Archive for December, 2009

Quotes for Entrepreneurs – December 2009

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

You can follow @skmurphy to get these quotes for entrepreneurs hot off the mojo wire or wait until the end of the month when they are collected on the blog. Enter your E-mail if you would like Feedburner to deliver new blog posts to your inbox.

Quoting myself a lot this month, evidence for something. I will have to look back in a year and see how many are still useful.

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“Facing a mirror you see merely your own countenance; facing your child you finally understand how everyone else has seen you.”
Daniel Raeburn from “Vessels

Hemingway’s shortest story: “For sale: baby shoes, never worn.”
Raeburn’s is as heartbreaking: “Irene Raeburn: born December 28, 2004, died December 24, 2004.”

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“Lots of guys came and went who had way more talent.
Talent doesn’t matter all that much. You gotta show up.”
Gregory Sullivan in “Carpenter Poets

Context and full quote:

“We were the opposite of the stereotype. We weren’t frustrated musicians working menial jobs waiting for our big break in music. We liked our day jobs and played music for a little money and some laughs. Only the contractor types were worth a damn anyway, as far as music. A real music job is very much like a building contract. You have to plan, and show up on time, and stay sober, and understand the logistics of the equipment. You have to be able to set up and repair your broken tools on the spot. You have to work closely with others. You have to figure out in advance what the customer wants, and deliver it skillfully. [...] We had lots of guys come and go that had way more talent than many of us that stuck. Talent don’t matter all that much. You gotta show up.”

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“Startups survive by doing less with less. They live on the scraps of a market that larger competitors ignore.”
Sean Murphy

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“Never compare your inside with somebody else’s outside.”
Hugh MacLeod

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“Pay close attention to the short descriptions of your product that early customers offer others.  This is your ‘elevator pitch.’”
Sean Murphy

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“What The Cloud provides is opportunity–a way to reduce the cost and risk of trying out service innovations.”
Bob Lewis

Full quote from “State of the Industry 2009

“What The Cloud provides, for companies with the wit to see it, is the opportunity to reduce the cost and risk of trying out service innovations. Focusing on IT’s ability to manage it … to control it … is a great way to make sure only your competitors take advantage of what it has to offer.

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Customer Development proceeds in parallel with Product Development, and informs it.”
Sean Murphy

Full quote from a comment I left on Steve Blank’s blog

“As soon as you can clearly articulate your hypotheses about the customer’s problem you should get out of the building and start having serious conversations. Customer Development proceeds in parallel with product development and informs it. One piece of paper with a prospect’s name and a few questions can communicate that you care about their perspective and have given some thought to making it a productive 10-20 minute conversation (if they want to talk longer you should let them, but you should be able to finish a short conversation in ten minutes or so).

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“You don’t get to say who you are, your behavior speaks for you.”
The Last Psychiatrist (pseudonym)

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“Startups should leverage their size by promising intimacy and delivering it in every relationship with prospects and customers.”
Sean Murphy

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“Character is what emerges from all the little things you were too busy to do yesterday, but did anyway.”
Mignon McLaughlin

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“Besides the noble art of getting things done, there is the noble art of leaving things undone. The wisdom of life consists in the elimination of non-essentials.”
Lin Yutang

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“I have learned the novice can often see things that the expert overlooks. All that is necessary is not to be afraid of making mistakes or of appearing naive.”
Abraham Maslow in Eupsychian Management

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Customer Development Proceeds in Parallel with Product Development

Written by Sean Murphy. Posted in 4 Finding your Niche, Customer Development, skmurphy

Steve Blank had a great post today “Building a Company with Customer Data, Why Metrics Are Not Enough” that highlights the need–even for Web Startups–to get out of the BatCave and talk to strangers who may be potential prospects. Engineers in particular can feel that this is not as productive a use of their time as some form of automated interaction. As Steve recounts, here is a typical reaction when he suggests that surveys in particular are not the best way to start:

“We’re a web startup, all our customers are on the web.  Why can’t I just get them to give me the answers I need this way?”

Often founders may try and substitute market research data for “seeing the elephant” or having actual contact with live prospects. Blank warns:

…market research firms are excellent at predicting the past. If they could predict the future, they’d be entrepreneurs.

