Archive for August, 2014

Ilya Semin on “Bootstrapping DataNyze to $1M/ARR” Sep-5-2014 in Palo Alto

Written by Sean Murphy. Posted in Events, skmurphy

Compare notes with entrepreneurs who eat problems for breakfast.Ilya Semin, founder of Datanyze, joins us at the Palo Alto Bootstrapper Breakfast 7:30am on Fri-Sep-5-2014 at Hobees in Palo Alto. Ilya will share what he learned bootstrapping Datanyze to $1M+ ARR and 9 employees. DataNyze provides competitive intelligence for Web analytics, Widgets, CDN, DNS, and related firms. It can answer questions like “Who are my competitor’s biggest customers?” and “Which customers are evaluating one of my competitors?”

Where: Hobees, 4224 El Camino Real, Palo Alto, CA
When: 7:30am to 9am Friday, September 5, 2014
Cost:  is $5 in advance and $10 at the door plus the cost of your breakfast, tax, and tip.
Register: http://www.meetup.com/Bootstrappers-Breakfast-SV/events/198423522/

Limited Seating please register in advance.

More On Ilya Semin and DataNyze

  • August 26, 2014 John Koetsier in VentureBeat: “Google of Sales and Marketing Raises $2M
    Knowing who uses your competitors’ products can be a huge competitive advantage. Knowing when potential customers start a trial of your competitor’s product could be a lifesaver. Datanyze trawls the web for scraps and pieces of code that reveal what software-as-a-service products companies are using on their website, announced today that it has raised a $2 million seed round from investors such as IDG Ventures, Google Ventures, and Mark Cuban. And that it’s been growing at the astonishing rate of 25 percent per month all this year.
  • January 20, 2014 John Koetsier profiles Datanyze for VentureBeat in “This Startup Tells You When Companies Try Your Competitor’s Software
    A tiny San Mateo startup that has taken no angel money, no venture capital, and no outside funding of any kind is growing at the torrid rate of 25 percent per month and luring away key employees from hot growing companies like KISSmetrics.
  • Ilya Semin on the Value of the Great Demo Workshop

John Foster McKenna 1990-2014

Written by Sean Murphy. Posted in skmurphy

John Foster McKenna: the tragedy of death at an early ageJohn Foster McKenna: December 4, 1990 – August 8, 2014

“Man that is born of a woman has but a short time to live, and is full of misery. He comes up, and is cut down, like a flower; he flees as it were a shadow, and never continues in one stay. In the midst of life we are in death…”
Book of Common Prayer: Order for the Burial of the Dead

Theresa and I met with John Foster McKenna at his father’s request about four  years ago. He was contemplating a career in business after college and  his father asked us to offer our perspective on sales and marketing and give him advice on books, types of courses, and  companies to consider. He was an earnest and direct young man, possessed of an athlete’s grace,  who was clearly willing to work hard and would likely prosper in whatever he set his mind to.

John McKenna was home for the holidays in 2012, relaxing in a touch football game when he suffered a seizure for the first time. I blogged about the events in “Good Fortune: Grandfather Dies, Father Dies, Son Dies” partially as a way to process them. In February 2013, his father  started a blog to keep friends and extended family informed of what was happening with his son’s cancer.  John underwent aggressive chemotherapy which brought a remission that allowed him to finish his education and go through college graduation.

John Foster McKenna passed away on August 8, 2014 after a twenty month battle with brain cancer. John lived his life in San Jose, attending The Harker School, Bellarmine College Preparatory ’09, and Gonzaga University, Bachelors of Business Administration ’13. He is survived by his parents, John William McKenna and Melanie S McKenna, his grandparents John Eugene McKenna and Marilyn McKenna, and numerous aunts, uncles and cousins on both the East and West coasts.
John McKenna Obituary

Visitation and Funeral

If you knew John or are a friend of the family there will be visitation hours at Darling-Fischer Garden Chapel, 471 E. Santa Clara St, San Jose on Wednesday August 13th from 4-9pm, with a Rosary at 7 pm.  On Thursday, August 14th there will be a Mass of Christian Burial at St. Victor’s Catholic Church, 3108 Sierra Road, San Jose at 10 am.  A reception to continue the celebration of John’s life will be held afterwards.

