Archive for March, 2010

Quotes For Entrepreneurs – March 2010

Written by Sean Murphy. Posted in Quotes, skmurphy

You can follow @skmurphy to get these quotes for entrepreneurs hot off the mojo wire or wait until the end of the month when they are collected on the blog. Enter your E-mail if you would like Feedburner to deliver new blog posts to your inbox.

+ + +

“To have what you want is riches, to be able to do without is power.”
George MacDonald

+ + +

“And the man in the suit has just bought a new car,
From the profit he’s made on your dreams”
Jim Capaldi “The Low Spark of High Heel Boys”

+ + +

“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”
Peter Drucker in “Innovation and Entrepreneurship” (1985)

I used this in my first batch of “Quotes for Founders” in April of 2008, when I started to collect the quotes that I was tweeting into blog posts. I liked it so much inadvertently retweeted it again, so it’s included in this month’s roundup.

+ + +

“Real world tests are all open book: lessons gleaned from the free market inexorably determine success.”
Jonathan Rosenberg

Full quote:

“In the real world the tests are all open book, and your success is inexorably determined by the lessons you glean from the free market.” from Jeff Jarvis “TEDxNYed: This is Bullshit

+ + +

“Our history is slow, continuous growth. In the race between tortoise and hare, well, we’re the slow guy”
Craig Newmark

This was Newmark’s answer to “How Craigslist Spread” is worth keeping as your screen saver quote. See also “Sustaining is More Important Than Starting”

+ + +

“A business should be run like an aquarium, where everybody can see what’s going on.” Jack Stack “The Great Game of Business” (page 72)

Full quote:

“A business should be run like an aquarium, where everybody can see what’s going on–what’s going in, what’s moving around, what’s coming out. That’s the only way to make sure people
understand what you’re doing, and why, and have some input into deciding where you are going. Then, when the unexpected happens, they know how to react and react quickly.”

The Great Game of Business site also lists simulations, webinars, coaching and more on open book management. See also “The Business is Everyone’s Business

+ + +

“The most profound technologies are those that disappear. They weave themselves into the fabric of everyday life until they are indistinguishable from it.” Mark Weiser in “The Computer for the 21st Century,” Scientific American, vol. 265 (September 1991): 94–104.

+ + +

“We missed good startups, usually good guys with a terrible idea. Now we focus more on the people than the idea.”
Paul Graham

Full quote from Hacker News Item 1192178:

“We’ve definitely missed good startups. But one advantage of having so many competitors is that we’re much more likely now to learn when we screw up. When a startup from one of the other YC-like organizations does well, I often check their YC application to see how we missed them. Usually it’s because they were good guys but working on a terrible idea, which they later changed. So in response to that we now make a conscious effort to pay less attention to the idea and more to the people when we read applications.”

In response to “Ask HN: Who got rejected in earlier cycles of YC application and made it anyway?

+ + +

“Our plan for 2010: kill initiatives we can’t fix, experiment cautiously, and treat social capital with the same care as cash.”
Sean Murphy

See also “Conserving Trust in a Downturn” & “Bouncing Back

+ + +

“The secret of happiness is curiosity”
Norman Douglas “The South Wind

Full quote:

“A sound schooling should teach manner of thought rather than matter. It should have a dual aim—to equip a man for hours of work, and for hours of leisure. They interact; if the leisure is misspent, the work will suffer. As regards the first, we cannot expect a school to purvey more than a grip of general principles. Even that is seldom given. The second should enable a man to extract as much happiness as possible out of his spare time. The secret of happiness is curiosity. Now curiosity is not only not roused; it is repressed. You will say there is not time for everything. But how much time is wasted!”

+ + +

“Companies that truly want to create a long-term capability around innovation need to invest in building a common language.”
Dr. Clayton Christensen

+ + +

“A toolmaker succeeds when customers succeed with his aid: e.g. a sword-smith succeeds when clients die of old age.”
Fred Brooks

Full quote:

“A toolmaker succeeds as, and only as, the users of his tool succeed with his aid.
However shining the blade, however jeweled the hilt, however perfect the heft, a sword is tested only by cutting. That sword-smith is successful whose clients die of old age.”
Source: Fred Brooks “The Computer Scientist as Toolsmith”, Comm ACM 39(5), March 1996

+ + +

“Salvation comes to him who never ceases to strive.”

+ + +

“Judge a man by his questions rather than by his answers.”

