Archive for June, 2012

Quotes For Entrepreneurs–June 2012

Written by Sean Murphy. Posted in Quotes, skmurphy

You can follow @skmurphy to get these 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.

Details as they snatched like pebbles carefully selected from riverbeds of conversations all over the Web and arrayed as semi-precious gems on a white linen tablecloth. But first an endorsement from an unusually discerning entrepreneur:

“I usually don’t follow people who just tweet quotes, but @skmurphy is exceptionally good.”
Hrishi Mittal (@hrishio) in a June 8, 2012 tweet

Proof there is merit in curating the brief brilliance of others.

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“You can sink so fast that you think you are flying.”
Marie Von Ebner-Eschenbach

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“The knowledge of the world is only to be acquired in the world, and not in a closet.”
Earl of Chesterfield

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“Where there’s no way there’s still a goal.”
Hans Kudszus

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“A drop of mercy weighs more than a barrel of knowledge.”
Friedrich Georg Junger

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“To be satisfied with little is hard, to be satisfied with a lot is impossible.”
Marie Von Ebner-Eschenbach

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“To be ignorant of what happened before you were born is to be ever a child. For what is man’s lifetime unless the memory of past events is woven with those of earlier times?”
Marcus Tullius Cicero

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“You are all that is left of your childhood.”
Richard Krause

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“This is the precept by which I have lived: prepare for the worst; expect the best; and take what comes.”
Hannah Arendt

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“Innovation for holders of conventional wisdom is not novelty but annihilation.”
Marshall McLuhan

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“Nothing is so often and so irrevocably missed as the opportunity that crops up daily.”
Marie Von Ebner-Eschenbach

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“The only way to know how a complex system will behave—after you modify it—is to modify it and see how it behaves.”
George Box

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“Failure is life’s magnifying glass.”
Simon May

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“Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.”
Samuel Beckett, Worstward Ho

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“I am always doing what I cannot do yet, in order to learn how to do it.”
Vincent Van Gogh

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“A stout heart breaks bad luck.”
Miguel de Cervantes “Don Quixote”

more context:

“…cheer up that little heart of yours, master mine, for at the present moment you seem to have got one no bigger than a hazel nut; remember what they say, that a stout heart breaks bad luck…”

Sancho Panza advises Don Quixote to cheer up in Miguel de Cervantes’ Don Quixote (emphasis added). Used as the opening quote in “The Heart That Holds On

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“The ability to learn faster than your competitors may be the only sustainable competitive advantage.”
Arie du Geus

h/t The Managers Diary (@ManagersDiary) via Esther Derby (@EstherDerby)

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“The elevator to success is out of order. You’ll have to use the stairs…one step at a time.”
Joe Girard

h/t Johnnie Moore “L’esprit d’escalier” with a great visual from a poster from The Hub, Melbourne

Cliche, Combat, Fellowship, Anarchy, Enigma

Written by Sean Murphy. Posted in Books, skmurphy

S. John Ross wrote a great short essay on “Five Elements of Commercial Appeal in RPG Design” (that I first read in “Things We Think About Games” by Will Hindmarch and Jeff Tidball) that suggested these elements were critical for creating a commercially successful RPG. I think they are also a good way to think about building a successful technology business.

Cliché: The value of cliché – the use of stock imagery and other familiar elements – is accessibility and mutual understanding.

Startups have limited resources, certainly compared to more well established firms that they find themselves competing with. They need to focus their innovative efforts on a very few areas and features for maximum effect. They need to leverage existing technology and standards, talk in terms that prospects will easily understand, and work from the familiar except for a handful of key areas where they are trying to differentiate their offering.

Combat: Nothing’s very dramatic (or funny, or scary) without some kind of conflict.

In the Innovator’s DNA, Clayton Christen outlines two fundamental attitudes that underpin any innovation:

  • A willingness to challenge the status quo.
  • A willingness to take risks

You have to take risks and work to obsolete one or more aspects of the status quo in a technology startup.

Fellowship: RPGs are an ensemble medium; the core experience is that of a fellowship of PCs cooperating (more or less) toward a common goal.

I think a team is essential to success in a technology startup, it’s just too difficult for one person to have all of the skills and experience necessary to provide a compelling product. I think fellowship is a better word than teamwork for the relationships that founders need to maintain to thrive.

Anarchy: In an RPG, you really can try anything you can think of, and that’s a feature that thrives on anarchy.

While you shouldn’t break all of the rules you have to be willing to break some of the rules that established firms are following if you want to differentiate yourself. The trick is to break rules in a way that creates novel differentiated value.

Enigma: The quality of enigma is – inevitably – the most elusive of these elements. In literal terms, it means any quality of the game-world that the Game Master is presumed to understand on a level the players never can.

There are mysteries about technology and customers needs that entrepreneurs have to penetrate to succeed. But if you teach a point where you believe that no mysteries remain then you are at the more risk than when you knew you were ignorant.

I used  “Seven Things I learned from World of WarCraft” by John August (another essay from “Things We Think About Games” by Will Hindmarch and Jeff Tidball) as a point of departure for “Focus Needs Buffers and Free Time

The TV Tropes wiki (Danger Will Robinson! this is a site you can lose several hours browsing if you are not careful) is a catalog of the tricks of the trade for writing fiction. We need a similar catalog of useful cliches for technology startups.

