Archive for September, 2010
September 30th, 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.
+ + +
In the realm of ideas everything depends on enthusiasm.. in the real world all rests on perseverance.
Johann Wolfgang von Goethe
+ + +
Time zones matter more than miles: if you are not in the same room then circadian rhythm offset matters more than geography.
Sean Murphy from “Beat the Clock”
+ + +
“If you chase two rabbits, both will escape.”
Chinese Proverb
+ + +
“Success is the culmination of failures, mistakes, false starts, confusion, and the determination to keep going anyway.”
Nick Gleason
+ + +
“Difficult to see. Always in motion is the future.”
Yoda to Luke in Star Wars V: The Empire Strikes Back
+ + +
“Organization and good planning are just crutches for those who can’t handle stress and caffeine.”
Evan Steeg
+ + +
“Goodwill is the one and only asset that competition cannot undersell or destroy.”
Marshall Field
+ + +
“When kind men grow angry, things are about to change.”
Jim Butcher
+ + +
“Being poor is knowing exactly how much everything costs.”
John Scalzi in “Being Poor“
Bootstrapping gives you a pretty good idea as well. “Being Poor” is a poignant blog post by Scalzi from September of 2005 and well worth reading. For another perspective see TJIC’s “Leftist Propaganda.”
+ + +
“The right word may be effective, but no word was ever as effective as a rightly timed pause.”
Mark Twain
+ + +
“We shape ourselves like clay from someone else’s dream.”
Danny Elfman “Not My Slave” (lyrics)
hat tip to Brad Pierce’s “The Paradox of Values.”
+ + +
“The truth is, start-up-land is littered with mavericks, iconoclasts, dropouts and misfits.”
Sramana Mitra in “The Real VCs of Silicon Valley”
As I read that quote again I think to myself, yes, that’s me, these are my kind of people. I mentioned this in “Highlighting Matt Maroon’s Why Not To Do A Startup”
+ + +
“The world is divided into people who do things and people who get the credit. Try, if you can, to belong to the first class. There’s far less competition.”
Dwight Morrow
+ + +
“It takes a lot of courage to show your dreams to someone else.”
Erma Bombeck
September 28th, 2010
EVENT ADVISORY for San Jose, CA – Sean Murphy, CEO at SKMurphy, will host the “Will Work For Equity – the World of Startups” panel discussion at the 2010 Silicon Valley Code Camp at Foothill College, Los Altos Hills, CA. The panel will outline important tips and issues to consider if you are investing your time in a startup.
Silicon Valley Code Camp is a wildly successful community unconference event. The Code Camp is about coding and software development where developers learn from fellow developers. The 2010 Silicon Valley Code Camp will have 193 sessions with presentation topics suggested and voted on by attendees.
A panel of three startup CEO’s will offer their perspectives on finding co-founders 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.
- 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.
- Matt Cameron CEO of Corporate Catapult. Corporate Catapult Inc, a career acceleration tool that is presently in private alpha.
Who: Sean Murphy, CEO, SKMurphy Inc
When: Sunday, October 10, 2010 at 2:45 pm
Where: Silicon Valley Code Camp at Foothill College, Room 8402
12345 El Monte Road
Los Altos Hills, CA 94022
Register: http://www.siliconvalley-codecamp.com/Register.aspx
About SKMurphy Inc.
SKMurphy, Inc. helps early stage startups and consultants market and sell the intangible, whether it is software or services. The company serves as advisors to dozens of startups, helping them explore new options, and to identify early customers and early revenue. Its clients offer software products or services in a wide variety of industries, including engineering, legal, health care, EDA, workgroup collaboration tools, financial, cellular, and text analytics
September 25th, 2010
“The truth is, start-up-land is littered with mavericks, iconoclasts, dropouts, and misfits.”
Sramana Mitra in “The Real VCs of Silicon Valley”
I have come to the conclusion that most entrepreneurship is involuntary. Either someone is an entrepreneur from the time they are young, which was my personal experience, or they are thrust into situations where their old career path(s) are foreclosed to them and they have to become entrepreneurial.