Killer Instinct Can Blind You to the Value of Partners

Written by Sean Murphy. Posted in 4 Finding your Niche

A “killer instinct” that allows you to focus and prioritize is helpful, but if it blinds you to win-win outcomes you will not succeed as an entrepreneur.

Killer Instinct

In “Killer Instinct” Rafael Corrales writes:

“There are no plus-minus stats to measure a player’s ruthlessness, his desire to beat his opponent so badly he’ll need therapy to recover. […]

Athletic greats squeeze every ounce out of their abilities. That drive and hunger is worth noting, since top athletes are typically not satisfied even when pulling in accolades, championships, and money.

Instead of measuring success relative to the general population, or a peer group, the great ones measure success relative to their potential and abilities. It’s clear this also applies to startups.

I encourage everyone I know to go start something if they’ve at least proven there’s a market need. I bet that the people who will be great are the ones who have a killer instinct to succeed.”

If by killer instinct he means the value of focus then I agree.

Win-Win Mindset Beats “Winner Take All” Thinking

But I find most startups succeed more on their ability to negotiate win-win outcomes with partners, customers, suppliers and less on “winner take all” models. Most markets look more like stag hunts where teams of cooperating players outperform “go it alone” firms. If a startup team sets high standards of excellence for performance that’s  great.

But you face so many competitors, including the status quo, that a focus on winning can lead to you to overlook opportunities for partnering. Especially in the early market. In  “What makes entrepreneurial” Saras Sarasvathy writes:

“Expert entrepreneurs […] are actually in the business of creating the future, which entails having to work together with a wide variety of people over long periods of time. [They fill their future] with enduring human relationships that outlive failures and create successes over time”

“This is largely ignored in our entrepreneurship curricula which tend to focus on market research, business planning, new venture financing and legal issues. As far as I know no entrepreneurship programs offer courses in creating and managing lasting relationships or stable stakeholder networks, nor on failure management.”

Related Blog Posts


Solve Real Problems That People Will Pay For Where You Add Unique Value

Written by Sean Murphy. Posted in skmurphy

Tien G. Nguyen suggested three filters for a good business idea:

  1. Solve a problem that he has personally.
  2. Solve a problem that customers will pay you immediately to solve.
  3. Solve a problem that is a real one for customers.

What I think he is looking for in #1 is a problem that he has some useful knowledge about.  Another way to say what I mean is that it should be become something that he can add unique value to, based on experience, expertise, or skills.

I think it’s stronger if  you reverse the order to be:

  1. Solve a real customer problem,
  2. That they are willing to pay for,
  3. Where you add unique value (know-how, experience, or expertise) to the solution.

Inventors & IP Management: Bill Meade Interview

Written by Sean Murphy. Posted in Legal Issues, skmurphy

I was delighted when Bill Meade, President of Basic IP Management, Inc. agreed to an interview about managing innovation and intellectual property (IP) to maximize profits. Bill served as Intellectual Property Manager and Future Products Manager at Hewlett-Packard, where he “lit the fire” that moved HP from #18 in US patenting to #3. He has run over 200 invention workshops around the world to help major corporations with IP management.

Q: What are some of the surprising things you have learned about inventors?

A: My three biggest surprises have been about prolific inventors.

  1. Nobody knows who they are.
    Example: Last workshop we ran, the top inventor turned in over 30 complete invention disclosures.  The IP attorneys had never seen him before.  The way you find them is by asking everyone to invent.
  2. They are as motivated by peer pressure as by incentives, you don’t need to motivate them directly.
    Example: One prolific inventor went from 12 disclosures per year to 200 per year after we started running invention workshops at his company, but he never went to a workshop.  Just increasing awareness of the amount of inventing in the environment motivates prolific inventors.
  3. Prolific inventors are contagious.
    Example: Another prolific inventor at HP became an on-ramp for the IP department finding inventing talent by bringing groups of not-yet-inventors to weekly invention office hours to learn how to complete disclosures.

Q: How do you define Intellectual Property (IP)?

A: We define IP as products of the human mind that have commercial value and are legally defensible. This includes patents, trade secrets, and copyright material. It also includes the defensive publication of ideas, which prevent their use as patents by competitors. If you look at managing IP at a company like IBM, they actively manage all four of these forms of intellectual property.

Q: Based on your experience, how do VPs of R&D/Engineering look at the managing IP?

A: In my experience R&D management tends to under value IP creation and management because they are not measured on it directly. It’s hard to measure: the effects of a strong or weak approach can take years to manifest. Invention disclosures, patent filings, and patents granted are all lagging indicators and are still only a poor proxy for patents successfully litigated or licensed.

