Tristan Kromer’s May Workshops Promise To Help You Reframe Your MVP

Written by Theresa Shafer. Posted in Events, Workshop

Tristan Kromer offers a great workshop on taking your big idea and break it into a series of small steps to test.

Your MVP Sucks! – How to crush your dreams and embrace reality

  • Monday, May 5, 2014 from 9:00 AM to 5:00 PM (PDT)   more info
  • Tuesday, May 20, 2014 from 9:00 AM to 5:00 PM (PDT) more info

You should attend if:

  • Have an understanding of lean but are looking for a deep dive;
  • You do not currently have Product / Market Fit;
  • Keep running experiments but either aren’t making progress or can’t tell if you’re making progress.

 

Recap of “How To Give a Great Demo” at CoFounders Club Wed-Apr-16-2014

Written by Sean Murphy. Posted in Demos, Events, skmurphy

Do The Last Thing First I had a great time at the Cofounder Club last night. Dea Wilson, founder of  Lifograph and organizer for the Meetup, invited me to talk about “Giving a Killer Demo.”  We had  a lively discussion upstairs at Procopio: starting with some introductions and then short demos by the attendees, then I gave a formal recap of the Great Demo methodology and how to apply it.

The key to a Great Demo is to “Do the Last Thing First” and get to the point immediately about the critical results that your software will deliver to the prospect. This is counter to many entrepreneur’s inclination to build up to a big finish after 15  or 30 minutes or longer.

Introduce / Illustrate / Do It / Peel It Back / Q and A / Summarize But by starting with a illustration of the key deliverable and then demonstrating in as few steps as possible how to achieve this result, you ensure that senior decision makers are still in the room when you get to the “Ta Da!” They can ask questions about other capabilities that they are interested in or start a conversation about how they can get started.

The second most important element of a Great Demo is appropriate preparation and a specific and detailed understanding of your prospect’s situation:

  1. Job Title and Industry: this provides a context for understanding how they are measured, likely objectives, and what examples or illustrations may be relevant.
  2. Critical Business Issue: What is the major problem he/she has?
  3. Reasons: Why is it a problem or what is the problem due to?
  4. Specific Capabilities: What capabilities are needed to address the problem?
  5. Delta: What is the value associated with making the change?
  6. Date: Is there a customer critical date or event that needs to be met?

If you are selling software to businesses, consider attending one of the two Great Demo! workshops we have scheduled in 2014 in San Jose

Register Now May 21&22, 2014 “Great Demo!” San Jose, CA

Register Now October 15&16, 2014 “Great Demo!” San Jose, CA

See also

Silicon Valley Robot Block Party 2014

Written by Theresa Shafer. Posted in Events

Recently, I attended the silicon valley robot block party. Like a mini-makers faire, it was alot of fun.  Folks were there with business robotics, home robotics, toy and entertainment robotics, and homemade robotic products by hobbiest and students.

Some of the robots showcased.

puzzlebox_orbit_helicoper

source: http://toyology.co.uk and orbit.puzzlebox.info

source: Techykids.com

source: Techykids.com

NASA

NASA

club project

Anki DRIVE

source: Anki.com

Robot Dog

pneubotics robots

source: Otherlabs

Romibo

source: Romibo

SRI Taurus

SRI Taurus

 lawn mover

Early this year, I interviewed the organizer of the event, Andra Keay, about the opportunities and challenges she sees in the robotic community. She is an Managing Director at Silicon Valley Robotics, and  Co Founder at Robot Garden

More coverage of the Silicon Valley Robotic Block Party

 

 

Quotes For Entrepreneurs–March 2014

Written by Sean Murphy. Posted in Quotes, skmurphy

You can follow @skmurphy to get these hot off the mojo wire or wait until they are collected in a blog post at the end of each month. Enter your E-mail address if you would like have new blog posts sent to you.

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“We first make our habits, and then our habits make us.”
John Dryden

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“Anxiety is the hand maiden of creativity.”
T. S. Eliot

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“It is not enough to be industrious; so are the ants. What are you industrious about?”
Henry David Thoreau

Other versions of this exist but this version is taken from Thoreau’s letter to his friend, H.G.O. Blake, on 16 November 1857.
h/t The Henry D.Thoreau Mis-Quotation Page at Walden.org

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“It is not enough to tolerate dissent: sometimes you have to demand it.”
Jack Galvin

h/t Brad Pierce in a comment in “Terry Frazier on How to Do Real Competitive Analysis

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“Society functions in a way much more interesting than the multiple-choice pattern we have been rewarded for succeeding at in school. Success in life comes not from the ability to choose between the four presented answers, but from the rather more difficult and painfully acquired ability to formulate the questions.”
David Mamet in The Secret Knowledge

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“Design is creativity with a strategy.”
Rob Curedale

h/t Expa.com (@Expa) also found at Quotes on Design, a great resource for design quotes.

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It’s not wise to violate rules until you know how to observe them.
T. S. Eliot

In an interview with Donald Hall in the Paris Review “T. S. Eliot, the Art of Poetry No. 1” Eliot said:

“I wanted to get to learn the technique of the theater so well that I could then forget about it. I always feel it’s not wise to violate rules until you know how to observe them.” T. S. Eliot

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“Watch what people are cynical about, and one can often discover what they lack.”
George S. Patton

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“My capital is time, not money”
Marcel Duchamp

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“Anytime we see a line, the product in question is underpriced.”
Naval Ravikant (@naval) in “The Bitcoin Model for Crowdfunding

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“Opportunity is sometimes hard to recognize if you’re only looking for a lucky break.”
Monta Crane

h/t Gerald Weinberg (@JerryWeinberg)

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“If thou art a writer, write as if thy time were short, for it is.”
Henry David Thoreau

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“How can so many things I’ve no more use for still have so much meaning for me.”
Ashleigh Brilliant

I feel this sensation most strongly when I look through boxes in my garage that store items I kept from old jobs and old startups. I regret loss of things I threw away: pictures and printouts I posted on the walls of my office or cubicle, chip plots, trade show posters, etc…

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“Execution focus yields a prioritized network of interdependent tasks;
exploration yields a portfolio of risks and options.”
Sean Murphy

I have been helping Patrick Steyaert on a new version of his Discovery Kanban talk. This sentence was my attempt at crystallizing the difference between execution and exploration.

