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 the outreach is tailored / artisinal, where the price point or deal value is above 5-10,000. Consumer startups feel this pressure to move to more scalable methods much earlier due. I know one piece of advice you always offering 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 ot 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 carying 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:

Thought Leadership: A Briefing For San Bruno Rotary

Written by Sean Murphy. Posted in Audio, Events, Silicon Valley, skmurphy, Thought Leadership

I gave a talk on “How to Give a Great Demo” in April at the Co-Founders Club and met Elijah Angote, founder of “The Best Notary” who arranged for me to speak at the Rotary Club of San Bruno today. So I have him to thank and the audience knew who to blame. I really enjoyed the talk and felt very at home with the group. Here is the audio for the core of the talk (I have cut intro and and about ten minutes of Q&A)


Or download from http://traffic.libsyn.com/skmurphy/ThoughtLeadership140806c.mp3

Here is a handout from the talk.


Thought Leadership

A Briefing for San Bruno Rotary, Aug-6-2014 by Sean Murphy, SKMurphy, Inc.

  1. What is thought leadership?
  2. Why will it bring you more business?
  3. How do you get started?

Thought Leadership: Discern the important events and trends at work in the present, predict their likely effects, and offer perspective and actionable advice in time to have an impact.

Thought Leadership In Action

  • Advise prospects and customers on how to overcome their most pressing problems
  • Customers bring you their hard problems, prospects ask you for insight on options

How Does It Bring You More Business?

  • A reputation for expertise means that you get called first
    • You can compete on more than price:  expertise acts as a differentiator
    • Encourages current customers to bring you new challenges
      • May lead to new opportunities and even new offerings for emerging needs

Key Practices for Thought Leadership

  • Careful observation, questions, networking
  • Writing and speaking to build influence

Build a Communication Strategy

  • Identify audience / Understand their needs  / Position your message / Promote
  • Measure success: website traffic, mailing list size, inquiries, customers

Execute: Your 90-day Plan Should Address:

  1. What other people say about you
  2. What you say
  3. What you write
  4. Getting found when people are looking

Topics You Can Always Talk About

  • Change: what’s waxing and waning
  • Significance of recent events
  • Checklists to identify or resolve problems

“The future is an abstraction, all change is happening now.”
Marcelo Rinesi

You can only take action in the present.

“I have gradually come to appreciate that the really important predictions are about the present. What is happening right now, and what is its significance?”
Robert Lucky

What Is The Current Situation / What Is Significant About it?

  • Before you can make predictions you have to understand what’s happened.
  • The easiest predictions are based on the “acorns” already planted in the present

Checklists:  Develop A Coachable Perspective

  • Teach customers and prospect to diagnose problems from symptoms
  • Teach prevention and self-service so that they call you for high value problems

Thought Leadership Brings Business

  • You get called first
  • Compete on more than price
  • New opportunities
  • New offerings

About SKMurphy, Inc.: We help you find leads and close deals

Bootstrappers Breakfast www.bootstrapperbreakfast.com

If you are looking or a speaker for your Silicon Valley business group please contact us. I enjoy giving highly interactive presentations to groups  of 12 to 40 people.  I am happy to talk to larger groups but I prefer where there are opportunities for real audience participation.  I also do a number of interactive webinars and workshops for groups who are not based in Silicon Valley so if that’s of interest please feel free to contact me as well.

Matt Oscamou of Frontier Bites on the value of the Bootstrapper Breakfast

Written by Sean Murphy. Posted in Audio, Events, Founder Story, skmurphy

Compare notes with entrepreneurs who eat problems for breakfast.Matt Oscamou, the founder of Frontier Bites, talked about lessons learned getting a food startup off the ground at the April 15 Bootstrapper Breakfast in Sunnyvale. Here is a short recording of his introduction, the benefits the Bootstrapper Breakfast® has offered him, and how he came to bootstrap Frontier Bites with his brother and persevere after his brother passed away in a rafting accident.


Download: http://traffic.libsyn.com/skmurphy/Oscamou-Intro-BB140415.mp3
A transcript of his introduction is available at Matt Oscamou talks about founding Frontier Bites, recap from April 15, 2014

Matt Oscamou: I have a food company in Silicon Valley, bucking the tech trend. I was over at Red Rock Coffee working in the downstairs area and I saw “Bootstrappers Breakfast” on the calendar so I figure I would try to find out what that was. This was right when I was getting going. It’s been a helpful group ot bounce some ideas off of. My attendance has been relatively sporadic based on the needs of the business. It’s been good.

I started the Bootstrapper Breakfasts in Sunnyvale in October of 2006. I was fed up with attending events where the only focus was on how to raise money from investors and where aspiring entrepreneurs would talk about what they would do once they raised money but not what they were doing to move their startup forward now.

One of the things that surprised me in the first year was that people would come for a variety of reasons. Some would attend regularly, others would come only once and a large fraction would attend when they had issues that they wanted to discuss. I thought Matt captured that neatly in his intro.

Related posts:

Recap Semifore MVP Clinic: Selling To A Team of Diverse Experts

Written by Sean Murphy. Posted in 4 Finding your Niche, 5 Scaling Up Stage, Audio, skmurphy


Series profile
Thinking about this using an OODA loop model – — Observe -> Orient -> Decide ->  Act

  • Orient part is sensemaking — its own kind of fast learning
  • Often takes a long time in a complex situation (e.g., all situations where learning is involved); subject to error because it’s “culture bound”
  • What we do
    • Asking what you see
    • Asking what are interactions (including between people, process, platform, and practices)
    • focused on  asking good questions / suggesting questions to research;  avoid giving advice
  • Audience: other entrepreneurs

Hosts

Presenter profiles (see extensive write up a “Semifore Execs Share Bootstrapping Lessons and 2014 Scaling Up Plans at Jan-17-2014 MVP Clinic)

  • Robert Callahan, COO Semifore, Inc.
  • Herb Winsted VP Business Development and Customer Care, Semifore, Inc.
  •  Semifore, Inc: niche software player in Electronic Design Automation founded in 2006 with a focus on tools for memory map management

Initial questions

  • How do we scale and grow the business
  • What strengths or accomplishments will you build on
  • What existing or constructed vantage-points (data-collection opportunities) have been or will be most useful?
  • What capabilities need to be developed
  • What’s the primary barrier or key challenges you need to overcome
  • talk about product and challenges -    cross functional nature
  • talk about what you have learned – making sense of current experience
  • look ahead 2014 talk about plans

Problem profile

  • complex sales environment
  • education / learning involved
  • many prospective clients have rolled their own
  • side issues = standards, interaction with purchasing
  • Usually find a pre-existing culture / product team /  team
  • more complex sales and adoption problem
    • touches hardware team (e.g. system architect, RTL developers)
    • software developers
    • documentation specialists
    • documentation consumers – e.g. verification and validation team
    • plus “team in larger team or org issues”

This is a mid-course correction conversation. We have a viable product that’s now robust

How do you scale the business?
Competitors are “in-house” solutions – first generation build out.  Semifore product replaces spreadsheets and in-house Perl scripts that represent a career path for internal tool developer

Questions from Audience 
Q: How many employees does Semifore have?
A: five direct plus some other outsource teams we draw on for specialized resources

Q: Do you monitor feature usage and see which ones are used and which ones are not? Do you remove unused features?
A: it’s on-premises software, there is no monitoring except in conversation with customer. Will be deleting some obsolete standards but have to provide a lot of legacy support and backward compatibility

John observed: consider inserting learning & feedback loops here.

Q: Do you have any services revenue?
A: We have  a hybrid license. basic level charge, tiers of users (groups of 10). we sell licenses in batches of 10 with a decreasing cost per incremental seat even as total site license fees go up. We have some project support service fees; there are also fees for “global license”

Q: Tips for growing from small groups to more users in the companies.  How to encourage spread inside customer
A: We believe the following have been key to our success:

  • spend face time with customers
  • dealing with the internal script-writers “who can do stuff.”
  • sales opportunity: when the script-writer leaves

Q: What percentage of customers did you have pre-existing relationships with (from Magma, as an ex-employee of that company, etc.)?
A: really only first customer, most of the rest were “cold starts”

Q: Also, is the tool compelling to any functional area as is, or is it compelling primarily because there’s a lack of resources for the previous internal approach?
A: a bit of both.  solutions exist in organizations that are not visible to management.

Notes from Live Session

Walking around the issues –

Rob: in the Valley back when disk drives looked like washing machines.  Finance roles, then managing channel and tech support.  EDA for last 15 years.  External advisor to Semifore, joined the firm a couple years ago.  growing the business from boutique to a real business.

Herb: business development VP — customer facing activities. started in the electronics business back in the ’70s. Projects in Europe, Japan, US, involved with Semifore since 2008. Semifore is the “right size” for connecting directly to customers.

Have both survived and added customers.  Tool crosses several different disciplines,  enabled by high level

Some standards IPXACT and System RDL but for the most part replacing either custom scripts or Excel input based techniques.
Rich Weber drew on experience at SGI, Cisco, Stratum One to create cross-compiler
selling to sw, firmware, and documentation teams proliferating from early beach heads

Respond to customers quickly. agile response.  Keeping customers.

Initial sell to a small team.  from 10 users to 100 in the same company. tool goes viral.  education challenges to begin using the tool.  Support requests are often enhancements to connect with their local requirements.

How to proliferate. Getting information early in the design / development process. Measure speed.  Perceiving the activity outside “my silo.”  It’s a blazingly fast product once it’s in place.

Q: does tool help to measure design cycle impact?
A: It’s really a technology driven company working with engineers who focus primarily on technology, but our customers live in a business environment. more recently customers are coming in and asking for automation of the creation of these architectural descriptions. Once the tool is adopted there is a shift from create the “perfect document” to ‘good enough distributed widely’.
Semifore enables a start from a terse description that can be elaborated.  EDA Process Workshop in Monterrey – need a good plan more than a good tool

Herbie: Making the transition from supporting a wide variety of design styles to a smaller subset that the industry as a whole seems to be converging on.
Sean: similar to what happened in networking where there was a convergence from “multi-protocol” to IP and Ethernet.

As an introduction strategy Semifore offers a sandbox model.

John: have you thought about a user conference where you can share lessons learned and foster “viral process”?

  • Rob: good idea, we could do it in the Valley
  • Herbie: one challenge is a lot of our customers are direct competitors and don’t allow us to talk a lot about what they are doing or even that they are using it.
  • John: breakfast at Coco’s might actually kick this off; talk about failure as much as glossy success. provides access to design ideas and source of marketing insights.
  • Sean: first Verilog user group was very low key.  It was at Denny’s.

Rob: engineer to engineer conversations have been of great benefit, but we have trouble translating that into business impact.