Entrepreneurs Need a Community of Practice Not a Movement

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 4 Finding your Niche, Community of Practice, skmurphy

Patrick Houston observes the following in “Lean Startup Concept No Silver Bullet

[…] I’ve read the book. I’ve recommended some its practices. I’ve embraced some too as my own startup conceives, develops, and consults to technology-fueled media startups. I concur with the precept at the heart of the lean approach: Even the most brilliant and experienced people don’t know enough to outwit emerging, rapidly changing, and increasingly complex markets, especially when it comes to products and business models without precedent.

According to the “lean” way of life, the only prudent way to determine what the market wants is to deploy the scientific method, the very same one we learned in grade school: State an hypothesis and then do an experiment to prove or disprove it.

This inherently more humble approach to business represents a refreshing contrast to the entrepreneurial hubris that struts its stuff down the streets of Palo Alto where people live by the self-assured motto, “Go big or go home.” If only for that reason, I’m attracted to its tenets.

But that doesn’t mean I’m willing to swallow it whole. The main reason: The “lean” philosophy is just that. It’s not just a tactic or strategy. To listen to its champions, it’s an ideology. I started wincing on Page 14 of the book when Ries called the Lean Startup idea “a global movement.” A movement? Really? Like civil rights? Environmentalism? The Arab Spring?

To me, when someone touts a practice as a movement that’s the telltale sign of fad, one that over-promises like so many predecessor methodologies that came and went because we failed to subject them stringently enough to critical thinking.

Eric Ries’ Startup Lessons Learned blog and the two Startup Lessons Learned conferences in 2010 and 2011 sparked a number of useful additions to established pragmatic approaches for new product development and introduction. He has encouraged entrepreneurs to focus on learning and to be curious about their customers’ needs and constraints. This has been is a healthy antidote to much that was written about how to court professional investors as the critical rite of passage for an entrepreneur to master.

But I don’t consider myself a disciple or part of a movement. I consider myself a practitioner. I am a huge fan of Saras Sarasvathy, Clayton Christensen, Peter Drucker, Gary Klein, and Gerald Weinberg. I found Geoffrey Moore’s Crossing the Chasm very useful and felt that the first three chapters of Four Steps to the Epiphany by Steve Blank offered a useful perspective, but was similar in many ways to Mark Leslie’s “Sales Learning Curve” and much of the key discussion in Innovator’s Solution by Christensen.

I continue to take an active part in the discussions on the Lean Startup Circle because I like the commitment to learning that the community has.  I think entrepreneurship represents a way of looking at the world, and in particular what Saras Sarasvathy calls effectual logic. Working from means to ends and then using those ends as new means to new ends.

In Sarasvathy & Venkataraman’s 2011 article  “Entrepreneurship as Method: Open Questions for an Entrepreneurial Future” in  Entrepreneurship Theory and Practice, 35(1), 113-135 they conclude:

Until now, for the most part, we have focused on entrepreneurship as a phenomenon and we have tried to understand how to create the conditions for good entrepreneurial performance whether at the firm level or at the societal level. That is akin to asking “What explains the discovery of penicillin or plate tectonics?” or trying to understand the role of government funding in the nature and magnitude of scientific output. To specify the method of science or of entrepreneurship, however, we have to roll up our sleeves and actually observe experienced entrepreneurs in action, read their diaries, examine their documents and sit in on negotiations—as did the scholarly and humanistic literati of Bacon’s time. And as we extract and codify the “real helps” of entrepreneurial thought and action, we need to figure out ways to embody them in particular techniques and mechanisms that we refine in the laboratory and the classroom with a view to carefully determining the logical relationships both between these mechanisms and how they connect to the unleashing of human potential. In short, we have an exciting time of hard work ahead of us.

I think we are closer to the 1% (or at most the 10%) level of understanding entrepreneurship and that it’s very short sighted to view it as a settled body of knowledge or a set of solved problems we can turn into checklists or video recorded lectures. It’s not algebra.

I certainly offer checklists and videos on this website that I hope you will find helpful but I look at them as my contribution to a community of practice devoted to entrepreneurship.

I find it hard to predict the evolution of lean / customer development. Looking back to 2003 when the first edition of “Four Steps” with the Tokyo subway map came out a lot has changed and yet the fundamental challenges the first few chapters address remain unchanged. “Get out of the building” is a technique for avoiding the prison of your own perceptions as an entrepreneur. The earlyvangelist checklist is still a reliable guide to spotting organizational change agents.

I saw a comment by Bill Seitz on Ash Maurya’s blog post about his new Spark59 Manifesto that gave me pause:

[…] I get uncomfortable with all the leading lights of the Lean movement becoming gold-prospecting-tool-sellers instead of people talking about lean from the content of mining for gold themselves… (Just as Internet Marketers give me the heebie-jeebies with 90% of the big success stories being people in….Internet Marketing.)

I find it hard to predict what books will be the most relevant to entrepreneurs in 2020. I think many of Peter Drucker’s books will still have relevant insights, as well as Christensen’s “Innovator’s Dilemma” and “Innovator’s DNA”, Sarasvathy’s “Effectual Entrepreneurship” and Gerald Weinberg’s “Secrets of Consulting.” But I find it hard to assess the long term impact of lean models for entrepreneurship.

Update July 1: I realized that I didn’t include a background link for Bill Seitz (@BillSeitz). He is a thoughtful individual with an interesting personal wiki at

Steve Blank originally published the first version of “Four Steps to the Epiphany” using Cafe Press in 2003 with a picture of the Tokyo subway map on its cover. The revised version has a 2005 copyright and Michaelangelo’s “The Creation of Adam” on the cover.

Dan Shipper: Every Sustainable Business Follows From Solid Fundamentals

Written by Sean Murphy. Posted in Founder Story

The following are excerpts from Dan Shipper’s “Why I’m Doing It All Wrong,” a blog post that I found very inspiring.

