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

Arun Kumar: 9 Lessons Learned Bootstrapping Kerika

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

I interviewed Arun Kumar in 2012 on his experiences bootstrapping Kerika. It’s a long interview but really gives you a sense of his journey as an entrepreneur, his insights into the future of global teams and how they will collaborate, and a candid list of lessons learned. Here are nine key take-aways that he offered in that interview from bootstrapping Kerika since 2002.

Nine Lessons Learned Bootstrapping Kerika

  1. Don’t spend too much time on market research.  After some point, you are not discovering anything new; you are just hearing the same points being rephrased in different ways.  Move faster into building your first couple of versions.
  2. If the feature is really important, it’s not free. Be very careful about what open-source products or libraries you incorporate into your own product.
  3. Watch users where possible; don’t rely upon them to tell you what they are having difficulties with.  People often don’t articulate problems if they think they will look stupid in doing so, and sometimes people don’t even realize what problems they are having.  With face-to-face contact and conversation you can find out what people want to achieve, which is often different from what they are complaining about.
  4. Users will use your product in ways you never considered.  That’s a good thing. Even if that particular use case wasn’t the one that you envisioned originally, that’s an opportunity not a problem.
  5.  You can’t push on a string: when you are trying to find your product-market fit, you need to find a use case where someone is pulling on the other end.
  6. You will almost never fire someone too soon.
  7. Get all the details right.  Concepts are great, but execution is what matters.
  8. There are no instant successes: every successful company has a revisionist history that makes its founders look unusually brilliant.
  9. You can fail by misfortune, but are unlikely to succeed by chance.

Related Posts

 

Ten Mistakes Early Stage Bootstrappers Often Make

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

Over the years I have moderated several hundred Bootstrapper Breakfasts (since starting them in Silicon Valley in 2006). After doing a hundred or so and working with many clients who were bootstrapping I came up with a checklist for common mistakes bootstrappers and bootstrapping teams make in their first year or so.

  1. Leaving Your Assumptions Implicit: Not Writing a Customer Development Plan
  2. Believing that Anyone Will Want Your Product: Not Targeting a Specific Buyer
  3. Confusing the User (or the Audience) with the Buyer/Customer
  4. Believing Your Product Will Sell Itself (Looking for Smarter Prospects)
  5. Developing the Full Product: Not Selling the Smallest Piece Possible at First
  6. Not Focusing on Break-even and Profit
  7. Expecting Too Much Too Soon: Not Planning for “Target Practice”, Iteration, and Improvement
  8. Confusing VC with Customer: Going for (2% of) a Really Big Market
  9. Expecting the Same Control Over Prospects and Team Members as Your Code Base (Single Founder “No Compromise” Mindset)
  10. Treating the Business Like a Hobby (Thank God for Significant Others, Recently Deceased Relatives, and Crappy Day Jobs)

Five additional challenges that also need to be navigated

  1. Managing different aspects of your identity at personal, family, and business level.
  2. Understanding the emotional connection required for a successful business transaction: mission, brand promise, and  logo.
  3. The networking etiquette in Silicon Valley: cards, introductions, how to get acquainted.
  4. Making the transition from selling to friends to selling to a strange
  5. Making the commitment to a business footing: licenses, structure, tracking expenses (and acknowledging that now you can fail).

Adapted from a talk I gave in August 2009 at the San Francisco Bootstrapper Breakfast.

Matt Wensing On Making the Transition to Growth

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

Stormpulse has gone from an idea bootstrapped on founder savings and credit cards, to a project funded by friends and family rounds, to a small business strengthened by angel money, to a company that’s raised “meaningful” capital (our last round was just over $2 million). Here’s what I’ve learned since I’ve been able to leave the ‘drowning and can’t work on the important things’ mode.
Matt Wensing in “What I’ve Learned Since Raising Capital

Matt Wensing has been bootstrapping Stormpulse since September of 2004 (“What Have I Been Doing?!“) He offers some short thoughts on what he has learned since raising capital and I wanted to highlight four:

Small for the sake of small is as bad as big for the sake of big.