Q: What are the aspects of developing and managing IP that get underestimated?

A: One of the biggest is how much more intellectual property their people can document and allow the corporation to protect if properly encouraged. This latent and often untapped potential for additional IP can be encouraged and directed toward the strategic objectives of the corporation. Many companies pay bonuses for invention disclosures and patents, but they underestimate the value of allocating blocks of time to writing invention disclosures and simplifying both the disclosure forms and the evaluation process so that they are much less of a burden on the potential inventor.

Q: What drives IP strategy?

A: Most IP strategy is developed in response to an IP crisis, for example being sued unexpectedly. Once an IP crisis happens, the company will start climbing the IP management learning curve, with management, lawyers, outside consultants, all hands scrambling.

The only good thing about an IP crisis is that the need for additional IP to manage the situation becomes crystal clear.

The biggest problem with managing IP by crisis is that very little long-term learning happens from crises.  The litigators declare victory and move on to the next crisis.  The managers are just happy to have the situation closed.  Corporate counsel is left burned out and un-thanked.  IP portfolio managers having survived litigation often leave their position, and often, their company.

Q: OK, so what should drive IP strategy?

A: We think there are perhaps a half dozen good answers:

  • Protect sales & product differentiation
  • Stop competitor formation
  • Buy oligopoly membership
  • Solve patent crises
  • Reduced litigation
  • License revenue

Q: What are some better practices you have seen at the engineering leadership level?

A: Several best practices for creating business value by defining and implementing an IP strategy:

  • Target the inventing you want
  • Tell your inventors what you want them to invent and why
  • Train your inventors and transfuse them with enthusiasm for inventing.
  • Measure using an objective rating process and provide quantitative feedback from idea rating.
  • Provide infrastructure for closed loop feedback between IP team and inventors.

More background on Bill Meade

Bill Meade is President of Basic IP Management, Inc. Prior to Basic IP, Bill served as Intellectual Property Manager and Future Products Manager at Hewlett-Packard with responsibilities including managing the business side of patent litigation, implementing IP strategy, damages estimation, increasing the strategic alignment of IP to LaserJet businesses, IP business process development including a world-wide invention incentive payment system.  Bill “lit the fire” that moved HP from #18 in US patenting to #3, running over 200 invention workshops for HP across the US and around the world. Bill has also served as Assistant Professor of Marketing at University of Missouri, where he moderated internet discussion lists for Geoffrey Moore and Guy Kawasaki. Bill holds a BA in Finance, an MBA in marketing, and a Ph.D. in marketing with minors in evolutionary ecology, econometrics, statistics, and electrical engineering, all from Michigan State University – The Eli Broad Graduate School of Management.

Moving From Vision to Engagement With Prospects

Written by Sean Murphy. Posted in Customer Development, skmurphy

I had an e-mail exchange with William Pietri (@williampietri) back in October that I am reproducing here with his permission. I believe that it highlights a set of issues around “being in the grip of a vision”  in a useful way.

William Pietri: I’m wondering how Lean Startup founders handle attacks of vision. Do you just sit still until it passes? Do you take to strong drink? Do you, like a werewolf before the full moon, lock yourself in a cage until you’re no longer dangerous?

Sean Murphy: If you didn’t believe that you could make the world a better place you wouldn’t be effective as an entrepreneur. I think vision is an important component to both inspiring and sustaining successful entrepreneurial endeavors. Necessary but not sufficient as the math majors say.

Pietri: In all seriousness, I keep running across entrepreneurs who have both the blessing and the curse of a strong product vision. So strong that they don’t feel the need to actually ship anything to see what customers think. Because of course it will work. Or at least they keep wanting to delay real-world feedback so that they can get the product “right”. Ha ha, “right”.

Murphy: We call this the “need to leave the Bat Cave and listen to strangers” as a lot of typically introverted technical entrepreneurs feel more comfortable continuing to perfect their craft/technology in a private workspace (or a secret hideout if they are in stealth mode).

Pietri: I occasionally have this problem myself, and I mainly deal with it by writing up ideas in my notebook, sketching out user interfaces, or producing stacks of index-card based product plans. Then I find the smallest shippable thing I can implement and push the pile of paper aside. Generally to be ignored for weeks or months.

Murphy: I think it’s good to explore the limits of the vision as long as you take the time to break it into a phased implementation, that you way know where you are trying to go and can put you first steps in a larger context. If you
were to sketch a “five phase plan” it’s better if you can actually begin in phase two and determine what earlier efforts you are building on (vs. starting from scratch).

