Here are two explainer videos Verdafero has produced: the first is intended for REIT executives, the second for general managers of hotels. They condense key symptoms for a customer need or problem and the impact of Verdafero on the bottom line.
Excerpts with commentary on Bill Watterson’s 1990 Kenyon College address: “Some Thoughts on the Real World By One Who Glimpsed it and Fled.”
We are offering our “Getting More Customers” workshop 9:00am-1:30pm on Sat-Apr-23-16. Spend a morning working on your business with a mix of lecture, discussion with peer entrepreneurs, and reflection and writing. You will leave with a plan for getting the phone to ring and your inbox to fill with inquiries.
Scott Robertson had a great post up last month on how to make content marketing work: be relevant, be different, be real, be useful, and be consistent. Here are some excerpts along with additional thoughts and commentary.
Theodore Zeldin gave a series of six lectures on conversation that were collected in slim book called “Conversation: How Talk Can Change Our Lives.” I found it offered a number of insights on what is needed for a serious conversation. And since serious conversation is one of the primary tools for early market exploration and customer development; I have curated a list of nine excerpts I think entrepreneurs will find useful.
My interview with Gabriel Weinberg was originally published Sep-8-2010. He was doing research for what became his fantastic book Traction. We talked for the better part of an hour and a half and I can remember he kept returning in different ways to what was needed to close your first dozen enterprise customers.
Any innovation effort is a painful struggle punctuated by false starts and dead ends. Your efforts are met with lack of interest even when a basic invention is working and active resistance when it starts to replace the tried and true. Like any childbirth the trick is managing the pain long enough to deliver.
Trust is built over repeated interactions between people. If your business requires long term relationships then you have to make sure that investments in automation are not deployed in a way that undercut your ability to have real conversations. Unfortunately, some uses of email automation tools are pushing sales conversations into the “Uncanny Valley” because they strive to simulate–but miss–a genuine personalized touch.
Cultivating mindfulness requires you to maintain situational awareness and realize when your reflexes may trigger a reaction that is not as thoughtful as the situation requires.
Q: We have already implemented the first prototype of our product, but we need to know that we are either on a good course or need to change.
A: If you long for certainty you should not be doing a startup, pick a regulated utility or government bureaucracy as a career. Lean Startup and Customer Development techniques can help you to reduce risks by identifying them and developing mitigation strategies but it’s not a guarantee. Any real market attracts competitors and you don’t get to write their plans so it’s not just a question of understanding the prospect’s status quo but being able to identify and react to competitive threats. The view that product-market fit is a ratchet that you cannot fall back from neglects the impact of competitive response, new entrants, and continued changes in technology and customer preference.
Q: Perhaps I overemphasized our desire for certainty; we understand a startup is uncertain. Should we use our current prototype as an MVP?
Yes. I would start with what you have and use it as a probe to refine your understanding of the market and customer needs.
Make a distinction between the product, your message, and your target customer. You can talk about your product in different ways, adjusting your message to highlight and test key hypotheses. You do not have to make any changes to your product to this. Any product by definition–or at least any short enough for a prospect for prospect to listen to willingly–of necessity highlights some aspects omits others. You can also use different messages on different target customers or present different message to different prospects of the same type as a way of refining your understanding of what they view as important.
It’s critical that you have conversations with prospects and not simply present messages and see what they react to. It’s only in conversation that you can truly be surprised (you have to be listening, it’s not a monolog) and often the most surprising and useful thing a prospect can do in a conversation is to ask you a question you have not considered before (that’s why it’s called a conversation not an interrogation). When you are looking for early customers the value hypothesis is critical. You may reach them using non-scalable methods that don’t address your first real growth hypothesis.
My take on the distinction between hypothesis and assumption, your mileage may vary: A hypothesis is what is being tested explicitly by an experiment. An assumption is tested implicitly. By making your assumptions as well as your hypotheses explicit you increase the clarity of your approach and the chance for learning. The two things that can trip you up most often is an unconscious assumption that masks a problem with your hypothesis or an unconscious bias in whom you are testing the value hypothesis on. In particular you may have defined your target customer by certain selection criteria but your actual choices for whom to speak to (or who will speak with you) are not sampling from the full spectrum of possibilities.
Q: Or should we build another or several other smaller MVPs to test only the most important assumptions? Should we build various tests in parallel to test the needs of different types of customers?
I have come around to the approach of testing several hypotheses in parallel, I think you learn faster and are more likely to identify a good opportunity more quickly. After you take your current prototype and use it to have conversations, I would explore a few different potential customer types in parallel. One good article on this is by David Aycan, “Don’t Let the Minimum Win Over the Viable,” where he offers a comparison between three approaches:
Traditional linear approach:
I am also a huge fan of Discovery Kanban as a way to manage a set of options and experiments in parallel with managing commitments to customers and other execution targets. It actually gets harder as you start to gain some early customers and need to continue to explore the market and refine your understanding in parallel with keeping your current customers satisfied.