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“Sometimes you come to an edge that just breaks off.”
Anne Carson

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“I know the price of success; dedication, hard work, and an unremitting devotion to the things you want to see happen.”
Frank Lloyd Wright

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“Luck cannot be duplicated.”
Richard Kostelanetz

h/t James  Geary
Used as a the opening quote for Feeling Lucky is Not a Strategy

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“Diligence is the mother of good luck.”
Benjamin Franklin

Used as the closing quote for Feeling Lucky is Not a Strategy

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“We work to become, not to acquire.”
Elbert Hubbard

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“A focus on revenue is core to bootstrapping but often at odds with the ‘venture lifestyle business.’”
Sean Murphy

In reply to a tweet by Rashaun P. Sourles (@rashaunps) “@skmurphy: Though my last startup failed, I’ve never forgotten the lessons you taught me about hustling early revenue. Just wish I had listened!”

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“The charm of fishing is that it is the pursuit of what is elusive but attainable, a perpetual series of occasions for hope.”
John Buchan

I think there are similarities to the early sales process. I can recall once waiting in a conference room with two founders staring at a speaker phone waiting for a scheduled call to start and feeling an eerie similarity to standing at the edge  of a pond with other boys holding our fishing poles with our lines in the water. It led me to write one of my “details as they..” tag lines:

“Details as they stand poised in an expectant silence, like runners before a starting gun, old men waiting for the fish to bite, or a sales team clustered around a speakerphone waiting for the prospect to call back.”

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“We cannot become what we need to be by remaining what we are.”
Max De Pree

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“Patience is a most necessary qualification for business; many a man would rather you heard his story than granted his request.”
Lord Chesterfield

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“Don’t take business advice from people with bad personal lives.”
Frank Chimero “Some Lessons I Learned in 2013

Used as the opening quote for “Building a Business Requires Building Trust.”

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“The wise speak only of what they know”
J.R.R. Tolkien

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 ”Fame is something that must be won.
Honor is something that must not be lost.”
Arthur Schopenhauer

Used as closing quote for ”Building a Business Requires Building Trust.”

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“You have to finish things — that’s what you learn from, you learn by finishing things.”
Neil Gaiman

h/t Neil Gaiman’s Advice to Aspiring Writers

Gaiman has offered at least two variations on the importance of learning from finishing:

“Whatever it takes to finish things, finish. You will learn more from  a glorious failure than you ever will from something you never finished.”
Neil Gaiman during “Question Time” section of “An evening of awesome with Hank and John Green” (Jan 15 2013) [transcript]

and

“Personally, I think you learn more from finishing things, from seeing them in print, wincing, and then figuring out what you did wrong, than you could ever do from eternally rewriting the same thing.”
Neil Gaiman in “No longer the blog without giraffes

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“The colossal misunderstanding of our time is the assumption that insight will work with people who are unmotivated to change.”
Edwin H. Friedman

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“The quality I most admire in a man is steadfastness.”
David Mamet

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“There is nothing so fatal to character as half-finished tasks.”
David Lloyd George

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“I have woven a parachute out of everything broken.”
William Stafford

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“Delivering value is a pre-requisite for sustainably capturing value i.e. getting paid.”
Ash Maurya (@ashmaurya)

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“An MVP is about delivering real value to customers for the purposes of maximizing validated learning.”
Shardul Mehta in “A Case Study in Defining an MVP

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“Great things are not done by impulse, but by a series of small things brought together.”
George Eliot

Update April 2: this appears to be incorrectly sourced to Eliot and is in fact a quote from Vincent Van Gogh in a letter to his brother Theo Sun-Oct-22-1882

“For the great doesn’t happen through impulse alone, and is a succession of little things that are brought together. ”
Vincent Van Gogh

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“Sometimes one pays the most for things one gets for nothing.”
Albert Einstein  in “What Life Means to Einstein: An Interview by George Sylvester Viereck” published in ‘The Saturday Evening Post’ on October 26, 1929

h/t Quoteyard

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“When you’re more susceptible to interruption, you do more out of the box thinking.”
Don Norman (found at  Quotes on Design)

Seems to be based on the last sentence in this paragraph from “Emotion & Design: Attractive things work better

Affect makes us smart, that’s the lesson of my current research into the role of affect. This is because affect is always passing judgments, presenting us with immediate information about the world: here is potential danger, there is potential comfort. This is nice, that bad. The affective signals work through neurochemicals, bathing the relevant brain centers and changing the way we perceive, decide, and react. These neurochemicals change the parameters of thought, adjusting such things as whether reason is primarily depth first (focused, not easily distracted) or breadth first (creative, out of the box thinking, but easily distractible).

[...] Positive affect broadens the thought processes, making it more easily distractible. When the problem requires focus, this is bad, but when the problem is best addressed through creative, out-of-the-box thinking, then this is precisely what is needed.

 

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“Calvin: I’m a misunderstood genius.”
“Hobbes: What’s misunderstood?”
“Calvin: Nobody thinks I’m a genius.”
Bill Watterson

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“Think you’re escaping and run into yourself.
Longest way round is the shortest way home.”
James JoyceUlysses

h/t Shaun Moran (@ShaunM_Dub) offered as a response to Einstein quote: ”Sometimes one pays the most for things one gets for nothing.”