There were two questions in the comments related to when and how to talk to prospects:

Q:  At what point in the process of our startup do we want to start getting interactive feedback from our target market? How much focus should we give to gathering customer preference while we are still in the inception phase of our idea?

As soon as you can clearly articulate your hypotheses about the customer’s problem you should get out of the building and start having serious conversations. Customer Development proceeds in parallel with product development and informs it.

One piece of paper with a prospect’s name and a few questions can communicate that you care about their perspective and have given some thought to making it a productive 10-20 minute conversation (if they want to talk longer you should let them, but you should be able to finish a short conversation in ten minutes or so).

Q: Talking to your customers directly is awesome. But, what is even better is to get a group of your customers to talk to you AND each other.

In the early market this is can cause problems when interviewing prospects: focus on one conversation at a time. Don’t let one prospect’s perspective who speaks first on a topic inadvertently anchor the group somewhere. Instead ask open ended questions and listen, prepared to be surprised.

Consider an appreciative inquiry approach to understand the customer’s operating reality.

Customer focus groups are effective for feature planning but more problematic in determining product/market fit in the early market.

Early Customer Conversations: Use Appreciative Inquiry and Amplify Positive Deviance

Written by Sean Murphy. Posted in Books, Customer Development, skmurphy

Q: Do you have a script for a customer interview?  What should I focus on? How much of the interview  for a web based offering can be replaced by a thorough evaluation of traffic and usage analytics?

I think the “Appreciative Inquiry” model offers a very effective model for early customer interviews. At a high level it’s

  • “What problems are you having?”
  • “What’s working around here?”

You need to focus on their pain and problems but build on their strengths. While there is a whole methodology/discipline you can follow at the Appreciative Inquiry Commons with “What is Appreciative Inquiry” a good place to start, I found the “Thin Book of Appreciative Inquiry” to be $8 and two hours well spent. It’s only 63 pages long but I found myself stopping several times and realizing I needed to change what I had been doing.

The “Amplify Positive Deviance” model developed by Jerry Sternin is another useful one to determine what the real status quo is for a category of prospect. Here are two good sources of information

I have transcribed the 7 steps in the “Positive Deviant” article and added a customer development interpretation for some of them in parentheses.

  1. Don’t assume you have the answer  (treat your approach as a hypothesis to be validated, updated, or refuted)
  2. Interview folks in settings where they are most likely to be forthcoming
  3. Encourage small steps using a new approach/tool/technology (get simple product in customers hands)
  4. Identify current status quo
  5. …and how positive deviants depart from it (different between early adopters and pragmatic/late majority)
  6. let deviants get others to adopt new tools / techniques (customers / word of mouth is most effective sales technique)
  7. Track results, keep score (add clear ROI to anecdotes from early adopters)

Sorry if this is too theoretical, but I think it’s more about a mindset or frame of reference you bring to the conversation than a particular script or set of questions.  Here are five related blog posts about early customer interviews:

Two Holiday Bootstrapper Breakfasts Added Mon-Dec-28 & Wed-Dec-30

Written by Sean Murphy. Posted in Events, skmurphy

steaming hot coffee and serious conversationWe have added two Holiday Bootstrapper Breakfasts in the week between Christmas and New Years. This year Christmas and New Years fell on the fourth Friday and first Friday of the month which collided with two regularly scheduled breakfasts (which have been canceled).

Which means that we will have a total of four breakfasts in the last three weeks of December:

  • Tue-Dec-15 7:30am in Sunnyvale at Coco’s
  • Fri-Dec-18 9am in SF at Boudin Bakery
  • Mon-Dec-28 9am in Sunnyvale at Coco’s
  • Wed Dec-30 9am in Mtn View at Red Rock
Register

And as we reminded you eight weeks ago in “Eleven Weeks–or Less–Left in 2009” here are some logistics issues you should take care of now instead of playing catch up in early 2010:

  • If this is your first year in business get your accounting system (in most cases in the US this will be QuickBooks) in order now, schedule a meeting with your accountant (or interview candidates and select one) before December 11. If you are based in Silicon Valley we are huge fans of Ogden Lilly.
  • If you’ve been working on a startup but haven’t incorporated yet, you may want to get all of your paperwork in order but postpone filing until the first week in January, in some states this will save you paying 2009 annual fees for a few weeks of operation in December and then 2010 annual fees. We like to see teams incorporate sooner rather than later if only because it gives you a vehicle to do business with that’s better than a collection of sole proprietorships.
  • Take some time to do both a recap of 2009 and a look forward for 2010, assessing what are appropriate goals in light of continued economic difficulties in most industries. The two Holiday Bootstrapper Breakfasts would be a good opportunity for this.