  • Sean: boiled frog problem- registers grow incrementally.  complexity ….  how to trigger the epiphany that “it’s getting hot”.  how describe the environmental question about increasing complexity.
  • Rob: we see people saying “we can’t manage any more. please help”
  • Sean: need to crystallize this customer’s business insight into tools for engineer customers at other firms (including prospects) into a compelling business proposition. Problem has scaled from hundreds to tens of thousands of registers

Sean: What is one thing that would change the equation:

  • Herbie: go to next level in revenues. A potential contract on the horizon would generate more human resource.
  • Rob: finalize and accurately describe tool functions, so can present / educate people at higher levels of the organization..

Q: What is your licensing model?
A:business predicated on one year licensing deals, renewals are based on internal uptake not multi-year contractual obligations. Avoids some issues where customers wait for end of quarter/year asking for large discounts

John: your great strength is your engineering view, but is this in some ways a weakness? Could you do more to see into the customer organization w/o more revenue?
Rob: A senior VP engineering has a P&L and a business view. We are a small tool in price, it’s hard to get their attention.

Take-Aways

  • Herbie: this session was out of our normal activity.  appreciate opportunity.  learned working inside orgs & managing projects: the reality of business situation, putting together the fifth team.
  • Rob: better mousetrap doesn’t always sell.  Semifore has good technology.  challenge is to refine the messaging.  describe “breakage is around the corner.”
  • Sean:  need to explain to prospects that they have gotten used to dealing with “broken”. I think Semifore’s challenge less in engineering more making business case to pragmatic buyers.

Recap From Dec-16-2013 MVP Clinic With Northwest Earth Institute (NWEI)

Written by Sean Murphy. Posted in Audio, skmurphy

On December 16, 2013 John Smith and I sat down with key members of the leadership team from the Northwest Earth Institute (NWEI) to discuss their plans for their 2014 EcoChallenge program.

The following folks took part from NWEI:

  • Mike Mercer, Executive Director
    As Executive Director, Mike has responsibility for the overall health and strategic direction of NWEI. He began his involvement with the Institute back in 1994 as a program participant and later a volunteer at the program and policy levels. Mike says, “I feel blessed to guide and learn from an organization that has had a profound impact on my life, and by extension others in my circle of relationships. I can’t imagine another place I would rather be.” Prior to joining NWEI as the Executive Director in 2007, Mike held a variety of leadership positions within the nonprofit sector including the YMCA and College Housing NW. He obtained his bachelor’s degree at Humboldt State University and sits on the board of trustees for the Rotary Club of Portland.
  • Rob Nathan, Director of Outreach and Technology
    As the Director of Outreach and Technology, Rob helps NWEI achieve its mission and foster leadership. He works with individuals and organizations across North America to implement NWEI discussion courses and the EcoChallenge. He has worked in the sustainability education field for ten years and has a deep passion for the pedagogy used by NWEI and its network. Prior to joining NWEI, Rob managed sustainability projects related to waste minimization across the Portland metro region. Rob holds a Master’s degree in Sustainability Education from Portland State University and an undergraduate degree from Prescott College. Rob also sits on the Board of Directors for our United Villages, a nonprofit community enhancement organization in North Portland.
  • Lori Davidson, Director of Marketing
    Lori is the Director of Marketing for NWEI. She joined the organization after spending many years as a marketing leader in the high tech industry in both the Bay Area and in Oregon, including professional experience in non-profit development. Lori’s vision for marketing for NWEI is very focused on telling and retelling the inspirational stories that emerge as people learn how to live sustainably. She also is eager to help higher ed professionals take advantage of the pedagogy and platform that have made NWEI a leader in enabling those “a-ha” moments. Lori believes in walking the talk, and that actions matter at least as much as words, so you will often find her looking deeply at the success of the programs and tweaking and retweaking until the results are what the organization needs. Lori is always looking to find ways to promote and connect NWEI with others, please  contact her with your good ideas. Lori holds an undergrad degree in Business and Finance from the University of Wisconsin and an MBA from Santa Clara University.

Background reading: “NWEI’s Our Model For Change

NWEI is a sustainability focused non-profit in Portland  OR with  two distinct lines of offerings:

  1.  a series of discussion courses designed to help people internalize, practice and share more sustainable behaviors  and
  2.  an annual EcoChallenge program  designed to help people change their habits over a two week time period in October.

NWEI just celebrated its 20th anniversary and has  logged over 140,000 participants in discussion courses and about 3000  participants in the EcoChallenge.

  • NWEI  is well positioned in this space both fiscally and  through its  mission. NWEI has earned revenue through the sales of course books, and  receives grants and support from donors.

There  is a small, regular and reasonably   predictable market for the  discussion courses, and the EcoChallenge has grown steadily since its  initiation four years ago, topping 2300 participants this year. NWEI’s change model is founded on a three step process of “Connect, Reflect, Act.” A cyclical process that provides for different entry points. The EcoChallenge typically starts at the Connect or Act stages.

The EcoChallenge is the focus for this discussion.  www.ecochallenge.org

Some notes from Lori Davidson to frame the discussion

  • Currently,  there is little follow up with individual EcoChallenge participants,  other than Thank You and an occasional newsletter…until the invitation  for EcoChallenge n+1 goes out.
  • The current website is adequate but could stand an update and incremental features
  • There is no app, but the team wants one. There is an app http://eco-challenge.eu/en/  for iphone which is largely based on open source: Open Source
  • The source code of EcoChallenge was published under the GPL 3.0 and is available here:
  • https://github.com/Raureif/EcoChallenge
  • The  majority of the EcoChallengers are in the Pacific Northwest, but there  is a growing community outside of Portland, largely out of student  populations.
  • The 2013 EcoChallengers are a mix of groups sponsored by their school/corporation and of individuals.
  • I  believe that nurturing and developing an ongoing conversation with an  active community of EcoChallenge participants is core to the mission of  NWEI and could yield a much broader reach – and be 100% aligned with the  mission of NWEI.
  • I would like to develop an approach for NWEI to enhance and expand that community.

http://www.ecochallenge.org/list_of_participants/team_list/

Ideal outcomes:

  • EcoChallengers
    • Become engaged community members – as measured by
    • Engage in online and in person dialog advancing the mission of NWEI (inspiring people to take responsibility for the earth)
    • Current EcoChallengers are inspired to bring their friends to EcoChallenge 2014
    • Volunteer to lead discussion courses
    • Joining (and pledging) to NWEI
    • 2013 EcoChallengers step up to engage and manage a community
    • EcoChallenge 2014 has 10000 members
  • One  key success factor for NWEI is the *deeply personal* and social nature  of the program.   How can we get that element into this community?

The EcoChallenge program builds on its virtual nature and expands its reach.  Meetups? Self organized camps?

  • More higher ed and corporate sponsors to work this into their sustainability/green agendas

Session Notes

Goal: taking things to the next level.

Sean: What’s worked historically?  To take EcoChallengers from 1,000 to 2300 participants.  what things do you want to make sure you don’t break?

Rob: institutional participation.  turn-key participation.  organizations and companies who can engage their networks.  Connecting with organizations drives growth.  Introduced a point system to gamify the event.

Lori: don’t want to break the revenue generation.  there is no requirement – not even  a pledge. They can pledge but its not a requirement.  The program falls short of covering the costs.  a tough spot because have seen a lot of growth, but it doesn’t pay for itself.  question: how grow but not compromise the openness?

Mike: Our belief in the program is based on the belief that change is a social process mediated by stories. it’s as much about stories as numbers.

Sean: numbers, stories, diagrams, pictures

John How are those stories broadcast, curated, and “metabolized” by the emerging community?  Can you use those stories to identify barriers at an institutional level?  to help institutions understand internal barriers to change?  The entire social process should be aimed both at successful changes and understanding failure or obstacle to change.

Answer: people read stories, find them, share them on featured page.  would a client institution pay for curation in order to gain greater insights?

Sean: might be a  process to curate beyond individual story-level — gather tips or techniques into a cookbook  for institutions of a certain type or about certain kinds of problems that people would pay for?  sharing common obstacles can be energizing.  Could be revised each year?  E-book sold for $2.

Lori: challenge is: whether people would value it, or be willing to pay for it.  This is a popular area to talk about.  How differentiate it from other collections of tips & tricks that are available for free?

Sean: where is the barrier between understanding and action.  You are clearly helping bring about behavior change.  But what’s the barrier in understanding the behavior change you cause?

Lori: this program is easy to explain.  It’s good because the level of effort depends on choices you make (from easy, like not using plastic bags to more difficult not using a car for a week).  Most people believe they ought to do more on the sustainability front. This program helps them actually do more.  Why take the action? If change is a social process then an important motivator is “I will participate since my friends are participating.  and I have been asked to participate.”  Episodic element is important for awareness — I can handle more intensive involvement in my busy schedule knowing that I can relax after the challenge is over.

Sean: question of increased donations or revenue.  Normally try to align value creation and payments. Not trying to get you to charge subscribers more but to offer differentiated advice.

Lori: concern that if a pledge were mandatory (to get access to blog, tips, ideas, etc.) might loose a large number of participants (especially students).  Institutions not willing to ask participants themselves for the pledge funds.

Sean: are there auxiliary products or elements that might be part of an ecosystem?  Can this EcoChallenge translate to new habits, e.g. meet a challenge for 10 of the 14 days it raises the bar on habits and future behavior;  if you run long term then it has a decrease in participation over time.  What can we learn from “quantified self” community?

Sean: long-term participation… willing to pay for those?

Lori: moving the discussion to courses offered by NWEI. Don’t have a way to motivate the EcoChallenge community to buy the other NWEI revenue producer: discussion courses.  Since ecochallengers are already involved & interested, they are a natural market.  but haven’t figured out how to do it.

Sean: suggest free discussion courses during the ecochallenge?  Parallel events?  To help people get a sense of what’s possible. The NWEI discussion courses are self-facilitated.

John: eco challenge has a “sense making’ aspect that could be developed more, perhaps with volunteers to help curate what has happened or what has been said. consider some courses that run in parallel and others that run afterward to reflect on challenge.

How to identify groups who want to get more involved?

The existing system suffers from a labor shortage to do sense-making, identify groups who want to or could get more involved.  Big risk of trying to do a lot automatically on the web during the EcoChallenge that may benefit from human expertise.  Learning and behavior change are the metrics; need to really understand them in detail, in many different settings before automating anything.

What is pattern of subscription to discussion courses.  What is the conversion rate between ecochallenge and discussion courses?  Uptake of discussion courses.  Are there frequent fliers who might be a different market segment?

more than half of discussion courses are in higher ed. used as part of a curriculum.  Also  faith-based organizations, business, and general community.  Faith-based: Unitarian adult education programs.  Only 10% of discussion courses are through businesses.

very diverse participants in both offerings, but eco challenge population is more diverse than the courses.

