Archive for 2006

The simple fact of the matter is, no matter what you charge, you are always go to lose some customers based purely on price and there is nothing you can do about that.

One of the techniques you can use is to make the offer so compelling that price is no longer an issue for the large majority of your potential customers.

You will tell your technical co-founder “it’ll just take you five minutes, I could write it myself in that amount of time.”

And you won’t get the feature you want, and your technical co-founder will resent you for saying what you said.

And that’s okay, because you have to learn that you’re not the developer, that’s why you’re the other guy.

When I want to know how serious an entrepreneur is about building their SaaS or mobile app, I don’t ask whether they have enough money.

I ask about their marketing.

That tells me whether they are seriously thinking about their product.

And whether they can finance it.

When it comes to partnering up with a cofounder, what you don’t know really can hurt you.

Unfortunately, many entrepreneurs get starry eyed about their business idea and are willing to hop in to bed with just about anyone that shows interest.

Just like any other long term relationship, you have to ask hard questions, find out as much as you can about each other, and be willing to have some difficult conversations.

Customers who demand big discounts are customers who will be big problems.

“What language/framework/technology should we use to build this?” is never the first question you should ask.

Or even the hundredth question?

What technology should you choose to develop your product or service should be so far down the decision list of what you’re building and how you’re building it is an afterthought.

Unless of course, the technology is the product. Then forget everything I just said.

Your technical co-founder will turn out terrible code in the first version.

The code that ran Facebook or eBay in the earliest days was dreadful.

MVP really does mean minimum viable product, even when you are talking about code.

If I was the type of technical founder, who upon being approached by a random stranger, let’s say by email, or at a networking meet-up, that was to immediately drop everything to chase off after an idea based on nothing but a brief conversation and the promise of some equity down the road, I probably wouldn’t be the kind of co-founder you would be looking for.

Fortunately for the both us, I’m not.

The nature of fund raising is that you are going to have to learn an awful lot about the various VC funds that are out there that go way beyond a few names and email addresses and putting your investor in your speed dial.

On demand weed delivery.

You know someone is going to do it should we ever legalise marijuana.

And the next evolution of that will be on demand weed delivery with a side order of cookies and pizza.

“3% of something huge [the next Facebook] is better than 100% of nothing.” is based on a faulty assumption that technical entrepreneurs are standing around with their hands in their pockets waiting to be given an idea.

At some point you will ask your technical co-founder a difficult question they won’t understand or will challenge their ego and the developer will put their hands behind their head and lean back in their chair.

And that’s okay, because you want to know where the limits of their knowledge are, but also where their comfort zone is.

Requiring a user to reveal their gender via mandatory use of a courtesy title, e.g. “Mr” or “Mrs” or “Miss”, for your SaaS or product means you are directly breaking an untold number of gender discrimination laws.

Want to be better at connecting?

Get out from behind your keyboard and your cellphone and then finally, get out of the office.

Commit to making a new strong connection with someone in your network.

Pick up the phone, send out an email; arrange a coffee meeting. Get out there.

You will be surprised what can come of it, even when nothing more than a good discussion comes of it.

The problem with soliciting feedback is not that action won’t be taken on the feedback.

It’s that invisible action is taken on the feedback.

Your audience can offer many ways for you to improve your product or service.

But if that feedback disappears into a black hole, never to resurface, or possibly be implemented many months or years down the line, the frustration your audience will feel is in the fact that their opinion or feedback was ignored.

It’s okay to tell them that you cannot take action.

It is the act of invisible action that your audience will find frustrating.

Messaging and signalling to your audience in a specific way about the action take (or not taken) is more powerful than doing exactly what they want but never telling them you did it.

The more you fail, the more you will have success.

If you attempt a moon shot on your first try, and you fail, and you fail big, that’s it.

Game Over!

There’s probably no second chance.

But how many of us ever try to do a moon shot project on our first attempt?

How many try to open with a piano recital at Carnegie Hall, tonight, having never touched a piano before?

Nobody!

When we don’t know what we’re doing, we try to do little things first.

We might fail.

But the failure is low-risk.

It’s a teaching moment.

It’s valuable because we hopefully learn from what our failure was.

And by repeated attempts, and repeated failure, we get better.

And the exact same thing applies to everything that we do.

The more we fail at something, the more successful we will be.

Some times your product is expensive.

Ferrari.

And other times your product feels expensive.

Apple.

Which are both completely different to over-priced.

Diamonds.

A SaaS (or product) business that has been in business for any length of time should always, and on a regular basis, e.g. every other quarter, figure out why discounts are given.

You might have a bundling discount built in to your service (or product): “buy two, get one free!”

You might have a sign-up discount for longevity: “sign up for two years and get 20% off your second year!”

Your discount metrics will tell you where you are leaving money on the table.

But more importantly, it will show you where you can convert users in to paying customers, or increase the yield of a customer by offering a negligible to you (but significant to the customer) discount.

“If we asked the customer what they wanted, they would have told us they wanted a faster horse.”

I’m paraphrasing here.

We repeat this idea that it is the world-changers that give customers products and services they don’t even know what they want.

And that is true to an extent.

Henry Ford didn’t give the customer a faster horse.

Steve Jobs didn’t give the customer a faster computer.

Richard Branson didn’t give the customer a faster airline.

What these three entrepreneurs did was give the customer a completely different product.

They painted the grand vision.

Then, they listened exceedingly carefully, after they delivered the product, to what the customer wanted.

Entrepreneurs should deal in revolutionary products.

Customers will tell you, in excruciating detail, what they want in those revolutionary products.

And please don’t try and give us a prettier Craiglist either.

So many VCs and investment funds specialising in funding only racial minorities or female entrepreneurs.

I wonder, if an investment fund popped up with a mission statement that read “We only fund middle-class white males” whether it would be decried as being racist or sexist.

If you can change the gender, or the race, or the religion of the target group from minority to majority, and people start taking umbrage, then even if you mean well, you’re still guilty of discrimination.

If you don’t have a documented discount policy that you strongly adhere too, at some point the future you are going to have customers that either need to be fired, or that you will lose because they are no longer getting the discount they expected (demanded?) when they first signed up.