A Clear Eyed View Of The Way Forward

Written by Sean Murphy. Posted in Rules of Thumb

It’s often hard to see your way forward. When there are many courses of action open to you whose possible outcomes are hard to predict you can remain paralyzed by analysis. I often find myself dithering past the point where picking any reasonable option and proceeding is far better than continuing to analyze my choices.

I frequently long for a clear eyed view of the way forward. Sometimes the path becomes clear when a situation echoes with prior experience or I see a pattern match to a prior success (or failure). Other times clarity flows from recognizing that there is only one option left: the “best bad plan.” The trick is to act immediately so as not to foreclose your only remaining potentially viable option.

Your Startup Never Gets Any Easier

Written by Sean Murphy. Posted in 2 Open for Business Stage, Rules of Thumb, skmurphy

When I first went to work for Monolithic Memories my boss, Ivan Pesic, told me, “It will be rough for the next two months and then it will get easier.” He was still telling the team that a year later when someone else offered that advice during a problem solving session and we all broke out laughing because we realized it was never going to get easier. We kept working on harder problems. Ivan went on to found Silvaco and despite a few legal setbacks built a company that has endured more than three decades.

Simon Sinek: Put People First

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

Simon Sinek earned a BA degree in cultural anthropology from Brandeis University; he attended City University in London with the intention of becoming a barrister, but left law school to go into advertising. He was interviewed in August of 2014 by John Wall on the RoninMarketeer site in connection with the launch of his second book “Leaders Eat Last.” Here are some excerpts that highlight his insights about why leaders and advertisers should put people first.

Entrepreneurs Exploit Errors in Conventional Wisdom

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

Four excerpts on how entrepreneurs exploit errors in conventional wisdom. The first two are from a Feb-8-2001 public forum that was part of BusinessWeek’s “Captains of Industry” series, where Oracle Corp. CEO Lawrence J. Ellison sat down with Editor-in-Chief Stephen B. Shepard. The last two are from Peter Thiel’s CS183 class lecture on secrets.

If You Are Cycling Through Chaos, Keep Pedaling

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

Patrick Brady writes at “Red Kite Prayer” on cycling and related topics. His blog took a very personal turn in February of 2013 with a post entitled “Any Normal Person.” In reading the series I was reminded of a remark Irwin Federman made to MMI employees when were using four day work weeks (actually five days work for four days pay): “We trust you to do the right thing. God has given you so much more responsibility as parents how can we not trust you.

Some Unsolicited Advice From David Cain

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

David Cain wrote a thought provoking, practical, and inspiring blog post today on “67 short pieces of advice you didn’t ask for.”  He acknowledges it’s a smorgasbord of unsolicited advice where you can take what you like and leave the rest for others:

“There’s no way for such an avalanche of unsolicited advice to come off as anything but preachy. But there’s also something appealing about the scattergun approach. Trying on a few dozen ideas in a few minutes will almost always leave you with something you can take to the bank, if you don’t get hung up on what doesn’t resonate. Here are sixty-seven short pieces of advice I either follow, or probably should. Take from it whatever rings true to you, and don’t take the whole thing too seriously. ”
David Cain’s intro to  “67 short pieces of advice you didn’t ask for.

Here are seven I took away, I have preserved his original numbering and added a few comments to particularize them for entrepreneurs:

Freedom

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

The desire for economic freedom and autonomy drives many entrepreneurs. Bootstrappers would rather work for customers than investors, choosing the discipline of the competitive marketplace over the wisdom and caprice of the boardroom.

“Life is too short to work at a job you hate,
but everyone has to do something someone else is willing to pay them for.”
Sid Emmert

Crafting a Value Proposition

Written by Sean Murphy. Posted in 2 Open for Business Stage, 3 Early Customer Stage, Rules of Thumb, Sales

Q: I struggle with the value proposition for our product. Either I am too abstract “we offer a positive return on time invested” or too vague “help increase your ability to manage critical challenges.” Do you have any suggestions for how to frame or formulate a value proposition?

Here a few questions that a value proposition normally addresses

Entrepreneurial Passion: Good Servant, Poor Master

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, Rules of Thumb, skmurphy

Entrepreneurial passion has to be based on a desire to create value, to be of service to a set of target customers. There may be many things you are interested in learning and room enough in your life for several hobbies, but pursuing a passion without regard to your ability to provide value in a way that is competitively differentiated is to pursue a hobby.

Diving In Over Your Head

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

One of the hallmarks of the entrepreneurial journey is diving in over your head.

At some point you have to commit fully to a new venture and at a later point you realize that, despite all of your careful preparation, you are testing the depth of water with both feet–or perhaps even head first. This is what can keep many up at nights or otherwise make life miserable.

Guidelines For An Online Community of Entrepreneurs

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

Q: I am starting an online community for technology entrepreneurs. Can you suggestion some guidelines I can use to help set newcomers expectations for what constitute valuable content and comments?