Startups survive because they can live on the scraps of a market (a niche) that larger competitors ignore or would be unable to pursue profitably. This is doing less with less. The trick is to minimize the amount of wasted effort. The challenge is to launch new initiatives and projects that build on existing relationships, knowledge, and successes.
“Life is pain, Highness. Anyone who says differently is selling something.”
Wesley to the Princess in “Princess Bride“
Related blog posts
September 23rd, 2010
I meet teams trying to cold call for their first customer and I just haven’t seen it work for startups selling to businesses. Here is a relevant excerpt from Gabriel Weinberg’s interview with me for his traction book.
yegg: So it is pretty rare that the first customer is from a cold lead?
skmurphy: I haven’t seen it. The challenge with a first customer for new software is that big unknown in the prospect’s mind is if the team going to perform. One of the best ways to attack that is through testimonials, but initially it’s got to be past performance, where somebody can vouch for the person–you know I’ve worked with Gabriel at this company or I’ve worked with so and so here.
yegg: You sit down with the warm lead for lunch. Is there anything productized at this point or are you in an open-ended discussion?
skmurphy: The first and most important thing is to figure out: do they have a problem that we can help them with? Often that will initially look more like a mix of consulting and product operation. So, the technology has to at least work when it’s in the founding team’s hands. It’s nice if it can work if you give it to the customer, but the founders have to at least be able to make it work to solve a real problem for the customer that the customer will pay for.
yegg: You have no problem with a consulting aspect for the first few customers?
skmurphy: No, and I think other people have described that in different terms. There is this term Flintstoning, or Wizard of Oz–it’s not uncommon that the team has to either work around problems in the technology or on-the-fly improvise adaptations that look more like a service engagement. If you try and make your product perfect before you engage, you’ll run out of time.
yegg: Because you didn’t understand the problem?
skmurphy: Right. Another thing that can happen is entrepreneurs show us a datasheet or a feature list and they’ve got forty features listed. Maybe twenty of them are real and twenty of them are things that they are planning, and they want to go to a customer and say, what do you think of these forty features?
The reality is that if the first two, three, four, maybe five are not compelling, he is not listening to your next thirty. So, another thing we’ll help startups with is to focus on a core need or a core problem leveraging a core capability.
We help them focus on the delta between the prospect’s status quo and what their offering does to move them to a better level of profitability, level of revenue, lower error rate, faster cycle time, …. You need to proceed from some theory about a delta, some outcome you are going to create in the prospect’s business.
For more on delivering your solution as a service before trying to fully automate it in your customer’s hands see the Aardvark talk from the 2010 Startup Lessons Learned Conference on “Wizard of Oz” development. It’s 30 minutes long and worth viewing at http://www.justin.tv/startuplessonslearned/b/262666394 The WSJ also wrote up Aardvark’s approach at “How A Startup Grew By Paying Attention To What’s Behind the Curtain.”
Related posts:
September 22nd, 2010
Every bootstrapper has a limited budget for attorney’s fees. Attorneys can help you foresee problems and craft contract language, which looks remarkably similar to English but is in fact code that is executed by the legal system. Use them to protect valuable assets–intellectual property, source code, revenue streams–not create them.
A small digression
If you have no experience whatsoever with software licensing issues this can be very dangerous.
True story: we had one client–briefly in 2007–who had downloaded three contracts from different websites and created a Frankenstein out of the piece parts. The problem was that one of the contracts explicitly specified that their development efforts on the software product were “work for hire” which meant that they had transferred ownership of their technology to their first client.
The client was alas somewhat unscrupulous and happily signed the contract very quickly and with a minimum of negotiation. They felt great…for a while.
They engaged us to help them find more customers and as a part of our due diligence (and in assisting ongoing negotiations with their original client) we discovered that they had a serious problem and that their first client intended to wring maximum advantage from the contract. We helped them find a startup friendly attorney but the business negotiations with the original client ultimately foreclosed a market segment for that client’s exclusive use of the technology in exchange for giving them ownership back of their technology.
