Archive for April, 2009

Quotes for Entrepreneurs – April 2009

Written by Sean Murphy. Posted in Quotes, skmurphy

It’s been a year since I started using Twitter to post quotes for entrepreneurs. I realize now that using Twitter, while encouraging me to collect more new quotes, forces me to focus on ones that will fit into a 140 character limit. I am thinking of retitling this “Pithy Quotes For Entrepreneurs” where pithy means both “precisely meaningful; forceful and brief” and “short enough for Twitter.”

When Shakespeare penned “brevity is the soul of wit” he didn’t know the half of it.

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“There’s no harm in having a hobby, just don’t let it get too expensive.”
Sean Murphy

If you don’t have a “stopping rule” or know when you need to switch to a new business model or new market or new product then you have a hobby.

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“Being direct and honest is a scalable communications strategy.”
Seth Godin from “Sugar Coated Corporate Speak

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“Future of link shorteners: economics & entropy dictate that most of these domains will fall into spammer hands eventually.”
Andrew Grumet

Quoted in “Joshua Schachter: URL Shorteners Considered Harmful” which referenced and elaborated on Joshua Schachter’s “On URL Shorteners.” This quote was in the comments. The most useful counter-argument I’ve seen is to locally host your own shortener or run your own shortener for a set of your sites.

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“Customers don’t ask for your transcript: no grades for resiliency, curiosity, agility, resourcefulness, pattern recognition, and tenacity.”
Steve Blank

More context:

“These guys [Bill Gates, Steve Jobs, Larry Ellison] realized that customers don’t ask for your transcript. There’s a big difference between being an employee at a great technology company and having the guts to start one. You don’t get grades for having resiliency, curiosity, agility, resourcefulness, pattern recognition and tenacity.”

This is in response to Google’s hiring policy of asking everyone for a transcript and only hiring A students, even those folks who have been out of college 20-30 years and may have a richer set of accomplishments than their transcripts might indicate. I have seen too many times the adage “The A students work for the entrepreneurial B students”  come true to place a lot of faith in grades for someone who has been out of college more than 5 years being a good predictor of on the job performance.

I blogged about this policy two years ago in “One Google Hiring Policy Startups Should Avoid.”

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“Learning too soon our limitations, we never learn our powers.”
Mignon McLaughlin

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“One half of knowing what you want is knowing what you must give up to get it.”
Sidney Howard

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“You never change something by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” Buckminster Fuller

This is a key concept in competing against either the status quo or existing products. Ultimately you have to obsolete them if you want to win.

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“I’m old-fashioned: I hold doors for ladies, take off my hat indoors, and define customer as ‘someone who pays you money.'”
Patrick McKenzie

Full quote:

“I’m terminally old-fashioned in a lot of ways. I hold open doors for ladies, take off my hat before entering buildings, and define customer as “someone who pays money for a good or service”.

Update June 7: I liked this so much I used it as a conclusion to “Andrew Chen: Most Web 2.0 Media Startups Have a B2B Enterprise Model.”

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“Startup dollhouse fallacy: startups are just shrunken-down big companies. ”
Eric Ries

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From the movie “The Devil’s Advocate

Milton: You have the talent. I knew that before you got here. It’s the other thing I wonder about.
Kevin: What thing is that?
Milton: Pressure. Changes everything. Some people, you squeeze them, they focus. Some people fold. Can you summon your talent at will? Can you deliver on deadline? Can you sleep at night?

Which came out on twitter as “Pressure…Can you summon your talent at will? Can you deliver on a deadline? Can you sleep at night?” Satan in “The Devil’s Advocate”

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“Genius is childhood recalled at will.” Charles Baudelaire


comment by Gordon Luster “I really like this guy’s taste in quotations. Check’em out.”

Bootstrapper Breakfast This Friday

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

steaming hot coffee and serious conversationI ran into an entrepreneur last night after the IEEE-CNSV “Service Economy” event who had been to a Bootstrapper Breakfast but had had to shut down his business. He asked me “I don’t have much to say right now but I get a lot out of the breakfasts, can I still come?”I said “Certainly. Not everyone who comes brings an issue every time. But I am certain that you will be able to offer other entrepreneurs insights on their issues.  And you will be doing a new startup at some point, you may find a partner or a team you can join that will benefit from your experience and expertise.”