8,000 in discussion courses (historically has been NWEI’s primary program) and 2,000 in eco challenge (people who want to “just do it” not talk about it so much.  They say, “I don’t want to talk about it, I want to do it.”   There are different demographics: eco challenge is younger, more online.  discussion courses more boomer generation, f2f.

possible innovations:

  • get own App (but don’t have $100K for development).  Could they build on an existing open source platform?
  • can they define an API for the website?
  • How would the App work with the current website, e.g. story sharing?
  • App would be good for “in the moment” participation, e.g. on a smart phone, not waiting to get home and log onto a computer.
  • thinking of the app as an extension of the website.  (Notice that there are some 500 apps listed on the quantified self website http://quantifiedself.com/guide/)

Big question: how to make stories easier to share (and retrieve) – using tagging, voting to guide promotion without linear search

  • Provide more small steps (e.g. similar to upvote by category, or tagging, or other crowd curation models)
  • tools for organizers
  • sharing photos is not easy on the website

Lori: how cultivate people who participate (for whatever reason)?

harder to find the stories: has NWEI found good curation tools for own team?  Add that in a way so that participants can do that for NWEI.  Creates an additional role.  Tagging or up-voting would be curation tools for work groups or globally.  How many stories and story fragments?  100′s.  need to categorize and pick top 10-50.  allow people to mark them with “I found this helpful”.  50 people doing tagging.

Ability to develop new kinds of tags: e.g., “stories who met challenge 12 out of 14 days”, or “3 out of 14.”  improve understanding of “levels of success or habit formation”.  Or understanding of different areas or settings that are
challenging.Explore different contexts – settings so understand differential challenges at the office, by activity – “reducing plastic” “biking”.  How harnessing volunteer energy? how channeling it?  how keep Disneyland clean: pick up the 1st piece of trash that’s dropped, encourages people to not drop trash.   So put a lot of effort into curation at the beginning so that people will do it themselves.

Reuse stories from last year!  starting from an empty slate is not such a good starting place.  collect best 100-200 stories into that e-book.  Special books under “time-saving” a popular tag.  or focused on the most popular stories.  Sell an e-book — with stories from last year that would start the process next time around..

  • a way of asking for a donation
  • contains challenges for participants
  • possibly a way to jumpstart workplace participation
  • collect wisdom from previous years

Closing feedback from NWEI panel:

  • helpful
  • don’t have to wait — can do a discussion course
  • good things to think about for 2014
  • App as an attractive nuisance – finding partners from existing or previous participants
  • asking existing community what apps they like

Learn More at http://www.ecochallenge.org or sign up as a member at http://nwei.org

Terry Frazier: How to Do Real Competitive Analysis

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


(You can also download from http://traffic.libsyn.com/skmurphy/TWF-SKM-interview131202.mp3 )

I have been collaborating on a new podcast series on competitive thinking and business wargaming with Terry Frazier who blogs at CompetitiveThinking.com Here is the audio from a short discussion we had on how to do real competitive analysis with a summary of the key points that includes three things to stop doing to make time for three things to start doing.

  1. Stop collecting information on competitors:  Terry believes that too often we are swamped with information like stock fluctuations and press releases that is essentially redundant. Without a clear strategy for how to analyze it it’s a waste of time. The reality is that your team already knows 90% of what you need to know to craft a competitive strategy.
  2. Stop relying on SWOT (Strengths-Weaknesses-Opportunities-Threats) analysis: Terry observes that these are too often performed from a purely “internal perspective” that fails to take into account customer, prospect, partner, and competitive perspectives.  It can be a “silly way of thinking” if you are not careful.
  3. Stop assuming buy-in and cultivate it: Terry cautions executives not confuse a lack of opposition to a plan as agreement with or approval of the plan.

As an employee at several large firms I was a flying monkey for various evil emperors. My duties frequently involved gathering data on competitors and doing–and re-doing–SWOT analyses. I next asked Terry  what I should have been doing instead.

  1. Engage managers effectively. Terry suggests involving them early; ask them to help define the questions and the approach.
  2. Filter and focus competitive information: Terry stresses the need for clarity on key intelligence topics: what are the key one or two drivers for your industry.
  3. Encourage debate that looks for where the plan is wrong: Terry believes that you need for a structured approach to encouraging dissent: require at least one manager to play the devil’s advocate. Someone needs to ask, “where’s the evidence against what we are planning to do?” As a senior manager you need to ask your managers to bring you contrary evidence and advise you where the weaknesses are in the plan. Separate your plan from your ego to enable you to accept criticism as suggestions for improvement.

This last strikes me as very rare and probably the most valuable.


Update Dec-3-2013: Brad Pierce left a comment related to the third item effective leaders need to start doing:

Tim Harford, in “Adapt: Why Success Always Starts with Failure”, recounts a lesson Jack Galvin taught David Patreus,
“It is not enough to tolerate dissent: sometimes you have to demand it.”

 

Recap From Nov-20-2103 MVP Clinic

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, Audio, Community of Practice, skmurphy

Overview: exploring how to identify some key problems in communities where the presenters members, trying to understand how to research them, and how to contribute to solving those problems.  Two very different people facing analogous situations: one is a researcher looking for action research topics in the KM4Dev community, the other is an entrepreneur who wants to make athletic contests more engaging for contestants and the audience by providing more information that is mobile device friendly.


(You can also download from http://traffic.libsyn.com/skmurphy/MVPClinic131120.mp3)

Next two MVP Clinics


Commonalities between the two cases that were presented on November 20, 2013

  • Challenges in understanding the embedded (often invisible) interests, incentives and assumptions of different groups
  • Assumptions about boundaries of organizations that interact with those communities
  • Change management perspective is necessary but is challenging to apply in a community context — it is more of an organizational term, based on a high degree of control
  • watching a school of fish trying to determine how they decide to change direction
  • both were familiar with communities but may not have appreciated impact of incentives

Panelists for today:

Presenter #1: Phillip Grunewald

  • PhD student researching how knowledge exchanges can be best facilitated in the international development sector.
  • Have been working on this for 1.5 years now and have another 1.5 years  left to conduct studies
  • Before starting this PhD, worked in in various organisations  on Marketing, Corporate Communications, Monitoring and Evaluation and  customer relationship management.
  • Hold a bachelor’s degree in corporate communications and a masters degree in international studies.
  • LinkedIn: http://uk.linkedin.com/pub/philipp-grunewald/6a/4ba/82/
  • Blog: www.thoughtfordevelopment.com / twitter: @thought4dev

Situation: 

  • Attempting to find a mutually beneficial way of facilitating researcher-practitioner interaction.
  • Usually a (social) researcher  (from an external institution) is perceived as an “outsider” that sees  his collaborators as either “means to an end” or as the objects of the  study.
  • This is due to a generally perceived separation between  researchers and practitioners. In this model the practitioners usually  deliver or are themselves the data for analysis.
  • The findings of  research then either stay within the realm of research or are  distributed back via, for example, reports.
  • This not only makes learning  cycles very long but also means that there are things the researcher  “is blind to” by not being closely embedded in the context that is being  studied (this has its advantages and disadvantages).
  • In  the particular the present situation involves a community of practitioners in a collaborative manner.
    • Have  offered 2 hours a week until next May to spend on research projects of  their choice.
    • An initial survey (http://www.allourideas.org/grunewaldtopics/results ) was used to generate and poll ideas. This generated considerable interest and a surprising list of ideas that  the community is interested in.
    • However, since then discussion on the  most popular topic started and participation rates have been low.
    • Part  of the reason might be the internal dynamics of the community, which are hard to completely understand but there are many other potential issues.

Ideal outcomes:

  • High levels of engagement on both sides
  • Mutual learning about content and process
  • Continuous feedback to the research process so that further research can incorporate (reiterative process)
  • Personal development of researcher
  • Basic research – exploration of impact of academic work
  • Experimenting – developing experience for questions that are motivated by practitioners concerns

 Criteria for acceptance of a project

  • Poll the community for popularity
  • Within the KM4Dev concerns (broad thematic area)

Alternative frames:

  • Researcher has to be in both worlds
  • Researcher has to be intimately involved with the research subjects
  • Framed within the KM4Dev topic

Alternative next steps:  

  • Abandon the whole idea as “too difficult”
  • Make questions more specific/have a clearer thematic focus
  • Have more explicit objectives
  • Make people aware that there is a free resource that they are not using
  • Ask people if they question researcher’s ability/capacity to come up with valuable contributions
  • Ask community members if they have no capacities to dedicate to the process (mainly time)
  • Ask why they do not prioritize this activity vis-a-vis their other activities
  • Drive  topics that have been chosen and only have low levels or participation  constrained to specific points in time (rather than ongoing)

NOTES Not much response after the initial survey.  Lots of ideas and votes in the survey, but the social network site (Ning) has had little or no participation Sean: offering service at no charge, letting them set the agenda. . Howard: trying to get an understand what an ideal research project be?  what kind of research design? Philipp: participatory action research.  looks at matter, gathers data, comes up with findings, brings it back. assess changes.  Then the cycle repeats. John: what does research mean to this community, 2-3 hours a week for 6 months may not match their expectations for a project, consider offering a research-related task (as opposed to undifferentiated “research”) e.g. data cleaning so that you avoid the challenge of not matching expectations or running up against problematic ideas of “research.” Sean Is there a concern about asking for credit in results? There IS a problem on the academic side with a self-assessed view of academics that are irrelevant. Sean: making a comparison with Eugene’s case: trying to make things easier, but not changing behavior. Assessing speed. making things go farther. Philipp: KM4Dev is focused on practice; other communities dominated by academics.  Research might be out of the norm; people are oriented toward peer-to-peer exchanges. Using Barb’s question: why should people change?  is there a clear blockage or missing piece that research can address? Originally this was just a probe: “what would the reaction be?”  So far: any outcome is interesting.  but not prepared to give up. Payoff given the challenge of understanding Philipp’s process. How do open source management of volunteers? Is there a pattern for organizing volunteer labor that could be harnessed / re-purposed for KM4Dev? Challenge of figuring out how to leverage 2-3 hours a week may mean focus don’t invest effort in engaging if payoff is small/problematic Howard: in a nonprofit where GIS data described a watershed that was intact in BC.  Tried to engage community around protecting the watershed.  When leaders from the nonprofit traveled there and met with community representatives, they found potential interest, but more interested in issue of teen suicide — a much more immediate threat than the logging companies coming in.  That was a real learning experience for the non-profit.  Shifted the organizations focus to partnering with them through a focus on their issues. [Added post-call: My quick summary of this nonprofit experience glosses over the fact  that, for the nonprofit, the discovery that community members had  completely different priorities represented / might have represented an  enormous challenge for the organization. The nonprofit had no expertise on the issue of teen suicide, and this issue could easily have been seen as beyond the scope of the organization's mission, which was at the time more environmentally oriented. It was the willingness to listen to community needs and to be flexible in responding that enable the organization to move forward.] What does the community view as a key problem ? Where are KM4Dev’s priorities and how does Phillip’s expertise and experience align for best contribution.  Philipp’s  feeling of pain and surprise means he has learned something. Complexity of the KM4Dev ecosystem that Philipp is working with.  same thing for Eugene.  In both cases, people see the offer through very different lenses.  How open up receptivity to alternative ways of working together? The challenge is getting a group of people to change.


