Archive for August, 2010
August 31st, 2010
You can follow @skmurphy to get these 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.
+ + +
“I don’t watch metrics on a daily basis because I don’t make metrics-based decisions on a daily basis”
From “Back Office Exposed: Bingo Card Creator” an interview with Patrick Mackenzie
Q: Can you share the key metrics you watch on a daily basis? Why are they important to you?
A: I have published a variety of stats but I don’t watch metrics on a daily basis because I don’t make metrics-based decisions on a daily basis, and absent making decisions watching metrics is only as productive as playing WoW.
+ + +
“I used to think I had ambition…but now I’m not so sure. It may have been only discontent. They’re easily confused.”
+ + +
“Late to bed, and late to rise, makes a man sick, poor, and stupid.”
+ + +
“No man is rich whose expenditure exceeds his means; and no one is poor whose income exceeds his outgoings.”
Thomas Chandler Haliburton
+ + +
“The point of forecasting is not to attempt illusory certainty, but to identify the full range of possible outcomes.”
From his blog entry for July 26, 2008: “Strong Opinions, Weakly Held” I offered additional commentary in “Paul Saffo: Forecasting is Strong Opinions, Weakly Held” I am a big fan of Paul Saffo and have blogged about him in these posts:
+ + +
“The trouble with our times is that the future is not what it used to be.”
I used this quote in a postscript to “Paul Saffo: Forecasting is Strong Opinions, Weakly Held” I thought that it neatly summarized the
“entrepreneur’s perpetual challenge: we have to let go of our nostalgia for our imagined (or anticipated) future and deal with the real options that we have created or are otherwise available to us.”
+ + +
“The only real training for leadership is leadership.”
+ + +
“No man ever steps in the same river twice, for it’s not the same river and he’s not the same man.”
+ + +
“It is good to have an end to journey toward; but it is the journey that matters, in the end.”
Ursula K. LeGuin
+ + +
“I heartily accept the motto, ‘That government is best which governs least’; and I should like to see it acted up to more rapidly and systematically.”
Henry David Thoreau “On Civil Disobedience“
August 30th, 2010
Sarah Allen will talk about bootstrapping a mobile startup at the Bootstrapper’s Breakfast Wednesday September 1 at 9am at Boudin Bakery, Embarcadero 4 in San Francisco. Sarah is a serial entrepreneur who is using her software development consulting business, Blazing Cloud, to bootstrap a mobile-focused startup, Mightyverse.
The Mightyverse blog offers this overview of the service:
Mightyverse is for people interested in language. We are building a database of words, phrases, and sentences translated from one language to another, including jokes, slang, lyrics, localisms, technical terms — anything you can imagine expressing.
Earlier Sarah was one of the co-founders of CoSA, The Company of Science & Art. The founders consulted part-time using their own software libraries to bootstrap a product business. This led to the creation of After Effects (acquired by Aldus, and subsequently Adobe).
August 29th, 2010
I will be giving a short presentation on “Feed Readers De-Mystified–Tips For Keeping Informed” at the September 23 Lunch & Learn Webinar hosted by People on the Go.
I will outline some important ways to monitor information about your business and industry on the web. The web has become the primary medium of business communication and information gathering: it is imperative that you learn to monitor new developments and relevant events for your job or business. We will explore a range of tools and time saving tips to keep abreast within your industry of clients, competitors, and relevant developments. This session will explore:
- Popular Feed Readers
- How they can help you stay current
- Limitations and Shortcomings
- Demo of the tools including
Some related blog posts:
This is a great overview by Dorai, I like his his five phase model for intelligence gathering and will address the first two–discovery and tracking–in my presentation:
There are about five stages in this process. This is a spiral model where you continuously enhance/refine every step based on what you learn from other steps.
- Discovery – Discovering Relevant sources of Information
- Tracking – Continuously monitoring these sources and discovering more in the process.
- Filtering – Filtering the noise and gaining the information most relevant to your business
- Extracting – Transforming information from free form into some kind of useful structure to distribute internally.