Pietri: Do Lean Startup founders have any tricks for breaking their attachment to grand visions?  Or even better, tricks for getting other people to wean themselves off self-feedback in favor of real-world feedback?

Murphy: The trick is not breaking your attachment to your vision, it’s breaking your vision it into steps.

I would also take a hard look at why you don’t feel a deadline–and the typical deadline for bootstrappers is caused by running out of money. Sometimes it’s too obliging a wife, girlfriend, parents, wealthy relative that is funding your efforts without asking you when you are going to ship or setting a funding limit. Sometimes it’s having a day job or successful consulting practice that puts off the need to actually make money from a new product.

Sometimes your identity is caught up in being an inventor and you don’t want to find out for real (the product can be a little bit like Schrodinger’s Cat, as long as you don’t open the box and test it in the market you can believe that it’s still alive) if people want to use–much less pay for–your product.

Net net: self-feedback can satisfy many needs but it won’t make you money; when you need to make money you need to have conversations with strangers and get “real world feedback.”

At least that’s what I try to remind myself of when I am in the “grip of a vision.”

Related Posts:

The Business is Everyone’s Business

Written by Sean Murphy. Posted in 2 Open for Business Stage, 3 Early Customer Stage, 5 Scaling Up Stage, skmurphy

“A business should be run like an aquarium, where everybody can see what’s going on–what’s going in, what’s moving around, what’s coming out. That’s the only way to make sure people understand what you’re doing, and why, and have some input into deciding where you are going. Then, when the unexpected happens, they know how to react and react quickly. ”

Jack Stack “The Great Game of Business” (page 72) see also

Edward Carrel left a great comment on Hacker News in response to “Project Manager’s vs.  Developer’s View” this quote (the thread is here)

I’ve never understood this bright line boundary between the patchwork of people that make up a technical group, and the patchwork of people that make up a business group. Presumably, the technology being developed is part of what makes the business viable; it isn’t just a bunch of people playing with text editors on company time, while the grown ups — the business folks — do everything that earns money.

It serious just seems like an artificial division to excuse the two groups for not listening to each other.

This becomes even more painful when you are one of the people who wants to be involved in whatever makes up this nebulous “business side”, and are told to go back to writing code.

My view: the business is everyone’s business, and any time you start developing bright line boundaries to either protect turf, enforce a hierarchy for its own sake, or excuse non-involvement, the least of your problems is one of your techies wanting to play with technology that seems superfluous to the untrained eye.

It reminded me a few paragraphs from an E-mail I sent to a client recently.

You have created a significant business opportunity with your accomplishments: you have happy customers, strong technology, and the demonstrated ability to close new business.

But I see the need for closer cross-functional coordination between sales, marketing, development, and customer service with clear agreement on both near term and long term strategy.

These four teams need to work together more closely to leverage your significant strengths and accomplishments. Closing new business opportunities and increasing penetration at existing customers is going to take more communication and continuous collaboration.

I think there are several things that work against effective cross-functional collaboration:

  • Time pressure: trust is built over time and developing a working consensus on a course of action takes extra time until  everyone is in at least rough agreement on goals, roles, and process.
  • Different perspectives:  software is easy to change and update; customers are much less forgiving and typically not interested in the reasons that you let them down.
  • Shared improvisation requires rehearsal, and rehearsal takes even more time. But you often  don’t have a second chance with a customer.
  • It requires you to admit your dependency on others with fundamentally different strengths.  Many founders in particular have very strong skills in at least one or two areas and can fall victim to favoring their strengths instead of taking advantage of different approaches that require other people with talents that the founders lack.
  • Software is the promise of a relationship but relationships are much more ambiguous than test results, transactions,  or program output. Different groups live in different world with different score keeping mechanisms.

Figuring out the right team and company scorekeeping mechanisms and building trust and shared improvisational skills all take time. But  I agree with Ed Carrel that the business is everyone’s business.

See also “The Business is Everyone’s Business (Part 2)” and these related blog posts:

Listening to Customers

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

In “Moore’s Law Beats Customer Feedback” Chris Morris highlights a quote by Jensen Huang from an April 8, 2009 talk at the Stanford Technology Ventures Program on “Favoring Moore’s Law Over Customer Feedback”  (Mr. Huang has a number of talks available on Stanford’s Entrepreneurship Corner):

“Sometimes you have to ignore your customers and follow Moore’s Law.”
Jensen Huang

Acknowledging Moore’s Law is Listening to Customers

My feeling is that Moore’s Law is customer feedback.

