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“Ever notice that ‘what the hell’ is always the right decision?”
Marilyn Monroe
“A problem adequately stated is a problem well on its way to being solved.” Buckminster Fuller
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Startups see fluid opportunities in dynamic environments, but no certainties before opportunities pass or the “situation changes.”
Sean Murphy in “Early Markets Offer Fluid Opportunities“
“It is wrong that Science Fiction is not on high school reading lists. The current reading lists adapt kids to live in the 1700’s.” Nolan Bushnell (@NolanBushnell)
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“Knowledge workers outlive organizations, and they are mobile. The need to manage oneself is therefore creating a revolution in human affairs.”
Peter Drucker “Managing Oneself“
More context from the conclusion of the article:
“In effect, managing oneself demands that each knowledge worker think and behave like a chief executive officer. Further, the shift from manual workers who do as they are told to knowledge workers who have to manage themselves profoundly challenges social structure. Every existing society, even the most individualistic one, takes two things for granted, if only subconsciously: that organizations outlive workers, and that most people stay put.
But today the opposite is true. Knowledge workers outlive organizations, and they are mobile. The need to manage oneself is therefore creating a revolution in human affairs.
Memorial Day is when we commemorate those who died in the service of our country. I offer two quotations related to men giving their lives in battle for you to mediate on.
It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.
SKMurphy’s Book Club for Business Impact provides actionable insights for the entrepreneurially minded, whether you are trying to bring change to a market or an organization. It’s a webinar / call in with a panel that has a roundtable discussion with the audience. Everyone will have a chance to contribute their experiences and lessons learned implementing ideas from a recent business book or article. I hope you can join us.
Title: SDForum Workshop Series “Networking for Lifetime Career Success”
Date: Tuesday, June 28, 2011, 7:30 AM – 10:00 AM
Description: During times of change, the ability to naturally and effectively network to identify new opportunities and develop professional relationships can be critical to success. In this interactive session, Next Step CEO, Jennifer Vessels, will provide proven tips for successful networking that attendees can put into practice immediately at the event.
This hour long program will include tips to you can use immediately to:
Create a memorable first impression.
Develop a compelling elevator speech to gain attention and be remembered.
Leverage ‘keys to networking success’ to stand out and be noticed (positively).
Utilize follow-up as foundation for long term relationship building
With time for networking, interaction and feedback built into the program, all participants will leave with an action plan and approach they can most effectively utilize for networking.
Confirmed Speaker: Jennifer Vessels, CEO of Next Step
Location: White & Lee, 541 Jefferson Avenue, Suite 100 Redwood City, CA 94063
I took part in a number of great conversations at today’s Startup Lessons Learned Conference, probably the most common–and most vexing–issue that was discussed was whether to give up in the face of modest success. I had perhaps half a dozen conversations around “We’ve come this far and have paying customers but are not sure we should continue on the path we are on.”
This is a very tough issue to manage. Here is a synthesis of the answers that I gave.
When you make the decision to commit to a course of action write down what success and failure looks like and estimate how far you should be in a few weeks to a few months (depending upon the scope of the decision). Plan for two or three re-evaluation points. Only evaluate whether you on track on a pre-defined schedule unless something extraordinary happens. This prevents a very painful loop where every few days you are wrestling with whether to continue or not.
Perhaps every two to four weeks but at least once very three month, assess where you are and what you have learned that you have incorporated into your process and approach. Periodically assessing what you have learned and how you have improved is another way to immunize yourself against doing the same thing over and over again expecting a different result: you should at least be making new mistakes.
Talk to peers and advisors. One benefit of peer to peer discussions with other entrepreneurs is that they give you a chance to get different perspectives on your situation (often another entrepreneur may bring a valuable emotional distance that navigates the twin risks of giving up too soon and persisting too long).
Be cautious in throwing away paying customers.
If you have had success in several areas or with seemingly different customers look for a common thread or underlying connection.
“Stubborn genius” is a tautology, but “stubborn fool” is as well, alas.
For the most part I see folks giving up too early far more often than persisting well past when they should abandon an idea. As Ringo Starr advises “it don’t come easy” and I see folks expecting a quick viral pop in two or three months giving up much much more often than a team persisting into their fourth year on an idea that’s clearly going nowhere.
But it’s possible that you have “climbed a small hill” and are in a market that is too small to support your firm.
I will be at the Startup Lessons Learned 2011 conference tomorrow. If you are there in person please say hello, I am always interested in meeting one of the baker’s dozen who read my blog.
At this point the conference is sold out but it is being streamed to something like 100 locations, see http://www.sllconf.com/streaming for a location near you.
The three talks I am most interested in hearing tomorrow are
10:20AM to 10:40AM PDT “Votizen Case Study: How and When to Pivot” Dave Binetti from Votizen, who is always candid and insightful about his entrepreneurial journey.
3:00 PM – 3:30 PM PDT Steve Blank’s Keynote. Steve Blank is always thought provoking and I expect nothing less from this keynote.
4:50 PM – 5:10 PM PDT “Groupon Case Study: Using Lean Startup Principles to Manage Hypergrowth” by Suneel Gupta, Groupon. I grew up in St. Louis so I was glad to see they could find room at the end of the day for a firm from “flyover country.” I don’t know much about Groupon but I understand that they have met with some success in the marketplace.
