Archive for April, 2011

Quotes for Entrepreneurs–April 2011

Written by Sean Murphy. Posted in Quotes, skmurphy

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

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“No, improvising is wonderful. But, the thing is that you cannot improvise unless you know exactly what you’re doing.”
Christopher Walken

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“What sets small businesses apart from large companies is their ability to make personal connections with customers.”
Ben Nesvig in “Marketing Mistakes Small Businesses Make

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“I never trust anyone who’s more excited about success than about doing the thing they want to be successful at.”
Randall Munroe  “Time Management” (h/t Adam Bard)

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“Remember, when it comes to commercial TV, the program is not the product.
YOU are the product, and the advertiser is the customer.”
– Mark W. Schumann [at least 2003 if not earlier]

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“If you are not paying for it, you’re not the customer; you’re the product being sold.”
Andrew Lewis commenting on “User Driven Discontent” August 26, 2010

Update Wed-Mar-21: Kevin Marks traces the insight further back in “When You’re the Merchandise, Not the Customer” he cites several sources ending with:

The earliest, most thorough exegesis of this idea I have found is Claire Wolfe’s 1999 article Little brother is watching you The Menace of Corporate America which opens with:

Perhaps because you’re not the customer any more. You’re simply a “resource” to be managed for profit. The customer is someone else now — and usually someone without your best interests at heart.

And has a continuing refrain of “Who is the Customer? Not you”, ending with

Who is the customer? Not you, whose life is reduced to someone else’s salable, searchable, investigatable data. The customer is everyone who wishes to own a piece of your life.

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“I quote others only the better to express myself.”
Michel de Montaigne

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“In skating over thin ice, our safety is in our speed.”
Ralph Waldo Emerson, “Prudence

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“The time to be most careful is when you have a hand full of trumps. ”
Josh Billings

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“The best minds of my generation are thinking about how to make people click ads. That sucks.”
Jeff Hammerbacher in “This Tech Bubble Is Different

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“The impossible is often the untried.”
Jim Goodwin

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“It is not the answer that enlightens, but the question.”
Eugene Ionesco

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“As a rule, I always look for what others ignore.”
Marshall McLuhan

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“I would rather be the man who bought the Brooklyn Bridge than the man who sold it.”
Will Rogers

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“Most people like hard work. Particularly when they are paying for it.”
Franklin P. Jones

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“The promise that you can get paid really well to do precisely what your boss instructs you to do is now a dream, no longer a reality.”
Seth Godin in “The Realization is Now

More context (bolding added):

What’s actually happening is this: we’re realizing that the industrial revolution is fading. The 80 year long run that brought ever-increasing productivity (and along with it, well-paying jobs for an ever-expanding middle class) is ending.

[...]
The promise that you can get paid really well to do precisely what your boss instructs you to do is now a dream, no longer a reality.

It takes a long time for a generation to come around to significant revolutionary change. The newspaper business, the steel business, law firms, the car business, the record business, even computers… one by one, our industries are being turned upside down, and so quickly that it requires us to change faster than we’d like.

It’s unpleasant, it’s not fair, but it’s all we’ve got. The sooner we realize that the world has changed, the sooner we can accept it and make something of what we’ve got.

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Myth #1: Product market fit is always a discrete, big bang event.
Myth #2: It’s patently obvious when you have product market fit.
Myth #3: Once you achieve product market fit, you can’t lose it.
Myth #4: Once you have product-market fit, you don’t have to sweat the competition.

Ben Horowitz in “The Revenge of the Fat Guy

He elaborates in the same blog post:

Product market fit isn’t a one-time, discrete point in time that announces itself with trumpet fanfares. Competitors arrive, markets segment and evolve, and stuff happens—all of which often make it hard to know you’re headed in the right direction before jamming down on the accelerator.

I originally quoted this in a postscript to “Product Market Fit is a Fraction Not a Bit” suggested by Patrick Vlaskovits.