“Swing for the fences” & “Scale as quickly as possible”

These are fundamental assumptions of startup building. From these come our conventional startup wisdom:

“Leave school” & “Raise money”

For a long time I accepted the “leave school and raise money” argument because I assumed that “swing for the fences” and “scale as quickly” as possible were inviolable tenets of company building. But it turns out they’re not inviolable. They’re not even tenets. They’re just a common way of thinking about how to do a startup.

I’m naturally interested in business. I’m naturally interested in coding and design. I’m naturally interested in writing.

And so my goal is this: to be able to do those things sustainably, for the rest of my life.

Home runs by definition aren’t sustainable. They’re not predictable. Sometimes you hit one, but most of the time you don’t. That part of things is mostly out of your control.

Because it’s out of my control and not sustainable, I’m not focused on it. For that matter I’m not interested in anything that’s not sustainable.

So what can be counted on?  Every successful business follows from solid fundamentals. Customers, money, funding. And that’s what I’m concentrated on.

What I’m spending my time doing now is this: learning how to build a real business. And by real, I mean a business that has money coming in the door from day one. Businesses that make money can be started in any investment climate. They don’t go out of style.

That’s why we’re holed up in an office in Philly for $650 a month working 14-hours a day this summer. That’s the goal.

I think there’s a time and place for raising money. I think there’s a time and a place to go for broke. So when I’m asked why I haven’t left school and raised money this is generally my reply:

I’m going to get into the big game eventually. But right now I’m working on perfecting my crossover dribble.

I want to get good at this stuff. And I know that I can do that without leaving school, and without raising money.

I originally posted these on the Bootstrapper Breakfast E-mail list which led Luke Teyssier to comment:

Thank you for a voice of sanity. Dropping out of college to get funding makes about as much sense as dropping out to join a baseball team. A very small few will hit the big leagues, but most would have been better off getting a solid foundation.

Ryan Waggoner: Maybe Startups Are So Hard Because We’re Doing Them Wrong

Written by Sean Murphy. Posted in Founder Story, Funding, skmurphy

This is reposted excerpt from a sequence of  Christmas Day Hackers news comments made by Ryan Waggoner ( ) hyperlinks added for context. The initial comment triggered an extended conversation with Paul Graham and others that makes for interesting reading. I agree with Ryan’s perspective and didn’t want it see lost in the dusty archives of Hacker News.

In 2009 I started a company with another guy, and I used to read articles like this, about how startups are so very difficult, and how you have to put everything on the line, your health, your wealth, your relationships, everything. It’s a very common theme in startup-land, and I constantly hear from founders who sacrificed their marriages, worked 19 hour days, slept under their desks, and racked up tens of thousands in credit card debt, all to make their dream a reality. The message is very clear: you have to be willing to do anything to succeed. Articles like this fed my ego, and made me feel like I was part of an elite cadre of founders.

Then my startup  failed, leaving myself and my cofounder with tens of thousands in debt and a pretty rough mess to clean up.

In the meantime, a good friend of mine who started a little project on the side slowly grew it over a period of a couple years into something that supports his family very well and has a good shot at doing millions in revenue within the next 5-10 years. And I don’t think he’s been very stressed while doing it. He loves what he does, has tons of time for his family, etc. The cynical among us might term this a “lifestyle business” and they’d be right. But I don’t think that bothers him and I can’t say I blame him.

There’s this really ugly side of the startup world that drives founders to completely unreasonable levels in pursuit of fast wealth creation, and it comes as a result of two factors: founders are naturally ambitious, driven people, and investors are in a hit-driven business. So the result is that investors naturally gravitate towards founders who either hit a billion dollars in a few years, or die trying (sometimes literally), and then investors and founders both are incentivized to craft this story that they only way to win is to win big, fast, and with all your chips on the line.

And these things become self-reinforcing, so you have investors talking about how the real reason startups are so valuable is that founders can work so hard that they accomplish a career’s worth of work in just a few years. The message is clear: you need to work 90 hours a week and either be the next Dropbox or flame out. And for the model most investors work under, that’s the only way they really make money.

But the more I look around, the more I wonder if there’s really much correlation between blowing your life up and startup success. Yes, you hear a lot of successful founders talking about how they killed themselves to get there. But thanks to survivorship bias, you don’t hear from all the ones who risked everything, turned their lives and relationships and health upside down, and then lost. And increasingly, I’m seeing a lot of examples of very successful founders who definitely work hard, but keep an eye on themselves, their health, their relationships, etc. and have lines they’re just not willing to cross. 37signals is the classic example here, but there are scores of others, many of them right here on HN. The key seems to be patience and humility, two things a lot of 20-something founders (including myself) have in very short supply

Maybe startups are so hard because we’re doing them wrong.

Building a sustainable growing business does not preclude seeking investment. It allows you to develop a business plan predicated on achievable growth that merits investment. Or you can continue to run a business that can support your family.

Father’s Day 2012

Written by Sean Murphy. Posted in Books, skmurphy

After my first son was born a friend recommended that I read “The Measure of a Man: Becoming the Father You Wish Your Father Had Been” by Jerrold Lee Shapiro. It was very good advice that I now pass on.

There was one key point that’s worth highlighting: it’s the father’s obligation to introduce a child to the world and to hold a child  accountable to to the standards of the world, not just the more forgiving standards of the family. For example: fathers typically communicate side to side looking at the same problem; fathers tend to hold children facing out when they carry them; fathers tend to determine the mutual game or activity. Mothers provide emotional support and affirmation. Mother communicate more face to face, tend to hold the child facing them, and engage in whatever game or activity the child wants.