Questions from the audience : First question is what’s research in many organizations where KM4Dev members work research is a restricted activity takes a certain status and has some inherent separation from “work in the field.”  So the first suggestion is: how about offering elements of research but not calling it research?  That could include data gathering and analyzing data, or a literature search or many many other bits or pieces that would be useful but are dis-aggregated. Second suggestion is that: KM4Dev members come from many different organizations and they play different roles in those organizations.  Getting them to agree on one research agenda or on one perspective going forward is an impossible feat.  The community will never “agree.” So what’s behind both suggestions is the idea of dissolving as a strategy: to breaks down research tasks into elements on the one hand and to break down the KM4Dev community into sectors with distinct interests.


Presenter #2: Eugene Chuvyrov

  • Have 14  years of  programming experience, with 3.5 of those being an independent   consultant.
  • Built many web-based and several mobile products – love   technology, not just programming, and I can see myself programming robots or wearable devices just as eagerly as I do mobile dev.
  • Ran a Software Architecture group in Florida and I help organize a  cloud  computing group here in the San Francisco Bay area.
  • http://www.we-compete.com/

Situation: 

  • A  year ago, Eugene and two former colleagues from Florida broke  ground on what I wanted to be a new way to engage the competitors and  fans in amateur athletic competitions.
  • As a bodybuilding competitor of 6  years, it always bothered me that:
    •  the process of registering for  competitions was archaic,
    • there was no way to see who was competing beforehand, and that sometimes competition results would not be posted for weeks.
    • I also thought that the competitions were boring for the  audience, since many were not familiar with competition rules or competitors.
  • I wanted to start with the sports I am very familiar with  (strength events) and expand into other sports from there.
  • I showed a  simple prototype of my mobile app to one of the more prominent  competition organizers and he stated they’d use it. (Face palm) that was  all the validation I needed to get going on executing the idea.
  • It took us 6 months to build a website and a mobile app, and I have been promoting it for another 6 months now.
    • I promoted http://we-compete.com  via contacting competition organizers who I knew directly, or via  friends who are also competitors.
    • I also contacted many competition  organizers whom I didn’t know, after noticing that
      • they still had either  .pdf files to download for competitor registrations,
      • or they tried to  integrate EventBrite/other ticketing software into their offering with an iform
    • I established contact with heads of federations that have 50-100  competitions each year and solicited their feedback.
    • I also invested in  Facebook and Google ads, but those generated close to 100% bounce rate.
  • We had half a dozen competitions created on the  platform. Since we waived all fees for the initial batch of users, I  cannot reliably say people would use us  if we had charged them our 2.5%  fee per registration/ticket sold.
  • I expected our offering to go viral  after the initial batch, but that did not happen.

Next Steps:

  • Currently, I resorted to more traditional  marketing.
  • I am organizing a competition myself in June in the East Bay  area, and will use http://www.we-compete.com  exclusively.
  • I am helping a few competition organizers pro bono with  basic web/technology stuff. I sponsored bodybuilding federations,
  • I am  getting more active on social media and doing promotions in e-mail  newsletters/magazines.
  • I am also weighing executing on a consumer play  related to We Compete via creating mobile apps for competitors, and  having those mobile apps feed data into the centralized database (if  competitors choose to share the info, of course).
  • I am also evaluating  partnership with competition content creators (video, photo, general  information) and seeking ways to get on podcasts and YouTube channels.
  • I  am very passionate about this space and would love to continue  executing on my ambitious vision, but not if I have to live under the  bridge while doing that.

NOTES Sean: does the app enrich the experience for an audience.  (business model would have to follow) Eugene: lots of pictures as a form of engagement, no centralized location.  Notice LOTS of mobile devices at any event. The idea is to function like a meetup. Competition is emotional experience… Eugene is connected in the competition space…  direct approach response has been good.  But so far people won’t pay. Business model is like http://eventbright.com

  •     the price/payment is before
  •     the benefit comes afterward

Consider attending a high school re-union to compare behaviors, rituals, and business models for somewhat different kinds of events. The app is really changing some of the dynamics of competition – knowns and unknowns for participants – what is the value of changing that, how to position it going forward and eat own dogfood in organizing a competition – that might be a business How to characterize users / clients

  • heads of established federations and contests – they may not be in much pain (yet?)
  • people considering a new contest for fun or profit – organize a competition “in a box’ similar to how Meetup lowers cost of coordination
  • Notice the monopoly structure of the business… populated by people that are not very tech-oriented

What is the mobile app about:

  • pictures?
  • stats?

Typical event:

  • 90 competitors
  • 500 fans/participants

Barb: I’m also thinking that this needs some change management theories applied to it… I think that Eugene is right in showing the benefit  Why should people change the way they do things, when they work so well so far? Sean: more like meetup than eventbright. Can you provide unique or more curated content?  or just additional content? …so that profiles persist across competitions… Could competitors be encouraged to pay for the profile? What’s the value of a profile to other competitors? Can other sites be integrated?  Do those other sites support the mobile side?  And what are their business models?  and do people look at those other sites during a competition? status quo; organizing iframing eventbrite. in some ways we-compete is a threat, in others a collaborator: complex ecosystem of organizers, athletes, audience Howard: “Create a competition in a box” may be inadvertently taking position of disrupter, so a threat. What you are hearing is that you should continue to explore, more by making offers than writing code


Questions from the audience: ? unique content vs. basic mobile app with pictures ? transition from “probably not a good idea” to “late” Philipp: What about assessing information needs ground up?

Audio and Notes from On-Line MVP Clinic Oct 23-2013 on Social Software

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, Audio

John Smith and I did an MVP Clinic for Social and Community Apps on Oct 23. We took notes live in a PrimaryPad (an EtherPad derivative application). What follows is a cleaned up version of notes that we took and the audience contributed to. You can see MVP Clinic for Social/Community Apps Wed Oct 23 for more background information.


Or download directly from http://traffic.libsyn.com/skmurphy/MVPClinic131023.mp3


Terry Frazier is Principal and Senior Competitive Analyst at Cognovis Group. He has been studying, writing about, and consulting on competitive and industry issues since 1998. His work has been used by both Fortune 1000 businesses and international analyst firms. Today he writes at http://CompetitiveThinking.com. He offered the following as background for the discussion:

  • Situation: I am working on a structured service/educational offering to create lasting competitive advantage and reduce competitive risk for the mid-size enterprise. The offering takes proven principles and techniques that have been used for decades by the Fortune 500 and packages them into what I call the Competitive Management Process which makes them accessible, affordable, and attractive for smaller companies.
  • Challenge: The best source of competitive information any company has is its own middle management and field staff. Yet very few companies have any structure for harnessing and directing this resource, much less channeling it into long-term competitive advantage. In most companies competitive strategy and competitive decision making are deemed to be the sole responsibility of senior (usually C-level) management. There is reluctance, on both sides, to engage lower-level managers and staff in an ongoing collaboration that challenges assumptions and feeds real-world perspective into the process. This barrier to meaningful ongoing exchange is something I need to overcome with almost every prospect.

Notes on Terry’s Discussion Plus Audience Questions

Change within a company required to use competitive tools. Technology as enabler and hindrance to improved competitiveness? Two kinds of tools:

  • technology for data collection, feeds, screen scraping, etc
  • conversation for contextualizing, sense-making (the challenging.part; Human intelligence is lacking. )

Sean: companies see it too much as a data/technology problem, not enough as a conversation, inquiry problem Lack of structure in conversation is a problem so “war games” strategy helps organize thinking. Role-playing in a game forces people to adopt a perspective. Example: Michelin Run Flat tire failure due to channel / ecosystem from “Wide Lens” by Ron Adner Key hypotheses -

  • How can I explain to firms what effective competitive intelligence looks like?
  • What is the smallest possible intervention (a taste of the experience)?

Q: how can you spend time with key personnel (who are the important actors in the marketplace in the company: suppliers, regulators, customers)

Q: What are instances of effective action / positive deviants already in place you could use as acorns or seedlings?

  • Where is this already working?
  • Are there existing meetings or teams you can focus on for insertion?
  • General pattern not available: so start looking at an individual company to pursue the seedlings to learn about the conversations that exist.

Terry has been looking at existing forums: sales managers (line level up to senior VP of sales). Have not located online watering holes where such people meet. No clear titles / water holes – need an existence proof.

Q: this is a key hypothesis to test – where are some aspects of these conversations already taking place? For example industry organizations or executive offsites. 

Q:  Is the question how to find the prospects? Or how to convince them they need field level competitive data? What are the tools for gathering the field managers’ perspective?

  • Yes: find the prospects (previous work based on job titles, which is not quite the criterion Terry wants). prospect needs to be influencer not so much decider.
  • Yes: convince them that they need this.
  • Launching a new product into a new or adjacent market (with a 70% failure rate)

Terry: Fancy tools not needed for this. E-mail and blogs are enough. Finding perspectives and the people who hold them is the challenge.

Q: Find out the response to the explainer videos.

Q: Sounds like the war games process is the situation when Terry gets to harvest understandings from people across the organization? I wonder how this process might become the basis for a more ongoing conversation?

Q: Consider inviting people from outside the organization as participants in the gaming.

John: In consulting knowledge transfer is often the “afterthought” sacrificed at the end of a project. Companies need to internalize the skills to have these conversations.

Q: Is the question how to find the prospects? Or how to convince them they need field level competitive data? What are the tools for gathering the field managers’ perspective?

Q: Have you considered a short “explainer” video?
Terry: Yes, please see http://competitivethinking.com/

Q: Sounds like the war games process is the situation when Terry gets to harvest understandings from people across the organization? I wonder how this process might become the basis for a more ongoing conversation? It seems like there are community-building techniques that might be woven into Terry’s existing process…


Dixie Griffin Good is director of Shambhala Online, a global learning community connected by the meditation teachings of Sakyong Mipham Rinpoche. For 15 years she consulted with local, state and national education organizations on the educational use of technology. She has a masters in Future Studies and enjoys managing and studying change processes.