Small for the sake of small is letting the desire for control or other perfectionist tendencies trump everything else.

The question isn’t “Stay small or go big?”
It’s: “Is the vision scalable & worth scaling?”

This is a key insight that most entrepreneurs overlook in their calculations of whether to seek funding. It’s not about whether you need it, it’s whether the plan merits and requires it.

Existential: Walking around the office, hearing other people having conversations that used to only be in my head.

If you want to scale up your business you have to share information and context and allow other members of your team to be able to have an informed discussion with you about risks and issues. And ultimately to have some of those discussions without your participation. As Hugh MacLeod observed,  “scaling your business is all about having more people solve more problems for you.”

Define a great box by defining where to play and how to win; encourage in-the-box innovation.

To harness the team’s creativity define the business model and key objectives and let them experiment and explore strategies and tactics to accomplish them.

See also Matt Wensing’s “Bootstrapping Stormpulse” posts : Part 1 and Part 2 and his Mixergy interview “Free to Fee


I think the key breakthrough he made was the realization that his clients didn’t want a weather map they wanted actionable suggestions predicated on an analysis of what they could do to mitigate risks against an identified asset base. He was selling against “the hapless weatherman outside in the hurricane” but it wasn’t his real competition.  In December 2013 he rebranded it “Riskpulse” with the following goal:

Stormpulse Inc. becomes Riskpulse in response to customer requests for deeper risk management solutions. Because Stormpulse had a history of integrating disparate data sources and tracking rapidly-shifting factors in weather for business continuity professionals, it was uniquely positioned to develop a broader system for the whole supply chain.

Brad Pierce: Preserve Context in Writing to Manage Interruptions

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

Manage interruptions by writing down enough context to continue later: organized notes must detail status and next steps.

Brad Pierce:  Preserve  Context in Writing to Manage Interruptions

On longer time scales, when you must drop something for a while, it’s important, before doing so, to leave behind enough context for yourself to swap it back in. Write down some organized notes about where you were, what still needed to be done, etc. Keeping a log can be a big help, too, but it’s not a substitute for a high-level summary before suspending the task.

A good mental model for suspending a task is to leave behind the sort of information that you would need to hand it off to another person to finish.

Pretend that you are handing off the task to another person and you will be going away on a long vacation and unavailable to answer further questions, because when you come back to the task you will effectively be that other person.

Swapping in a new context is very expensive. Saving your state well when you suspend is actually much, much cheaper overall, assuming that you’ll need to come back to the task eventually.

Brad Pierce in Making the best of a bad interruption

I really like Brad’s advice and think it’s particularly useful for entrepreneurs in a couple of different situations:

At The End of a Meeting

Be clear on issues, risks, and action items before you adjourn. Don’t defer on getting agreement on critical risks, key concerns, and key tasks assignments. Rough notes that everyone agrees to means that the team is more likely to make forward progress instead of rehashing the key points of the last conversation (“I thought we agreed to…”) or arguing about things in email.

When Launching a Probe or Experiment

When you are launching a probe or experiment that may fail: plan your “time out” points and best alternatives in advance.  Some examples:

  • You are sending an e-mail request for a meeting or asking for action. Decide before you send it what you will do if you get no response: e.g. leave a voicemail, escalate, try alternatives, etc.. This is a variation on a premortem where you anticipate failure and what you will do to address it. But your state of information won’t substantially change with silence. While you still have the full context, plan out you next two or three steps so that you can also put them on the calendar without having to revisit the situation.
  • You are trying to fix a problem or defect. Decide on two or three options you can try that may fix the problem so that you can either shift to the next one or start two or three efforts in parallel. Obviously if the failure of your first attempt provides new information you may change your follow up, but it’s worth trying to anticipate now what are the most likely failure modes and writing that into your plan so that you don’t have to recover your full context to continue to take action.