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If you think lemons are bitter try some of that fruit from the bin labelled “experience.”
Sean Murphy

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“Change careers like Tarzan: don’t let go of the old until the new supports you, but don’t lose momentum.”
Derek Sivers (@sivers) in “Change Careers Like Tarzan

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“The shortcut that’s sure to work, every time: take the long way. Do the hard work, consistently and with generosity and transparency. And then you won’t waste time doing it over.”

Seth Godin in “The Certain Shortcut

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Building a Business Requires Building Trust

Written by Sean Murphy. Posted in 3 Early Customer Stage, 4 Finding your Niche, 5 Scaling Up Stage, Sales, skmurphy

“Don’t take business advice from people with bad personal lives.”
Frank Chimero “Some Lessons I Learned in 2013

One of the hallmarks for success in a business-to-business market is the ability to form personal relationships as well as professional business relationships. I am always dismayed when I read advice that advocates bait and switch or other forms of con games that erode trust and make it difficult for any startup to build relationships.

Anyone who always puts themselves first ends up with bad personal life. Startups that are only clear on their own needs rarely outrun the same fate. It’s the difference between a focus on funding or an “exit” and a focus on building a business.

Working with bootstrappers sometimes puts us on teams that are in desperate circumstances. Where they are able to translate time pressure and resource starvation into a bias for action from a change in perspective they often succeed–or at least move beyond the current crisis: success, like the horizon, is an imaginary line you can approach but never seen to cross. But where they use it as an excuse to take shortcuts that abuse prospects trust we sometimes have to part company. It does not happen very often, and it hasn’t happened in more than a year, but perhaps three or four times in the last decade we have had to walk away from a sales or marketing strategy we didn’t feel was in the long term best interest of the startup or their prospects.

“Fame is something that must be won.
Honor is something that must not be lost.”
Arthur Schopenhauer

Related posts

  • Treat Social Capital With The Same Care as Cash
  • De Tocqueville on Concept of “Self Interest Rightly Understood”
    You meet people who have a clear understanding of their own needs and seem to spend no time on anything else. But the deals that they make seem to based only on fear and threat. To create real opportunities in your own business requires that you explore and understand the needs and aspirations of your current and potential customers. To bring them ideas that will improve their lives and businesses requires that they trust you have their interests at heart when they talk about current problems that may expose their weaknesses and shortcomings
  • Keeping Your Customers’ Trust [Includes a Recap of Weinberg's 11 Laws of Trust]
    I think B2B software is often purchased by firms hoping to achieve–or avoid–some sort of change. Like consulting, software is the promise of an ongoing business relationship.  The two essentials in a mutually satisfactory business relationship are trust and an exchange of value.
  • Sustaining Is More Important Than Starting
  • David Foster Wallace: The Only Choice We Get is What to Worship especially this section from Wallace’s talk:
    But of course there are all different kinds of freedom, and the kind that is most precious you will not hear much talked about in the great outside world of winning and achieving and displaying. The really important kind of freedom involves attention, and awareness, and discipline, and effort, and being able truly to care about other people and to sacrifice for them, over and over, in myriad petty little unsexy ways, every day. That is real freedom. The alternative is unconsciousness, the default-setting, the “rat race” — the constant gnawing sense of having had and lost some infinite thing.
  • Honesty in Negotiations
    One of the key tasks we help early stage teams with preparing for and executing successful negotiations.  There is a belief among some engineers that the best marketing and sales people are the most accomplished liars. In my experience nothing could be further from the truth. Most negotiations have long term consequences and involve interacting with people that you will encounter again and who know others you will encounter in the future.  I always assume that at some point in the future the folks I am negotiating will know the full truth of the situation and that very few secrets remain that way for long. In George Higgins‘ novel “Dreamland” a character remarks “I never forget and I always find out. ” I assume that about anyone that I am negotiating with.

Great Demo Workshop Attendee: “Holy Crap! My Demos Have Too Much Detail”

Written by Sean Murphy. Posted in Demos, Sales, skmurphy, Testimonial, Workshop

After every Great Demo! workshop we contact the attendees with a short E-Mail that reads in part:

I want to check-in to see how you have been doing using the ideas and skills we covered in our Great Demo! Workshop three months ago.  Specifically, I’d like to hear:

  1. What have been the results so far?
  2. Do you have any success stories to report or share?
  3. Any questions or new situations you’d like to discuss?

What follows is a redacted e-mail from a real attendee at a recent Great Demo workshop. We have his permission to post it, but he asked that we remove identifying information because of his candor about his approach to demos before he came to the workshop.

Hello Peter,

I would like to tell you that your workshop has had a positive impact not only on my demos, but also on my customer meetings in general.

The key message I took away, “Do the last thing first,” has proven very effective at increasing customer engagement in our demos. Our product is a sophisticated one with a long history–what are prospects sometimes describe as “very complex” or “arcane” even “confusing.” We sometimes present modules that–in hindsight–were of no of interest to the customer. This can not only turn a demo into a waste of everyone’s time but also convert a hot prospect into a lukewarm one.

It’s seems obvious now, but getting right to the point and then working backwards based on the customer’s level of  interest (“Peeling back the onion”) has triggered a lot more questions and demos that end in clearly defined next steps instead of “you’ve given us a lot to think about, please let us get back to you.”

The example that really punched me in the gut when I realized what I had been doing was your hyperkinetic  impersonation of someone doing a demo of Microsoft Word. Your first answer to  the question, “Can you print?” seemed  reasonable: you opened the print dialog box and walked through all the print options in detail–portrait or landscape, single or double-sided printing; color or black and white, number of copies, print quality, etc…

But when you did the second take and said “Yes, would you like to see it?” and clicked the print icon I had this terrible sinking feeling.