  • Situation: We’re developing a series of online courses that I’d market beyond the Shambhala to broader communities
    • The Product: Way of Shambhala Online courses, 8 courses; 5 to 6 weeks long
    • Meditation In Everyday Life, Contentment IEL, Joy IEL, Fearlessness IEL, Wisdom IEL
    • Basic Goodness Series (3 courses).
  • Challenge: Marketing beyond our organization — going out.
  • Context: Shambhala and shambhala online. http://shambhalaonline.org/ many centers of various sizes.
    • Undercapitalized–like many startups.
    • Offering live webinars to online courses beyond.
    • 12,000 members 200 centers or groups

Key hypotheses or criteria.

  • ID Most likely courses (what are the door openers)? Dixie: mediation in everyday life
  • experiment: live event free and recording for a price?
  • Local centers offer the same courses live – so almost competitors
  • What’s the synergy between the local centers and Shambhala Online?
    • Online as Gateway to local center?
    • Criterion: “how far from a local center do you live?” establishing more centers and more members as a desired outcome.
  • Goals/impacts for Shambhala Online going forward:
    • income
    • synergy with local centers
    • more interest/ signups for advanced programs
  • Assets:
    • reputation
    • local centers
    • alumni?

Notes on Dixie’s Discussion Plus Audience Questions

John: is Shambhala Online as a “smart pipe” for delivery or does it contribute to content creation?

  • Could it be an asset for teachers / experts / masters ?
  • deliver feedback on audience reaction to talks?

Sean: consider flipped classroom model: basic tools are available, but face-to-face plays its role. What is the relationship with local centers: how do you create as much synergy as possible and minimize competitive overlap?

John: Who is the voice or carrier on Facebook? who looking for? Role of local centers? minimize conflict or maximize collaboration / mutual support. Dixie’s strategies:

  • Newsletter not just for upcoming programs
  • Meeting of center and group leaders (use 10 minutes to inform and enlist support)
  • Adv’t template carries message

Sean: look beyond “spiritual” aspirations to determine real pain/need. Can you discern patterns in who’s attracted, stage of life, other characteristics.

Current demographic skewed toward elders but  target market is younger professional people in their 30′s or earlier.

Centers on college campuses? May need to use intermediate generations. Look at new members in last 2-3 years.

John: mechanism talk re Facebook is important, but the important stuff is prior experience in growing a community with 12,000 members.

Sean: 12-step programs are worth focusing on if they are currently a source of folks interested in mindfulness and meditation today.

Q: maybe instead of “war games” in Dixie’s context, situation , the metaphor might be “scenario planning”

Greg Heffron (Technology Leader, Shambhala Online): We’ve been looking into Facebook marketing. I’m curious if others have used FB marketing to expand into new markets.

Dixie: great idea about understanding the data we already have. I’ll make a point of searching our database for demographic info on recent members.


General debrief from both sessions in MVP Clinic

  • John: time required?
  • Terry: like format, conversational style. useful to hear questions
  • It’s hard because the early MVP phase is very much about sense-making in a fog, so things tend to ramble a little bit
  • Dixie: surprised that these ideas hadn’t occurred to me before. Very different perspectives. appreciating the questions.
  • Dixie: visual thinker: would appreciate faces, diagrams, drawings.
  • Sean: MVP conversation is inherently tentative and entrepreneurs are at a loss for words. Can’t just calculate the derivative of a formula to find the answer.
  • to audience – if you want to take part let us know
  • consider a repeat session with Terry and Dixie: what have you learned in the last 90 days?

My key take-away from the session: when you are in the middle of defining your MVP things are often very confused. It’s not immediately obvious what insights are valuable. Just because you are wandering around trying to map  a new market does not mean you are lost.

You have a lot of conversations that are tentative and exploratory and you often find yourself at a loss for words. And that’s why we tried this format as a way to walk around the issues. There is not a simple formula for moving from point A to point B with a new product. I thought the session captured the process of groping toward insight.

We have planned three more MVP Clinics for Social/Community Applications

Audio: Paul Spaan’s Briefing on 3D Printing at May 24 2013 Bootstrapper Breakfast

Written by Sean Murphy. Posted in Audio, Events

Compare notes with entrepreneurs who eat problems for breakfast.Paul Spaan worked as a mechanical engineer for more than two decades at major Silicon Valley technology firms before launching Spaan Enterprises to explore his long term interest in 3D printing. On Friday May 24, he shared lessons learned from the installation and bringup of two 3D printers and some examples of prototypes he has designed and printed  at the Bootstrapper Breakfast in Mountain View.

Here is the edited audio from the session that also captures many of the audience questions:

It’s also available for download directly : SpaanBB130524b

3D Printing Definition and Timeline

Paul provided the following definition and timeline:

3D printing–also known as additive manufacturing or positive manufacturing–is a process of making a three dimensional solid object of virtually any shape from a digital model.

  • 70′s Stereo Lithography (SLA) laser cured liquid photo polymer (3D Systems / NYSE:DDD)
  • 80′s Fusion Deposition Modeling (FDM) melting plastic filament (Stratasys Inc / NASDAQ:SSYS)
  • 80′s Selective Laser Sintering (SLS) for metal, ceramics, or plastics, etc…
  • 90′s Rapid Prototyping service bureaus became available: Raychem,Quickparts, SolidConcepts, etc…
  • 2007 Reprap homegrown (FDM) “self-replicating” printer hits open source maker  movement (See RepRap Family Tree)
  • 2012 consumer level printers hit the mainstream media
  • 2013 MakerBot makes the Today Show, 3D Systems “Cube” sold at Staples.

Related Articles and Blog Posts

 

Podcast with Pete Tormey: Bootstrapper’s Delegation Checklist

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, Audio, skmurphy

Pete Tormey and did a short podcast on a checklist to help bootstrapping entrepreneurs decide what tasks it made the most sense to delegate in an early stage startup.

Pete is a serial entrepreneur and patent attorney with Antero Tormey. He co-moderates the Bootstrapper Breakfast group that meets the first Wednesday of the month at Boudin Bakery in Embarcadero 4 in San Francisco. We covered a couple of key points:

  • Make of list of the critical tasks that you need to accomplished: these cannot be delegated.
  • Understand the skill level and relevant experience of the person you plan to delegate the task or function to. Even though the task may be an appropriate one to delegate you may spend as much time closely monitoring someone who is not experienced.
  • Focus on the real business risks you are facing:
    • Does a market exist for your product?
    • Do you have a compelling value proposition?
    • How can you find prospects, determine if they have a need for your product, and convince them to pay for it?
  • Business structure questions and scaling issues should be deferred until key risks have been addressed.

Or download Podcast with Pete Tormey: Bootstrapper’s Delegation Checklist [PT130702] (MP3) 7 minutes long

We plan to do another podcast next month, if you have questions you would like to here addressed or want to take part please leave a comment or use the contact form.

Paul Spaan Offers 3D Printing Show & Tell Fri-May-24 at Mountain View BB

Written by Sean Murphy. Posted in Audio, Events, skmurphy

Compare notes with entrepreneurs who eat problems for breakfast.Join other entrepreneurs for serious conversations about growing a business based on internal cash flow and organic profit at a Bootstrappers Breakfast®. Paul Spaan, CEO of Spaan Enterprises, will offer a seven minute briefing on “3D Printing For Bootstrappers” and circulate examples of prototype products he has printed. Paul’s briefing will be followed by our regular roundtable discussion format.

When: 9:00am to 10:30am Fri-May-24
Where: Red Rock Coffee, Mtn View (2nd Floor)
Cost: $5 RSVP, $10 at door (order your own coffee downstairs).
Please RSVP

Paul Spaan worked as a mechanical engineer for more than two decades at major Silicon Valley technology firms before launching Spaan Enterprises to explore his long term interest in 3D printing. He will share some lessons learned from the installation and bringup of two 3D printers and bring examples of prototypes he has designed and printed for a seven minute “show and tell” and take part our regular roundtable discussion.

Paul anticipates that 3D printers that now cost less than $20,000–and in many cases much less than $20,000–will enable new categories of small scale manufacturing businesses in the same way that personal computers and high performance workstations enabled new kinds of information and knowledge processing businesses.

Bring your questions about the business opportunities for bootstrappers that 3D printing is now enabling.

Paul believes that we are in the midst of a price performance transition that will have as significant an impact on product design
and production at small firms as low cost laser and inkjet printers combined with desktop publishing software did for the design and production of product printed content.


Update-Thu-Sep-2 Audio Now Available

Founder Story: Ari Halberstadt of Catalee on Founder’s Dilemmas and Residential Energy Market

Written by Sean Murphy. Posted in 1 Idea Stage, Audio, Founder Story

Theresa Shafer met Ari Halberstadt at a Bootstrapper Breakfast in SF earlier this year and was very impressed with his approach to his new startup, Catalee. Ari volunteered to talk with me about Noam Wasserman‘s “The Founder’s Dilemmas” as well as Catalee. Here is a 12 minute podcast and transcript of our phone call.

Or download AriHalberstadt130404b (MP3) 12 minutes.

Sean Murphy:  Sean Murphy here with Ari Halberstadt. We’re talking about Noam Wasserman’s “The Founder’s Dilemma” and Air’s new startup, Catalee. Ari, do you want to take a minute to introduce yourself, tell us a little bit more about Catalee?

Ari Halberstadt:  Catalee is a startup that will help people improve their use of energy, basically reduce the use of energy in existing buildings and save people money at the same time. I’m looking at residential customers and, initially, small commercial market. These are markets that are somewhat underserved but they are quite large. There’s a large number of buildings and they tend to use energy quite inefficiently. Saving can be quite significant, cost effectively. But there are a lot of barriers to getting it done and I aim to streamline that process for the customers.

Sean:  We’ve been talking about Noam Wasserman’s The Founder’s Dilemma. I was going to read a little bit from a short passage on page 331 that I thought captured the essence of the entrepreneurial journey.  He says,

“The path from founding to success is a long and winding one with dilemma after dilemma forcing founders to make decision after decision all with the important, and sometimes surprising, short-term and long-term consequences.”

He elaborates on that, a few pages later, and says,

“At each fork in the road, the decision that maximizes value tends to threaten the founders control and vice versa. There is inherent conflict between maintaining control and building value in high potential startups because the latter requires value added players who demand more control.”

At this point, you’re actually looking for cofounders to help you bring Catalee to its full potential. Is that fair?

Ari:  Yes, that’s right.

Sean:  Can you talk about what you’ve accomplished so far, what the next milestone is you’re aiming for, and where you’re looking for help?

Ari:  I’ve looked at the market, and I’m working on approaches that I think could help consumers streamline this process as well as provide potential investment opportunities. I really need to turn that into a testable product, something that is a minimally viable product as well as find some customers to start using that. I’m really in that transition from idea phase to actually having a product out there. That’s basically where I am right now, and I need people to work with me on that process.