- Sharing – Sharing information at different levels of granularity, refining it and deriving actionable intelligence.
August 28th, 2010
Startups have fewer meetings than larger companies but entrepreneurs still need to make those meetings effective, in fact there is less margin for unproductive meetings in a startup than there is in a larger firm. Here are two sources of good information on effective teams and how they meet:
- James Shonk’s “Working in Teams” is a great place to start (and available used for a penny plus shipping on Amazon).
- Michael Lopp’s “Rands in Repose” blog category devoted to management is also useful, in particular his post “How to Run a Meeting“
Shonk offers a great model for effective teamwork:
- Goals: what are we here to accomplish?
- Roles: who is going to play each position on the team?
- Process: how are we going to work together, what are the rules for interacting?
- Relationship: how do we feel about each other?
While poor morale or interpersonal conflict can often be a harbinger for deeper problems, it’s much more effective to make sure that everyone is clear on the answers to the following two questions before analyzing particular processes or interactions:
- Are the goals for the team/group clear and agreed to?
- Are the roles that each attendee will play in contributing to them clear and agreed to?
One key metric for a team is interdependence: if you don’t need a member of the team to accomplish the key goals, shrink the size of the meeting and see if that improves focus and traction.
Lopp offers another perspective on meetings in a product development environment that complements Shonk. He suggests that every successful meeting needs:
- an agenda
- a referee to keep the team making progress.
We take part in a number of working meetings with founders where it can sometimes seem that more heat than light is shed on a topic. Most of the founders we work with are engineers or scientists and they typically chose those careers because their underlying personalities are more comfortable interacting with things and ideas than people. There can be a temptation to try a new technology or software tool to address meetings that have become dysfunctional
A better place to start is to make sure that the goals are both energizing and challenging for your team. And that each member has a key role to play. That being said we have found that using a wiki page for a common agenda and minutes/action-items works much better than e-mail for teams up to a dozen or so and creating a parallel chat session if you are on a conference call allows members to add quick comments, suggest related URLS, raise their hand to speak, and capture shared notes contemporaneously (which not only adds value but demonstrate that they are actively listening).
August 27th, 2010
Theresa Shafer and I are giving a talk on “10 Tips on How to Choose a Business Partner” on Monday, September 13, 2010, 11:30 am – 1:00 pm at the Women In Consulting (WIC) South Bay meeting.
We will outline some important tips and considerations when choosing a partner, sub-contractor, or alliances members that will help grow your business. We will explore a range of working relationships including employees, contractors, alliances, partners and co-owners. We will look these relationship roles and tips for structuring these deals.
This session will explore:
- Difference between employees, contractors, alliances, partners and co-owners
- Defining the relationship roles
- When to decide to partner
- What partners need from you
- How to pitch to a partner
About the Presenters
- Theresa Shafer is a hardware engineer and a mom, with a do-it/done methodology.
- Sean Murphy has taken an entrepreneurial approach to life since he could drive.
- They have served as an advisor to dozens of startups, helping them explore new options and bring their businesses to new levels. SKMurphy, Inc., focuses on early customers and early revenue for software startups, helping engineers to understand business development. Their clients have offerings in electronic design automation, artificial intelligence, web-enabled collaboration, proteomics, text analytics, legal services automation, and medical services workflow.
Los Gatos Lodge, 50 Los Gatos-Saratoga Road, Los Gatos, CA 95032; 408-354-3300
(Off of Hwy 880 at the Hwy 9 exit)
Cost (includes meeting, meal, beverage, dessert)
- WIC Members: $23 preregistration, $28 at the door
- Non-WIC Members: $33 preregistration, $38 at the door
- Price includes meeting, meal, beverage, and dessert
Register: at the door; advanced on-line reservation closed Thursday, September 9, 2010, 12 Noon
August 26th, 2010
We posted the interview I did with Floyd Tucker of DreamSimplicity about a month ago but in the last two days I have had two people comment to me directly and one tweet about my “three equations and three unknowns” answer:
@dorait Sean: Startups are trying to solve 3 equations with three unknowns – http://bit.ly/dq7Sqd
Here is the relevant excerpt from the transcript:
FLOYD TUCKER: [...] Can you tell me a little bit about the early customer stage?