Become an independent thinker and have the courage to follow your ideas.
Show respect to others and never think more highly of yourself than you ought.
Avoid bad habits of sloth, dissipation, dishonesty, and other qualities that would cause others to lose respect for you.
Set goals that challenge you to do your best and follow diligently after them.
Apply all this consistently to every part of your life, always striving to better yourself in even the smallest ways while maintaining integrity.
In my student days, I worked in restaurants. I worked with a guy who was a Mexican immigrant, who washed dishes with me for several years in a busy restaurant.
He worked hard.
He was always upbeat.
He never complained.
And he radiated a sense of joy all about him.
Why? Because he was content with what he was doing while obviously striving to improve himself at the same time.
He would often sing while he worked. And that was inspiring. That man might never make a mark in the broader society but I could see he would be a fine leader wherever his life circumstances took him.
These same qualities can be found in the startup world, but they are by no means limited to those who seek success in business.
They are life qualities. It profits us all to follow them.
I like this model of leadership as service, offering an example that promotes shared accountability. It reminds me of the middle two stanzas from Marge Piercy’s poem “To Be of Use”
I love people who harness themselves, an ox to a heavy cart,
who pull like water buffalo, with massive patience,
who strain in the mud and the muck to move things forward,
who do what has to be done, again and again.
I want to be with people who submerge
in the task, who go into the fields to harvest
and work in a row and pass the bags along,
who are not parlor generals and field deserters
but move in a common rhythm
when the food must come in or the fire be put out.
Here are a couple of rules of thumb you may find helpful in thinking about price, value, and your prospect’s perception of risk.
There is a difference between something that is free and something that costs one penny. The gap between charging nothing and charging one penny is much much larger than between charging one penny or two. See “The Penny Gap“
If it’s easy to exit a business relationship then prospects are more willing to experiment. Lowering barriers to exit (not just price) makes them more willing to try your offering. See “Let Me Go Back!“
If your costs are predictable and can be easily controlled by the customer then it’s easier to get a prospect to do business with you. Consider phone charges that are either a flat fee every month or per minute charges against only calls you place vs. getting billed for people calling you: you cannot predict how many people will call you. We have a client who insists on storage charges based on the “number of printed pages” in a document. Their prospects cannot predict how many “printed pages” will be stored and this is an ongoing point of contention.
Even “free” has an opportunity cost. Carefully consider all of the direct and opportunity costs your product imposes before calling it free. The canonical example is the hypothetical free medical clinic at the top of Mount Everest: they can’t figure out why most of their patients are Sherpas. Many products offer user interfaces that are inadvertent IQ tests and are so hard to use that even though they are “free” few can figure them out.
Businesses don’t like “free” for important functions because free does not come with an enforceable service level agreement or the promise of a real relationship with the vendor. See Ethan Stock’s “Google Responds Urchin Works” in particular this paragraph (bolding added):
We are asking our customers to bet their businesses on our ability to deliver. “Flaky but free” simply does not cut it any more. How many of you out there rely on Yahoo or Google email for business-critical communications? What if it went down tomorrow, for 48 hours? What if Salesforce.com stopped working for 48 hours? What if Ebay or Adwords stopped working? Marketing campaigns, communications, and commerce grind to a halt, and real damage is done to real people and real businesses.
Focus first on how and why your customers find value in your offering with software or SaaS products your pricing will normally flow from that
“The only certainty is a reasonable probability.”
Edgar Watson Howe, “Country Town Sayings”
“An approximate answer to the right problem is worth a good deal more than an exact answer to an approximate problem.”
John Tukey
Startups see fluid opportunities in dynamic environments, but no certainties before opportunities pass or the situation changes.
You have to act when you are about 60-70% confident, even 80% can be hard to achieve.
If you have all of the facts it’s not a decision it’s a choice.
“The shrewd guess, the fertile hypothesis, the courageous leap to a tentative conclusion–these are the most valuable coin of the thinker at work. But in most schools guessing is heavily penalized and is associated somehow with laziness.”
Jerome S. Bruner
Tristan Kromer, who blogs at Grasshopper Herder, offered some great insights on business models on the Lean Startup Circle mailing list in response to a question about how to select which idea to focus on for your startup
There’s nothing wrong with a services business.
It’s harder to scale, but there’s nothing in the customer development handbook that says only billion dollar scalable software companies are worth doing.
Plenty of people get filthy rich running pool cleaning businesses.
I think a lot of people look to software businesses with some idea that it will somehow be easier because there is no inventory and you can just build one product for a million people.
Personally, I think that’s an illusion. There are just different issues. There is still inventory (people), assets (ideas), a manufacturing process (coding), etc.
Starting out as a service business, or primarily as a services business, does not preclude you from becoming a product oriented company later on. I hear too many entrepreneurs worrying “that approach won’t scale” when they should be more worried “that approach is unlikely to find any customers.”
Also, if there are complex workflows involved, using a service business to prototype and explore what capabilities will actually be required (and used) is much much faster than trying to get it all coded.