OK, it might have been a longer conversation and I may not have been as cogent, but the thought was there. We have one seat left for our Bootstrapper Breakfast™ 7:30 at Hobee’s in Palo Alto on Friday: please register if you plan to attend, we will have to turn you away if we are full and you have not registered.

We are running four breakfasts a month now, if this Friday isn’t convenient or gets full, consider another:

Update: we are now full for Friday’s breakfast in Palo Alto, please join us at another breakfast in May.

Conway’s Law: the Co-Evolution of Business Organization and Product Design

Written by Sean Murphy. Posted in 5 Scaling Up Stage, Rules of Thumb, skmurphy

Bruce Sterling in a 1994 speech “The Virtual City” made some interesting points about the interaction between the co-evolution of communication technology and cities.

The telegraph, and the telephone, which followed on its heels in about forty years, made the urban skyscraper possible. Not physically possible — the skyscraper was physically possible as soon as you had iron girders, curtain walls and steel-cage construction. But the telephone made the skyscraper informationally possible. Imagine how incredibly difficult it would be to run a business inside a skyscraper without electrical communication. It would be physically impossible to ship all those necessary messenger boys up and down through the structure.

There are very few high rise buildings in Silicon Valley, most of the technology firms end up in campuses full of buildings no more than four or five stories tall. Most startups tend to be in one and two story buildings.  Winston Churchill observed that “We shape our buildings, and afterwards our buildings shape us.” I have worked my entire career in one and two story buildings in the urban sprawl of Silicon Valley. I wonder if the software that comes out of firms working in highrises in downtown San Francisco is markedly different from what’s produced in the industrial parks and campus office buildings of Silicon Valley.

In “How do Committees Invent” Melvin Conway’s observed what come to be known as “Conway’s Law.”

The basic thesis of this article is that organizations which design systems (in the broad sense used here) are constrained to produce designs which are copies of the communication structures of these organizations. We have seen that this fact has important implications for the management of system design. Primarily, we have found a criterion for the structuring of design organizations: a design effort should be organized according to the need for communication.

Another formulation of Conway’s Law is that communication problems in an organization will be manifested in their finished products. One example of this is from Tracy Kidder’s “The Soul of a New Machine” has a scene where Tom West, the leader of the Data General effort to develop a 32 bit mini gets a look at the VAX, DEC’s competing machine:

“Looking into the VAX, West had imagined he saw a diagram of DEC’s corporate organization. He felt that the VAX was too complicated. He did not like, for instance, the system by which various parts of the machine communicated with each other; for his taste, there was too much protocol involved. He decided that VAX embodied flaws in DEC’s corporate organization. The machine expressed that phenomenally successful company’s cautious, bureaucratic style. Was this true? West said it didn’t matter, it was a useful theory.”

Some lessons from Conway’s Law for startups:

  • Attack a much larger competitor at “interstitial opportunities” that will require two or more divisions to collaborate to be able to compete with you.
  • Be alert to a pattern of software defects that indicate team communication problems that you have overlooked (or been ignoring as not important).
  • Whenever there is more than one way to accomplish the same thing, do a root cause analysis to make sure that the relevant parties are collaborating and not each going their own way.

See also

Customer Development is a Sequence of Prototypes

Written by Sean Murphy. Posted in Customer Development, Rules of Thumb, skmurphy

John Hanks and Todd Dobberstein of National Instruments have written an outstanding article “Eight Rules for Prototyping” (hat tip to Andrew Hargadon’s “Prototypes ‘R’ Us” ) that apply hardware, software, and systems companies. Here are my top four from the list, but the entire article is worth reading.

There is a path to success. If you can demonstrate or, better yet, put a prototype into the customer’s hands and get real feedback on the value of your innovation, the probability of business success greatly increases. If you want to be an entrepreneur and move your idea out of your head, develop a prototype…

Show don’t tell. Give a prospect something that can be marked up, or better you can take turns marking up or modifying.

1. Recognize That Ideas Are Cheap. [...] The expense lies in testing and verifying what has economic value. A great prototype is often the best way to start a dialogue with potential customers and test your idea’s value.

Perspective is valuable. Yours…and more importantly the customer’s.

2. Start with a Paper Design. [...] For a user interface or Web software prototype, a paper design is efficient and effective for quickly working through the functionality. You can get peers and, hopefully, customers to give feedback on where images, text, buttons, graphs, menus, or pull-down selections are located. Paper designs are inexpensive and more valuable than words.