Schedule Time to Document Your Context

Schedule time for documenting context in advance of predictable interruptions: allocate time to write down the key aspects of where you are before anything that will trigger a context shift such as scheduled conversations with other people, the end of the day, end of the week, the start of a parallel or overlapping project commitment etc…

Create “Buffer Days” To Clear Administrivia Backlog

Group Low Context Activities Into Clusters: I am borrowing this from Dan Sulivan’s “The Great Crossover.”

  • Focus Days:  you work with undivided concentration on key business activities.
  • Free Days: time you spend to relax and recharge with family and friends, no business activity.
  • Buffer Days: time you spend cleaning up, preparing, running errands, and otherwise make your focus days more effective.

Buffer days and free days are filled with tasks that don’t require you to store context. See also

Tony Schwartz: Notice the Good, Cultivate Good Habits, Slow Down, and Do the Right Thing

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

Tony Schwartz wrote a  great post on “Turning 60: The Twelve Most Important Lessons I’ve Learned So Far.” Here are my top four from his list (original numbering preserved).

2. Notice the good. We each carry an evolutionary predisposition to dwell on what’s wrong in our lives. The antidote is to deliberately take time out each day to notice what’s going right, and to feel grateful for what you’ve got. It’s probably a lot.

I think this is a clever way of saying count your blessings, but a good habit to cultivate however you phrase it.

7. The more behaviors you intentionally make automatic in your life, the more you’ll get done. If you have to think about doing something each time you do it, you probably won’t do it for very long. The trick is to get more things done using less energy and conscious self-control. How often do you forget to brush your teeth?

There is a lot to be said for breaking out of the routine and “thinking outside of the box” but the more useful default activities you can turn into habit the more you can concentrate on what’s really important. Three useful business habits for you to consider:

  • Carry a pen and paper or 3×5 cards to capture thoughts, insights, and suggestions from others.
  • Make a list and work it. Less useful for exploring but essential for finishing. This is a habit I learned from my first business partner, David Woodruff, at Woodruff & Murphy, Decision Systems Associates. He always carried a clipboard and pen everywhere so that he could plan the day and work the plan. It was a habit he had picked up managing  small construction projects but it has broad applicability.
  • Always debrief at the end of a project. Ask for feedback and volunteer self-criticism before offering your suggestions to others. Especially when things have not gone well and you would rather sweep the wreckage under the rug.

8. Slow down. Speed is the enemy of nearly everything in life that really matters. It’s addictive and it undermines quality, compassion, depth, creativity, appreciation and real relationship.

I find this to be very hard by the middle of the day. Forcing myself to measure twice and cut once is easier in the morning than in the afternoon when I often I feel behind.  The right decision, especially where people are concerned, is critical. I try to meditate twice a day and take at least a short walk  to clear my head in the late afternoon. This is very counter-cultural for Silicon Valley and startups, it’s an overlooked source of effectiveness as a result.

10. Do the right thing because it’s the right thing to do, and don’t expect anything in return. Your values are one of the only possessions you have that no one can take away from you. Doing the right thing may not always get you what you think you want in the moment, but it will almost always leave you feeling better about yourself in the long run. When in doubt, default to calm and kind.

We always try to put clients first and make sure our partners get paid when we do. Bootstrapping a startup is a very difficult way to make a living and may of our clients find it to be very stressful from time to time. I try to remain empathetic since i have made most of the mistakes that I see them making or hear them recount. But I also try and be as honest and direct as they can tolerate, explaining what I see as the key facts in  a situation, and courses of action that they should consider.

 

Don’t Waste Time Painting Tom Sawyer’s Fence: Proving Someone Wrong Is A Poor Motivator

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

Don’t waste time painting Tom Sawyer’s fence: proving someone wrong is actually a poor source of motivation. It’s OK to ignore conventional wisdom, but don’t get trapped into doing someone else’s work (or building their platform) just to prove them wrong. Build something instead of trying to win an argument.

Ben stopped nibbling his apple. Tom swept his brush daintily back and forth – stepped back to note the effect – added a touch here and there – criticised the effect again – Ben watching every move and getting more and more interested, more and more absorbed. Presently he said:

“Say, Tom, let me whitewash a little.”