What I think he means “ignore some of your more established prospects.” NVIDIA sold chips to customers in its first five years. By that I mean that they had customers that were using their products.  Just not to some of his larger potential prospects. NVIDIA also had SGI as an “existence proof” for a market for high end graphics. They had lead customers from the beginning, he doesn’t mention who they are, choosing to focus on the larger prospects who were initially not interested, but they didn’t invent their architecture in a vacuum. For example, from Firing Squad’s History of NVIDIA:

Curtis Priem, NVIDIA Chief Technical Officer, had been the architect for the first graphics processor for the PC, the IBM Professional Graphics Adapter, and more recently had developed the GX graphics chips at Sun Microsystems. Chris Malachowsky, VP of Hardware Engineering, was a Senior Staff Engineer for Sun Microsystems, Inc., and was co-inventor of the GX graphics architecture.

In fact, when it came to standards for representing 3D they initially picked the wrong standard and had to “listen to their customer” and change horses. See, for example Tom’s Hardware: 13 years of NVIDIA History:

The principal problem with the NV1 was in its management of 3D: it used quadratic texture mapping (QTM) instead of the technique used currently, which is based on polygons. DirectX appeared just after the card was released, and it used polygons, so the NV1 was a failure over the long term. […] The NV2 used the same rendering method and was never completed. It was to have been used in the Dreamcast console (which replaced the Saturn), but Sega finally chose a polygon-based technology (PowerVR) and Nvidia abandoned QTM in favor of polygon-based rendering with the NV3.

My take away is that if a large established customer shows no interest, talk to smaller players who are interested in becoming larger and help them to disrupt the market. Don’t wait for the established players to embrace your product idea before proceeding.

Great Demo Workshop on April 9 2010

Written by Theresa Shafer. Posted in Demos, Events, Sales

Create and Deliver Surprisingly Compelling Software Demonstrations
“Do The Last Thing First” — the recipe for a Great Demo!

When: Friday, April 9, 2010

  • 8:15 am – 5:00 pm
  • Advanced Topics PM Session: 1 – 5pm (see below)

Where: Moorpark Hotel, 4241 Moorpark Ave, San Jose CA 95129
Cost: $560

This is an interactive workshop with Peter Cohan geared especially for you who demonstrate B-to-B software to your customer and channels. Bring a copy of your demo and be prepared to present it — we’ll help you turn it into a surprisingly compelling demo! AM Session Cost (includes breakfast, lunch, copy of Peter Cohan’s “Great Demo!” book):

Register Great Demo

This seminar outlines a framework for the creation and delivery of improved demos and presentations to enable increased success in the marketing, sale, and deployment of software and related products. Whether it’s face to face, in a webinar, as a screencast, or as a self-running demo the ability to present the key benefits of your software product is essential to generating prospect interest and ultimately revenue. Peter Cohan of The Second Derivative gives us the recipe for a Great Demo!

“I am confident that with the insights gained from your workshop we will land more customers in fewer iterations.”
Lav Pachuri, CEO, href=””>Xleron Inc.

“Peter Cohan’s Great Demo method really works. It helped us win DEMOgod, and it has allowed us to explain our offering much more clearly to prospects.”
Chaim Indig, CEO, Phreesia
(See “DEMOgod Winner Phreesia Praises Peter Cohan Training“)

ABOUT THE SPEAKER: Peter Cohan, Principal at Second Derivative
Community Web Site:

Peter Cohan is the founder and a principal of The Second Derivative, a consultancy focused on helping software organizations improve their sales and marketing results. In July 2004, he enabled and began moderating DemoGurus®, a community web exchange dedicated to helping sales and marketing teams improve their software demonstrations. In 2003, he authored Great Demo!, a book that provides methods to create and execute compelling demonstrations. The 2nd edition of Great Demo! was published March 2005.

Before The Second Derivative, Peter founded the Discovery Tools® business unit at Symyx Technologies, Inc., where he grew the business from an empty spreadsheet into a $30 million operation. Prior to Symyx, Peter served in marketing, sales, and management positions at MDL Information Systems, a leading provider of scientific information management software. Peter currently serves on the Board of Directors for Collaborative Drug Discovery, Inc. and the board of advisors for Excellin, Inc. He holds a degree in chemistry.

Peter has experience as an individual contributor, manage and senior management in marketing, sales, and business development. He has also been, and continues to be, a customer.