I am a huge fan of Neil Perkin’s blog “Only Dead Fish” and his two newsletters: “Your Weekly Dead Fish” (archive) and “Fraggl.” I followed a link from his post on “Complexity and Simplicity” to a thought provoking presentation by Possible Health on “Our For Impact Culture Code.”
Here is my take on some key concepts from the deck (emphasis in original) that would benefit bootstrappers –as well as “non-profits.” I have added my observations in italic:
- “Non-profit” is a legal structure, not a way of doing things. And we don’t believe that we should define ourselves in the negative. Instead, we exist to create impact.
Observation: bootstrappers are often motivated by a desire to make an impact (in addition to a desire for autonomy) and have to focus on impact as a way to prove credibility and establish their firm as a viable alternative worthy of consideration.
- We treat efficiency as a moral must.
Observation: in the non-profit world this avoids the trap of excusing poor and/or inefficient execution because you are working on a “good cause.” For bootstrappers it’s second only to impact for viability.
- If building effective healthcare systems for the poor were easy, everyone would do it. We do this work precisely because it is labeled as “impossible” by many.
Observation: you can substitute “effective healthcare system” for whatever you own Big Hairy Audacious Goal (see “Building Companies to Last” by Jim Collins for more on this term). Bootstrappers have to work in riskier and more challenge environments because established firms are less willing to invest effort when markets with a clearer return are accessible.
- When your outcome is impact, time is a terrible thing to waste.
Observation: as I have outlined in the Chalk Talk on Technology Introduction, prospects use their estimate of your “time to impact” as the single best indicator of the amount of risk in your solution. Days to weeks beats months to quarters.
- When you’re working in the world’s most challenging environments under constant uncertainty, the way to maximize learning is to minimize the time to try things.
Observation: any environment with high uncertainty is challenging, running smaller experiments minimizes the cost of failure and speeds learning.
- It’s everyone’s job to turn time into resources and possibility for our patients.
Observation: all that bootstrappers have in the beginning is their time; if they cannot create an impact and a sense of possibility in prospects they won’t prosper.
Related Startup Culture posts:
- Four Excerpts from Valve’s Employee Handbook That Belong In Yours
- Yanis Varoufakis: “Valve is an Enlightened Oligarchy”
- Netflix Culture: Freedom and Responsibility by Reed Hastings
Update June-28-2014: Guillermo Marqueta-Silbert (@guillemarqueta) tweeted a comment to the effect that the exchange rate for entrepreneur hours to impact was a function of entrepreneurial skill. I think this is a great insight and suggests a more nuanced understanding that it’s not just trying anything but trying things that flow from a deep understanding of customer situation and needs, competitive landscape, relevant technology alternatives, and market evolution. In an OODA Loop formulation–Observe-Orient-Decide-Act–the key differentiator that expertise brings is a richer and faster Orientation to the situation.
Q: When I introduce the idea for my business a lot of my friends are quick to ask: “are you sure there is no one else doing this?” In today’s fast and disruptive business world, I think it is very hard to come up with a business idea that is 100% unique, and utilizes a completely new set of technology features. I constantly find myself arguing that it doesn’t matter if someone else also has the same startup or business idea, it’s how you go about executing your business idea that matters.
What are your thoughts on competitors and how put off should I be when I find out another company has a similar product and mission to my startup?
“Don’t take business advice from people with bad personal lives.”
Frank Chimero “Some Lessons I Learned in 2013“
One of the hallmarks for success in a business-to-business market is the ability to form personal relationships as well as professional business relationships. Both require building trust. I am always dismayed when I read advice that advocates bait and switch or other forms of con games that erode trust and make it difficult for any startup to build relationships.
The video from my “What is Lean–Lean Innovation 101” talk is up:
Here is the description for the talk
“Lean” provides a scientific approach for creating a product and developing new businesses. Teams can iteratively building products or services to meet the needs of early customers by adopting a combination of customer development, business-hypothesis-driven experimentation and iterative product releases. This talk covers:
- Why more and more companies are using Lean
- What is Lean, what it is not
- Key concepts
- Get Out Of Your BatCave
- Use an initial product (MVP) as a probe to explore the market
- When and how to pivot
- Rules of thumb for successful lean innovation
Q: We have started selling and are looking for resources for a lean approach to sales, in particular for new product introduction.
Lean Approach To Sales at Lean Startup Conference 2012
Scott Sambucci and I presented a workshop at Lean Startup 2012 on “Engineering Your Sales Process.”
The deck is posted at http://www.slideshare.net/SalesQualia/engineering-your-sales-process
About 70% of the workshop is interaction with attendee on their specific early sales challenges so it’s not something that we video record.