Here are some good guidelines and articles that I would start with, borrowing what makes sense and adapting it.

  • Hacker News Guidelines would be a place where I would start. In particular: defining what is on and off topic, how to write titles, and guidelines for leaving comments. Your rules may be different, your focus certainly is, but it would be a place to start.
  • The “Please Do” and “Please Don’t” lists on Reddit Reddiquette are definitely worth reviewing for things to include.
  • For “ASK BN” See Stack overflow how to ask a question for some specific suggestions worth considering for those posts

Nine Tips For Expert Public Speaking

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

Conor Neill has a great post up today on “a 9 Step Cheatsheet for Becoming a Public Speaking Expert” courtesy of the London Speakers Bureau. I am not usually a fan of  infographics but this is is exceptionally well done. Expert public speaking requires deliberate practice the same as any other skill. Here are some key tips I took away for entrepreneurs from the list but the entire infographic is worth a look.

Five Mistakes To Avoid In a Nurturing E-Mail

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

I signed up for a free trial of a lean project management tool (I have changed the name of the tool to <LeanTool>). A few days later I got the following nurturing E-Mail.

Subject: Are you afraid to manage your project in a lean way?

We’ve noticed that you haven’t been signing into <LeanTool> for a long time and this is a sign that you are not really committed to being lean. Remember that 96% of innovative projects fail, will your project be one of them? I hope not!

Remember that just having a gym membership is not going to help you get better, if you want to improve you have to do the work!

Log in to <LeanTool> today and start validating your project.

There are a x problems with this:

  1. it’s not nurturing.
  2. It assumes the tool is flawless and the problem is one of my motivation. In fact the tool does not work.
  3. I signed up for a free trial but none of the three primary dashboards in <LeanTool> for hypotheses, experiments, and results actually worked.

So I replied:

I went to add a hypothesis and it said that I need to pay.
I tried to add an experiment and it said I need to pay.
I tried to record a result and it said I need to pay.

Can you please explain your model for free evaluation?

It’s like someone showing you free samples in the supermarket and asking “Would you like to try it?” When you say “Yes” then you hear “that will be a $1″

You advertise a free trial but it seems like it is more like a free product tour, you cannot actually do anything.

Anyway, if what you are doing is working for you don’t stop but it seems weirdly antagonistic and dysfunctional
as an approach to letting me evaluate your software. Do you have any fully worked out examples I can review?

I got the following reply:

Hi Sean, thanks for writing!

We have reviewed the website and realized that there is a mistake: previously, we offered a free trial, and we haven’t updated the text in the startups page.

Sorry for the inconvenience. We really appreciate your feedback and we’d like to offer you a 14-day free trial with all functionality available and a 10% off in our pricing plans.

It seemed a little flaky so I waited a few days and checked their website, it still advertised a free trial.

“Get 1 canvas + 1 user totally FREE (No credit card is required.)”

A day later I got another copy of the original “nurturing” E-Mail.

  1. Sending the identical e-mail a week later is definitely not a good idea.
  2. Not fixing the website announcement of a free trial tells me that they are in free fall.

Customer Interviews: Spend an Hour to Save a Minute

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, Customer Development, Lean Startup, Rules of Thumb

For customer interviews we have a rule of thumb that if an hour or research saves a minute early in the conversation it’s a good investment.  When you look at the list of questions you have prepared to learn about the prospect’s business and their needs, it’s easy to say to yourself, “I am really busy I can just ask these at the start to ‘set the table.'” But there are significant risks with this approach.

Preparations Cuts Risk Of Customer Interviews Ending Prematurely

While the interview may be nominally scheduled for 15 minutes or a half-hour and may run an hour if it goes well the first six minute or so  are critical to communicating that you have done your homework on their situation and their needs. If you start to ask questions that are already published on-line you can appear lazy or unprepared. If you can do research on a prospect in advance, it’s worth spending an hour to save a minute in the conversation. You can even start the conversation by saying “when I prepared for this conversation here is what I learned about your firm” and give a brief summary of what you know about their situation.

It’s OK to say “I see on your website that you have hired four people in the last three months, how has that impacted …” or “I read a profile of your firm in the San Jose Business Journal Book of Lists, have you grown beyond the 12 people listed in February?” This shows that you have done your homework and don’t want to waste their time but need to confirm some of the key facts that may bear on their needs.

Information Sources To Consult Prior To Customer Interviews

  • Do a thorough review of the prospect’s website.
  • Search for any articles in the last two years at least to see what kind of press coverage they have received.
  • Review the Linkedin profiles for the firm, the person you are talking to, and anyone with similar titles or in the same department.
  • Review on-line postings in relevant forums for the industry.
  • See if they have a blog, a twitter account, a YouTube account, and similar social media sits that are often used for business purposes.