This was an “own goal” that some first time entrepreneurs are at risk for: contracts may look like they are in English but they are not. You should at least take your English language “meeting of the minds” deal points and pay an attorney for an hour or two to review the basics. If you have a first customer, a clear scope of work or datasheet for the product, agreement on value/price, you should be able to find an attorney that would be willing to defer an hour or two of time to help prevent basic mistakes.
We routinely recommend that bootstrappers talk to Robert Dang or Joey Tran at FortisGC in Redwood Shores or George Grellas in Cupertino. All three have experience helping bootstrapping startups, are highly knowledgeable, and a pleasure to work with.
September 21st, 2010
If you are considering joining a startup or are in the process of building out your initial team I am moderating a panel at Silicon Valley Code Camp with three startup CEO’s that you should find helpful. It’s scheduled for Sunday October 10 at 2:45pm and you can sign up here.
We will explore:
- Practical difference between employees, contractors, alliances, partners and co-owners.
- How to define the key roles in a startup: who is wearing which hats.
- What partners need from you.
- How to pitch to a co-founder.
- What it means to join a global team.
Panel:
- Matt Cameron CEO of Corporate Catapult, a career acceleration tool in private alpha.
- Peter Hoffman CEO of Interactive Mobile Solutions. IMS helps event planners enhance their attendees’ conference experience through an innovative, mobile technology solution called ConferenceConnect.
- Merc Martinelli CEO of Verdafero, which is a SaaS platform that can be used for sustainability planning, energy efficiency and carbon management services for small and medium enterprise businesses.
Silicon Valley Code Camp is free an open to the public.
Please register so that we can get an accurate gauge of interest and get a room that’s an appropriate size.
Related blog posts:
September 20th, 2010
Pete Tormey moderates the Dublin/Pleasanton Bootstrapper Breakfasts® (along with Richard Moerschell) and fills in from time to time in San Francisco as well. I asked him what he felt some key benefits attendees gained at a breakfast and he sent me a great three minute podcast that I have embedded below. He identifies three benefits he see attendees gaining from the conversation at a Bootstrappers Breakfast:
- Being around other bootstrapping entrepreneurs renews your enthusiasm
- Serious suggestions from other attendees can spark your own creativity in addressing business challenges
- Comparing notes can give you peace of mind knowing that many folks are wrestling with the same issues.
We also have three Bootstrapper Breakfasts® this week in Silicon Valley
- 7:30am to 9:00am Tue-Sep-21 at Coco’s at Lawrence and Oakmead in Sunnyvale
- 7:30am to 9:00am Thu-Sep-23 at Athens Burger Restaurant in Dublin
- 9:00am to 9:00am Fri-Sep-24 at Red Rock Coffee in Mountain View
These breakfasts cost $5 if you register in advance (plus the price of your own food and/or drink) and give you a chance to compare notes with other technology entrepreneurs.
September 19th, 2010
“Difficult to see. Always in motion is the future.”
Yoda to Luke in “The Empire Strikes Back”
Michael Malone’s “The Future Arrived Yesterday: The Rise of the Protean Corporation and What it Means for You.” was published in May of 2009. It offers a vision of the future of the corporation that builds on his earlier “Virtual Corporation,” written with Bill Davidow, and “Bill and Dave.“ The last book offers a number of unique insights into the success of Hewlett Packard and supplies complementary information to David Packard’s “The HP Way,” another book that is well worth reading.
There is a good 15-25 page article in “The Future Arrived Yesterday” but I don’t know that I can recommend reading it before you have read “Bill and Dave” and “The HP Way.” There are a few key ideas that I think are coming true. As Marcelo Rinesi has observed, “The future is an abstraction, all change is happening now,” and we can see the shape of the future today.
Proteus was a shape changing sea god in Greek Mythology. Wikipedia advises:
From this feature of Proteus comes the adjective protean, with the general meaning of “versatile”, “mutable”, “capable of assuming many forms”. “Protean” has positive connotations of flexibility, versatility and adaptability.
Malone starts out with 6 premises:
- The pace of technological change will continue; Moore’s Law will continue to drive semiconductor technology for at least another decade.
- The number of consumers in the world economy will triple to three billion by 2015, thanks to the Internet and cheap mobile phones.