Scott Sambucci has two books out that address early sales issues:
- “Startup Selling: How to sell if you really, really have to and don’t know how”
- “52 Sales Questions Answered: A Q&A Guide to Customer Development & Sales”
Two articles that offer useful overviews for defining a sales process:
- The Entrepreneur’s Guide to Sales by Mark Duncan and Sean Murphy
- The Sales Learning Curve by Mark Leslie and Charles Holloway (2006)
Revised in 2011 at “Sales Learning Cycle“
Other books you may find helpful:
- SPIN Selling by Neil Rackham
- Solution Selling by Michael Bosworth
- You’ll Never Get No for an Answer by Jack Carew
- Secrets of Consulting by Gerald Weinberg
- Getting it Right the First Time: How Innovative Companies Anticipate Demand by Christy and Katsaros
Here is a long interview I gave to Gabriel Weinberg on early stage B2B sales that many entrepreneurs have found useful: Sean Murphy on the first six to twelve enterprise customers
All of these resources talk about a systematic approach to selling for new products. I continue to offer “Engineering Your Sales Process”® as a workshop for early stage teams. Please contact me if you would like to arrange for a workshop.
Let’s face it, finding customers can be quite a challenge. In this interactive workshop, we will cover a variety of proven marketing techniques for growing your business: attendees will select one or two that fit their style and develop a plan to implement them in their business in the next 90 days.
- Speaking – small groups, large groups, conferences, …
- Writing – blogging, newsletters, articles, …
- What Other People Say About You – referrals, testimonials, case studies, …
- Getting Found When and Where Prospects are Looking: adwords, Craigslist, trade shows, SEO/SEM, …
March 25, 2014 9am-12:30pm
$90 includes lunch
“This workshop provided great material to bounce off of. SKMurphy created a fertile space for me to think about my business and plan a concrete step forward. Thank you.” Paul Konasewich, President at Connect Leadership
I had a conversation today with a good friend I had not seen in a while. Normally cheerful, he was feeling “stuck” in his startup
I have started several businesses, tried to start quite a few more, changed direction more often than I ever planned and shut down more than a few–sometimes even before they really got off the ground. I am familiar with a sense of getting stuck, of things not working. It’s hard to discern and harder to admit what is working and what is not. But at some point I had to acknowledge the need for change and tinker with my approach.
I gave him three suggestions that I have worked for me when I find myself stuck:
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
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
- 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
- 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.
- 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.
Justin Kan (@JustinKan) wrote “Startups Don’t Die They Commit Suicide” in 2011″ (mirrored on his blog here) reflecting on what he had observed and learned as a serial entrepreneur. It was reposted on the Philly Startup Leaders list earlier this week which led me to write the following comments mixed with excerpts from Kan’s post.
Startups die in many ways, but in the past couple of years I’ve noticed that the most common cause of death is [when] founders/management kill the company while it’s still very much breathing.
Entrepreneurship Requires Perseverance
I think this is right, two key requirements for building a business are team morale–shared vision, enjoyment of working together, hope for the future–and cash flow. And morale can get you through periods of poor cash flow more than cash flow can compensate for poor morale and team dynamics. I think a lot of teams lose their “gumption” and give up.
Long before startups get to the point of delinquent electricity bills or serious payroll cuts, they implode. The people in them give up and move on to do other things, or they realize that startups are hard and can cause a massive amount of mental and physical exhaustion — or the founders get jobs at other companies, go back to school, or simply move out of the valley and disappear.
I think bootstrappers are in some way at less risk for this because they know it’s going to be hard, although perhaps not how hard.
A lot of times the founders don’t maintain their health and energy and cannot weather a setback or analyze their situation with enough emotional distance: debugging your startup requires peace of mind
Often the root problem can be traced back to a lack of product traction — it’s rare to find people willingly quitting companies with exploding metrics. But one thing that many entrepreneurs don’t realize is that patience and iteration are critical in achieving product market fit.
Keeping a ‘captain’s log’ or other journal can give you a place to vent your frustrations–and let them cool for later analysis–jot down your fragmentary insights for later revision and recombination, and allow you to look back at earlier crises you have managed and problems solved: record to remember, pause to reflect. We have worked with a couple of Finnish teams and they have a great word “sisu” that is the Arctic version of gumption.
Overnight successes might happen fast, but they never actually happen overnight.
I think a lot of the desire for overnight success is driven by trade press accounts of young millionaires who clean up the real story to make it seem simple and inevitable. I have met a number of entrepreneurs who think that one deal or one relationship will be the point of departure for a rocket trip to the stars. That’s always the way the success narrative is cleaned up and presented, but the reality almost always–barring a few lottery ticket winners–involved a lot more hard work and the slow accumulation of many small insights, decisions, and advantages.
On the other hand, happy people don’t normally start new companies: as Sramana Mitra has observed, startups are founded by mavericks, iconoclasts, dropouts, and misfits. In fact, I think Barry Moltz is right: you need to be a little crazy.
Still, I think morale at an individual and team level is a key resource, and the teams that persevere seem to be more driven by the thought of proving a new idea right than proving former co-workers, bosses, or relatives wrong. While 0roving folks wrong can be the start–bold action coupled with frank expression has inadvertently launched many a deeply felt entrepreneurial career–it’s rarely what sustains an individual much less a team.
“It’s only after you fail once or twice and learn to rely equally on thought, analysis, and anticipation–in addition to speed, talent, and execution–that you can really call yourself an entrepreneur. ”
Barry Moltz in “You Need to Be a Little Crazy“