Tom considered, was about to consent; but he altered his mind:

“No – no – I reckon it wouldn’t hardly do, Ben. You see, Aunt Polly’s awful particular about this fence – right here on the street, you know – but if it was the back fence I wouldn’t mind and she wouldn’t. Yes, she’s awful particular about this fence; it’s got to be done very careful; I reckon there ain’t one boy in a thousand, maybe two thousand, that can do it the way it’s got to be done.”

“No – is that so? Oh come, now – lemme, just try. Only just a little – I’d let you, if you was me, Tom.”

Mark Twain “The Adventures of Tom Sawyer”  Chapter 2

Rand Fishkin: You Can’t Do It Motivated Me

In “You Can’t Do It is a Powerful Motivation” Rand Fishkin recounts accurate advice he receive and ignored:

  • “You can’t build a big company in the SEO space,” said plenty of business people I talked to. “Stick with consulting–it’s what you know and you’ve got a great brand.”
  • “You need to hire a head of product and build a product team.”
  • “You can’t build a search engine sized web index on $1 million.”
  • “Don’t try to raise money now – you won’t get any.”
  • “The self-service / web app model is wrong. You need to build an enterprise sales force / charge more for your product / create embedded software so it’s not so easy to quit.”

Build Something Instead of Trying to Win an Argument

Most of this is implementation advice from folks with considerable implementation experience. No one was arguing about customer need, except perhaps the last one is about value proposition. He needs to turn this into a positive narrative. The Germans have an aphorism: “Stubbornness is the energy of fools.” He should reframe this as a persevering focus on his prospect’s needs.

Sam Walton: Ignore Conventional Wisdom

Sam Walton suggested an approach Rand might consider in his ten rules for building a successful business:

Rule 10: Swim upstream. Go the other way. Ignore the conventional wisdom.
If everybody else is doing it one way, there’s a good chance you can find your niche by going in exactly the opposite direction. But be prepared for a lot of folks to wave you down and tell you you’re headed the wrong way. I guess in all my years, what I heard more often than anything was: a town of less than 50,000 population cannot support a discount store for very long.

Related Blog Posts

Ten Principles for Trust and Integrity from Adventures in Missions

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

I have come to believe that morale or esprit de corps is the critical resource for a bootstrapping team. With it they can persist, blending freelancing, consulting work, customer discovery, product development, sales, and customer support.

The simple view is that you can just focus on one thing at a time–develop a product, market it, refine it, scale up–and that a few iterations will get you there. The reality for most is that it’s much harder and requires perseverance as a team.

The teams that persevere bring complementary skills and shared values to a common effort sustained by trust, shared vision and joint accountability. The first ten principles from  Adventures in Missions focus on trust and integrity,  offering some useful guidelines for building and maintaining trust:

  1. Integrity in an organization is built by developing trust.
  2. Trust is the glue that enables a team to function well.
  3. Trust is built over time through competence, commitment, and care.
  4. Trust is built as we preserve and build the significance of others.
  5. Trust is built through bearing each others’ burdens.
  6. Trust is built through a rapid response to communication.
  7. Trust is built through humility.
  8. Trust is built through personal contact.
  9. Trust is diminished by sarcasm and criticism.
  10. Integrity means making and living up to commitments.

See also “Entrepreneurship is the Launching of Surprises” which explores George Gilder’s essay “Unleash the Mind” and contains this insight that I think I am building on in my focus on morale as the key resource in a startup:

“America’s wealth is not an inventory of goods; it is an organic entity, a fragile pulsing fabric of ideas, expectations, loyalties, moral commitments, visions.”
George Gilder

Four Principles From Jonathan Wang’s “Start-Up Black Ops Creed”

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

Jonathan Wang penned the Start-Up Black Ops creed, here are some extracts I want to use a website started on the belief:

Every entrepreneur will, at some point along their journey, find themselves at the bottom of a big, dark pit–seemingly alone, surrounded by nothing, and without a way out.  That is the unavoidable norm when it comes to starting and running your own business. It is only at the bottom of this hole where you can learn and develop the skills to get out…and in doing so, you learn just how difficult entrepreneurship is and what it requires of your will and patience to succeed.