Six Questions That You Normally Have to Ask In The Conversation

  1. Prospect’s description of the problem in their own words. This is rarely more than a sentence or two and capturing the essence in their own words is key.
  2. High level description of current work process or work flow in their own words. This forms the basis for any delta comparison or differentiation of your solution.
  3. Any constraints they mention: if you hear the same ones multiple times you will more than likely have to satisfy them.
  4. How they will tell that a new solution will leave them better off: this is different from asking them to specify the solution, it’s asking for “future state” or the end result they would like to achieve.
  5. What else they have tried to do to solve the problem: probe for why they were not satisfactory.
  6. Key metrics or figures of merit they would use to evaluate a new outcome.

Closing Thoughts

“A month in the laboratory can often save an hour in the library.”
F. H. Westheimer

Entrepreneurs seem to divide into two camps:

  • those who want to have a conversation immediately, and
  • those who are quite content to research for months as long as they don’t have to talk to strangers.

Striking a balance is the key to maximizing your learning from a customer interview. Effective research prior to the customer interview allows you to

  • Ask better questions
  • Provide evidence of your commitment to developing a mutually satisfactory business relationship
  • Detect when your prospect is leaving something out or perhaps coloring the situation too much. You are not a stenographer there to capture whatever they say without reflection, but if your only source of information is what they tell you then you risk “garbage in, garbage out” in your product plans and MVP.

Related Posts

Q: Side Payment Requested In Negotiation

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

Q: We have been in customer discovery for a few months and have a situation in a negotiation that I am not sure how to deal with. A decision maker at a potential customer says he believes that our product can help but it’s not addressing a burning problem. The wrinkle that I have not encountered before: he says he would like to pursue this idea on his own so he wants us to compensate him for the ideas he is bringing. Any advice on how to look at the situation or how best to handle it?

Some Questions to Consider:

  • Who owns the ideas that he gave you?
  • Has he disclosed them to his company?
  • Are they his ideas or the company’s property?
  • Have you signed a non-disclosure either with him personally or with the company?
  • Did he give you the ideas freely or did he ask to be paid before he disclosed them?
  • Are there patents involved or does he plan to patent them?

If he is asking for a personal payment made to him, and not to the company, but it’s something you plan to sell to his company then you are walking into an ethical minefield. If he plans to pursue them himself it’s probably better to let him go on his way and talk to other folks who are not conflicted.

Act As If Everything You Do Will Become Public

As a rule of thumb it’s best to act as if everything that you do will become fully know to all of the parties involved or affected by your actions.  This side payment request does not sound like it would pass that test the way that you have described it.

If his company is not aware of the fact that he has ideas for improving internal processes or workflows and he is trying to sell them to you there are some potential conflicts there.

Normal Negotiation Flow For New Technology

Normally what would happen is that they would disclose to your their needs, specific ideas for functionality and perhaps implementation options, constraints that your solution  has to observe, and other relevant factors. You would either develop a custom product that is their property (work for hire) or you would develop a product you could sell to them and to others. The product might be sold at a discount to them to reflect their contribution, they might ask that you not sell it to named competitors for a a period of time (6,12,24 months).  In the first case you would be developing a custom implementation, in the second case you would be developing a solution that they would like to become an industry standard–perhaps after enjoying a temporary period of advantage over competitors–and they want to spread the cost of development across many players in the industry.

You Normally Don’t Make Side Payments

You don’t normally make side payments to individuals. One exception might be that the other party wants to leave his current job at your prospect company and come to work directly for you. But you want to be very careful about making payments to employees of firms or government agencies that you are trying to do business with. The employer may view it as a bribe or kickback. This is also true for offers of stock or stock options in your firm and payments to relatives or entities controlled by the employee but not part of the prospect company.

Related Blog Posts

  • Honesty In Negotiations
    I always assume that at some point in the future the folks I am negotiating will know the full truth of the situation and that very few secrets remain that way for long.
  • Building a Business Requires Building Trust
    Working with bootstrappers sometimes puts us on teams that are in desperate circumstances. Where they are able to translate time pressure and resource starvation into a bias for action from a change in perspective they often succeed–or at least move beyond the current crisis: success, like the horizon, is an imaginary line you can approach but never seen to cross. But where they use it as an excuse to take shortcuts that abuse prospects trust we sometimes have to part company.
  • The Lucky and the Wise
    It can be hard to assess whose advice to take about your business. One reason for cultivating at least a kitchen cabinet of informal advisors if not a more formal advisory board is that a diversity of perspectives can normally provide more insights into opportunities, risks, and options for managing them. Advice from a lucky entrepreneur tends to be very specific and suggest a “copy exactly” model, a wise entrepreneur will offer principles and several alternatives with one or two approaches recommended as most likely to succeed or least risky.
  • Treat Social Capital With The Same Care as Cash
    Trust Doesn’t Scale, It’s Knit by Aligning Actions With Prior Commitments

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