These days Microsoft Office and HTML count as paper. But the best first prototype is a single sheet of paper that helps shape a conversation over a cup of coffee. But John Gall‘s observation from 30 years ago in Systemantics are still true: “A complex system that works is invariably found to have evolved from a simple system that worked. The inverse proposition also appears to be true: A complex system designed from scratch never works and cannot be made to work. You have to start over, beginning with a working simple system.”

3. Put in Just Enough Work. [...] There are two good reasons to prototype: the first is to test the feasibility of a hardware or software architecture, and the second is to create a demonstration and gain customer feedback so you can price and put a value on your innovation. Keep these objectives in mind and be careful not to fall in love with the process…

Prototypes can help you assess both technical feasibility and market risk (if you will let them leave the Bat Cave so that prospects can play with them).

6. Avoid Focusing on Cost Too Early. Initially, focus on proving the value of your innovation, and design with modularity in mind. While frustrating, your design may follow many paths that do not ultimately lead to value. Focus on securing your first set of customers and then work on cost optimization.

There are a variety of “premature optimizations” that should be postponed until you have real customer feedback. It’s a good article, my only fault would be that it will normally take a sequence of prototypes to bring a product to market and the article seems to imply that one is enough. It can be but you are better to “go ugly early” and get feedback than waiting to develop the one demo that will wow them into submission.

Five Output Formats to Support

Written by Sean Murphy. Posted in Demos, skmurphy

Some output formats to consider your application, they each have different properties and affordances and are not easily substituted for each other :

  1. Screen
  2. E-Mail
  3. Projector
  4. Print
  5. Fax

Screen

  • Most common way that users will interact in everyday use.
  • This is how many prospects will view the product.

E-mail output options

  • Simple hypertext (e.g. URLs as footnotes)
  • Text in monospace Font with 60 character line limit

Projector / PowerPoint or HTML that drives presentation at lower resolution

  • The developers typically design and develop on high resolution monitors, most of your demos will be given at a lower resolution on a projector. Make sure both look good.
  • Your users may want to run your application on the projector during a group meeting, test this.

Print – color or gray scale

  • Many senior managers are most concerned with how this looks, as it is the way that they are used to consuming information.

Fax – true black and white

  • Test this, some patterns create problems, many shades are indistinguishable when printed in black and white.

What To Do After the Layoff Fairy Taps You on the Shoulder

Written by Sean Murphy. Posted in skmurphy

Building on yesterday’s “A Too Common Conversation of Late”  here are some additional suggestions and advice for the newly unemployed.

The loss of structure can be crippling. Get active and stay active.

Unplug your television and visit the library. Make a list and read 5-10 books a month.

Reconnect with old friends at least once a day. Schedule breakfasts with folks or find a reason to get out of bed first thing in the morning.

Vacation is over. You’ve had your two weeks off. You can only look for work perhaps 1-2 hours a day actively in the absence of getting invited in for an interview. That leaves you with 12-14 hours a day to volunteer, take a part time job, or otherwise structure your time.

Stay connected with people. Join a job search group or two: only other people who are looking for work can truly appreciate the emotional roller coaster you are on.

Think about starting your own company.

A Too Common Conversation of Late

Written by Sean Murphy. Posted in Consulting Business, skmurphy

Layoffs continue to encourage old friends and co-workers to reconnect and many to consider–somewhat involuntarily–an entrepreneurial phase for their next career move. I spoke to three people today who had been laid off in the last month or so. Here is the summary of some key suggestions the three conversations:

  • If you are considering joining or forming a startup, check out a Bootstrappers Breakfast that’s convenient. We are up to four a month in Palo Alto, Mountain View, Sunnyvale, and Milpitas.
  • Probably the best South Bay group for professionals seeking employment is the eight year old CSIX, they meet every Tuesday in Cupertino and every Thursday in Saratoga.
  • If you are considering a career in consulting consider joining/attending
  • If you are feeling inventive check out the Inventor’s Alliance and TechShop.
  • We see a decidedly mixed economic environment with some clients prospering and others not so much. It’s definitely not as bad as the dotcom meltdown for technical folks in Silicon Valley but it’s not good and it doesn’t look like it will turn around this year.
  • There is a lot of opportunity, especially if you are able to take advantage of some technical and business innovations whose full effects are yet to be felt:
    • Skype, and VoIP in general make global conversations, both personal and teleconferences much less expensive.
    • Cloud computing, in particular Amazon’s EC2, make launching a new web business cheap and easy to scale.
    • Wikis and real-time document collaboration services are fundamentally altering consulting service delivery.
    • More generally, software-enabled services that blend human expertise with automation are creating a number of new kinds of businesses.