“Holy Crap! My demos have too much detail,” I said to myself.

Change is hard, but the three of us who attended your class took the “Great Demo” approach back and have seen a difference in the number of demos that now lead to sales that are progressing.

You may be in the same predicament if your approach demos involves one or more of the following:

  • You include a multi-slide corporate overview whether the prospect requests it or not.
  • Demos are viewed as an opportunity to provide training on your product.
  • It’s not uncommon for a demo to end with prospects sitting in stunned silence or murmuring, “let us think about this and get back to you” instead of asking questions.

We have two Great Demo! workshops on on the calendar for 2014 in San Jose

May 21&22, 2014 “Great Demo!” San Jose, CA Register Now
October 15&16, 2014 “Great Demo!” San Jose, CA Register Now

Learn How to Market Your Expertise March 25 in Sunnyvale

Written by Sean Murphy. Posted in Events, skmurphy

Getting More CustomersWhether you are a software startup or a consultant you have to convince prospects that you have the expertise to solve their problems by what you say, what you write, and what others say about you. This three hour workshop will outline a mix of proven marketing techniques for generating leads for your business. Attendees will select one or two that best fit their style, present them in a roundtable discussion format for refinement, and leave with a ninety-day action plan for incorporating them into their business.

When/Where:  March 25, 2014 9am-12:30pm in Sunnyvale, CA
Cost: $90 includes lunch

Register Now

Office Hours: Schedule Time To Walk Around Your MVP

Written by Sean Murphy. Posted in Lead Generation, Sales, skmurphy

Office Hours ButtonIf you are looking for advice on lead generation or closing deals consider scheduling “office hours” to walk around your current sales process or a particular opportunity you are trying to close. SKMurphy functions as a startup advisor to help you understand the process of building a business. We understand the challenges of selecting an advisor–and advising entrepreneurs–and have blogged about it a few times:

We offer a no-cost, no-obligation MVP Readiness Assessment.
Request a consultation at https://skmtest.wufoo.com/forms/skmurphy-office-hours/

Without A Revenue Hypothesis Your Business Model Is a List of User Activities

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, Customer Development

Q: I am building an app that helps people build nearby interest groups (e.g. local model railroaders, quilters in your town, etc…). I am trying to establish a baseline for my value hypothesis testing and am considering the following metrics:

  • Registration rate of those who come to landing page
  • Rate of registered users who join or create an interest group
  • Rate of interest group members who interact (post etc) in a group
  • Rate of interest group members who log in again after a month

Even if I estimate the each of these rates at 50% I cannot tell what this would mean in terms of validating my business. Also I cannot determine how to use these metrics to determine the features to put in my MVP.

Any advice for where to start in a minimum set of metrics and features for an MVP for this service?

A: For the sake of an initial model let’s accept your estimate of a 50% rate for those four metrics. There are two key sets of hypotheses that you are missing:

  1. What are your hypotheses for how you generate revenue? What will your customers pay for and why? 
  2. What are your hypotheses for the cost of acquiring and servicing a paying customer? How much will it cost to get them to the landing page and to maintain the service?

Your answers to these two sets of hypotheses interact to tell you how long you can stay in business.

Q: Those are great questions but I feel like they are related to growth, something I think I should explore once I have figured out the value testing.

A: Getting paid is proof of your value hypothesis. You need to map your path to revenue. Once you can do that then planning how to do it in a repeatable scalable way is your growth hypothesis. Given that you are zero revenue you need to grow to at least break even to keep running experiments.

Q: OK I understand the importance of the monetization strategy in the hypothesis testing, but I don’t think it’s relevant to my original question. Suppose I added a another metric:

  • Rate of interest group members who convert to a premium account (e.g. for unlimited messaging)

And I assume it costs me $1 to get new visitors to my landing page. So now I have six hypotheses:

  • It costs $1 to get a visitor to the landing page
  • 50% of visitors register
  • 50% of registered users join or create an interest group.
  • 50% of interest group members interact in a group.
  • 50% of interactive group members login after a month.
  • 50% of persistent interactive group members upgrade to a premium account

What does that tell me? I still cannot tell if I have a  good starting point.

A: I think it makes all of the difference in the world, now you are optimizing for revenue in your experiments. The others are all vanity metrics if you don’t have hypotheses for their relationship to revenue and impact on cost.

You can enter whatever you think your conversions will be a priori, and now you can construct a hypothetical business that is profitable.

Without that you don’t have a (profitable) hypothetical business, you have a list of activities that users are engaging in.

Discovery Kanban Helps You Manage Risks and Options In Your Product Roadmap

Written by Sean Murphy. Posted in Customer Development, Lean Startup, skmurphy, Tools for Startups

I came across this presentation from LLKD13 (#LLKD13  / storify) by Patrick Steyaert (@PatrickSteyaert) of Okaloa on Discovery Kanban after following some links off a Kanban discussion group last year:

Slides

Video

It’s a complex and challenging presentation that connects a number of different concepts–including fitness landscape models, the Cynefin framework  and its concept of probes, the OODA loop, optionality–into a coherent synthesis: Kanban models can be used not only for managing execution or delivery flow by minimizing the amount of work in progress, but also for managing the discovery process of curating a portfolio of risks and options.

At a high level an execution focus yields a prioritized network of interdependent tasks; exploration yields a portfolio of risks and options.

I had the good fortune to meet Arlette Vercammen of Okaloa a the Lean Startup Conference 2013 and we had a conversation that has sparked an ongoing collaboration around helping Okaloa evolve their Discovery Kanban model both for startups and change agents in larger firms.

Patrick will be providing an updated version of the presentation June 16 in Leuven, Belgium:  ”More Agility and Predictability with Visual Management and Kanban.”