Wang offers four principles

1. You are not alone – the process is equally difficult and sucks just as much to the next person.

I think it’s very important to network, to reach out for advice and assistance, and to understand that bringing something new into the world is always a challenge.

2. You can be creative – desperation will force you to try things you have never done before.

In “Innovation Needs Starvation, Pressure, and a New Perspective”  I explored Dave Snowden’s  perspective on Culture and Innovation;  he identified three  necessary, but not sufficient conditions for innovation to take place:

  1. Starvation of familiar resource, forcing you to find new approaches, doing things in a different way;
  2. Pressure that forces you to engage in the problem;
  3. Perspective Shift to allow different patterns and ideas to be brought into play.

Of these, I think “a shift in perspective” is the most important. At a certain point pressure enables a shift, but as it continues to build it can extinguish creativity.

3. You don’t give up – you always ensure yourself a fighting chance when you at least try.

Not giving up is not the same thing as doing the same thing over and over without variation. “Try try again” is good advice only if you vary your approach. One way to avoid giving up is to develop a plan for alternative approaches before “Plan A” fails.  You can always update it based on what has not worked, but having a backup plan (and a backup for your backup) allows you to avoid the problem of “I cannot think of what to do next” when you are under the most pressure. In “Customer Development and its Discontents” I covered three common failure modes for engineering-driven companies as they approach the challenge of marketing and selling their product:

  • Get out of the BatCave: don’t try and figure it out without talking to prospects and your current customers
  • Test and measure: don’t rely just on your intuition, form falsifiable hypotheses
  • Iterate frequently: update your plans based on results to date, don’t be guided by the “Little Engine That Could” and keep trying the same thing hoping for a different result.

4. You will fail (not once, but many times) – you are better for it and will emerge smarter and stronger

For this to happen you need to conduct both pre-mortems, anticipating problems in advance, and periodic after actions  (also called post mortems, retrospectives, or lessons learned).  This also informs your customer’s perspective, as I noted in “The Technology is Nothing Without the Team

Most bootstrapping firms start out by delivering a service, or at least wrapping their product in a thick protective blanket of consulting to protect their customers from any sharp unfinished edges. And if you have ever used a product too early you know that the jagged edges of tomorrow can scratch some pretty deep wounds that are slow to heal and may leave impressive scars on what was once a promising career.

This is why early customers look hard at the people in your startup: they know that the technology cannot be divorced from the team and that how you respond when your product is producing unsatisfactory results is the most important question they have to answer. Because,  as Gerald Weinberg advises, “nothing new ever works ” and sooner or later you will have to respond.


See also “Three Take-Aways from Jonathan Wang’s Talk on Jaio Sports (Hardware Startup)

Bootstrappers Turn Time Into Resources and Possibilities For Customers

Written by Sean Murphy. Posted in 3 Early Customer Stage, 4 Finding your Niche, Rules of Thumb

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:

  1. “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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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:


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.

Reflections on Startup Conference 2014 in Redwood City

Written by Theresa Shafer. Posted in Community of Practice, Events, Rules of Thumb

“Not everyone who is worth knowing is famous.
Not everyone who is famous is worth knowing.
You meet your community of practice,
those who can help you see the adjacent possible,
in line waiting for the famous.”
Sean Murphy (inspired by Elia Freedman’s “Accidental Meetings“)

The conversations I had with individual entrepreneurs were the best part people of the Startup Conference 2014. 2,000 entrepreneurs, VCs, and met in Redwood City on, May 14, 2014. I talked to a number of folks and had several conversations that were far better than any of the presentations I sat through.

I came away with a couple of thoughts on networking.