I am always happy to hear from old friends and former co-workers and happy to try and connect you with other folks or firms where there may be some synergies.

Uncertain Times

Written by Sean Murphy. Posted in skmurphy

Glenn Kelman had a guest post on Guy Kawasaki’s blog in February of this year that had this second paragraph that is wonderfully evocative of the ephemeral sense impressions that register in a state of suspense:

“Life,” William James once said, “is in the transitions.” He wasn’t talking about weddings and graduations, but the lonely moments before, when a decision still hangs in the balance, and irrelevant details are so vivid that they’ll stick in your mind for years to come: the melted-plastic smell of a U-Haul cab; the iron sound of a public mailbox swinging shut; a paper hospital cup; a flight of stairs; a metal door-knob; a sealed envelope.

The William James’ quote is from his essay “A World of Pure Experience

Life is in the transitions as much as in the terms connected; often, indeed, it seems to be there more emphatically, as if our spurts and sallies forward were the real firing-line of the battle, were like the thin line of flame advancing across the dry autumnal field which the farmer proceeds to burn. In this line we live prospectively as well as retrospectively. It is ‘of’ the past, inasmuch as it comes expressly as the past’s continuation; it is ‘of’ the future in so far as the future, when it comes, will have continued it.

We live in uncertain times, both in terms of the economic and technology transitions that are underway. I guess I am guided by two rules of thumb when I find myself in turbulent situations:

  1. “It may looks like a crisis but it’s only the end of an illusion.” Gerald Weinberg in Secrets of Consulting
  2. “Innovation requires us to systematically identify changes that have already occurred but whose full effects have not yet been felt, and then to look at them as opportunities. It also requires existing companies to abandon rather than defend yesterday.” Peter Drucker in Innovation and Entrepreneurship

Other relevant blog posts


There was a sequel post “Uncertain Times 2” written in January 2011.

Spanish Method: Pay For Customer Development Per Iteration

Written by Sean Murphy. Posted in Customer Development, skmurphy

I came across a very thought provoking approach to customer development, or at least offering consulting services for customer development (a subject at least of personal interest to me). Juan Paredes’ “Spanish Method” is outlined in his “First Iteration of a New Minimum Viable Service“:

I don’t price by project or by hour. I price by OODA loop units. This allows you to experiment and iterate in small increments, do it fast, cost-effectively, and wasting very little of your time. I use technology to keep costs down and metrics meaningful. I specialize in lean startups and English-speaking though leaders. See about me for more information on my background.

His focus is the Spanish speaking market for English-speaking startup teams.

3 Reasons to Attend a Website Peer Review

Written by Theresa Shafer. Posted in Events

We have done three other events like this in conjunction with sponsoring organizations like Innovation Denmark, SDForum, or Startup Epicenter. Participants have told us that they had three benefits.

  1. In reviewing another firm’s website and providing concrete feedback, they developed new perspectives on how prospects and other visitors might assess their own site.
  2. There are always so many things that can be done to improve a website it can be an endless sinkhole of time. Helping a peer with their site helped them identify the most important improvements to make next. Also some of the feedback provided by fellow CEOs were directly applicable to their own.
  3. They learned about a number of free and low cost tools and resources that are available for website design and analysis.

SKMurphy’s Website Peer Review
Friday April 17, 2009
11:30am – 1pm
Play n Plug, Sunnyvale

This event is open to all. There are two ways to participate: presenter or reviewer. For more information see http://www.skmurphy.com/blog/2009/02/22/skmurphys-peer-review-for-websites-set-for-april-17/

Joshua Schacter: URL Shorteners Considered Harmful

Written by Sean Murphy. Posted in skmurphy

Joshua Schacter’s “On URL Shorteners” is a great examination of the likely outcomes from the proliferation and use of URL shorteners.

There are three other parties in the ecosystem of a link: the publisher (the site the link points to), the transit (places where that shortened link is used, such as Twitter or TypePad), and the clicker (the person who ultimately follows the shortened links). Each is harmed to some extent by URL shortening.