“The present life of man upon earth, O king, seems to me, in comparison with that time which is unknown to us, like to the swift flight of a sparrow through the house wherein you sit at supper in winter, with your ealdormen and thegns, while the fire blazes in the midst, and the hall is warmed, but the wintry storms of rain or snow are raging abroad. The sparrow, flying in at one door and immediately out at another, whilst he is within, is safe from the wintry tempest; but after a short space of fair weather, he immediately vanishes out of your sight, passing from winter into winter again. So this life of man appears for a little while, but of what is to follow or what went before we know nothing at all.”
Venerable Bede’s “Ecclesiastical History of the English People (London: A Revised Translation With Introduction, Life, and Notes By A. M. Sellar, published by George Bell and Sons, 1907) Book 2, Chapter 13


I came across a quote by Thomas Carlyle that crystallized my sense of loss at John’s death.

“The tragedy of life is not so much what men suffer, but what they miss.”
Thomas Carlyle

Remarks from Rosary Service

John W. McKenna has posted his remarks from the Rosary service here is a key passage but the entire eulogy is very moving and worth reading:

I have often remarked how amazed I have been at the manner with which he responded to his disease and its prognosis. That if it had been me, at the same age as John, there is exactly zero chance I would have responded with anything close to his equanimity. And I know that his ability to persevere is truly a credit to his mother.

In the days since his first seizure, when his friends were with him as they prepared to play football and had to respond to that sudden crisis, to the final night when one of his cousins and one of his friends were with him, Melanie and I have had the wonderful opportunity to see just how much love there was in John’s life. His friends, whether from Little League, our Berryessa neighborhood, Harker Academy, Bellarmine, or Gonzaga, and his family of beloved cousins, were constantly by his side; encouraging him, celebrating the good times, sharing stories or sometimes just being with him quietly. Their goodness and kindness showed us that he was truly blessed.

One thing that made the funeral very different was that about half of those in attendance were in their teens in twenties. It was a moving service and the first hour or so of the reception was also sombre, but then someone started to play some music and it took on more of the ambience of a wedding reception. I cannot imagine John Foster McKenna would have objected. We had all seen his death coming or so long we had all had the opportunity to grieve. John’s remarks end with a quote by Bill Clinton on April 19, 2005 at the ten year anniversary of the Oklahoma bombing that I found helpful:

“Yet, by the grace of God, time takes its toll not only on youth and beauty, but also on tragedy. The tomorrows come almost against our will. And they bring healing and hope, new responsibilities and new possibilities.”

 

Q: How to Apply Lean Innovation Methods To Regulated Industries

Written by Sean Murphy. Posted in Demos, skmurphy

Q: My research focused on the assessment of atherosclerosis in coronary arteries using  Computed Tomography examinations as the imaging modality. I have looked at various aspects of atherosclerosis such as volume scores, automatic extraction of anatomical structures, plaque detection, dual energy CT and plaque distribution patterns. I am new to the lean innovation methods and am having difficulty applying methods like minimum viable product (MVP) in my industry, medical imaging,  which is heavily regulated. I cannot see how to do incremental updates given the level of regulatory sign-off required.

We have worked with a number of medical instrument and “medical workflow” startups who face this challenge in different ways. And our work on the BeamWise team has led to a number of conversations with medical imaging and instrumentation companies developing new products.

Lean Innovation: Established Firms Vs. Startups

An established firm with existing customers should invest effort in instrumenting current offerings to get a better handle on actual use and duty cycle, and allow the technicians/researchers/doctors to provide feedback in context (at point of care or point of use) for shortcomings or issues. More simply, take a hard look at how folks are using your current product before proposing something new.

Startups need to separate the challenges of image collection from the usability. For new modalities of image collection you need to work with research groups to be able to get access to tissue samples or live subjects depending upon your application. Often a veterinary or agricultural application is an easier way in than aiming directly at human subject applications, once you have  established the usefulness finding teams that want to work with you on human subjects becomes easier. If your primary worry (or innovation) is more about usability or image presentation then you can work from “canned” image data sets and pay technicians, researchers, or doctors to take part in feedback sessions where they interact with the images produced (perhaps in the context of your user interface)  and give you feedback.

Net net, even though the final configuration is subject to rigorous review you can find ways to test different critical aspects of your product and iterate without having to get final approval.

