a “sourcing advantage.”

Your sourcing advantage is that you can get more of the product than anyone else, even if there is a supply shortfall across the vertical, and sell it cheaper than anyone else all the time.

Amazon is an extreme example where they either don’t care because they are big enough (now) or they can artificially induce a sourcing advantage (because they are big enough (now)).

Pets.com is the prime example of lacking a sourcing advantage.

Oooh! An idea! And you’re giving it to me for free!

Companies that reach critical mass make money in spite of themselves.

The reason that good software developers from graduated good schools aren’t interested in working for below market rate and 0.0025% equity in a pre-revenue, seed stage start-up is that they aren’t bad at math.

The only way to get someone with such terrible compensation is to find someone who *IS* bad at math – perhaps an English major from an 8-week coding boot camp.

Your products (and your services) should never be sold by the same people who create them.

You will ask your (inexperienced) technical co-founder for a time estimate and they will lie to you too make you happy.

And that’s okay, because we all need to learn that time estimates with immediate answers and no due diligence are worth precisely the amount of time they took to estimate.

I do a lot of travelling each year, talking to investors, pitching to customers, and just general meetings and I view all of that travel time as hugely productive to develop “me.”

Audio books that I can listen to on my Archos MP3 player are absolutely essential to maintain my sanity.

I can carry a dozen audio books with me where ever I go so long as I have a few spare batteries or a wall socket to charge up the player.

Sales, marketing, psychology, history, biographies of great leaders, business methodologies, science.

It’s like carrying a university lecture hall in your pocket that you can listen to when driving out to visit a customer.