Related blog posts and articles

Q: Should I Persevere With My Product Or Get A Job?

Written by Sean Murphy. Posted in 1 Idea Stage

Q:  I can’t get people to use my service. For the last 9 months or so I been trying to get it going, trying to validate the idea, but I can’t get people to use it, and I’ve iterated and improved the product multiple times.  I can get people to click on ads  and visit the service but no one will even sign up much less use the service.  

A:  Whom have you talked to about the service? Have you talked to potential customers?

Q:  Up until now, I’ve only really gotten feedback from my family and friends. I thought that marketing would be enough to explain the idea and convert visitors into customers, but it’s not working, and I’ve tried different methods and messages.  

A: How did you come up with the idea for the service?

Q: I got the idea from my Dad almost two years ago and developed the idea into what it is now.  I have been into technology for as long as I can remember and I am constantly dreaming of tons of amazing ideas, but most of them are too complicated to create myself:  when my Dad came along with the idea I saw it as a chance to start fulfilling my dreams. At the time I thought that idea was simple enough to develop into a product. But I was wrong; it was much much harder than I had anticipated.  

A: As Paul Saffo advises, “Never mistake a clear view for a short distance.” I can sympathize with the challenges of having too many ideas and ideas that are too complex to make viable. It doesn’t hurt to write them down and in the case of the more complex ones also try to break them into phases or steps and see if you can create a building block that might then enable a second step etc..  How long have you been working on this particular idea?

Q: I took me about a year to develop a minimum viable product; About half way through I dropped out of college to focus on it full time. It has been rough but I have finished developing it.  I don’t know what to do and I can’t keep wasting my time and money on something that’s not working. My parents were supportive at first, but now they are saying I need to get a job. So, any advice on the service  or what I should do would be great.  

A:  A year ago if your parents had said we will support you for a year but if you have no customers then you have to go back to college or get a job would you have agreed? If not, how much time would you have asked for?

You have to treat the friends and family who are supporting you just as you would an investor and give them visibility into your plans and results. It’s also not fair to ask for a blank check: you have to have a stopping rule.

Experienced investors, whether Angel or VC, will impose one on you. But friends and family may find it harder. That’s why you have to agree up front on the limit of investment you are asking for.

You don’t have to give up on your vision, but you need to either earn enough to become self-sufficient to pursue it on your own, or go back to college to finish your education. Here are a few questions you can use to measure your progress and navigate your way forward:

  • What have you learned in the last six months that’s made you more effective as an entrepreneur?
  • In the last three months?
  • What do you hope to learn in another three that will allow you to gain customers?
  • Before you start a new project you need to define your stopping rule or you risk going bankrupt or you force the people who are supporting you to define it for you–or you bankrupt them as well.

Here are “Three Questions to Ask Before Quitting” from pages 66-71 of Seth Godin’s “The Dip

  1. Am I Panicking? Decide in advance when you are going to quit.
  2. Who Am I Trying to Influence? A person or a market? Markets value persistence far more than an individual.
  3. What Sort of Measurable Progress am I Making?

Q: What do you think of the advice a friend gave me: ”You’ll never fail if you don’t give up.”

Be very careful of this advice:  if you keep doing the same thing expecting different results you won’t succeed either. Take a long-term view for a moment. Looking back from 30 or 35 or 40 it’s unlikely you would regret finishing college and perhaps even working for five or ten years to get some real world experience before starting a company.

If your goal is to be an effective entrepreneur then you may learn faster in other situations than by continuing full time on your startup today. Despite what you read on TechCrunch and similar sites very little success is overnight.

Related

Feeling Lucky Is Not a Strategy

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, skmurphy

“Luck cannot be duplicated.” Richard Kostelanetz

Riffing on a Nov-2-2013 TechCrunch post by Cowboy VenturesAileen Lee (@aileenlee) “Welcome To The Unicorn Club: Learning From Billion-Dollar Startups” Ryan Hoover suggests that you should ”Forget What You Know: There is No Right Way to Start Up”[1][2]

“They didn’t talk to people. They didn’t do market research. They didn’t create a landing page to see if people would enter their email. They just built it. For the past year, they invested in the team and technology to prioritize speed of iteration with disregard to traditional methods of customer development and company building.”
Ryan Hoover in “Forget What You Know: There is No Right Way to Start Up”

This is not a methodology, it’s hoping to get lucky. The article cites several startups that may have gotten lucky as proof of…I am not sure, I guess that it’s possible to get lucky.

“Lean methodology and the startup community at large, espouses customer interviews, landing page tests, concierge experiments, and other tactics for testing hypotheses and measuring demand before building a product. In many cases, this is good advice but sometimes it’s a waste of time or worse, directs entrepreneurs away from something truly great.”
Ryan Hoover in “Forget What You Know: There is No Right Way to Start Up”

For every team that gets lucky I wonder how many thousands run through their savings in search of the truly great without talking to customers or testing their hypotheses. Perhaps a more careful and detailed analysis will uncover ways to duplicate the success of some of these startups but I worry that it may be like trying to select the winning lottery ticket: the fact that some people do it does not change the fact that on average it’s a terrible investment strategy.

“Diligence is the mother of good luck.” Benjamin Franklin


Ryan’s essay also appeared on LinkedIn and TheNextWeb:

I don’t think this “Forget What You Know” post is representative of the quality of Ryan’s insights. Here are three blog posts by him that I have found very useful and recommend reading:

 

Office Hours: Schedule Time to Review Your MVP Readiness

Written by Theresa Shafer. Posted in Startups

Office Hours ButtonAre you a startup founder or an innovator at a tech company with burning questions looking to get some great advice on your venture or idea from an lean startup expert for B2B startups?