  • Focus first on understanding the other person’s situation and what they are trying to accomplish. This enables you to share useful and directly relevant information and to ask for insight and assistance that they are more likely to be able to offer.
  • Trust develops over time: smiling helps, listening closely can require effort in a crowd but by giving someone your clear attention you encourage them to have a serious conversation.
  • Make a note to jog your memory of the conversation. I often use either a their business card or a 3×5 card, use your smartphone or tablet if that’s easier.
  • You can only make connections if you first listen carefully and understand their story.
  • If you meet someone at an event don’t skip talking to them if you have the opportunity. Serendipity is always at work but is only possible if you make the effort to have a conversation. It’s hard to predict where things will lead.
  • If you intend to talk to a speaker rehearse what you want to say and get to the point in 15-20 seconds. Exchange cards if you want to follow up. Especially if there is a line get to the point and limit yourself to 30-60 seconds. If a minute leaves you with the strong impression that they would like to talk more go back to the end of the line and let others have a chance to talk briefly before engaging in an extended conversation.

“All great work is preparing yourself for the accident to happen.”
Sidney Lumet

Corinne Roosevelt Robinson: Focus for Effect But Look Beyond Your Own Special Interests

Written by Theresa Shafer. Posted in Rules of Thumb

“Nothing is as difficult as to achieve results in this world if one is filled full of great tolerance and the milk of human kindness. The person who achieves must generally be a one-idea individual, concentrated entirely on that one idea, and ruthless in his aspect toward other men and other ideas.”
Corinne Roosevelt Robinson in chapter 1 of “My Brother Theodore Roosevelt.” 

This passage is actually about her father, Theodore Roosevelt Sr.  She continues:

“My father, in his brief life of forty-six years, achieved almost everything he undertook, and he undertook many things, but, although able to give the concentration which is necessary to achievement, he had the power of interesting himself in many things outside of his own special interests, and by the most delicate and comprehending sympathy made himself a factor in the lives of any number of other human beings.”
Corinne Roosevelt Robinson in chapter 1 of “My Brother Theodore Roosevelt.”

Good advice for entrepreneurs: you have to focus for effect, making hard choices to drive a project or product forward. But if you are only interested in yourself and your own needs you won’t have much of a life.

Kent Beck and Don Reinertsen on Value of Storytelling

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

What follows is an exchange on twitter between Kent Beck and Don Reinertsen on Dec 12-2013 about their experiences as speakers at the Lean Startup Conference 2013 that I thought was worth preserving.

Kent Beck and Don Reinertsen on Value of Storytelling

Kent Beck (@KentBeck) Dec 12: The beauty of teaching through storytelling is that the listeners’ lessons aren’t limited by the storyteller’s imagination.

Donald Reinertsen (@DReinertsen) Dec 12: And, as in the old story of a donkey carrying a load of books, the payload can sometimes be more sophisticated than the narrator.

Kent Beck (@KentBeck) Dec 12: Good thing I don’t mind being a donkey :)

Donald Reinertsen (@DReinertsen) Dec 12: I rather enjoy it. Such moments permit one to unintentionally deliver an unexpected, and unreasonable, amount of value.

I did a roundup of speakers, videos, and blog posts from the Lean Startup 2013 if you are interested in learning more about their presentations or others.

Don Reinertsen Presentations

Don Reinertsen also has a number of good presentations up at InfoQ a “Beyond Deming” video at Lean Product Development Flow.  Here is his talk from Lean Startup 2013:

Kent Beck’s talk from Lean Startup 2013:

Related Blog Posts

Tools vs. Methods vs. Policies

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

What’s interesting about digital tools for information work is how frequently they are born from a specific ideology: someone thought work should be done in a certain manner, they found no tools to support that method, so they set off to build their own tool that presumes their ideology is true and best. Thus, we get another to-do app, Twitter client, or project management app.

Everything that’s made has a bias, but simple implements—a hammer, a lever, a text editor—assume little and ask less. The tool doesn’t force the hand. But digital tools for information work are spookier. The tools can force the mind, since they have an ideological perspective baked into them. To best use the tool, you must think like the people who made it. This situation, at its best, is called learning. But more often than not, with my tools, it feels like the tail wagging the dog.