Consider Attending Great Demo Workshop

You might also consider our October 15-16 “Great Demo” workshop, a number of medical imaging firms have attended over the years and have found that Peter Cohan offered a number of valuable insights they were able to incorporate into their discovery conversations and demos of new products.

You are also welcome to schedule a no cost office hours session if you want to talk further and have us help you design some experiments to move your MVP forward.

A Conversation With Tristan Kromer on B2B vs. B2C Customer Acquisition Challenges

Written by Sean Murphy. Posted in Audio, Customer Development, skmurphy


Direct download from http://traffic.libsyn.com/skmurphy/Tristan_Sean_6-13-14b.mp3

Here is a rough transcript of the first five minutes or so to give you a flavor, I think you will find it interesting if you are wrestling with customer development or customer validation in an early market:

Sean: I am sitting here today with Tristan Kromer, we are going to talk about the differences between B2B an B2C customer acquisition methods.

Tristan: some consumer startups seem to latch onto a particular technique and apply it regardless of context. I am really interested in the different approaches you can use to find B2B customers and where the differences are between selling to consumer, small business, and enterprise.

Sean: B2B outreach–where the price point or deal value is above $5-10,000–is more tailored or artisanal. Consumer startups feel this pressure to move to more scalable methods much earlier. I know one piece of advice you offer regardless of whether it’s consumer or business is to have conversations with prospects on an ongoing basis.

Tristan: always start face to face, even for consumer. What the consumer folks may call a “manual process.” Because that’s a much more rapid form of connect. Even if you want to have a highly automated sales process, you believe that consumers will see your hero image and read your FAQ and click on the purchase button, that’s a sales process. Your face to face conversation can be roughly analogous: demonstrate the the value proposition, answer questions and then you have an ask. By doing that face to face, analog vs. digital so to speak, you get a lot more feedback and can see when the prospect smiles, frowns, looks confused, etc.. You can apply that feedback to your digital process. For example, when I use this language consistently  it’s getting a much better response. Let me try that on a landing page.

Sean: there is a desire to create scale, to create the digital process, right away. For me it’s much harder to learn from when you have a lot of unknowns. The odd thing is that B2B stays more personal because above a certain deal size you cannot assume you can avoid a negotiation to be able to get the business. There are going to be several serious conversations and at least one serious negotiating session where the value of the transaction is above $10,000.

Tristan: there is also a bias to a longer term relationship on the large dollar B2B purchase. There is an expectation of support that is often not there in a smaller consumer purchase. There is a sense of “you are going to be guy we deal with when we have problems or renew.”

Sean: yes the salesperson has to be viewed as a point of service and as providing value. Your point about a “bias to a long term relationship” was a good one: I think the enduring consumer brands pay a lot of attention to that as well. With startup sometimes there is so much focus on the ramp that sometimes unfortunately less attention is paid to reputation, brand, social capital, whatever you want to call it. It’s not so much “we have cool logo” but “our cool logo represents a promise that people can depend on.”

Tristan: I agree: it’s two different things. It’s esthetics vs. trust. You have repeated interactions with the firm and now you can trust them. I have recently been doing some work with large brands and it’s amazing the impact that a trusted brand has on conversations with customers. There is an automatic assumption that it’s going to be a serious conversation.

Sean: does that work against experimentation? Because they feel that they are carrying the brand they don’t want to be “too experimental?”

Tristan: it opens doors and you can have conversations that startups find much more difficult to secure. So there can be a bias towards a false positive. But as least you are having conversations you can learn from instead of trying to have conversations. I think you can be aware of the bias and manage for it. But there is fear of failure, but you can compensate for that with “off brand” tests where you don’t identify the brand.

Sean: we don’t do as much “I am from IBM” as “Charlie recommended that we speak to you” and they can check with Charlie and he will confirm it. Or I am a member of this community, I have presented at this conference, I have taken part in this working group. There is a brand effect for smaller startups, but it’s predicated on prior accomplishments or prior
relationships that can be re-activated or leveraged.


Here are some other interesting interviews with Tristan:

Q: Is the Prisoners Dilemma A Good Model for Doing Business?

Written by Sean Murphy. Posted in Sales

The prisoners dilemma thought experiment that posits a single isolated transaction as the entire relationship does not offer a good model for business and dealing with prospects, customers, partners, suppliers, employees, or really anyone.