Anyway, it’s a very practical book that stresses strong reasons for different parenting styles and why both are important.

How To Run Experiments That Improve Your Business – On-Line Book Club June 20

Written by Theresa Shafer. Posted in Books, Events

Tomorrow, we complete our coverage of “The Innovator’s DNA”. We have a great panel who will share their tips and lessons learned running experiments that improved their products and business models.

Join us Wednesday June 20, 2012
12 noon – 1pm PST

Register at

How is SKMurphy Book Club different from other book review clubs?

There is a large gap between reading a business book or article and applying it to your work. We find entrepreneurs and business leaders who have applied the techniques and methods suggested by the authors and have a candid discussion about what they have learned.  The panel shares stories about what has worked and what hasn’t, offering insights you can act on. It’s a discussion that also includes questions and comments from the audience, with audience questions probing for real insights on how to use the ideas and principles outlined in the book.

Since we selected the Innovator’s DNA as one of the best business books of 2011, we have explored the key skills in five webinars:

Find other recorded sessions at  SKMurphy Book Club for Business Impact

Great Demo! Demonstration Effectiveness Workshop

Written by Theresa Shafer. Posted in Demos, Events


Establish a framework, including skills and processes, to create and deliver improved software demonstrations to increase success in the sales and deployment of your organization’s offerings.


  • Improve demonstration quality and effectiveness, by implementing a standard process and tools for demonstrations.
  • Establish and communicate clear objectives for each demo.
  • Increase probability of success for demo outcomes for real-life situations.
  • Improve communication, preparation and follow-up between sales and presales.
  • Reduce the cost of sales by using demos more judiciously.
  • Increase the average deal size and/or sell additional products and services.
  • Increase existing subscription expansion and renewals.


Participants will learn how to:

  1. Determine the right content for a demonstration, based on the customer’s business needs and objectives.
  2. Organize the content in a novel, logical progression that maps to audience needs and depth of interest – and engage and prove your capabilities within the first six minutes of the demonstration.
  3. Prepare demonstrations using the new method.
  4. Present demonstrations with the highest probability of success in achieving the desired objectives.
  5. Manage a range of real-life situations and scenarios.

Participants complete the Workshop equipped with:

  1. A newly constructed, highly compelling demonstration of your software, targeted specifically for a typical key scenario.
  2. The ability to apply the method to develop equally targeted and compelling demonstrations for other scenarios, products, and situations.

The Great Demo! methodology delivers targeted “what’s in it for me?” benefits right up front, followed by rapid, targeted proof, and then further, more detailed exploration in accord with the audience’s level and depth of interest.  This proven, highly successful method maps extremely well to the specific needs and constraints of audiences that can include senior management, middle management, end users, and IT staff.


1-Day and 1.5-Day Sessions:

The Workshop begins by introducing the method and typical results, generating interest in the participants to learn more.  An understanding of what constitutes demonstrations and the purposes for delivering demonstrations is developed, followed by exploring the reasons why demonstrations can fail and the resulting impact on the organization.

Next, a method is presented that provides the participants with the tools and processes to ensure that the qualification and discovery information necessary to create successful demonstrations is uncovered and communicated.  This segment introduces qualification and discovery steps and methods, and defines roles and expectations for Sales and Technical staff.  Customer-derived qualification and discovery information is then mapped to the specific capabilities to be demonstrated.

Role-play exercises are used to establish the concepts and skills in day-to-day practice for the participants.  The scenarios generated by the participants during role-play are developed further during the course of the Workshop.

The key components for a demonstration are then developed, including the Customer Situation, Illustrations, “Do It” and “Peel Back the Layers” demo pathways.  Components are created in exercises and presented by the participants to the Workshop attendees in role-play, cementing the concepts and establishing desired behavior.  The components are developed and added to the growing demo, with each subsequent role-play reinforcing the skills previously learned.

The method developed up to this point in the Workshop is designed for “ideal” situations, providing participants with a simple, effective process to follow and generating confidence.  The next segments of the Workshop expand the participants’ toolkit to enable improved success with “real-life” situations.

Proven methods for handling questions, changes in agendas, and other interruptions are introduced and practiced.  The use of Demonstration Roadmaps is presented in conjunction with multi-solution and multi-customer-role demonstrations.

Wrap-up for 1-Day Session Participants.

1.5-Day Session:

The second morning provides sufficient time to extend role-play to embrace more “real-life” situations.  Participants incorporate the skills developed on Day 1 and present their new demonstrations “top-to-bottom” during the final role-play exercises.

The additional time also enables exploration of additional demonstration challenges and topics.  Example topics include Remote Demonstrations (e.g., via WebEx), Managing and Out-flanking Competition, Uncovering and Leveraging Value, RFP’s and Scripted Demos, New Product Roll-out Scenarios, Team Tactics (sales/presales choreography),  Managing POC’s and others.

Marcelo Rinesi: The Expertise Light Speed Barrier

Written by Sean Murphy. Posted in 1 Idea Stage, Rules of Thumb

The following article is copyright Marcelo Rinesi and was originally published in October 2009 on the now defunct “Frontier Economy” website as “There is No Quick Way To Win The World Cup.” It is republished here in it’s entirety with his written permission. I think his fundamental insight about how long it takes to develop expertise around a new tool or technology has profound implications.

Winning the soccer World Cup, or even just getting into its final stages, is a very difficult achievement. Some countries make it look easy, just like professional athletes can make extraordinary physical feats seem “just a bit above average,” but in fact it takes many years of concerted effort to arrive at that level of collective skill.