Sean:  When you look at this market, the clean tech energy-saving market’s been around for a while. I think that there’s a general proof of need. What led you to focus in particular on residential and small business?

Ari:   Those are very large markets. The residential one is the largest, particularly the single-family homeowner, where you actually have a person that owns that property and could make decisions. It’s quite heterogeneous.

There are a lot of people out there who are at times neglected. Large companies that can come in and help a university or a hospital set up their energy efficiency have been less interested in helping make it simpler for homeowners to access those resources. There’s a very large market with a lot of potential savings.

The small commercial firms represent a smaller market. It’s still a large number of buildings in the commercial sector, but it also has similar needs to home owners who face challenges finding the right services to get energy efficiency projects implemented. Some of the smaller businesses tend to be quite energy intensive.

Sean:  As you think about how your first offering is going to be both minimal but somehow differentiated from what’s out there, what do you see as the key difference or the two or three key differences between what you would offer and what’s already available to the homeowner or the small business owner?

Ari:  First of all, it would be simpler. The homeowner would not need to spend a lot of time trying to figure out certain attributes of their property. We would also not require too much hands-on, up front, from contractors. The service would actually predict in advance what the energy savings could be for a property. That would help to save time and streamline the process.

It would also lead people through the entire process, which right now is so fragmented that people will try to upgrade and sometimes just give up. It can be a cumbersome and confusing process:  I’ve spoken to people who just gave up because it’s too hard for them to go through the hassle when they don’t don’t see the benefits.

Catalee will connect homeowners with the resources, the people, the products, and the services that can help them:  there are contractors, there’s financing available as well as incentives that can be hard  to actually get sometimes. It’s so fragmented.

Sean:  So in terms of the full product road map, that comes into play even more? You’re looking both for an insertion point and then a way to build out a much richer system beyond that?

Ari:   Yes. I’m looking to interact with the entire system of home building performance. There are existing systems out there, but I want to connect them more efficiently. One of those would be a contractor. Another is the finance, which actually would have an opportunity for investment in these kinds of efficiency gains which, currently, it’s hard for them to access.

It’s actually a system that can be addressed more holistically. By doing that, you actually unlock a lot of additional opportunities.

Sean:  When we talked earlier you felt that your top three strengths were technical software development, an understanding of the science and an ability to look at the problem as a system. Do you want to elaborate on that a little bit?

Ari:  I have a background as a software engineer. I’ve worked in that field. That helped me see the utility in how software can analyze the information. A lot of this problem is an information problem. People don’t have the information. It’s necessary to analyze the opportunities available. There are actually tools out there, but they’re cumbersome to use.  I can look at these things and say, “We need to put these things together.” Software is a way to do that. I have a background as a scientist. That gives me some understanding of scientific processes and thinking. In terms of the system, I look at the problems as interconnected components, not just one small element that often people might try to address.

Sean:  When you look at all the other skills or key skills that are going to be required to build a successful first product, take it to market and close some business, what are the key skills you’re looking for in one or more co-founders to help you get there?

Ari:   I need someone with sales experience, how to develop the sales and products. Somebody, more generally, with business, especially somebody with experience in the energy efficiency and energy field, would be very helpful. That’s an area I think I’m a little less experienced in. They would understand how to sell the products and develop the markets.

Sean:   So you’re looking for folks that have an energy experience or some contact or understanding how that works? The ability to do more detailed financial analysis, as might be applicable to either a homeowner or a small business? And then, sales and marketing strength to help you actually go to market and close business?

Ari:   Yes. Those would be key skills that would be necessary to help the business. I’ve tried to approach the problem from, rather than building prototype software, straight out, I’m actually analyzing the market, getting a better understanding of it. And looking at what existing tools I can start using to build an initial product offering. Or maybe even a service.

Sean:  Is that more what they call a concierge or a Wizard of Oz model where you take existing tools and knit them together?

Ari:  Yeah, that’s actually something that I’m exploring at the moment to see how I can leverage some of the existing tools. There are actually many tools out there or programs for building performance analysis. But they tend to be one off or building-by-building solutions are very time consuming for people to work with. I’m exploring ways to work with the underlying engines, for instance, to make that more efficient and streamlined.

Sean:  Are there any key values you’re looking for in terms of recruiting a team? When you think about shared values or values you’re looking for, what would you say would be one or two key things you would look for in a partner or cofounder?

Ari:  The one thing is I’m very dedicated to dealing with is waste of energy that’s leading to climate change. Somebody who shared that kind of a vision would be important, to understand that that’s a key element that’s driving my interest in this business and where the focus should remain.

Sean:  At the Bootstrapper’s Breakfast we talk about founder who are looking for missionaries or  for mercenaries. So one of the high-order bits for Catalee is you want to have an impact on the global warming problem.

Ari:  Exactly.

Sean:  You’re looking for missionaries.

Ari:   Yes, and I think that these markets are big enough that we could actually have a big impact on a large scale.

Sean:  Well, this has been very interesting. Thanks for taking part. If folks are interested in contacting Ari Halberstadt they can reach him at Catalee.com

For New Products Prospect Objections Are Valuable Data

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

For some clients we record our working sessions so that they can play them back later and we can listen to them and improve the quality of our interaction and improvisation.

What follows is a 90 second snippet from a recent working session that contains a true story about a conversation I had several years ago with a former co-worker who asked me to do him a favor and look at the demo of a new startup he had gone to work for.

Or download SmarterProspects (MP3) 90 seconds.

We have always talked about “early customers, early revenue.”

The new product introduction problem, the new product sales problem is a distinct problem from the scale up problem.

Getting those first six to twelve B2B sales is a very different problem from scaling.

Whether you want to it call it an exploratory approach or discovery driven sales, it’s a very different sales process than most sales guys are used to.

Very early on I got called in by a guy that I had worked with who had been VP of sales at a billion dollar software company who had gone to a startup. He had gone through 30 sales calls.

We sat down and he took me through the demo. He had two other engineers working with him and they some interesting technology. It was a little bit of a kitchen sink product but it was in an area where VP of sales had connections and they had had 30 visits to prospects.

And the demo went on for about 90 minutes. Afterward I said, “Can you show me the first version of this demo that you gave to the first prospect?”

They asked “What do you mean?”

I said, “Can you tell me how the demo has changed since you started showing it.”

He looked at me and said “That’s the problem! We need to find smarter prospects!

True story. I realized that when he had worked in sales at large companies they didn’t a sales pitch that doesn’t work. So most sales guys assume that what they need to do is handle objections not change the basic pitch.

For the most part for early stage entrepreneurs the objections are actually data: they offer insights for how to improve the pitch.

Take aways for first time entrepreneurs thinking about hiring a sales person:

  1. If you are selling a product that is form, fit, and function compatible with existing offerings you can hire someone who has sold to your customers a similar product and probably do well if you check references and go on sales calls with them for a few weeks.
  2. If it’s a novel product or a new market you need to learn how to sell it before you can hire somebody to sell it for you. You need to develop the sales materials and appropriate checklists for qualifying an opportunity, planning a sale, and closing the opportunity. Once you have closed a few sales you and you have a basic process you can then hire a sales person and teach them how to sell your product. Not how to sell, but how to sell your product.
  3. Six to eight minutes is a good running length for a basic demo. If that triggers more questions or comments then you can take as long as the prospect is interested. But you need to get your key points across in the first few minutes.

Related blog posts

Podcast with Pete Tormey on Forming a Team, Dividing Equity, and Gaining Early Traction

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, Audio

Pete Tormey and I decided to do a podcast to address a number of team formation, business formation, and early revenue issues that we have seen in our own startups, in our practices, or hear questions about at the various Bootstrapper Breakfasts® meetings we take part in.

Pete is a serial entrepreneur and patent attorney with Antero Tormey. He co-moderates the Bootstrapper Breakfast group that meets the first Wednesday of the month at Boudin Bakery in Embarcadero 4 in San Francisco. We walk around a number of issues around mistakes that break teams up early or plant the seeds that kill a startup later on.


Or download Conversation with Pete Tormey Forming a Team, Dividing Equity, and Gaining Early Traction [PT130515] (MP3) 43 minutes long

We plan to do another podcast next month, if you have questions you would like to here addressed or want to take part please leave a comment or use the contact form.

Slides and Audio From “How To Bootstrap” ASLCPA Mar-27-2013

Written by Sean Murphy. Posted in Audio, Events, skmurphy, Video

Or download directly from “How To Bootstrap” [ASLCPA Mar-27-2013] (MP3)”

It was a great audience and a lively discussion about bootstrapping. I am grateful to Mark Sheffield, CPA, of ASL for the invitation to speak and to Pete Tormey, co-moderator of the  San Francisco Bootstrapper Breakfast, and Michal Domanski, moderator of the Warsaw Bootstrapper Breakfast,  for reviewing and suggesting improvements to the talk.

I also want to thank to Colette Gonsalves (@coletteaundrea) for her live tweets from the event:

  • The key to bootstrapping: sweat equity, relationships, know how
  • Bootstrappers focus on what they don’t know to find their problems
  • Leverage expertise to focus on a niche, rather than the big market
  • Evaluate an opportunity: what is the problem & what do you bring that can create value solving it
  • Bootstrapping finance tip: live as cheaply as possible, delay gratification
  • From day 1 as a bootstrapper you’re in sales
  • Don’t keep giving a pitch that hasn’t worked. Learn why & change it
  • Revenue is the only real proof of market
  • Ask your target market who they’re using now cause you’ll have to differentiate from them
  • Bootstrappers don’t go all in – they make small investments in solving focused needs they can win & build on them

After the event I did a Founder’s Pit Crew interview with Mark Sheffield. The ASL Emerging Business Group also has a great New Business Startup Guide available as a PDF.


Update Fri-Apr-5: Thanks to some sound editing work by Steve Wasiura I have an updated MP3 that cleans a low hum from the file. Steve has a blog post about the talk with his notes at “How to Bootstrap Your Startup” on his blog. He writes:

Now I understand your quote from the March 2013 roundup:

“Nothing clears up a case so much as stating it to another person.”
Arthur Conan Doyle

by turning my notes into a blog post, I understood the lessons better.

Recap and Audio From “Lessons Learned Implementing Great Demo! Methodology”

Written by Sean Murphy. Posted in Audio, Books, Demos, skmurphy

We offered a Book Club for Business Impact webinar on Sep-4-2012 that addressed  “Lessons Learned Implementing The Great Demo! Methodology” based on the Great Demo! book by Peter Cohan. We had two change agents join us on the panel: Barry Nelson and Jolie Rollins and our intent, consistent with the Book Club’s promise, elicit actionable insights from the panel informed by the book’s content.

