Archive for February, 2011

Quotes For Entrepreneurs–February 2011

Written by Sean Murphy. Posted in Quotes, skmurphy

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“So writing requirements is a composition of unambiguous narratives emerging from the problem domain.”
Sergio Bogazzi

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“The bootstrapper’s key early milestone is the first dollar of revenue from a customer willing to act as a reference.”
Sean Murphy in “Handout for Mapping The Path to Your First Dollar of Revenue

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“You don’t see something until you have the right metaphor to let you perceive it. ”
Robert Stetson Shaw

Quoted in James Gleick’s Chaos:

They had a game they would play, sitting at a coffee house. They would ask: How far away is the nearest strange attractor? Was it that rattling automobile fender? A fluttering leaf? “You don’t see something until you have the right metaphor to perceive it,” Shaw said, echoing Thomas S. Kuhn.

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“Here’s the thing: there isn’t a shortage of ideas. There’s a shortage of execution.”
Seth Godin “Understanding Business Development

More context (emphasis added):

I regularly hear from readers who are frustrated because a big company wasn’t willing to hear a great idea they mailed in.  Here’s the thing: there isn’t a shortage of ideas. There’s a shortage of execution. That means that successful business development teams look for proven partners and organizations with momentum. A key part of that is the decision to say no early and quickly and respectfully to people who don’t meet that threshold.

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“The entrepreneur builds an enterprise; the technician builds a job.”
Michael Gerber

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Jamie Zawinski’s resignation from Netscape has three great quotes

  • We put the Internet in the hands of normal people. We kick-started a new communications medium. We changed the world.
  • There exist counterexamples to this, but in general, great things are accomplished by small groups of people who are driven, who have unity of purpose.
  • two kinds of people: those who want to go work for a company to make it successful, and those who want to go work for a successful company.

Opening Paragraphs

April 1st, 1999 will be my last day as an employee of the Netscape Communications division of America Online, and my last day working for

Netscape has been a great disappointment to me for quite some time. When we started this company, we were out to change the world. And we did that. Without us, the change probably would have happened anyway, maybe six months or a year later, and who-knows-what would have played out differently. But we were the ones who actually did it. When you see URLs on grocery bags, on billboards, on the sides of trucks, at the end of movie credits just after the studio logos — that was us, we did that. We put the Internet in the hands of normal people. We kick-started a new communications medium. We changed the world.

But we did that in 1994 and 1995. What we did from 1996 through 1999 was coast along, riding the wave caused by what we did before.

Why? Because the company stopped innovating. The company got big, and big companies just aren’t creative. There exist counterexamples to this, but in general, great things are accomplished by small groups of people who are driven, who have unity of purpose. The more people involved, the slower and stupider their union is.

And there’s another factor involved, which is that you can divide our industry into two kinds of people: those who want to go work for a company to make it successful, and those who want to go work for a successful company. Netscape’s early success and rapid growth caused us to stop getting the former and start getting the latter.

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Entrepreneurship is neither a science nor an art. It is a practice.”
Peter Drucker

Update June 27, 2011: This is a great quote that I use to open “A Scientific Approach to Startups Won’t Create ‘A Science of Startups’

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“Remember, the essence of lean is the scientific method. Form a hypothesis and test it. Opinions have little value outside that framework.”
John Prendergast

Context is an e-mail from John to Lean Startup Circle mailing list:

As an aside, most of the requests for landing page feedback here have been a little misguided.

The only general feedback you should care about on a landing page in a smoke test is, drumroll, from potential customers in the form of behavior. Do they convert based on your value proposition? Unless this group is really your target (which has been true in a few cases) then general feedback makes little sense. Even then, you want this groups behavior not opinion.

This group can be much more useful once you’ve got some baseline data. Bring data to the group and many people with fine minds who are generous with their time will jump in and help diagnose and interpret.

Remember, the essence of lean is the scientific method. Form a hypothesis and test it. Opinions have little value outside that framework.

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“Tell everyone what you want to do and someone will want to help you do it.”
W. Clement Stone

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“An important key to success is self-confidence.
An important key to self-confidence is preparation.”
Arthur Ashe

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“Never give up what you have seen for what you have heard.”
Swahili proverb quoted in “Wisdom of the Soul for Black Folk

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“I am more alive than most people. I am an unpopular electric eel set in a pond of goldfish.”
Dame Edith Sitwell 1887-1964

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“As the births of living creatures are at first ill-shapen, so are all innovations, which are the births of time.”
Francis Bacon

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“A really dangerous man generally tries to avoid trouble.”
Edward Howe “Country Town Sayings”

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“If there is something you must do and you cannot do it, you cannot do anything else.”
Mignon McLaughlin

I used this as the opening quote for “Getting Unstuck.”