SKMurphy functions as a startup advisor to help you understand the process of building a business.  We offer a no-cost, no-obligation MVP Readiness Assessment.

Request a consultation during our MVP Readiness Office Hours at https://skmtest.wufoo.com/forms/skmurphy-office-hours/

IEEE CNSV Mastermind 2014

Written by Theresa Shafer. Posted in Consulting Business, Events

Mastermind GroupsWe wanted to let all of you know that IEEE-CNSV has a new benefit for its members. You have a chance to join and participate in a formal Mastermind (Peer Support) Group. This group is much different from our regular meetings. We will meet for a fixed set of four weeks about every other week starting on April 3, 2014. Group members will make a commitment to come to all of these four meetings, and to keep what is discussed in confidence. So, that means the members really get to know each other, and work on what is keeping their businesses from higher levels of success.

All attendees MUST have a CNSV profile (here is information on how to join CNSV). The group size will be limited to 12 attendees, so sign up right away if you to participate.

  • DATES:  Thursdays in April & May — April 3, April 17, May 1 and May 15 of 2014
  • TIME: 4-6pm
  • LOCATION: Hobee’s at 800 W Ahwanee Ave, Sunnyvale, CA 94085 (just off Mathida Ave new Hiway 101)
  • COST: Free, but agree to purchase something from the restaurant, so they will reserve this room for us. This set of four meetings would normally cost $200, so this is a real bargain.

REGISTER: http://www.meetup.com/BayAreaMastermind/

WHAT MIGHT BE DISCUSSED IN A MASTERMIND MEETING?

Mastermind meetings allow you do share ideas as to what areas you are considering for the growth of your business, or your business and life balance. You will get feedback from your peers on how to resolve the concerns.

Areas that could be discussed:

  • Business Plans for 2014
  • How to get more business
  • ow to handle the stress of too much business at one time
  • How to get out from under Brokers
  • How to keep up with changing technologies
  • Whatever concerns or challenges you might be having

Video from Lean Innovation 101 Talk at SF Bay ACM Nov-20-2013

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, 4 Finding your Niche, Events, Lean Startup, skmurphy, Video

The video from my “What is Lean–Lean Innovation 101” talk is up:

Here is the description for the talk

“Lean” provides a scientific approach for creating a product and developing new businesses. Teams can iteratively building products or services to meet the needs of early customers by adopting a combination of customer development, business-hypothesis-driven experimentation and iterative product releases. This talk covers:

  • Why more and more companies are using Lean
  • What is Lean, what it is not
  • Key concepts
  • Get Out Of Your BatCave
  • Use an initial product (MVP) as a probe to explore the market
  • Build-Measure-Learn
  • When and how to pivot
  • Rules of thumb for successful lean innovation

I want to thank Alex Sokolsky for his outstanding effort on behalf of SF Bay ACM doing the video capture and editing.

IEEE-CNSV Panel Explores Engineering in Japan vs Silicon Valley Mon-Mar-3

Written by Sean Murphy. Posted in 1 Idea Stage, Events, Silicon Valley, skmurphy

I am helping to moderate a panel 7pm Mon-Mar-3 at IEEE-CNSV on “Innovation: Work and Life of the Engineer in Japan and Silicon Valley” The event takes place at Agilent Technologies, Inc. in the Aristotle Room, Bldg. 5 located at 5301 Stevens Creek Blvd., Santa Clara, CA 95051. There is no charge to attend and the event is open to the public.

The event is organized by Takahide Inoue, the Global Outreach Director for the Center for Information Technology Research in the Interest of Society at UC Berkeley.

The panel members are:

  • Takashi Yoshimori, Toshiba Semiconductor
  • Laura Smoliar, Independent Consultant, Signal Lake Venture Capital
  • Tom Coughlin, IEEE Region Six Director-Elect, CNSV member and Independent Consultant
  • Kim Parnell, Past Chair, IEEE Santa Clara Valley Section, CNSV member and Independent Consultant
  • Brian Berg, Past Chair, IEEE Santa Clara Valley Section, CNSV member and Independent Consultant

Here are some of the questions I hope the panel is able to address:

  • What are innovation lessons from Silicon Valley?
  • How does Silicon Valley do so many innovations?
  • What are innovation lessons from Japan?
  • How do Japanese engineers sustain their interest in a topic to achieve mastery instead of moving on to the “new hot thing” or next “bright shiny object?”
  • What makes an innovative culture? What can other areas do to create an innovative culture?
  • In Silicon Valley, we tend to celebrate the individual over the group. For Silicon Valley engineers how do you give back to your  community?
  • The Japanese say that “the nail that sticks up gets hammered down.” For Japanese engineers, how do you disagree constructively with your peers to foster innovation?
  • What advice do you have for engineers for finding an idea that can inspire them to work on for several years before it becomes a reality?
  • How do you see the work of the engineer changing in the next five to ten years?

I hope you can join us tomorrow night. Here are some background material on Silicon Valley’s innovation culture you may find relevant.

Here are five related blog posts about Silicon Valley it’s entrepreneurial culture

Finally Tom Wolfe wrote “The Tinkering’s of Robert Noyce” about the founding and early culture at Fairchild and Intel for Esquire in December of 1983 and updated it for Forbes ASAP fourteen years later as “Robert Noyce and his Congregation.” (Aug-25-1997).