Q: Is the Prisoners Dilemma A Good Model for Doing Business?

Q: I am currently working on a degree in Computer Science with a focus on Artificial Intelligence, in particular Machine Learning and Natural Language Processing. My goal is to do a startup after college but while I find the technology aspects straightforward, some aspects of business are challenging.

How do you form partnerships with other people and other companies? I studied game theory last year and it would seem from the Prisoners Dilemma that as long as you plan on never working with that person again it is in your best interest to screw them over. But if you plan on working with them for a long time then you should start by being good to them and then treat them as they treat you (“Tit for Tat“). How do you look at forming business partnerships?

A: In real life, as opposed to thought experiments like the Prisoners Dilemma, it’s hard to tell when, where, and in what circumstances you will meet someone again. I don’t think it’s ever in your best interest to screw anyone over.

We exist in a web of relationships with membership in overlapping but distinct communities. As entrepreneurs we can be seen as agents of chaos by the status quo but our aim is innovation that leaves society on balance better off.

Of course we have to make a profit for our businesses to continue, but there are other gains that come from entrepreneurship beyond the financial that lead us to invest in our employees education, to invest in our communities and to “leave a little money on the table” when dealing with partners and suppliers in the interest of good will and future relationships.

Business is situated in community and a social context: a good reputation as fair dealer committed to the values of the community, as evidenced by actual kindness and charity will create more value in the long run than treating every transaction as the last one you will ever do with the other party.

Related Blog Posts

Customer Development Surveys Always Suck For B2B

Written by Sean Murphy. Posted in Customer Development, skmurphy

A customer development survey always sucks for B2B: have a conversation instead.

If you are selling to business and you tell yourself “my time is so incredibly valuable” I need to automate my interactions with prospects you are missing the point. The key challenge in the early market is to establish and maintain trust by listening, making and meeting commitments, and following up to very that your customers are satisfied. It’s not so much about punching the most important item on your task list as cultivating relationships with key customers, partners, and employees: all of these start with conversations and are built on trust

Once you are trying to validate what you think you have learned, start making good faith offers. Don’t start surveying more prospects, see if the firms you have already talked to are willing to buy. And if not,  learn why not in a conversation.

Practical tips for how to conduct B2B Customer Development Interviews

Start With a List of Customers and Problems That Build on Your Experience and Relationships

Written by Sean Murphy. Posted in 1 Idea Stage, Community of Practice

“Start building network, blog, educating 1 year before you make the leap.
Build community.
The first sales will always be to friends. Make those friends.”
Conor Neill in “Entrepreneur: Start a year before you Start

I think Conor Neill offers this is a great framing for the need to identify the things about your plan that are not likely to change–a problem area, a category of customer–and join communities that are already focused on these. Build on experience and relationships.

He advises “build community” and not “build new community” and I agree, I would build new only where you cannot find existing communities.  If it’s a real customer category or a real problem there is almost always one or more communities formed that are addressing it at least partially. There may be several each using different terminology and focused on a different aspect of the same set of problems, but this is a search you can start well advance in crafting a product.

I don’t know if your first sales come from “friends” but certainly from people that trust you, if you can start the trust building process in advance of the sales process by becoming a member in good standing of communities they are already a member of or by writing or speaking about topics that they are interested in, then you effectively start in advance of the direct sales process.

Build on Experience

Another way to look at this is to “always start in phase two of a five phase plan.” Look into your past experiences and projects for examples of problems solved and relationships that you can build on as you start your new venture. If you are going in to a new area and cannot identify aspects of prior experience or expertise that will have an impact then be careful: you may be attracted to the new new thing without a way to differentiate your offering.

It’s OK to start over from scratch but if you are effectively setting fire to ten or twenty years of experience you may want to look instead at problems and fields that are adjacent or can take advantage of your experience in preference to one where you don’t bring relevant experience. Green fields are seductive because you know the problems of the areas you are more familiar with and can fall victim to the “grass is greener” when speculating about how easy a new field may be.

“An early start beats fast running.”
Michael Bowen (@mdcbowen) “Cobb’s Rules

Related Posts

Quick Links

Bootstrappers Breakfast Link Startup Stages Clients In the News Upcoming Events Office Hours Button Newsletter SignUp