SEAN MURPHY: We just spend a lot of time on this. It’s a very different sales style than you’ll see later on. It’s a conversational sales style. It’s much more about understanding the problem.
You’re trying to solve three equations, three unknowns:
- Are you talking to the right people?
- Do you have the right features?
- Do those features translate into benefits that are going to be useful to them?
Here are three strategies that founders often use to answer these three interrelated questions, the likely results that ensue, and how we help them make key adjustments to get early customers and early revenue.
Current Strategy: Demo the product to anyone who will sit still. And by demo I mean explain how the product works.
- Likely Result: On a statistical basis you may ultimately encounter a visionary customer who can intuit the benefits and determine that it’s worth the risk to work with you. One symptom we often see for this is that we ask a team how they have found their customers and they say that the customers have found them.
- Our Fix: This is also why we are huge fans of Peter Cohan’s “Great Demo” methodology (see Great Demo Workshop Sept-15 2010) because he addresses the need to talk to the right target about a problem they are interested in solving in a way that they understand by stressing a few key features.
Current Strategy: Talk to a number of target customers, compile a large wish list of features, return to BatCave and start work on a one year roadmap.
- Likely Result: The one year roadmap takes much longer than anticipated. But the founders don’t leave the BatCave until they are within two weeks to two months of running out of money.
- Our Fix: Trim the feature set to a minimum set that firms will pay for. Possibly offer consulting mixed with product licensing to enable engagement with an immature product to address cash flow issues. Get out of the BatCave for further conversations to discover and validate potential customers an ongoing basis.
Current Strategy: Talk to a number of target customers about a challenge they face (e.g. saving money, increasing productivity, reducing certain kinds of errors).
- Likely Result: When the prospect agrees that they have the need be unable to explain specific features that can actually achieve it, or be unable to explain how the particular person you are talking to would be accomplished in particular for the person you are talking to. This is the GEICO “Would you like to save money on your car insurance?” pitch without the ability to offer a quote specific to their car, driving record, and other relevant particulars.
- Our Fix: Focus very specifically on what your product capabilities mean for who you should talk to and how it will make a measurable difference in a problem or challenge they are willing to spend money to address. Adjust your target and connect the dots very quickly and specifically to the benefit. This is component of compelling demos is also covered in Peter’s workshop.
August 25th, 2010
Ed Weissman (edw519 on HN) had another great comment recently on Hacker News at http://news.ycombinator.com/item?id=1424446 that builds on “Ed Weissman on B2B Opportunities for Startups” (I have added some hyperlinks for context)
Enterprise software sucks.
We don’t talk about it much here at HN, but think about it. Every man-made object you encounter every day was manufactured somewhere. And moved, more than once. Now add in all the sales, marketing, customer service, operations, accounting, finance, human resources, etc., etc., etc. needed to support that manufacturing and distribution. Next, add financial markets, healthcare, energy, entertainment, etc., etc., etc. and you have tons of stuff. But you don’t see it and rarely think about it. Kinda like most of the iceberg being underwater.
And all of this needs software. And most of what they have sucks. I mean really sucks. Enterprise software is so bad that there are multi-billion dollar industries devoted to consulting on how to use it, how to share it, and how to store it in data warehouses and harvest it. It’s so bad that lots of people have to dump the data out of their enterprise systems and into Microsoft Excel just to get anything done.
When Willie Sutton was asked why he robbed banks, he said because that’s where the money is.
What banks were in the 1930’s, enterprise IT is in the 21st century.