The text of California Historical Marker 836:

PIONEER ELECTRONICS RESEARCH LABORATORY – This is the original site of the laboratory and factory of Federal Telegraph Company, founded in 1909 by Cyril F. Elwell. Here, Dr. Lee de Forest, inventor of the three-element radio vacuum tube, devised the first vacuum tube amplifier and oscillator in 1911-13. Worldwide developments based on this research led to modern radio communication, television, and the electronics age…California Registered Historical Landmark No. 836..Plaque placed by the State Department of Parks and Recreation in cooperation with the City of Palo Alto and the Palo Alto Historical Association, May 2, 1970

Quotes For Entrepreneurs–February 2014

Written by Sean Murphy. Posted in Quotes, skmurphy

You can follow @skmurphy to get these hot off the mojo wire or wait until they are collected in a blog post at the end of each month. Enter your E-mail address if you would like have new blog posts sent to you.

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“I am old enough to see how little I have done in so much time, and how much I have to do in so little.”
Sheila Kaye-Smith

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“Observation is a passive science, experimentation an active science.”
Claude Bernard

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“One always has a better book in one’s mind than one can manage to get onto paper.”
Michael Cunningham

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“Never let the future disturb you. You will meet it, if you have to, with the same weapons of reason which today arm you against the present.”
Marcus Aurelius in Meditations

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“You always have prior information before you do an experiment, because something motivated you to do the experiment.”
John D. Cook (@StatFact)

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“Bad hires are by definition great interviewees. Think on that.”
Dave Cheney (@davecheney)

h/t Benjamin Sullivan (@bjns)

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“Everything can be taken from a man but one thing: the last of human freedoms–to choose one’s attitude in any given set of circumstances, to choose one’s own way.”
Viktor E. Frankl in “Man’s Search for Meaning

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“The humble improve.”
Wynton Marsalis in ”To a Young Jazz Musician: Letters from the Road” first letter is “The Humble Self

Originally used in “Applying the Agile Manifesto to Software Startups” The ”The Humble Self” was the spine for “Wynton Marsalis on Humility, Self-Mastery, and Learning

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“Don’t call it a comeback, I’ve been here for years.”
LL Cool JMama Said Knock You Out

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“Life is like a taxi. The meter just keeps a-ticking whether you are getting somewhere or just standing still.”
Lou Erickson

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“There are two great rules of life: never tell everything at once.”
Ken Venturi

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“If you are not part of the solution you are part of the precipitate.”
Steven Wright

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“For fast acting relief, try slowing down.”
Lily Tomlin

h/t “Quotes for Public Speakers (No. 166) Lily Tomlin

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“Good communication is as stimulating as black coffee, and just as hard to sleep after.”
Anne Morrow Lindbergh

Used as closing quote for “Four Questions We Use to Help Improve Our Practice

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“It requires troublesome work to undertake the alteration of old beliefs.”
John Dewey in “How We Think (Revised Edition)

Used as opening quote for “Four Questions We Use to Help Improve Our Practice

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“Theory can blind observation.”
Carol Gilligan

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“Sometimes you get the best light from a burning bridge.”
Don Henley

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“Nick: You want to be your own boss but the trouble with that is you don’t pay yourself anything.”
Herb Gardner in “A Thousand Clowns

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“Fate is being kind to me. Fate doesn’t want me to be too famous too young.”
Duke Ellington

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“If you want to learn about an organization, try to change it.”
Kurt Lewin

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“I’m more interested in what I discover than what I invent.”
Paul Simon

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“The wise musicians are those who play what they can master.”
Duke Ellington

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“Unlikely adventures require unlikely tools.”
Zack Helm

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A truly creative person rids himself of all self-imposed limitations.”
Gerald Jampolsky

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“If we do not plant knowledge when young, it will give us no shade when we are old.”
Lord Chesterfield

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“Only those who have the patience to do simple things perfectly will acquire the skill to do difficult things easily.”
Johann Friedrich Von Schiller

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“Somewhere along the line all of us must learn this lesson: it costs something to be what we are.”
Clarence Day

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“It is not impossibilities that fill us with despair, but possibilities which we have failed to realize.”
Robert Mallett

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“Refrain from following the example of those whose craving is for attention, not their own improvement.”
Seneca “Letter from a Stoic”

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“A good leader takes care of those in their charge.
A bad leader takes charge of those in their care.”
Simon Sinek (@simonsinek)

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“An accrual accounting perspective has too much parallax from a bootstrapper’s actual cash position and offers a false sense of security. Do cashflow based planning and management.”
Sean Murphy in “5 Serious Financial Mistakes Bootstrappers Can Avoid.

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Five Serious Financial Mistakes Bootstrappers Can Avoid

Written by Theresa Shafer. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, First Office, skmurphy

Five  serious but avoidable financial mistakes we hear from time to time at a Bootstrapper Breakfast:

  1. Mistake: using credit cards to finance your startup.
    Fix: Pay cash, trade favors, barter, go without, but don’t let your monthly balance roll over and accumulate.
  2. Mistake: not having a stopping rule for when you need to stop bootstrapping and look for work. This can lead to bankruptcy.
    Fix: set a time limit and an expense limit for getting your new business off the ground. Work part time and work on your business part time to maintain break even cash flow.
  3. Mistake: not keeping your spouse in the loop if they are working and keeping the lights on while you bootstrap.
    Fix: treat your spouse as an investor or a board member: provide ongoing detailed accounting of plans and spending.
  4. Mistake: hiring a full time employee too soon.
    Fix: start with contractors, make sure you can at least break-even on a regular basis with the contribution the employee will make vs. the additional expenses incurred–understand all of the expenses you first full time employee will trigger (e.g. workers compensation, payroll service, fixed salary expense (vs. contractor)).
  5. Mistake:  signing a lease on an office too soon
    Fix: use co-working space, look for an informal sublet, be clear on why you need an office (e.g. just pay for meeting rooms as needed, barter for lab or working space as needed, look at hourly/day rate offices for conference calls or meetings).