Here is the audio track

Or download directly from  Implementing  Great Demo! Methodology 9-4-12 (MP3)

Here is all of the relevant text from the slides with the addition of questions asked by the audience as they were posed to the panel.

Today’s Panel

  • Barry Nelson, CEO, FactorLab, Inc.
    • CEO, FactorLab, Inc. FactorLab helps teams engage in the good practices that give them a competitive advantage. Helped over 100 organizations- bridge the gap between good processes, good people and good execution
  • Jolie Rollins,, Consultant Healthcare Information Technology (HIT) and Change Management Leader.
    • Prior management roles at gloStream,  Allscripts, Misys, and Medic; BA Accounting, North Carolina State University
  • Organizer: Sean Murphy, SKMurphy, Inc.
    • CEO SKMurphy, Inc.  Consults on technology market creation and new technology product introduction. Earlier at Cisco, 3Com, AMD has BS Mathematical Sciences, MS Engineering-Economic Systems, Stanford University
  • Moderator: Peter Cohan, The Second Derivative
    • Founder, The Second Derivative. Provides sales training with a focus on “Great Demo!” method. Prior executive roles at Symyx Discovery Tools, Elsevier, and MDL Information Systems. BS Chemistry University of California at San Diego

Overview of Great Demo! Method

  • A Great Demo: Do the Last Thing First!
  • 2 Types of Demos
    • Technical Proof
    • Vision Generation
  • Key Steps in Great Demo
    • Introduce – Summarize Situation
    • Illustrate
    • Do It – Do The Last Thing First
    • Q&A: Peel Back the Layers
    • Summarize
  • Preparing For a Demo: Agree on Customer Situation (“Situation Slide”)
    • Job Title and Industry
    • Critical Business Issue
    • Problems/Reason
    • Specific Capabilities Sought
    • Delta over Status Quo
    • Time Frame / Impending Event

Questions that panel addressed:

  • Q: You mention win, loss, and “no decision.” What is your definition of “no decision” and why is the “no decision” rate important?
  • Q: What is a critical business issue?
  • Q: What are good questions that uncover specific capabilities sought and time frame for decision?
  • Q: What was a key challenge you had to overcome to implement the Great Demo! methodology at your company?
  • Q: Is it easier for startups before they have customers?
  • Q: How do you convince startup engineers to discuss only a few cool new features?
  • Q: How do you get entrepreneurs to focus on the customer in a demo and not the product?
  • Q: What bad demo habits are the hardest to get rid off?
  • Q: What good demo habits are the most important to develop?
  • Q: How do you handle it when someone says “I’ve been selling/doing demos for a decade, you can’t tell ME how to do them!” ?
  • Q: What’s the best way to respond to “I already know this, I don’t need training!” ?
  • Q: How do you change someone’s mind when they say ““This demo is too critical to try out something new…” ?
  • Q: Final take away from each panel member
  • Q: We see other startups creating short 60-90s animations to explain their product, any thoughts on this?
  • Q: How do you use this method at a trade show when many demos are blind dates? You have to be assessing prospect’s situation in parallel with giving the demo?

See also

Peter Cohan’s next Great Demo Workshop in Silicon Valley is October 10-11, 2012.

Scope and Scale of Plans and Activities

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

Source: Powers of Ten (which was inspired by “Cosmic View: The Universe in 40 Jumps” by Kees Boeke)

I remember watching this film in high school and having it change my perspective. I thought I would try and look at not distances but durations in the context of planning tasks and individual (and organizational) objectives. I set one hour as the zero point and looked at a factor of 10,000 in either direction. The yellow background cells are the powers of ten, the blue hold other durations that I thought should be included for “human scale” activities.

Power
of 10
Duration Human Scale / Meaning Flow/Plan
-5 0.03 seconds Subliminal Perception Flow
-4 0.3 seconds Keystroke Flow
-3 3 seconds Read a headline or a tweet Flow/Habit
-3 to -2 Other useful durations in seconds: 10, 15, 20
-2 30 seconds a very small task Flow/Habit/Checklist
-2 to -1 Other useful durations: 1 minute, 90 seconds, 2 minutes, 3 minutes
-1 6 minutes a small task Flow/Plan/Checklist
-1 to 0 Other useful durations in minutes: 10, 15, 20, and 30
0 1 hour a medium task Flow/Plan/Checklist
0 to 1 Other useful durations: 90 minutes, 2 hours, 4 hours
1 10 hours one day’s work Flow/Plan
1 to 2 Other useful durations: 2 days, one week
2 100 hours two weeks or a fortnight Plan
2 to 3 Other useful durations: one month, one quarter (13 weeks), six months, nine months
3 1,000 hours 20 weeks (no natural analog) Mission/Plan
2 to 3 Other useful durations: one year, 18 months, two years
4 10,000 hours 4 years – a career at one company
a high school or  college education
enough deliberate practice to develop expertise
Mission
5 100,000 hours 40 years – a career Mission

I think the time scales break down into five overlapping domains:

  • Mission: significant accomplishments that require sustained effort over a long period of time.
  • Plan/Strategy:  objectives that require a written plan that is revised in response to results to accomplish.
  • Flow/Proficiency: short term objective that can be accomplished as the result of a single concentrated effort, the plan can essentially be kept in your head, and one outcome is often learning and increased proficiency.
  • Habit: an action that is done autonomously and often without conscious awareness or control.
  • Checklist:  a sequence of actions that may overload short term memory or is executed under significant time pressure or with high risk of failure. Normally written down to ensure compliance.

There are also recurring cycles that are not accounted for that can trigger habits or team or organizational actions

  • Hourly
  • Daily
  • Weekly
  • Monthly
  • Quarterly
  • Yearly

This is an attempt to map out project and process duration as well as task length and an individual’s ability to remain in flow. Whether you are planning a meeting, your day, a project, a startup, or your life, time is the single irreplaceable resource. Understanding how different durations stack and recur in cycles is part of that.

Pete Tormey on the Benefits of Attending a Bootstrappers Breakfast

Written by Sean Murphy. Posted in Audio, Events, skmurphy

steaming hot coffee and serious conversationPete Tormey moderates the Dublin/Pleasanton Bootstrapper Breakfasts® (along with Richard Moerschell) and fills in from time to time in San Francisco as well. I asked him what he felt some key benefits attendees gained at a breakfast and he sent me a great three minute podcast that I have embedded below. He identifies three benefits he see attendees gaining from the conversation at a Bootstrappers Breakfast:

  • Being around other bootstrapping entrepreneurs renews your enthusiasm
  • Serious suggestions from other attendees can spark your own creativity in addressing business challenges
  • Comparing notes can give you peace of mind knowing that many folks are wrestling with the same issues.

Or download directly: PTormeyBB100920

We also have three Bootstrapper Breakfasts® this week in Silicon Valley

  • 7:30am to 9:00am Tue-Sep-21 at Coco’s at Lawrence and Oakmead in Sunnyvale
  • 7:30am to 9:00am Thu-Sep-23 at Athens Burger Restaurant in Dublin
  • 9:00am to 9:00am Fri-Sep-24 at Red Rock Coffee in Mountain View

These breakfasts cost $5 if you register in advance (plus the price of your own food and/or drink) and give you a chance to compare notes with other technology entrepreneurs.
Register

“Now What? Your Post Launch Growth Plan” Podcast and Transcript

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

Adapted from a presentation on “Now What? Your Post Launch Growth Plan” at the KASE Entrepreneur Seminar on October 16, 2007.

Download: MP3

If you take away nothing else from tonight, it’s that going from your beta to your launch requires that what used to take an enormous amount of effort to achieve a level of performance has to become routine. You cannot rely on heroics once you are scaling the company: you have to build process and procedure into it. So, we are going to talk now about how you grow after launch in three areas:

  • at company level
  • in customer development (sales, marketing, and business development)
  • in product development

At a company level, what’s the challenge after launch? The challenge is that you have to build an effort that you can sustain and scale, which means you have to develop things like process and metrics and dashboards.

So…process, metrics, and dashboards…most of you probably have left big companies where you had process dashboards and metrics, and you are thinking “I don’t want any more of that.”

Just as little process as possible is a good thing, but you can’t get away from it completely.

After launch, you grow from a small team of generalists to a larger team of primarily specialists, because with that comes division of labor and the ability to scale. You can’t just keep hiring generalists, utility infielders who are comfortable in the white space on the org chart–an org chart that used to be pretty much entirely white space now has a lot of boxes on it. You’ve got to hire people that are outstanding in that one particular box, in part because they can rely on the folks in the boxes around them to be outstanding as well.

In the beginning, as you are adding customers one by one, you are just trying to get that next customer. After launch it’s about next quarter, it’s about a business plan; it’s about a revenue target, it’s no longer one by one.

In the beginning there are only one or two people–typically the CEO and CTO–who can actually make a binding commitment. But for your company to scale up, a whole bunch of people start to make promises to a lot more customers. This means two things:

  1. If you don’t have a plan, it’s like running a development effort without a source code control system: you don’t know what you are changing, so you need a plan.
  2. If you don’t agree how you’re going to change that plan; if you don’t develop a change process, you are going to spend more time arguing about how to change the plan, then on the merits and drawbacks of the change that is being proposed.

So post launch, there is much more need for a plan of record and a change process that people buy into.

Audience Question: Roughly, how long are these plans? It sounds like there is lot of work to develop these plans and targets and commitments and keep updating them.

So, one or two pages is reasonable length for a plan, that’s what most people can absorb. Especially for your near horizon, a one or two page written plan is normally enough to get you there; you don’t need a book. But, you have to have it written down and documented: it can be a wiki page, it can be something as easy as that to change–and track changes–but it has to be in writing.

How many people have sales guys in their company? [No one raises a hand.] Okay. Well, after you launch they may become more important.

Right now the sales incentive for Beta is very simple, if we make the sale we all get to keep our jobs. It’s a pretty easy thing to focus on. But, after you launch you get what you reward, so you want to pay very careful attention to whatever you put into that compensation plan, and how it aligns with your business model.

As you scale up, it’s more than just new accounts. Right now for most people that are in Beta or just have early customers, it’s all new accounts. Later on there are also renewals and upgrades, these require a different focus and different incentives.

So, we do a lot of work with software companies; this talk is aimed more at software companies than hardware companies. With hardware it is hard to add features to a chip once you’ve shipped. The point is that software startups are tempted to of accumulate a whole bunch of small features into some kind of shotgun blast full of birdshot, and hope that something will stick; some golden BB against the wall.

The reality is this that big features, important features, are what drive interest and adoption. So, as you are doing your planning, think about one or two things that are actually going to move the needle on prospects’ interest, and plan the release around that.