Managing Oneself

Written by Theresa Shafer. Posted in Books

Book Club icon On May 25, 2011, Howard Dernehl, Moe Arnaiz,  Charles Baugh and Sean Murphy recap Drucker’s article “Managing Oneself” followed by examples of how they have incorporated how they learn and their strengths into their business.

View the recorded discussion


“Managing Oneself”

by Peter Drucker

This short seminal article by Peter Drucker tells us that we must all learn to develop ourselves.

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  • What do you think of the book?
  • Do you have a question about the current book?
  • How did impact your business?

Additional Book Reviews


The Back of the Napkin: Solving Problems and Selling Ideas with Pictures

Written by Theresa Shafer. Posted in Books

Call-in Book Review recorded on May 11, 2011
Charles Baugh, Terry Frazier and Sean Murphy recap Dan Roams’ “Back of the Napkin” followed by examples of how they have incorporated informal drawings into our business communication and collaboration. View the recorded session

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The Back of the Napkin: Solving Problems and Selling Ideas with Pictures

by Dan Roam

“There is no more powerful way to prove that we know something well than to draw a simple picture of it. And there is no more powerful way to see hidden solutions than to pick up a pen and draw out the pieces of our problem.”

So writes Dan Roam in The Back of the Napkin, the international bestseller.

Related Resources:

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Additional Book Reviews

Managing Oneself Article
Boyd-OODA The Lean Startup
Moore's Darwin and the Demon HRB article
Cohan Great Demo
Origin and Evolution

Signed up for Startup Lessons Learned Conference

Written by Theresa Shafer. Posted in Customer Development, Events

Hope to see you on Monday, May 23, 2011 in San Francisco, CA for the Second Startup Lessons Learned conference. The day-long event will feature a mix of panels and talks focused on the key challenges and issues that technical and market-facing people at startups need to understand in order to succeed in building successful startups. Here is our roundup of last year’s press coverage and blog commentary on the conference that will be of use to entrepreneurs. More information www.sllconf.com

Get your early bird ticket for $250 now through April 23.

Register at http://sllconf2011.eventbrite.com/?ref=ecount

Stoking the Star Maker Machinery Behind The Popular App

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

“Startups are a force for good because they have proven over time to be the best vehicle for pursuing innovation. But not all startups are innovative. We can never have enough startups that are pursuing unique solutions to important problems. But a profusion of “me-too” startups can actually damage the startup ecosystem by consuming the sunlight (funding, engineers) that would otherwise go to more unique and innovative startups.”
Chris Yeh in “Can We Ever Have Too Many Startups?” (emphasis added).

I think that many of the next generation incubators (e.g. YCombinator, 500 Startups, etc….) are funding app startups that are the equivalent of “one hit wonder” bands.  Apps are the new pop songs and the incubators are the music labels.

I blogged about “Entrepreneurial Motivation” in January of 2009, highlighting Tim O’Reilly’s thought provoking post “Work on Stuff that Matters” from earlier that month. O’Reilly highlighted three principles:

  1. Work on something that matters to you more than money.
  2. Create more value than you capture.
  3. Take the long view.

that I still find very valuable. I want to work on things that will make a meaningful difference in people’s lives. And like Randall Munroe, “I never trust anyone who’s more excited about success than about doing the thing they want to be successful at.”


I was a free man in Paris
I felt unfettered and alive
There was nobody calling me up for favors
And no one’s future to decide
You know I’d go back there tomorrow
But for the work I’ve taken on
Stoking the star maker machinery
Behind the popular song

Lyrics from Joni Mitchell’s “Free Man In Paris”

Georgi Dagnall on Steve Blank’s Visit to April Bootstrapper Breakfast

Written by Sean Murphy. Posted in skmurphy

After every Bootstrapper Breakfast® we E-mail all of the participants and ask them for “one thing you learned at the breakfast.” Georgi Dagnall left a nice comment after Steve Blank visited on Friday (I have added some links for context)

Sean suggested that I read the book, Four Steps to the Epiphany written by Steve Blank. I took his advice and found it to be one of the most practical business books I had ever read. When I heard that Steve was going to be the speaker at this Bootstrappers Breakfast, I had to attend to hear him talk in this intimate venue. I learned much, but the best point was the suggestion that Steve had to read the book, Business Model Generation. It is on my To Do list.