#3 got picked up by Entrepreneur Magazine in a roundup of 7 tips: “Funding Your Business on Your Own? Learn From These 7 Entrepreneurs.”  I thought these three from the list were also common and avoidable:

  • “Branding too soon” by Rebecca Tracey of The Uncaged Life
    This is really investing too much in messaging before you know what works. I have made this mistake and I see others do it as a way to make the business seem “more real” or “like an established company.”  Trying things out in conversation gives you the fastest feedback and is the easiest way to iterate if you are deliberate about it.
  • “Idealism about costs” by Tom Alexander of PK4 Media
    This comes in many forms, but the most serious that he touches on is not understanding how long it can take to get paid, especially by a larger firm. 90 to 120 days from invoice has not been uncommon for many of our clients. Small firms tend to pay faster, and getting paid the first time by a large firm can take much longer than subsequently.
  • “Failing to calculate burn rates” by Steve Spalding of Project MONA
    This takes several forms, but one mistake is to pay yourself a salary (incurring State and Federal taxes on the “round trip” from your savings back to your bills instead of putting less money into the business and living off of your savings. It’s also better to provide the bulk of your starting capital as a loan instead of equity, so that early profits can be distributed as loan repayments instead of salary or dividends.

Update Thu-Feb-27 (morning): Elia Freedman offered a common critique of this post, In Getting Good At Making Money by Justin Williams and “How to Get Good at Making Money” by Jason Fried. Writing “The Art of Bootstrapping” he observes

The only thing a bootstrapper needs to know: CASH IS KING. Nothing else matters and every decision needs to be made to maximize cash. The articles refer to revenues, but revenue is not cash. Here’s an example: I do a contract development job today for $10,000. When done I submit an invoice and the company takes 60 days to pay. Yes, I have $10,000 in revenues today but I don’t get the cash for 60 days. How do I pay my bills in the meantime?

I am relentless when it comes to managing cash. I have a spreadsheet that gets duplicated and updated with actuals and projections every month. This allows me to make cash flow decisions months before the negative shortfall actually happens, allowing me at various times in the history of the company to ratchet up spending, lay people off, cut payroll or minimize other expenses. Because of this work, I see the company very very clearly on a month to month basis and can make appropriate choices.

I think it’s a fair criticism. An accrual accounting perspective has too much parallax from bootstrapper’s actual cash position and offers a false sense of security. I tried to sharpen the advice from the Entrepreneur round up on “Idealism about costs” toward this but I would add a sixth mistake to make it clear:

Mistake: Using accrual accounting (ignoring the timing–the real cash impact–of cost and revenue items) will kill you.
Fix: Forecast  and manage the explicit timing of cash in and cash out for your business. Understand that people will cash your checks immediately but be slow to pay your invoices.  Some won’t pay the full amount or even pay at all. Rely on clear understanding and simple plain English agreements, don’t hope that “legal language” in a contract will make a difference to your getting paid (assume any contracts you sign will be enforced against you by larger firms.

I think trust is as important, if not more important than cash. Bootstrappers who focus exclusively on cash without also managing trust and social capital will often fail to prosper as well. Related blog posts:

Update Mar 8: this post was included in the Founder Institute’s “Mar 2 2014: This Week’s Must Read Articles For Entrepreneurs.

Make the Transition to Sales: Two Workshops For Entrepreneurs in March

Written by Sean Murphy. Posted in skmurphy, Workshop

I think the most difficult challenge in sales is maintaining an appropriate perspective and emotional distance from deals: balancing fear, greed, and frustration to maintain empathy and a clear understanding of business objectives.

Some of the technologies employed in the sales process are changing rapidly but they impact the tactics, not the substance. Selling for entrepreneurs is about establishing rapport, project management, and acting as a change agent. The need to listen, communicate clearly, and build trust over time  has not changed.

I have been selling my expertise since I started a photography business when I was 16. But I have always looked at myself as an entrepreneur not a salesperson or a consultant…or an employee for that matter –in my own mind I was getting training to be more effective as an entrepreneur in my own business.

To a first order sales people worry about making quota, entrepreneurs worry about making payroll. It’s a different mindset.

We have two workshops on offer in March, one that’s focused on discovery driven sales and one about lead generation–getting the phone to ring. We have offered both for more than 7 years now and they have each undergone considerable change and improvement.

But what hasn’t changed is that entrepreneurs need to generate leads and close deals if they want to build a business.

Sold Out Improve your Sales Pitch with Cohan’s Great Demo! Workshop
March 5&6, 2014 “Great Demo!” San Jose, CA
Register Now Getting More Customers Workshop
March 25, 2014 9am-12:30pm Sunnyvale, CA

Update Wed-Feb-26  Great Demo Mar 5-6 has sold out.

Please register for May 21-22 workshop
Register Now

Q: Resources For A Lean Approach to Sales, In Particular New Product Introduction

Written by Sean Murphy. Posted in 3 Early Customer Stage, 4 Finding your Niche, Sales, skmurphy, Workshop

Q: We have started selling and are looking for resources for a lean approach to sales, in particular for new product introduction.

Scott Sambucci and I presented a workshop at Lean Startup 2012 on “Engineering Your Sales Process.”
The deck is posted at http://www.slideshare.net/SalesQualia/engineering-your-sales-process

About 70% of the workshop is interaction with attendee on their specific early sales challenges so it’s not something that we video record.

Scott Sambucci has two books out that address early sales issues:

Here are two articles that offer useful overviews of what’s needed to define a sales process:

In addition here are some other books you may find helpful:

Here is a long interview I gave to Gabriel Weinberg on early stage B2B sales that many entrepreneurs have found useful: Sean Murphy on the first six enterprise customers

All of these resources talk about a systematic approach to selling for new products.  I continue to offer “Engineering Your Sales Process”® as a workshop for early stage teams. Please contact me if you would like to arrange for a workshop.

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