Getting Unstuck

Written by Sean Murphy. Posted in Consulting Business

“If there is something you must do and you cannot do it, you cannot do anything else.”
Mignon McLaughlin

I think this highlights a variation on perfectionism but it’s something I certainly wrestle with from time to time. “Good enough” is one way to break the logjam, but if something is late I can sometimes feel that it has to be better (or perfect) to justify the fact that it’s late.

I worked with a peer manager at Cisco who would damage projects because he wanted to work on a task but he could not do quick and dirty version or a first draft. He would get later and work on it without showing anyone and ultimately teams learned to route around him or be very careful of any solo assignments he took on.

Sometimes I don’t want to take the next step because I can’t face the downside: I would rather live with the possibility of an outcome than take the necessary steps to determine if it’s actually going to happen.  When I was younger I would sometimes hold off on selling a stock that had dropped because “it’s not a loss until I sell it.”

When I had a business in the mid-90’s I was slow to prune my sales funnel of prospects that had stalled, I see this same behavior in clients now. Once you do you realize that you have to generate more leads and that often forces you to explore new options or approaches you have hesitated on because the pipeline looks full.

Perfectionism is a very dangerous trait in a startup founder. Two ways that we address it in both our own operations and in our client engagements is to use wikis and shared calendars. Every draft of a plan or document goes into the wiki from the beginning: everyone’s drafts and progress (or lack of progress) are visible to everyone else on the team. But because we are on the same team we can help each other out.  Shared calendars and gives team members permission to help with phone calls and meetings you are avoiding scheduling.

Facing it, always facing it, that’s the way to get through. Face it.
Joseph Conrad

Webinar Feb-24: “Early Revenue for Enterprise Web App Providers”

Written by Sean Murphy. Posted in Events, skmurphy

I have teamed up with DreamSimplicity to offer a free webinar on “Early Revenue for Enterprise Web App Providers” on Thursday Feb 24 at 9:00 AM PST

Registration is at and a recording will be made available if you are unable to take part. There is no charge for the live webinar or access to the recording.

This interactive webinar is for SaaS firms faced with an “enterprise sales” challenge by virtue of their minimum price point or number of people who have to change to create value.

A lot of effort has gone into customer development methodologies for testing landing pages and pricing pages. But many of these are predicated on SaaS apps that only require a change at the task level for an individual to create value (e.g. personal productivity tools). What happens when a business process has to change (e.g. inventory management, corporate treasury actions, a project workspace) that requires more than one person to change what they are doing to create any value? What does customer development, in particular customer discovery and validation look like.

Update Mar-1-2013: Video is now available at “Video for Early Revenue for Enterprise Web Apps

Managing Email Conversations With Customers

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

A guest post by Edith Harbaugh that offers a number of practical tips and suggestions for managing email conversations with customers.

Managing Email Conversations With Customers

Focus on Value Not Volume

The most important rule with customer email is to do your best to make sure each email message is appreciated and valued.  Rather than focus on “I need to send out large volumes of emails daily”, think “what would my users appreciate hearing about, and how often?”

  • Done properly: your customers will see an email as a great convenience: “Wow, I didn’t know you would let me know about this!”
  • Done poorly: you will send emails that will get tagged as “junk”.  Once enough people tag you as “junk”, all emails from your company are suspect and you can get blacklisted.  Emails like password updates, customer service, and other important emails won’t get through to new or current users.

The latter is an unpleasant place to be.  Start off small, see what the response is, iterate.  Quality is better  than quantity.  Once you’ve sent out too many emails, you’ve gone over the abyss into blacklist, and it’s hard to get back.

Don’t Send From

Always monitor the the “from” address of your auto-emails.  A no-reply address is a huge mistake that keeps you from getting closer to your customers.  I’ve been surprised by how many people hit “reply” to auto-emails, and I like reading their thoughts.

Of course, make it really, really easy for people to unsubscribe.

Optimal Frequency of Emails: It Depends

This is a big “it depends”, with no one right answer.  Keep in mind your end goal: getting people to come to your website.  However many emails gets you the response you want is the right answer for you.  GroupOn and DailyBurn, for example, do very well with daily emails.

Maximize the signal to noise for your users so they keep subscribed to your emails, and keep clicking on them to come back to your website.  Just because you can send a notification for everything doesn’t mean you should.

For example: if you have used a bug tracking system that sends an email for every new bug that’s logged  or every status change you know how quickly these emails become noise. The risk is that important bugs can get ignored easily.

The same pattern can happen with overly “chatty” email notification system: people stop paying attention.  Check your open rates to see if your email is going unopened and monitor the trend.

Consider three or four tiers of frequency and importance: for example daily, weekly, monthly, and important (but only a few times a year).  Let people select how often they would like to hear from you but distinguish between informational emails, recap or summary updates, and important messages that may require action.

Related Blog Posts

Five Reasons Companies Hire Consultants

Written by Theresa Shafer. Posted in Consulting Business

From an article by Theresa Shafer in the  PATCA Feb 2011 Newsletter

Understanding why companies hire consultants can provide clues on what to look for and how to find more business.