I agree with Ed that there are enormous opportunities for startups in the B2B or Enterprise market. One of the reasons that Enterprise software is so poor is that the IT department often does not make usability a priority and has a lot of difficulty determining the productivity impact of a new application. They also strongly prefer their current vendors and for the most part are loathe to do business with startups. In 2007 I blogged about “Selling Around IT in Larger Firms” and suggested these rules of thumb:
Large firm IT departments are “gatekeepers”. Their job is to keep the enterprise network computing infrastructure safe and operational. New software from a new vendor is almost always viewed as a threat. Most of the time, they will say NO to any new software. Most of the time our clients have to sell around them. Here’s five tips for doing that:
- Provide a service (deliver the results of you running your software) instead of selling software.
- Package your offering as SaaS at a price that’s below the radar of IT.
- Leverage an existing partner: Who else is your prospect buying from?
- Find someone who is in a lot of pain whose needs have been ignored by IT.
- Find someone whose needs span more than one IT administrative boundary, so that no single IT group views satisfying the need as their obligation.
The other unfortunate aspect of a career in IT is that often turns software developers into anti-matter for customer development techniques and any marketing or sales approach that is designed to foster adoption. Most IT folks are handicapped by a tendency to dictate applications that can and cannot be used and have not mastered the skills of appreciative inquiry and conversational selling that are key to uncovering a prospect’s needs.
Alan Grinshtein was also impressed by Ed Weissman’s post and used it as a point of departure in “The Enterprise Software Opportunity” to lament that too many startups focus on advertising driven business models:
The Sirens of Social have seduced too many good minds to build and crash startups. There are too many brilliant problem solvers who aren’t developing brilliant solutions for business. Enterprise software is particularly awful. Imagine the progress that could be made and the money that’s being left on the table. They could be blowing competition out of the water. Sad.
I think three reasons for this are:
- understanding the value of your offering,
- negotiating for a fair price with prospects,
- continuing to enhance your offering so that it provides more value that customers are willing to pay for
are all hard problems.
As a result, many software entrepreneurs succumb to one of two temptations: either they treat themselves as the first customer (“scratch your own itch”) and build what they would like to use–making the critical assumption that they are an accurate proxy for other prospects without validating their hypotheses–or they “give the software way” to build up a large audience that they will figure out how to monetize later.
And Now a Word From Our Sponsor…
If you are hard at work on a B2B software product but are having trouble determining how to price it, or negotiating for the value that it offers, or locating a good niche to target for early adopters, please contact us. We would be happy to explore how we can help.
August 24th, 2010
I mentioned on August 12 in “Signup For ‘Will Work For Equity’ at Silicon Valley Code Camp” that I had submitted the following session for this year’s Silicon Valley Code Camp (Oct 9-10 at Foothill College):
Will Work For Equity – the World Startups
Are you considering joining a startup? Sean Murphy, CEO at SKMurphy, will host a panel outlining important tips and issues to consider if you are investing your time in a startup. This session will explore: difference between employees, contractors, alliances, partners and co-owners; defining the key roles in a startup; what partners need from you; how to pitch to a co-founder.
I can now announce the panel of three startup CEOs who will offer their perspectives on the issues and answer questions from the audience.
- Peter Hoffman CEO of Interactive Mobile Solutions. IMS helps event planners enhance their attendees’ conference experience through an innovative, mobile technology solution called ConferenceConnect. Peter has over 25 years of creating and directing conferences and leadership symposiums in education, non-profit and corporate environments. Most recently he was Senior Manager for Apple Higher Education Advocacy and Leadership. Peter has also held positions as Vice President of Events and Marketing for the Community College Foundation and Executive Director for the Ohlone College Foundation.
- Merc Martinelli CEO of Verdafero. Verdafero Inc. has developed a SaaS platform that can be used for sustainability planning, energy efficiency and carbon management services for small and medium enterprise businesses. Merc is an experienced tech executive who previously worked at Cisco Systems where he led the new product introduction department within the multi-billion dollar Enterprise Line of Business. Earlier in his career he held leadership positions at KLA Instruments and was a pilot in the USAF.
