Archive for 2003

Iterate until you achieve product-market fit.

Then keep iterating to redefine the market so that competitor’s products no longer do.

Hey, would you look at that. Another “marriage proposal” from someone I just met.

This is one of the privations of being technically inclined.

You get propositioned by hopeful (and hopeless) entrepreneurs all the time looking for you to be their co-founder and build something together.

They have an idea and all they need is an engineer and a small amount of investment (just a few million) to make it a reality.

We have a technical term for that: Nothing!

If you are creating a software as a service application, be aware that every single customer that visits your website will be looking for a discount, no matter how small it may be.

I keep meeting entrepreneurs who think that partying and drinking in loud bars is a good use of their time and equates to “networking.”

The ROI on this kind of activity is so minimal it is akin to waiting for lightning to strike.

Tenacity.

Perseverance.

Doggedness.

Persistence.

Resolute.

Fancy words that describe your endurance for weathering the storms that will continuously batter your entrepreneurial endeavours.

The focus of your product development should be to cultivate a level of compulsiveness in your users that borders on religious fervour.

You will become frustrated at the speed with which your technical co-founder is fixing a seemingly simple bug.

And that’s okay, because not everything that looks simple actually is.

No matter the size of the discount being requested, you need to know your walk away numbers.

When you are just starting out an NDA is a cute way to demonstrate to the world you don’t have anything worth stealing.

Choosing which frameworks to use, which language to use, which game engine to use, which platforms to target, are all business decisions that should be made within the context of the business.

The moment you leave these important decisions up to your software developers you have started to give away business advantages to your competitors.

P.S. I’m a lifelong engineer and software developer and it took me a long time to realize this.

Sourcing and on-boarding new candidates will be one of the most time consuming and expensive activities your start-up will endure.

I am a great believer in the lean startup philosophy.

The leanest startup I can think of is an Excel spreadsheet, an email address, a cellphone, and a landing page that collects your email address.

And I am not too sure about the cellphone.

When you want to start, start small.

Really small.

Thinking of something small?

Good.

Well, that’s too big, let’s think smaller than that.

Bit smaller.

Smaller.

Good.

Got it?

That is what you need to start with.

That is what you will ship.

Something so infinitesimally small that the risk, to your bottom line, to your ego, to your customers (current and potential), to your company, and to whether you will ship at all, is so freaking small that you wouldn’t notice it.

That small thing would be considered a rounding error in your productivity.

Shipping something that is as small as possible is powerful.

Because it builds a habit of shipping.

And it lets us fail and try again very rapidly.

I think a lot of people throw around the word “sociopath” to describe an entrepreneur when what they mean is “just bloody rude.”

So many entrepreneurs fail catastrophically, either through a product that fails in the market or by simply running out of money, because they insist on trying to launch publicly with a final, absolutely perfect product (or service).

I find that many start-ups go after “cost inefficiencies.”

That is, they are trying to cut out the middle-man.

And when the middleman is an unregulated rent seeker, that is good business model to try and optimize.

The problem comes when start-ups go after cutting out the middleman (by making themselves a lower priced middleman), but the cost inefficiencies and the friction built in to the business model are mandated by legislation.

And that legislation is usually backed by powerful lobbying interests.

Those start-ups, if they can disrupt the business model and reduce the friction and cost inefficiencies, can change an entire industry.

But those start-ups are unicorns, and what they are building is an unassailable position.

The crux of the problem is that other start-ups come along and try to duplicate that success, usually without any success at all, because they are not trying to disrupt anything, they are just copycatting the trailblazer.

Those are the start-ups I won’t get involved with.

Never trust the technology advice of a Chief Technology Officer who doesn’t own a computer that is personally his.

My clients treat me a like a God.

They take very little notice of me and anything I say until their server stops working and then they pray to the Lloyd that their pleas for a miracle fix are heard.

If you don’t specifically need to know the gender of your user, for your app, product, SaaS or service, I can guarantee you are breaking the law in at least a dozen countries.

E-commerce, much like credit cards, have a distinct customer acquisition cost that you need to actively calculate.

And then recalculate at regular intervals – the price will change as the market dynamics change with the waxing and waning of your competitors and the shifting requirements of customers.

A sense of urgency in your start-up culture will never be as powerful as a sense of purpose.

Be flexible in the service you offer.

Be inflexible in the pricing of your services.

You will ask your developer to implement a feature at 11PM on Friday when they are working late and then wonder why the developer hasn’t gotten this simple feature implemented by 7AM Monday morning after you spent the weekend partying in a hot-tub.

And that’s okay, because you need to learn that sleep and partying are not a magic time machine that accelerates you in to a shiny future of new features.

And you need to learn that other people like to party and sleep too.

Attention can be consumed, and some entrepreneurs want to gorge themselves before they realize that attention is an expensive resource to replenish.

It doesn’t matter who your customer is they will demand a discount.

“We’re a small, nascent start-up and we don’t have much budget. What can you do for us?”

through to:

“We’re a large enterprise and we will buy a lot of services from you over the coming years.”

Everyone tries it on.

And if those are the only reasons they have, the discount isn’t the problem, it’s the customer’s commitment.