The key to the delay inherent in the development of world class performance, whether in sports or in other activities, is the often-mentioned rule of thumb of it taking about ten years of focused practice from an individual to become an expert in a discipline. This often requires people to begin training at very young age; professional sports is perhaps the most visible example of the tendency to professionalize the management of highly skilled individuals at ever-younger ages.

But turning young kids into young soccer cracks that will later become national heroes requires not only their raw potential, but also numbers (that is, a society large and interested enough in the sport that there is an ample pool of talent to select from) and teachers, which themselves have to be well-versed in what they teach. This can take at least a couple of “generations” of experts to develop, a development course that cannot be sped up much by applying more resources. For example, while wealthy countries routinely hire expert coaches and physical trainers, even well-defined activities like competition sports involve a complex network of skills and traditions which cannot easily be transplanted from one place to another.

The same rules of expertise acquisition apply to all endeavors in business and industry. While political and economic time frames are constantly getting shorter, a failure to take into account the basic rates of human capital accumulation can make leaders underestimate the time required to replicate a successful organization elsewhere. Recent histories of quick and sustained economic growth have generally been preceded by at least a decade of deliberate human capital accumulation, something not all political or management cultures are willing to support.

Also, it’s interesting to note that the Internet as a large-scale phenomenon is still very young; it doesn’t have much more than a decade. It could be argued that the “Web 2.0″ explosion (which was, in fact, implied in much of the pre-Internet literature) could be at least in part related to the fact that only now does the world count with a large and highly skilled workforce with years of Internet-scale computing experience. This isn’t meant to disparage technologists of previous eras. It is undeniable, though, that the only way to gain experience with Internet-scale computing is to work with an Internet, and there wasn’t one available until recently.

So although technologies seem to appear at ever-faster rates, we still only come to fully dominate them years later. Will this gap ever be reduced? Should we manage to defeat the “expertise light speed barrier” and find ways to teach and learn much more effective than anything before, it would have an astounding impact on our societies and economies. Until then, we need to be wary of the time investment associated with the development of expertise… and realize that just because a technology has been with us for a few years, it doesn’t mean we are fully aware of what it can be used for.

Answering Questions About Your Product In An On-Line Forum

Written by Sean Murphy. Posted in Community of Practice, skmurphy

Situation — you have joined an on-line forum or e-mail list where participants discuss issues related to your product or applications or needs that your product is used for. Someone posts a question in an on-line forum along the lines of:

  • What tools are people using to solve problem X or need Y?
  • What are the pros and cons of choosing tool A vs. tool B (where you offer tool A)?
  • What are the strengths and weaknesses of solution B vs. solution C (where you still offer tool A)?

Recognize that you and vendor B and vendor C are all stakeholders in promoting the category: why do people select a commercial solution instead of rolling their own or using free or open source alternatives. In general you want to adopt the tone and perspective of a knowledge user not a cheerleader or advocate. This is a different situation than someone walking up to you at a trade show booth and asking for a sales pitch.

When there is very little context provided by the person asking the question it’s often better to start with some additional objective questions to better understand their particular needs, constraints, workflow or overall situation.

Acknowledge that both tool B and tool C are good solutions unless they are not at all appropriate. Mention other solutions that are also viable.

Point to objective third party write-ups of how to make the decision. Help the poster walk around the issues; don’t just advocate for your offering. Software, whether installed or SaaS, is the promise of an ongoing relationship with a customer, not a one time transaction. You are not selling a wedding dress–something that will normally only be purchased and used once in a lifetime–you are selling a tool that your customer will rely on going forward.  You want to act like a trusted advisor not a used car salesperson.

If you are selling a tool or service that is normally only used once (e.g. how do I migrate my data from X to Y and I am not going back) then focus on the results and how to measure them. Explain your process steps and quality control measures.

Be frank about the weaknesses or shortcomings of your offering that are relevant to the situation described in the question or uncovered in response to your request for more context. Acknowledging shortcomings increases credibility; if a user were writing in they would talk about relevant shortcomings of the solution they were recommending.

Offer one or two reasons why named customers have told you they chose your solution. Tie these back to the objective questions you asked in the beginning.

It’s critical to understand the problem the customer is trying to solve so that you highlight relevant capabilities that your product or alternatives offer for the particular use case. While the sales team at the Jaguar dealership cannot figure out how those poor guys selling Fiats make any money because no one ever walks into their dealership who wants a Fiat, consumer Reports still covers both in their buyer’s guide. Public comments in a forum should be more like a buyer’s guide than a sales pitch.

Summary: your fundamental goal is to be viewed as a valuable contributor to the community.

  • Building credibility is the result of a series of posts that allow you to be viewed as a member in good standing.
  • Good posts normally include one or more of the following
    • Objective questions aimed at a better understanding of situation and context for decision.
    • Objective statements either about your offerings shortcomings or assessments from third parties.
    • Real stories from customers that are relevant to the situation.

Verify Your Market Insights Against A Variety of Information Sources

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

While we stress the value of serious conversations with prospects and customers there are other sources of useful information on emerging opportunities for your current product or next offering. I have placed them on a spectrum that runs from a macroscopic view based on objective measurements and numbers to a microscopic view that is more subjective and based on stories.

I have included some options that are available to more established firms so that early stage firms remain mindful of sources of information not yet available to them.  I don’t think you should proceed top down  as much as consult the variety of sources that you have available to cross check and verify insights from any single source.