Frank Chimero in “No New Tools

For a while I was fighting with the auto-correct features built into various content management systems after I enabled “Correct Spelling Automatically.” It had seemed like a great idea given the number of typos I produce, but it would not let me enter words easily that were not in the built in dictionary and often miscorrected a typo to the wrong word. Better to go back to red squiggly lines under a word that it cannot find in the dictionary. The word “bootstrapper” comes up a lot on this blog, always with red squiggly lines (which can mask when it is misspelled).

Entrepreneurs try to design software tools that make customers lives easier. But it’s hard to avoid assumptions about “the right way” or “why would you ever want to do that” from creeping in. It’s not uncommon to visit a customer who has been using your product for six months or so and have to repress the urge to say “you are using our product wrong!” and instead say, “Wow, that’s an interesting use for our technology: what led you to apply it this way?”

IT organizations developing tools face a double whammy: their own built in assumptions and the end user trying to bake policy into the tool so that it cannot be used to violate policy. I remember watching a demo of a new in-house scheduling tool a few years ago and one of the features was that the schedule was always feasible. You could not overcommit anyone’s time or assign them to competing projects on that theory that people cannot be in two places at once and we should make plans based on extraordinary efforts. Good as far as it went but it rendered the tool useless for planning (which was about two-thirds of the motivation, time tracking was the other primary goal) because you could not enter a preliminary plan and see where it was infeasible. You could enter a plan with slack and underutilized people or equipment, but you could not temporarily overcommit and then shuffle assignments to make it feasible.

We had this same conversation with a recent BeamWise prospect: they wanted the software to prevent any invalid configurations from being designed. Our suggestion was that it was useful to know how much margin/overlap you had between conflicting elements instead of simply knowing that two or more items would not fit together correctly.

I am not advocating for accounting systems that don’t add expenses correctly or tax software that does not produce a correct return. But one of the advantages of software is that it allows you to investigate hypothetical configurations and alternate futures. Think about how you can enable exploration of a design space as much as validate that what is being designed is correct.


Related blog posts

Here are  a few on BeamWiseTM

Legal Advice: Start With a Plain English Agreement That Covers Key Deal Points

Written by Sean Murphy. Posted in Rules of Thumb

I am not an attorney. This is not legal advice.

Back when i had a real job at Cisco a few years ago I managed a webmaster who asked me to debug a problem with javascript embedded in the HTML for a page they had written. As we dug into about 30 lines of javascript it became clear that it was three sections from different programs with inconsistent variables names that had been glued together. The webmaster understood how to write good content and basic HTML and had viewed the javascript like a poem, assembling different stanzas from other pages in the hope they would form a coherent whole.

True story.

When I tell software engineers this story they often laugh. And then they realize that I am telling them the story because they have assembled a contract from different legalese they have found on the Internet in hopes of creating a legally binding and coherent whole.

I have seen firms give away the rights to their software because they didn’t understand the legal meaning of certain phrases they copied from a contract they found on the Internet.–this a true story that happened to a client a few years ago. The other side was happy to sign because they understood what “work for hire” meant, and happy to enforce it later.

Nobody likes spending money on attorneys, entrepreneurs are not alone in this regard. But you can always put a budget on their efforts (one rule of thumb is to spend 1% of the contract value on a legal review if you are bootstrapping) and ask an attorney to give you a prioritized list of risks. Many of the things that large firms pay attorneys to worry about are not worth spending attorney time on for an early stage startup.

Focus on key risks, not every risk. Also understand that to some attorneys ‘doing nothing’ can represent the least risk, but to a bootstrapper doing nothing means your runway keeps getting shorter. Doing nothing and taking no risks for long enough gives you the opportunity to ask for your old job back.

Find an attorney who is comfortable working with bootstrappers. Ask other bootstrappers who they use if need be.

Start with a plain English agreement that enables a meeting of the minds: it can just be a bulleted list of key points. If you are not an attorney do not attempt to write “legalese.” It just sets you up for signing a contract that you have drafted but don’t really understand.

A plain English document affords the layperson (non-attorney) substantially more protection and is always more useful as a starting point. Even if the other side starts with a contract take the time to reach agreement on key points in plain English so that you can tell whether you are negotiating substance or style when you involve your own attorney.

 

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