Also, just because you don’t know about the bugs you are going to have to fix in the next two weeks or four weeks or six weeks: they are going to show up. Leave some cushion in the schedule: don’t try and put eight pounds of feathers in an eight pound sack and discover another three pounds as you are half way down the road.

In the beginning, as we are going one by one for customers, a special for this customer makes a lot of sense. After you launch, when you are going after markets, this becomes a much more unattractive approach. You want to limit the amount of work you do for any one customer.

Early on, early adopters are very smart people, and they have a couple of wonderful features:

  • They are highly risk-tolerant.
  • They don’t mind if things don’t quite work–as long as you ultimately get them fixed.
  • They’ll actually buy the product without having to be sold.

Problem is they are just not enough to actually build a company on, but they are wonderful folks in the beginning. And, a lot of people think this is going to go on forever, and alas it doesn’t.

So, nobody had any sales guys, so right now the CEO is selling in your startups? Who is selling in your startups? CEO, alright; so typically one guy is kind of like the gorilla, the tall thin engineer whatever doing the selling, right? And, still figuring out what works in the sales pitch and what doesn’t.

The founders have to be directly and intimately involved in selling, because maybe it’s not the sales pitch, maybe the product sucks, right? Maybe the business model is not quite right for what you are trying to do. The founders have to be intimately involved to be able to make adjustments between the message, the product, and the business model. Also, if they are not involved now, they can’t manage later on as they scale its sales force. So, you have to learn what’s involved with managing the sales force. It’s not magic. It’s not hire the best liars you can. It’s a real art.

We sometimes talk to firms that have hired and fired several sales people. They don’t yet have a sales pitch that works, and they are just burning money. Don’t do this. A real sales guy will give the same pitch over and over again, because that’s what works in the corporate world, and that’s what normally works post-launch. Because, most of the time they have been handed the pitch that works, and so if it didn’t work with this prospect, then it’s the prospect’s problem. During beta and for your early sales, your pitch may suck and will need to be changed.

A lot of engineers we talk to say we can’t figure out how to get the sales guys to do what we want them to do.

We reason with them.
We talk to them.
We invite them to meetings.
We show them the corporate mission statement.

Let me explain you, it’s very, very easy to get a sales guy to do what you would like. You adjust his compensation plan; you pay for what you want and you manage against that. It’s very simple. If you don’t do that, you are wasting your time and his.

Now we are going to look at customer development in Beta versus after-launch. In the early market you are exploring; you launch when you believe you are going to accelerate. You’ve found a market; you’ve found a way to go.

In the early market, you’ve got a number of hypotheses that you are testing. After you launch, you better be working based on facts and metrics. Now, some people launch and nobody comes, I submit to you, you are still back in the early market.

In the early market, you are trying to adjust your business model, adjust your promise. After you launch, you are penalized for changing that promise a lot, so you better figure that out before you start to put the big megaphone in front of it.

In the early market you are trying to find a niche, you are trying to find some place to insert and get some foothold. After you launch, you are trying to find a big market. Don’t confuse those two.

Here’s an example of how I learned how sales guys look at problems. At the time I was running support at MMC Networks and over a period of about nine months we hired nine or ten new staff. We scaled support from about six to fifteen people. We were supporting more than sixty active design projects with more coming in every month.

I went to John the VP of sales and said, “we can’t support all the people you are bringing us, can we slow down? Can we focus on the big guys? Can we–you know–focus for effect?”
John would say “you know you are absolutely right.”
So I would say “Great!”

Next month more new evaluations.
Back I go to John: “We can’t support this many new firms, they are falling on the floor. We have so many that the thrashing in talking to them is taking more time. We are actually getting less done then if we had fewer evals.”
“You are absolutely right.”

Next month, more evals. Finally asked him, “John, how are you compensated? Are you compensated on revenue?”
He says “No, that’s way too hard to figure, that’s way too downstream. We are compensated on design starts.”
So, then I knew my argument was not with him.

How many people have heard of Jotspot? About two years ago they were kind of struggling against Socialtext, they announced three thousand beta users. Big press release, big news, big noise. Months go by, much testing, the development guys are very happy, because we are getting the product tested; this is great, this is great. Then they launch, and they say now that we are launched it’s not free anymore. You have to pay, or in thirty days we are going to turn you off.

They figure they’ll get probably half or at least a third of these beta users. It’s more like 2%. They have to go back into the garage and figure out how is it that you actually find guys that want to pay for the product, that don’t just want to use it for free.

For all of you that are doing free, freemiums, social networks, and all this free stuff, I would submit to you, there’s a hell of a difference between getting guys to use stuff for free than for a penny. You are better off now–day one, user one–figuring that out.

Finally, we get to product development.

The interesting thing is we talked in customer development about how things change. The challenge you have in running product development post launch is, you want to hang on to the values and the things that got you where you were. So in fact, you don’t want things to change; in particular you still want a fast clock cycle in decision-making. And, you want to maintain as much creativity, flexibility, and intelligent reaction as you can. You want to fight bureaucracy as hard as you can.

In beta its really simple: does the thing work yet? No. OK let’s not ship it. Later on, you can’t do it that way, because you end up in an infinite loop where more bugs flow in, more feature requests flow in, and the release balloons into a whale that never ships.

Also, QA effort is a function of about the cube of the number of features. So, as that release grows large, your ability to test it gets away from you exponentially. What works: pick a date, stick with it. Let one or two major features drive that date, fix the problems you can; live with the rest until the next release.

There is always a reason to hold the release.
There is always a reason to hold the release.
Resist that it and get it out.

If you have a faster decision cycle, several things get a lot easier:

  • You don’t have to be as smart about the market, because you are going to be in contact with it sooner.
  • You don’t have to look six months ahead; you will have a product out there in two.
  • You don’t have to forecast customer needs; you are going to be bringing them ideas asking “what do you think?”
  • You don’t have to anticipate your customer’s actions next year, because you are going to be inside their reaction cycle.

Audience Question: So, what’s the difference between a faster decision cycle and a slower one?

Historically the on-premises software guys were working on an annual release cycle. I would submit to you that you guys should be looking at least quarterly and better monthly releases. That way you are moving well inside of their decision making cycle. It’s different for chips, different for other kind of companies; but you want to be much faster than your more established peers. And, you want to stay fast as long as you can, because the risk of somebody flying up your tailpipe is much more than somebody stepping on you.

Question for Audience: How many of you are working in a startup that can still fit around one table? Say, a table with eight people, OK?

If you have to have a meeting, everybody in the company can be in the room. The executive staff is the product team is everything else: conversation, fast decisions, everybody is there.

You get bigger, your temptation is to have the executive staff hang on to all of those decisions. But what you really have to worry about is growing the company, you need to delegate to a product team that has a representative mix of folks from the various functions to drive the product.

If you are one of the founders, you have to worry about growing the business; let the product team run the product. You might at some point have two products, or three products.

At Beta: not so many commitments, and actually a lot of the commitments you make don’t matter, because the customer doesn’t buy, you can forget about them. Later on, more people remember.

Early on when it’s ready you can ship it; later on you’ll go dead doing that. Early on what’s that guy need; later on you better be working to a plan: maybe one page, two pages long.

In the beginning you could be customer [deal] driven, but later on you have to be market driven. You can’t just satisfy a handful of folks, and somewhere around nine customers; a customer driven model starts to break down. So, unless nine customers gets you to where you want to go; you’ve got to be thinking about making a transition to a market focus.

What stays the same: fast decisions, stay creative, stay flexible.

Another story: we use WebEx Office, and we use that for our calendaring.

So, we invite our customers to come to meetings with us using WebEx Office, which was originally developed by Intranets.com. It was an intranet application where a manger would use it to send an invite to a subordinate. In that context you can say things like, “you are required to come to this meeting.”

Now, in a consulting context, when I require my clients to come to meetings, they write back and say “I don’t think it works that way, you can invite me to a meeting, but you can’t require me to do a damn thing.”

We call up WebEx and ask can you fix this, can we change that little piece of text you are generating with my name next to it, that’s pissing my customers off?

Roach motel: request goes in, no sound, no picture, who knows. So, knowing a little bit about things, I call the sales guy and say “you know we may quit paying you for this.” Because we pay them every month. So then, we get a meeting with product support, no roadmap, no tracking; and I get a lecture about how hard the product manager’s job is. I go hey I’ve got a hard job too.

If anyone knows a good alternative to WebEx Office I’d actually like to hear it. Don’t be these guys.

Who knows what a whole product? A whole product is everything that’s needed to solve the customer’s problem: documentation, interfaces, useful error messages, etc.. In the beginning you can have a partial product. You can have a product that geeks can love; later on it’s a product your Mom has to be able to use.

Audience question: How does a transition take place from where we are all running around ad hoc to where we are doing these one page plans that make it scalable and repeatable?

Typically there are one or more failures, some people lose their jobs, and then new people come in and things change. Don’t be those guys either.

Audience question: At what point, you know when you have a CEO that’s so hands on in the company, and then things start to specialize and differentiate. I mean is there any point at which CEO starts to delegate? Say for sales department for example?

There are a couple of challenges. The CEO is either sales oriented or development oriented or maybe customer support oriented. He may be trying to get out. The challenge comes above some headcount–say twenty-five–he’s got to learn to manage managers, so that happens pretty fast.

The first bottleneck is if he is the mobile sonic boom who closes business: you miss a quarter, you miss a deal. He has to be able to delegate, and teach other people how to sell. He’s got to be able to let go and other people run the product. But, that occurs pretty fast; I mean you can get to sixty people or eighty people, but at that point the wheels are going to fall off if you’re not able to delegate; so it’s pretty fast.

Another difference between beta and after launch is that normally, in beta, if you don’t have it, they won’t believe you. So, it’s much harder to fool your customers. Later on when you are a bigger company, maybe you’ve got some VC, you can show customers a roadmap and actually decoy them in ways that can do them real damage. So, meeting those commitments later on has to be done, because your customers are more trusting of you than in the beginning.

If it’s three guys in a garage, they are only going to believe what they see. If you tell them you are going to bring out a box, you can show them a picture but they are not going to give you money until they see the box. Later on if you bring out a second box, you might be able to have them pay some money, because you’ve given them the first box. So, commitment tracking becomes even more important after launch, because your customers become more trusting–fewer early adopters more mainstream users.

The other thing that happens is that engineering’s access to the customer gets more and more mediated. You’ve got more marketing guys, you’ve got more support guys, maybe you’ve got a customer advisory board. So, making that work, and learning how to work through intermediaries becomes more important. In the beginning, between somebody bringing the deal and what engineering wants to do, you can pretty much decide what’s going to happen. Later on, you get more input from other folks.

So we help very early stage software companies with strategies for customer and business development. We help them find early customers, early references, and early revenue.

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