Macroscopic / Objective / Numbers / Trends

  • Published Statistics
    • Market statistics
    • Government statistics (e.g. census, labor bureau, …)
    • Third Party Market Studies and Analysis
    • Independent financial analysis of public companies
  • Third Party Perspectives
    • News articles, blog posts, and other third party stories
    • Editorial Calendars and Conference call for paper topic lists
    • Third Party Experts and Analysts (who have surveyed / interviewed prospects)
    • Interview potential partners / channels
  • Surveys
    • Survey prospects directly
    • Survey customers (if you have them)
    • Responses to adwords, landing pages, and other probes
  • Public conversations
    • Discussions of problems and issues in public mailing lists
    • Published papers and articles authored by prospects
    • Panels and presentations at conference and trade shows
  • Public data about competitors – website and other published content
    • Product Datasheets and Service Descriptions
    • Positioning statements
    • Case Studies (in particular the implied frame of reference and what’s rarely or never mentioned)
  • Direct Conversation with Prospects
    • Exploratory / Problem Discovery conversations
    • Demo Feedback
    • Benchmark / Evaluation / Trial use feedback
    • Proposals to Prospects (and their reaction)
  • Win-loss analysis (talk with both prospects and customers)
  • Direct conversations with Customers
    • Why did they buy?
    • What do they use?
    • How do they use it differently than you anticipated (are they “using it wrong!”)?
    • New Features / Needs
    • Case Studies

Microscopic / Subjective / Stories

Shelly Gordon of G2 Communications at Sunnyvale BB Tue-June-19

Written by Sean Murphy. Posted in Events

Compare notes with entrepreneurs who eat problems for breakfast.Shelly Gordon, from G2 Communications Inc., has come to a couple of Bootstrapper Breakfasts® in the last year and offered very practical suggestions on how to tell the story of your startup and where to look for coverage.  We have asked her to share her insights on the “How to turn my problem solving idea into a remarkable story” at our next Bootstrapper Breakfast Tuesday June 19 at 7:30am at Coco’s in Sunnyvale.

Our format with a speaker is only slightly different than our regular roundtable discussions. After the regular round of introductions and suggestions for issues to be discussed the speaker makes about six minutes of prepared remarks, takes questions from other attendees, and then joins our regular roundtable conversation.

Great PR is about developing great stories of influence that journalists, bloggers, etc. want to write about and your market wants to read/view/listen to. Bring your questions on:

  • How to approach journalists & bloggers
  • Crafting your story

Come prepared to tell us a story about your fledgling idea; product; solution to a problem; or new service. Rather than simply describe your new business venture; tell us a story.

If you haven’t been to a breakfast before:  we start promptly at 7:30am with introductions; the formal event ends at 9am but you are welcome to stay after and talk to other attendees afterwards. Come prepared to introduce yourself and offer at least a one sentence summary of where you are in your entrepreneurial journey. There is one conversation around the table that is moderated by a volunteer: the breakfast is a chance to compare notes on operational, development, and business issues with peers. Vast majority of attendees are focused on technology startups but all are welcome.

Exits vs. Enduring Companies

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

VCs and angels may talk about changing the world, but their business model rests on a more prosaic calculation: Buy low, sell high. They invest in companies they think will become more valuable, so they can sell their stake for a sizable profit. From the time that VCs invest in a company, they have five years—10 at the most—to sell their entire position, hopefully for many times more than their original investment. After that, it doesn’t matter to them whether the company survives a year or a century.

To put it another way, the VC model is based on creating wealth for investors, not on building successful businesses. You buy into a company early on and sell out a few years later; if you pick well, you can make lots of money. But your profits don’t accrue to the company itself, which could implode after your exit for all you care. Silicon Valley is full of venture capitalists who have become dynastically wealthy off the backs of companies that no longer exist.

Felix Salmon “For High Tech Companies, Going Public Sucks

Marc Andreessen’s selection as “The Man Who Makes the Future” in a recent Wired cover and interview highlighted five key idea and related project or companies he started as a result:

  1. 1992: Everyone Will Have the Web  (Mosaic at NCSA)
  2. 1995: The Browser Will Be the Operating System (Netscape)
  3. 1999: Web Businesses Will Live in the Cloud (LoudCloud)
  4. 2004: Everything Will Be Social (Ning)
  5. 2009: Software Will Eat the World (Andreessen Horowitz)

It’s interesting that there is no mention of Jim Clark recruiting him to start Netscape, he does have an interesting aside as to how ephemeral even significant products can be:

Andreessen: One of the first times Zuckerberg and I got together, in 2005 or 2006, he stopped me in the middle of conversation and asked: “What did Netscape do?” And I said, “What do you mean, what did Netscape do?” And he was like, “Dude, I was in junior high. I wasn’t paying attention.”

Felix Salmon offered a less enthusiastic endorsement than Wired:

“In many ways, Andreessen’s entire fortune has been built on the greater-fool theory: if you build something trendy enough, there’s probably going to be a huge lumbering company out there somewhere willing to overpay for it. Hence the buzziness of the Wired interview — clouds! social! SAAS!”
Felix Salmon in “The Problem with Marc Andreessen

Salmon’s assessment echoes Chris O’Brien 2009 profile, “The Curious Case of Marc Andreessen” written just prior to the launch of Andreessen Horowitz, which triggered a Curious Case of Marc Andreessen Part 2. Some excerpts

And then there’s Marc Andreessen, the businessman, who seems to me to be — how can I put this charitably? — a bit of a dud.  […]

I don’t want to imply he’s a failure, because he’s not. But when I look at Andreessen’s business track record, I’m less interested in his checking account than the financial statements of his companies. As far as I can tell, Andreessen has never started or operated a profitable business, with one exception: Netscape turned an annual profit, back in 1996 when it posted a $19 million profit. Of course, that was when the company still charged you $49 to buy a copy of Netscape Navigator. Once Microsoft started giving its Explorer browser away for free, that was all she wrote. Andreessen and Netscape couldn’t figure out another business model, and vanished a couple of years later in a complex deal with Sun Microsystems and AOL that was announced November 1998.