John Carter to Speak at IEEE-CNSV on “Doing the Math” Tue-Dec-15-2009

Written by Sean Murphy. Posted in Events, skmurphy

John Carter  CEO of TCGen is speaking on “Doing the Math: How to Estimate and Manage Results” at IEEE-CNSV on Tuesday December 15 at 7pm at KeyPoint Credit Union, 2805 Bowers Ave., Santa Clara, CA 95051. The event is free and open to the public.

His talk will focus on estimating the effort required to achieve results on a technical project, a key task for entrepreneurs who need to estimate budgets and manage customer expectations. Mr. Carter will present some best practices for estimation that apply to projects that involve some degree of organizational, workflow, or IT changes, and where there is vested interest in making the change quickly and ensuring it is on track.

He gave an outstanding talk at BayChi in May of this year on “How to Fire Your Boss and Become a Consultant

His presentation style was interesting, he asked questions at the beginning and then stopped the presentation about 12-15 minutes in to take questions and engage the audience before continuing.

Key points I took away:

  • This was really for consultants selling to large companies
  • Happiness is the difference between reality and expectations
  • Unique specialty: charge by the project
  • Write a project plan (statement of work) with client together
  • Give advice in advance that is specific and actionable to give them an idea of what it will be like to work with you
  • Use automated time records (Time Slips)
  • Spend at at least 10 hours marketing a week (15% of a 65 hour work week)
    • marketing includes developing articles, preparing presentations
  • Public speaking communicates your personal chemistry and offers insight into what working with you would be like
  • Key account selling: always look for referrals to adjacent divisions of larger firms
  • To be a successful consultant, you must have recognizable intellectual property distinguishing your services from others.
  • Successful consultants listen for what the person is actually saying: people will tell you what they want, what their pain is.
  • Focus on marketing not selling: future-oriented in time, one to many, create demand

Note: the talk will be preceded by the CNSV Annual Meeting and election of 2010 officers.

Few Seats Left for Jan-12-2010 Idea to Revenue Workshop

Written by Sean Murphy. Posted in Events, skmurphy

We have a few seats left for our Jan 12, 2010 Idea to Revenue workshop in Redwood Shores, CA. If you are in formation or the early days of your startup this is a good opportunity to spend four hours on your business with your team members. We help you ask each other the hard questions so you can leave with a one page plan for your next steps.

This will sell out, register now.

Update Jan-3: Sold out.

Tips For A Startup’s Early Press Releases

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

We use eReleases which distributes over PR newswire for about half the price ($400). See http://www.ereleases.com/submit.html for details, we have been working with them for more than two years and been very pleased.

Press releases are not appropriate for every startup’s marketing communication: you need to make sure that you have the right message before you broadcast it widely. One of the advantage of doing individual interviews in the customer discovery and validation phases is that you can tweak your message between each conversation.

You will need to experiment and understand what keywords in the title and the first paragraph make them more likely to get picked up by relevant publications. It’s also more compelling to include a quote from a third party (typically a customer) who can validate/substantiate one or more of the statements you are making. You can think of them as larger and more expensive Adword ads.

We have seen excellent results (increased SEO, direct sales inquires) from well written press releases. But, like an adword, the lack of a compelling title or poor first sentence can have them fall flat.

I would not send press releases to bloggers (who have not signed up for press release distribution through one of the services) but work with them on an individual basis. Identify blogs who address an audience you are trying to reach and leave substantial comments: not “look at this link” but one to three sentences of relevant content that responds meaningfully to the blog post you are commenting on. You can also approach bloggers to see if they are interested in a short interview or Q&A with one of your team.

If you are bootstrapping your startup you need to focus on where your efforts will do the most good: analyze what publications or websites are most likely to attract the audience that you want to reach and laser your efforts towards them. Relationships take time to build so plan your efforts for a set of activities you can sustain. If you are in the early customer discovery phase there are almost certainly bloggers who knowledgeable about the market you are targeting and who would be willing to give you ten to twenty minutes on the phone to give you feedback on your product idea.

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