- Matt Cameron CEO of Corporate Catapult. Matt is a native of New Zealand (they even have colour TV there now) currently residing in San Francisco. He started his first business at 25 (a food delivery service) and is now on his fourth start-up: Corporate Catapult Inc, a career acceleration tool that is presently in private alpha. On occasion he will admit to having also worked for Hewlett-Packard, Wang, IBM and EDS in sales roles. Most recently, Matt was employee #6 for Salesforce.com Asia as Regional Sales Director.
This will be an interesting panel if enough folks vote to include it in the final program. Vote here.
August 23rd, 2010
Ed Weissman (edw519 on HN) had a great comment a while back on Hacker News at http://news.ycombinator.com/item?id=83561 that I got his permission to re-publish here:
My target market is small business. 3 Reasons They Prefer Pay Over Free:
- They don’t want their employees looking at ads.
- They need leverage when they have complaints. (Why would they listen to me if I’m not paying anything?)
- They want you to stick around.
Provide them with something they want and charging them will not be an issue.
His answer was in response to the question “Who is building a startup/product and making money by charging customers?” and he offers a great list of reasons why business buyers prefer to pay.
I think an alternative to #1 is that ad driven sites tend to promote more page views and page refreshes, which tend to lower productivity compared to a well designed subscription driven site (so they value their employees time, and the work that they deliver, more than they want to get a “free app”). Also, some amount of screen real estate has to be lost to ads that could instead be applied to improving the information content on the page directly relevant to the task the employee is performing.
#2 is very under-appreciated by the advertising driven sites. I think that startups stay in “free beta” too long in particular. I only want to use an application in support of my business, especially if it impacts prospects or customers, if I know the developers will respond, and the default terms of service typically say that they can disappear without warning (along with my data). Even a 15-30 day grace period with a warning for shutdown would be a huge improvement.
#3 points out a misunderstanding between how technologists or solo consultants may view a new tool and the total cost of adoption that a small business faces. A small business has to bear a lot of cost in workflow and process changeover. They do want you to stick around because their true cost of adoption is much higher than what they are paying you.
Andrew Warner has a great interview with Ed Weissman on “Why Do People Join On-Line Communities” where Ed describes in detail the benefits he gets from taking part in the Hacker News community.
See also Ed Weissman on B2B Opportunities for Startups Part 2
August 22nd, 2010
Jenna Wortham’s “Fraternity of the Wired Works in the Wee Hours” in the New York Times on July 25 highlighted an interesting new trend in co-working: the 10pm to 4am shift. Profiling the “New York Nightowls” (tagline “New York Nightowls is a late night co-working club for professionals”) she opens with: (hyperlinks added)
After college, most people do their best to avoid having to pull any more all-nighters. But for some, even after graduation, the wee hours of the morning are the most productive.
That is what led Amber Lambke and Allan Grinshtein to start a group called the New York Nightowls, a sort of study hall for entrepreneurs, freelancers and software developers who gather at 10 every Tuesday night and stay as late as 4 a.m.
“The goal is to come, get inspired, meet new people and get work done,” said Ms. Lambke, a creative consultant. “It’s six hours of uninterrupted, productive time where you’re surrounded by other creative people doing awesome things.”
It’s an interesting concept and complementary to Bootstrapper Breakfasts that start at 7:30am (although it’s hard to imagine much in the way of a common attendees). One of Cecily Drucker’s Startup Secrets was to “embrace the fertile void of sleepless nights. Lots of creativity can occur then.” I blogged about it in “Productive Larks and Creative Owls” inspired by Tim Berry’s observation: “As a morning person, I’m generally more productive. As a night person, I’m generally more creative.”
Also folks that are part of global teams may be up at this hour if it’s part of the workday for the bulk of their team. The New York Nightowls have met weekly for at least the last 17 weeks according to their Meetup site http://www.meetup.com/NY-Nightowls/ and groups have sprung up in a number of other cities:
I think there are interesting implications for co-working facilities, running a second and third shift in some locations might appeal to not only to natural nightowls but also members of global teams who are working time shifted.