Andreessen’s reputation has only risen as he has emerged as a leading angel investor for the Web 2.0 industry, advising or investing in companies like Facebook and Twitter. These companies reflect the philosophy of service and technology over revenues and profits.


Of course, at some point, these priorities have to change. A company has to actually make money. Innovation can’t be sustained by creating a venture-backed Ponzi scheme where one money-losing start-up is sold to another, which is then sold to another.

Losing money indefinitely isn’t just a financial failure. It represents a failure to truly understand how a service or product is creating value for a customer, how to communicate that value, and how to persuade the customer to pay above and beyond for that value.

That, all too often, is where the valley still falls short: Failing to innovate around the business to the same degree it innovates around the technology.

Three years after O’Brien’s article his assessment seems prescient.

Enterprise Change Agents Need to Add Process Mining to Their Bag of Tricks

Written by Sean Murphy. Posted in 1 Idea Stage, Rules of Thumb, skmurphy, Tools for Startups

“Process Mining Camp is where professionals gather to learn from seasoned experts. A place where you can meet fellow explorers and exchange ideas and business cards. Old-timers and greenhorns alike, this is where we get down to business and share stories from the frontier at the campfire.

Whether you are an expert or have just recently heard of process mining, here you can meet other people who are just as curious and passionate about process mining as you are. Learn about how others are using process mining, and what they have to tell you.”

Opening lines to Process Mining Camp 2012 home page

You can learn a lot from interdisciplinary efforts and the connections they explore between seemingly unrelated fields.  I think process mining tools are going to become an essential part of the enterprise change agent’s toolkit, and that includes any startups selling to the enterprise who perform a “before and after workflow analysis” as a part of their engagement process.  For a better definition of process mining I quote the opening paragraphs of the  2011 “Process Mining Manifesto” developed by the IEEE Task Force on Process Mining.

Process mining is a relatively young research discipline that sits between computational intelligence and data mining on the one hand, and process modeling and analysis on the other hand. The idea of process mining is to discover, monitor and improve real processes (i.e., not assumed processes) by extracting knowledge from event logs readily available in today’s (information) systems. Process mining includes (automated) process discovery (i.e., extracting process models from an event log), conformance checking (i.e., monitoring deviations by comparing model and log), social network/ organizational mining, automated construction of simulation models, model extension, model repair, case prediction, and history-based recommendations.

More fundamentally I think this is a recognition of the implications that we no longer manage businesses by paper records, software is the new paper for coordination, communication, and collaboration in the enterprise. A spreadsheet, a shared document directory, or a content management system of some sort typically mediates what we call a “manual process” today. There has always been a certain amount of analysis of these records for what I would call an autopsy: auditors determining after the fact where things went wrong. I think the analysis of these records is going to play a much more important role in diagnosis and prescription, so that there is less need for an autopsy.

Today many change initiatives (and new software sales almost always involve the key elements of a change initiative) rely on interviews and replicating the results from an existing “manual system.” Both are still requirements for initiating and completing a successful improvement project and remain critical to gaining a deep understanding of the culture, key assumptions , and unwritten rules of a firm. But change agents will need to become more skilled at assembling and analyzing the records not only of primary processes but the interstitial connections between them: processes mining tools and techniques will play an important role here.

The Heart That Holds On

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

“…cheer up that little heart of yours, master mine, for at the present moment you seem to have got one no bigger than a hazel nut; remember what they say, that a stout heart breaks bad luck…”

Sancho Panza advises Don Quixote to cheer up in Miguel de Cervantes’ Don Quixote (emphasis added)

The entrepreneurs I have come to see as truly successful are those who are motivated to make a positive difference in the world. You can have a job in a startup, you can become an entrepreneur as a lifestyle choice, you can pursue a career in the VC ecosystem, but I think that entrepreneurship is more properly viewed as a vocation or a calling.

Their desire to effect meaningful change is what sustains entrepreneurs on the emotional roller coaster of a new business and allow them to adjust their means and their goals to take advantage of new information and new opportunities. Working so that one day you can tell everyone to get lost seems unsustainable to me. I think you start from where you are with what you have available to create new value, pulled forward by a vision of what’s possible that you want to help create and take part in.

I don’t think entrepreneurship is sustained by consumption fantasies–what you will buy with your first million–as much as by what’s in your heart and a childlike curiosity toward how the world works and new undiscovered possibilities.

One movie that looks at the spiritual aspects of entrepreneurship in a very down to earth and thoughtful way is “The Call of the Entrepreneur.” It’s available from the Acton Institute and on Amazon:

Here is the trailer:

E. L. Doctorow once said that “writing a novel is like driving a car at night. You can see only as far as your headlights, but you can make the whole trip that way.” You don’t have to see where you’re going, you don’t have to see your destination or everything you will pass along the way. You just have to see two or three feet ahead of you. This is right up there with the best advice about writing, or life, I have ever heard.

from Bird By Bird by Anne Lamott

How to Tell When Your Team Has a Workable Plan of Action

Written by Sean Murphy. Posted in Rules of Thumb

In “Sources of Power: How People Make DecisionsGary Klein offers a checklist and a process, the latter borrowed from Karl Weick, for reaching a working consensus. First his list of the key elements of a plan:

  1. Common purpose and high level goals
  2. Clear objective, common description of the desired outcome
  3. The sequence of steps in the plan.
  4. The reasons for these steps
  5. The key decisions that may have to be made.
  6. Outcomes to be avoided (anti-goals or non-goals).
  7. Constraints and other considerations.