Larry Lang on Managing Incentives

Written by Sean Murphy. Posted in 5 Scaling Up Stage

The recent troubles at Cisco have prompted a lot of commentary on the Cisco alumni e-mail list. One of the more thoughtful analyses was posted by Larry Lang (@llang629), who spent more than a decade at Cisco in a variety of positions. His last was as  VP and General Manager of the Mobile Wireless Group at Cisco, he is currently CEO of Quorum. The following is posted with his permission


I first joined Cisco in 1991, left for a startup, then returned for a second act which ended in 2009. Towards the end, I thought a lot about the changes at Cisco, seeking an objective framework with which to analyze the chaos surrounding the topic.

Fundamentally, a company consists of people, and their aggregate behaviors determine its direction. That behavior inevitably changes as the company matures. During hyper-growth, spending time on internal politics is generally irrational. Why waste time picking pockets when it’s raining money? But as growth slows, the rewards grow sparser, so spending time on internal competition makes more rational sense. At Cisco’s size, how much can any one employee make the stock price go up (assuming they hold enough stock to care)? Instead, they invest more time ensuring the reward-dispensing leadership, up to the CEO, holds them in greater esteem than their peers. You can wish this behavior weren’t true, you can decry it as evil, but objectively it becomes rational strategy for the individual employee.

If you accept this inversion in the “motivational magnetic field,” then the main failing of John Chambers and the senior leadership team is not adjusting their compass to navigate by it. The challenge for a mature company is channeling the energy of internal competition into constructive external activity, which is not easy. Consider the esteem in which GE is held, as one of the few companies that display competence at this management imperative. You can also see why Cisco could postpone this transformation, considering how long the incredible networking market fueled its growth, well past the size where you’d expect it to fade.

Unfortunately, with his inverted compass, John made exactly inverse decisions (IMHO). Rather than using clear accountability and transparency to prevent destructive internal competition, he instituted the collaboration framework, with its infamous Councils and Boards. They created an environment of diluted accountability and undecipherable results, in which destructive internal competition festers out of control.

Can he turn this around? I’m not sure. It requires a very different style, driven by Excel rather than PowerPoint. I doubt I would thrive in it, one reason I voted with my feet.

I look back with nostalgia on earlier Cisco, but I know those times are gone forever, just as I look back with nostalgia on how a younger me used to party. But a forty-something returning to a frat house doesn’t recapture his youth; he just looks out of place and maybe even pathetic. Time to grow up.

I owe Cisco a great deal, not just financially, but also in terms of learning, life experiences, and friendships. I view its current struggles ruefully. Turnarounds on that scale are not easy. I wish them luck.


When Larry e-mailed his approval for me to post his remarks he added this postscript:

I thought about this for a long time, and wanted to offer the framework that helped me reach my decisions.  In the end, it wastes energy to curse the people at a more mature company for being idiots or bureaucrats or heartless or conniving or what have you.  As the economists say, people respond to incentives, the rest is just working out the details (and sometimes, discerning what the incentives really are).

I hope my comments are fair and empathetic.  My tiny CEO job has given me a whole new appreciation for the challenges Chambers has faced and overcome.  He may be struggling to find answers now, perhaps because there just aren’t great answers.  But overall he’s played a heck of a game.

I have written about Cisco in these posts:

Making the Trains Run on Time: Software Release

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

I recently took part in a  small reunion of folks who worked on the “router  software release” team at Cisco in the early years and I took it as an opportunity to jot down some rules of thumb I learned, mostly the hard way, about managing software releases.

There is always a strong reason to slip the schedule. It can be one more critical feature needed to close a major opportunity or one more critical bug fix that can’t wait for the next release.

Once you start to slip the schedule it’s very hard to stop.

A “train schedule” model, where you establish a predictable schedule and then manage feature content against a fixed ship date, seems like it’s less efficient but I have found it to be far more effective. You can make exceptions for a handful of major features agreed to well  in advance or a very few critical bugs affecting significant functionality for many customers.