It’s a very useful analysis that looks at the likely trajectory of “free” services that are middlemen. Since twitter is one of the more popular drivers for URL shorteners due to the 140 character limit Jason Kottke, while agreeing with Schachter, suggests the following:

With respect to Twitter, I would like to see two things happen:

  1. That they automatically unshorten all URLs except when the 140 character limit is necessary in SMS messages.
  2. In cases where shortening is necessary, Twitter should automatically use a shortener of their own.

That way, users know what they’re getting and as long as Twitter is around, those links stay alive.

Since I only post quotes on twitter/skmurphy I don’t use a URL shortener. I tried them out when I was posting announcements to the SDForum Marketing SIG Yahoo Group that contained the ginormous URLs that the SDForum website uses (which were broken up by Yahoo on send and inevitably led to complaints about a broken URL) but the cure was worse than that disease.

I do use an “unshortener,” the Backtweets tool (from the folks who brought you Backtype, another useful tool for bloggers) to search for links to sites in tweets

The comments are also well worth reading, I found Andrew Grumet‘s had a reasonable conclusion

There’s nothing in the law to prevent the owners of any of these shorteners to sell their domain to the highest bidder. Neither is there anything to prevent these operators from lapsing on their domain registration. Do you know when your favorite URL shortener’s registration expires?

It doesn’t really matter of no new links are created through the domain, btw. In the past five days I’ve gotten over two hundred spam attempts to URLs that haven’t existed on my domain since early 2006.

Economics and entropy dictate that most of these domains will fall into spammer hands eventually.

Update April 6: In re-reading this the core advice of “be careful of brokers or intermediaries between you and your customer who are working for free: their business model is subject to change without notice” got lost and I wanted to highlight it.

Update April 12: I wanted to highlight a comment Terry Frazier made, which outlines one use case I think it appropriate–hosting your own shortener.

Most of the shortened URLs I use are intended for temporary use and I don’t really care if they go away someday. I never record a shortened URL as a link.

However, there is an exception to the temporary usage, and that is when the URL is published in some offline form. Using a shortened URL in these cases is not only helpful to the reader, but may well increase the likelihood that readers will type the URL into their browser to visit the site.

When published offline the shortened URL is, indeed, “permanent.” At least, after a fashion. To date, I have made it a point to publish both the original URL and the shortened version, so even if the shortened URL goes bad, the reader will have the original.

The preferred method, however, would be to run your own short URL service, via your own domain. This is pretty simple using a product like Will Master’s GoShortURL php script. This would keep the short URL valid for as long as you maintained your own domain. And if you let your domain go, you probably don’t care about the shortened links anymore anyway.

Update April 19: Steve Hodson lists 91 different URL shorteners in “URL Shorteners–the Herpes of the Web

Comments from Mar-31 Getting More Customers

Written by Sean Murphy. Posted in Events, skmurphy

We had a great “Getting More Customers” workshop yesterday. It was our first time using the Pacific Business Centers location in Palo Alto and it worked out well. We used their boardroom and it made for a comfortable setting. This was the first time we’ve used a large flat screen TV monitor instead of an LCD projector, it worked fine–and it puts out much less heat than a projector over four hours, which was made it a little more comfortable.
We passed out feedback cards, here are a representative sample of comments on how attendees felt:

  • Well organized. Liked having handouts for all slides so I didn’t have to take notes. Liked the roundtable discussion.
  • Great seminar! this was helpful for me in two ways:
    • It quickly outlined many different techniques that can be used to help attract customers.
    • It “forced” me to sit down and focus on two areas to attack and generate some usable measurable milestones. Thanks!
  • Coming from a tech background and being new to bizdev areas, this was immensely helpful. I feel empowered!
  • Liked focus on key elements and action items. There was useful information on tools and processes. I learned from listening to other attendees 90 day plans.
  • Great workshop!  A lot to digest but very good ideas. I am re-inspired!
  • Specific market identification at the beginning was very useful, as well as having us consider the most effective manner to reach it. A number of different methods were presented that were inexpensive. Leaving with an action plan was a plus.
  • Very insightful–especially in having me think about customer pain. Very good resources in the workbook.

Paul Moriarty was an attendee and left this comment on twitter just after the class, which was very nice.

Just got back from a seminar on getting more customers with 2 strategies and a 90-day action plan. SKMurphy rocks! 

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