- Industrialized nations, but especially the United States, are becoming more entrepreneurial.
- A new generation of young people, with different attitudes toward institutions and authority, is entering the workforce.
- Companies, by their very nature, want to grow and endure.
- Human nature has not changed.
He identifies two forces at work that will transform these premises over time:
- Centrifugal forces that are pulling corporations apart: technology, culture, and demographics.
- Centripetal forces that are drawing corporations together: human needs for socialization, commitment to a larger purpose, continuity and constancy, and a sense of legacy.
This leads to a “Protean structure” of:
- A small core of employees with real guarantees of a lifetime job. Perhaps a few dozen to a few hundred employees.
- An inner ring of “regular employees who look like today’s regular employees. They don’t have a lifetime employment guarantee (but then very few do). Perhaps 10-20% of the total employee count.
- An outer ring (or Cloud) of temporary workers of all sorts. They may have contracts or a relationship that may last from a few hours to a decade or more, while monthly turnover may reach 50%. This is 80-90% of the employees.
This looks a lot like an early stage startup:, a few founders, a handful of full time employees, and much of the work performed by contractors or consultants or a variety of highly specialized business process outsourcers.
Malone observed:
Successful companies of the future must find a way to continuously and rapidly change almost every one of their attributes–products, services, finance, physical plant, markets, customers, and both tactical and strategic goals–yet at the same time retain a core of values, customs, legends, and philosophy that will be little affected by the continuous and explosive changes taking place just beyond its edges.
Key take-aways for startups.
- Read the “The HP Way“
- Read “Bill and Dave.“
- Plan for global competition and a global workforce from the get go.
- Give some thought to the key values that will shape your culture, and ultimately your competitive posture and your ability to attract new employees.
- Understand where you fit in the clouds of other enterprises and how they can be the source of not only revenue but partnerships based on shared development of offerings that are core to your firm and important but off strategy for the larger firm.
September 18th, 2010
Just a quick reminder that I will be presenting on “Feed Readers De-Mystified: Tips for Keeping Informed” this Thursday, September 23, 12:00-12:45 PM PDT. If you are not using feeds and alerts to track your competition, stay on top of developments at major customers, and keep abreast of significant developments in your industry, then you are missing out on low cost–and often free–methods for keeping informed.
Register here: People On the Go’s Free Lunchtime Webinar “Tips For Keeping Informed“
September 12th, 2010
I mentioned in “3 Equations 3 Unknowns: Customers, Features, and Message” that we spend a lot of time on the early customer stage. It requires 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?
The customer discovery interview process can be tough to master. You are trying to determine if the customer has a problem that they will pay you to solve with your technology: do you have the right features and do those features translate into useful benefits.
But we actually see team often go wrong with the first question: are you talking to the right people. And this error is much harder to recover from. You can do a poor job interviewing the right prospect and get some feedback that allows you to iterate. But a great job interviewing the wrong prospect will tell you very little. Improving targeting, or at least validating you can identify a prospect, has a big impact.
When someone is describing their offering at the a Bootstrappers Breakfast we will often take them through the “Three Question Test” as a group exercise. We will say,
“OK, we have assembled a brain trust for you this morning, you have 12 people around the table who would like to help you. Please give us three questions that have yes, no, or number answers and tell us the combination that would indicate that you could offer the person they are talking to clear value.”
It’s harder than it looks. Most folks start with something like “Do you want to save money on your car insurance.” This question is worthless. Any question that you can append “, you moron” to the end of is not a good question because it does not disqualify anyone (I suppose if you didn’t own a car you would not want to save money on your car insurance). The next iteration tend to start out much too broadly, ignoring geography, industry, customer firm size (whether measure in headcount, revenue, or some other transaction count), title(s) of buyer, and pain points that are actually symptoms that a potential customer is experiencing.
On this last point you don’t go to your doctor and say “I think I have diabetes” you say “my vision is sometimes blurry and I am getting really thirsty and I feel tired all the time.” Business prospects don’t want ” better website” they want “more leads from their website” or “fewer calls to the hotline because the website allows customers to solve their own issues.”
Previous Posts