These would normally be framed as a narrative:

  • Situation: here is what we believe that we face
  • Task (Course of Action): what we have agreed to do
  • Intent: our reasons why we have chosen this course of action
  • Concerns: risks and potential events or developments we will watch out for
  • Calibration: a pre-mortem exercise where the team assumes that the plan has failed and brainstorms likely reasons why and ways to improve the plan to minimize or avoid the risks.

This checklist and narrative for describing a plan provides not only a useful basis for reaching a working consensus at a team level but also in reaching a working agreement with customers and getting feedback from advisors:

  • Make sure you have agreement on the facts of the situation and a range of hypotheses where you don’t have strong data.
  • Don’t agree to a course of action without understanding the larger goal, key risks and outcomes to be avoided, and doing at least one round of pre-mortem review where you agree on the most likely causes of failure
  • Whenever an advisor suggests a particular course of action get an explanation of what alternatives were also considered and how they were evaluated.
  • Consider not only the “Plan A” sequence but the likely decisions and branch points: what data will you want to have in hand to go with Plan B, or Plan J.

A roundup of some other posts on planning and pre-mortem

Update Apr-29-2014 : Malcolm Bell talks about using premortem technique in “How I killed Mailcloud’s 21,000 users today.” He included two useful references:

  • There’s a great Harvard Business School guest post on this here, by Gary Klein.
  • Research conducted in 1989 by Deborah J. Mitchell, of the Wharton School; Jay Russo, of Cornell; and Nancy Pennington, of the University of Colorado, found that prospective hindsight—imagining that an event has already occurred—increases the ability to correctly identify reasons for future outcomes by 30%. We have used prospective hindsight to devise a method called a premortem, which helps project teams identify risks at the outset.


Getting Started and Managing Rejection

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage

Q: An incubator rejected me because they didn’t feel I was working on an important problem. While I can respect their decision I feel that I need to prove them wrong by making my idea work.

A: It’s your startup: your interests, experiences, and skills have to be a part of the equation.

If you find your idea energizing I would not worry about the incubator admissions staff rejecting it: whatever your idea you will find most people you talk to rejecting it until you get all of the kinks worked out. The incubator may well be right, but that does not mean you should not still pursue your idea if you find it energizing.

If you persist in customer discovery you will find ways to improve your initial product idea (and more than likely refine your target customer and how you talk about their problem and your solution) and it will become more compelling.  I think you have to follow your own interests not work on someone else’s plan. This does not mean that you should ignore a customer when they tell you that something else is a bigger problem for them and would you mind helping them with that instead. But investors–I think in this case the incubator is acting more as an investor than a customer–tend to follow fashions than what’s genuinely needed.

I would try and find at least one other person who is energized by it as a team of two has a much higher chance of success and if you can’t convince at least one other person in three to six months then perhaps you should reconsider.

When you consider who might make a good business partner or co-founder select first for shared values.  Don’t worry as much about the idea, in fact you can spend time helping them with their great idea and vice versa and over time you may find a way to blend them. You can do this with two or three people at once on different ideas just to get a better sense of what it would be like to work with each of them.

Don’t let someone’s rejection “put a chip” on your shoulder. They have doubtless forgotten about you and it’s not a path to value creation for the most part. I see a number of entrepreneurs pursuing an idea to prove someone wrong in an argument that they had months–or worse years–ago.  This can  also lock you into an unwillingness to improve your idea, because changing it means that the incubator was right.

At the same time you may be tempted to set too high bar for yourself by the incubator’s rejection: don’t feel that you need to find a compelling idea before you get started. Just start with an idea that energizes you. Start where you are with what you have available to you. Saras Sarasvathy’s model of effectual entrepreneurship is the best one I have seen so far for the mindset that’s required in very early ventures and new markets.

Relationships are as much of an asset as knowledge. Pick a group of people you have an affinity for and talk with them about problems they face with tasks that they are trying to accomplish or their job or firm as a whole.

Look for problems that group has where collecting and documenting the work-arounds and partial solutions has value. This normally means that the group as a whole knows that they have a problem and are looking for a better solution. For example,  I am working with a team that is helping caregivers address what doctors refer to as the polypharmacy problem (and you or I would call “grandma has a big bag of pills to take every week”). There are many ideas and solutions already available that have various degrees of impact and effectiveness: documenting what helps and when has value in and of itself.

Look for groups that have not adopted a particular solution and probe for what’s missing or what’s wrong with the value proposition. It’s also useful to look across industries, what has been adopted in X but not in Y.

For B2B markets always do a workflow analysis. Understand what their business, processes, job content, and task look like before and after the introduction of your solution. Calculate the impact using their description and their estimates for quantities and frequencies and then probe for the implications:

  • “It sounds like this is costing you $100K every quarter.”
  • “It sounds like it’s taking two of your people full time to fix this problem who could be working on something else if this error went away”
  • “It sounds like you are losing 30 minutes a day on this”

Allow them to tweak their numbers. Asking them how much they would spend without doing a workflow analysis is essentially asking them to figure out the full impact in their head, it deprives you of the opportunity to explore the implications and determine the real value drivers.

You have to play your own game using your own unique skills and focus on creating value. Don’t be afraid to team up or even work for another startup or another large firm as a way to learn more rapidly.

See also

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