1.   Crisis Resolution: Often consultants are hired to solve a crisis when the current staff cannot resolve the situation adequately.  Sometimes the crisis involves time to market, sometimes product failure, or an unexpected employee situation. For example, outside consultants might be bought in to solve a power, timing, or IE6 compatibility issue. These situations are great opportunities because you have a very motivated buyer! What type of crises do you help solve? How can you find more of these situations?

2.   Expert Skills: Consultants are hired for skills that are not available in-house. If these skills are a short-term need, it’s often much more cost-effective for a company to hire an outside expert rather than adding someone on the full-time payroll. To which teams do you bring complementary skills?

3.   Additional Resources: Consultants are added to the staff to deliver a project that is important and urgent. They may look to outside consultants to fully staff the latest project, or to complete a project that is outside of their business model. Besides PATCA, where do companies look for these qualified resources? Are you listed there?

4.  Training: Sometimes, especially in areas involving new technologies, a company’s staff will need to be trained. They may need to learn how to use a new device, a software package, or a new management training system. On which tools could you provide training? What are some new skills that you could teach?

5.   Objective Review: Companies can’t always have highly specialized experts on staff full time to evaluate every product or service they want to use. They may use outside consultants to fully evaluate and independently test a new software product, tool, or compliance program. What set of tools could you evaluate and advise on?

Consultants are a useful and cost effective resource for companies. They meet short term needs for specific expertise. And, it may be more cost-effective for a company compared to adding someone on the full-time payroll. Broadcasting how your talents and expertise can be of value in solving prospective clients’ problems is a good way to find new partnering and client relationships.

Prepare and Rehearse Your Answer to “How Do We Get Started?”

Written by Sean Murphy. Posted in 3 Early Customer Stage, Customer Development

From “Five Things to Remember When Selling a New Product

What is the next step? A serious prospect will be able to outline at a high level what’s involved in the evaluation and purchase of your product. At the same time you need to be prepared to outline the process you would like to follow. If the prospect says “This sounds great, how do we get started?” your answers are not:

  • “Cut us a check”
  • “No one has ever said yes before, we weren’t really expecting to have to answer that today.”

Have your own plan of action prepared to be able to demonstrate real results even if, and especially if, this is your first real interested prospect.

Too often we see teams that don’t have an answer ready for “How do we get started?”

The other thing to practice is a graceful departure if there is little interest or no fit. Don’t be this guy:

We were driving back from a sales call and the CTO said “I don’t understand. We won the argument. Why didn’t we win the sale?” He was very disappointed at the prospect’s stupidity and stubbornness.

Our “Entrepreneur’s Guide To Sales” Added To Chicago MBA Coursepack

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

Mark Duncan and I collaborated on a four page  article “An Entrepreneur’s Guide to Sales” that was designed as an adjunct to a custom sales training workshop. It’s intended for entrepreneurial engineers who need to develop and debug a B2B sales process.

Most articles and books on sales are intended for people who sell. In contrast, this article is for the technical founders of a software startup who need to better understand the sales process, with practical tips on how they can be more effective as part of the selling team.

Specifically, we’ll review frequent reasons for the sales process being broken, the need for an iterative approach in refining the sales learning curve, key steps in the sales process, preparing for a sales call, sales methodologies, and key sales positions.

We were contacted recently the folks at XanEdu publishing to license it for use in a package of supplementary materials–a coursepack—for a new course “Building Internet Start-Ups: Risk, Reward, and Failure” taught by Groupon co-founders Eric Lefkofsky and Brad Keywell at the University of Chicago’s Booth School of Business.

Adrian Perez on Great Demo Workshop

Written by Sean Murphy. Posted in Demos, skmurphy, Video, Workshop

Here is a brief testimonial from Adrian Perez (@adrian_perez) after he attended our Great Demo workshop in September of 2010.

Create and Deliver Surprisingly Compelling Software Demonstrations
“Do The Last Thing First” — the recipe for a Great Demo!

When: Tuesday, April 12, 2010 8 am to 5 pm
Where: Moorpark Hotel, 4241 Moorpark Ave, San Jose CA 95129

Cost: $590
Before March 28: $566

This is an interactive workshop with Peter Cohan geared especially for you who demonstrate B-to-B software to your customer and channels. Bring a copy of your demo and be prepared to present it–we’ll help you turn it into a surprisingly compelling demo!

Register Great Demo

Fred Wilson on Role of CEO: Manage Vision, Talent, Cash

Written by Sean Murphy. Posted in skmurphy

Fred Wilson recounts an experienced venture capitalist’s explanation to him  of  “What a CEO Does

A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.

I think this works just as well for bootstrapping teams relying on organic growth as a venture backed firm:

  • Strategy/Focus
  • Team/Talent
  • Cash/Profit

Of these the strategy defines the goals and talent and cash are constraints that need to be managed.  Talent and financial capital have to be assessed in the context of the firm’s objectives.

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