In the minds of many developers the release is one more “all nighter” or at worst “a long weekend” away form being ready. Sometimes they are right.

A software roadmap is a complex multi-party treaty, negotiated not only internally between sales, marketing, support, and development but externally with customers  and other interested parties. It’s not a real plan until everyone is somewhat dissatisfied.

The challenges of managing a roadmap are exacerbated by politics in a large organization,  while startups often wrestle with the significant uncertainties  of if and when  prospects, each with their own are needs, are going to close.

Conversations Entrepreneurs Remember

Written by Sean Murphy. Posted in Events, skmurphy

steaming hot coffee and serious conversationWe had a great Bootstrapper Breakfast® in February in Milpitas with Isaac Garcia, CEO of Central Desktop, speaking very candidly about the challenges of Bootstrapping Central Desktop and some lessons learned.

Bob Gerughty mentioned after the meeting that he had run into someone who remembered him from  a comment he made at a breakfast almost a year ago. Bob was a Treasurer and/or head of Taxation at Altera, NeoMagic, and Phoenix Technologie before he branched out to bootstrap his own firm. He asks  a great questions and offers insights that are very practical–and memorable as a result–so I was not surprised.

Isaac really lifted our spirits with his humor and informed perspective on bootstrapping, folks stayed afterward for private conversations for more than an hour.  And Bob’s remark, coupled with the energy in the room after Isaac’s talk, triggered some reflection on some other recent “networking events” I attended in January and February of this year, and the reasons why the breakfast often result in memorable conversations.

The formal part of the meeting is a single conversation among anywhere from eight people to two dozen. Everyone has a chance to introduce themselves, talk a little bit about what they are working on, and then ask the group advice on one or more issues that they are wrestling with. Because each Bootstrapper Breakfast is moderated no one person can dominate the conversation and everyone gets a chance to take part.

In a regular networking meeting you are standing up in knots of two to six people, meeting a few new people in the course of the informal networking session and mainly introducing yourself, talking a little about yourself and what brought you to the meeting.  But you end up having to repeat yourself half a dozen times and you don’t get to hear the other person for very long either.

Failure to Thrive

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

“Death did not come with the thunderous gallop of a pale horse nor the wicked song of a blackened scythe hissing through the air. His was a quiet and patient arrival cloaked in the subtle hesitation that turns hopeful tomorrows into regretful yesterdays.”
Kep Pump

“We need to work on the product for another two weeks and add this one last feature.”

Every time I hear that I sense a mindset of  “subtle hesitation” that kills more products than any competitor.

You have to get out of the BatCave.

“Our website is not ready, I need to take a week or two and make a few final improvements.”

That statement will be true to the end of time.  Show folks what you have and use it as a provocation to discuss their challenges. But focus on their issues, not what’s wrong with your offering in the absence of a problem they are trying to solve.

When Peggy Aycinena interviewed me last year, she asked:

Q – When small companies can barely keep the lights on, how much of their discretionary budget should be spent on Marketing?

Sean Murphy – There are a couple ways of looking at that question, but the key question is “where are you at risk.”

For the most part, there comes a point where the technology is more or less functional. At that point, most of your risk is the market risk–finding customers who will work with you. In the last decade I haven’t heard about too many new products where I said to myself, “Wow, I wonder how they did that.”

Most of the risk is adoption risk or market risk, which means that you have to devote time and money to solving that problem. Our rule of thumb is that 20-to-40 percent has to be devoted to customer development–marketing, sales, and business development–because that’s where the risk is.

You can’t stay in the BatCave and continue to add features without contact with real design groups. I think too many startups rely on marketing communications, which is just one part of marketing. Most of these tools you sell with your ears; you’ve got to engage with prospects and have real conversations. Of course, you can’t do that if you can’t get in the door.

You have to get out of the BatCave, listen to prospects, and sell what you have.


If you are worried about your demo or not sure how to improve it, sign up for our April 12 “Great Demo” workshop with Peter Cohan, I promise you it will be a day well spent in 2011.

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