  • 8:15 AM Breakfast & Registration
  • 8:30 AM Workshop begins
  • Noon Lunch & De-brief
  • 1 PM Wrap up

Seating is Limited These are intensive sessions and we ask that you arrive at least 15 minutes before 8:30AM start time to ensure you will have a seat and won’t disrupt the session once it is underway.

PM Session: Advanced Topics

In response to requests for assistance on demo delivery we have added an afternoon session to our Great Demos workshop. If this is your first exposure to the Great Demo come for the morning and get a great overview of the methodology and stay for the afternoon if you would like an opportunity for more interactive training on advanced topics such as multi-solution, multi-player demonstrations, and vision generation demonstrations. The advanced topic session as covers real life issues like handling bugs, crashes, and time challenges.

This is an interactive workshop with Peter Cohan is only available to people who have already attended the morning session or a previous Great Demo session.

When: Wednesday March 17, 2010   1:00 – 5:00 pm
Where: Moorpark Hotel, 4241 Moorpark Ave, San Jose CA 95129
Cost $200  Register for the Advanced Topics

Advanced Topics Agenda:

  • 1 PM Advanced Topics
    • multiple solution demos
    • presenting to a mixed audience with different needs or information requirements
    • vision generation demonstrations
    • handling bugs, crashes, and time challenges.
  • 5 PM Wrap up

For more information: Theresa Shafer 408-252-9676

Recurring Problems Have Both Technical and Psychological Roots

Written by Sean Murphy. Posted in Books, skmurphy

I got an e-mailed question from someone who had watched my “The Limits of I’ll Know It When I See It” video.

Q:  In your talk you say “Most recurring problems are a combination of an unsolved technical problem and an unresolved emotional component to that problem.” Is there more about this in Ericsson’s “The Role of Deliberate Practice in the Acquisition of Expert Performance” or in the Gary Klein’s “Sources of Power“?

A:  It’s actually from another great book: “The Art of Learning” by Josh Waitzkin.  I found this quote on page 108:

“The aim is to minimize repetition as much as possible, by having an eye for consistent psychological and technical themes of error.”

but he is a little clearer in two other interviews, the first is  Scott Barry Kaufman’s “Learning About Learning: An Interview With Josh Waitkzkin”  (yellow highlight added)

S. In reading your book, it seems as though your major strength in Tai Chi Chuan is the way you put your mind into the game. You were able to beat players much stronger than you by “getting into their mind.” I find this fascinating. Why do you think you were so good at psyching people out? Was it because of your early chess experiences?

J. Sure, my chess experience taught me a lot about the psychology of competition. World-class chess players are incredibly brilliant people who have spent their lives figuring out ways to get it your head, to break you down. Usually every high level chess error is accompanied by a psychological break of sorts-to survive, you have to understand the inner game. I am always looking for where the psychological and the technical collide–that surely comes from my chess study. But frankly, I think I really got good at the psychological game after chess. Chess taught me how to be relentlessly introspective, how to unearth tells in myself and in opponents, but then I really took that foundation and put it into dynamic action in the martial arts. I work on being a heat seeking missile for dogma. If you unearth or instill a false assumption in an opponent, they are in a lot of trouble unless they feel you getting into their head and kick you out fast. Of course this eye for false constructs is an important tool in the learning process as well.

The second is Thomas Huynh‘s “Interview with Josh Waitzkin” (yellow highlight added)

Q:  Did you find the skills or outlook you gained from first learning chess on the streets of New York City (Washington Square Park) helped you to outmaneuver those who only had classical training?

A:  […] To survive in the park you have to be a fighter. You have to be able to handle any kind of distraction. Honestly, I think those early lessons lay the foundation for my most intense world championship fights years later. I learned early that just about every error has a technical and psychological component, and if you get good at discovering those connections, you’ll be a step ahead of the competition. And of course as a kid, facing other 7, 8 and 9 year olds in National Championships felt like a piece of cake compared to what I dealt with every day in Washington Square.

Here the implications for the roots of a recurring error or  consistent mistake in play coming from both a technical and a psychological blind spot are clearest. Robert Pirsig wrote something along the same lines in “Zen and The Art of Motorcycle Maintenance” which also applies to entrepreneurs building companies:

“Peace of mind isn’t at all superficial, really. It’s the whole thing. That which produces it is good maintenance; that which disturbs it is poor maintenance. What we call workability of the machine is just an objectification of this peace of mind. The ultimate test’s always your own serenity. If you don’t have this when you start and maintain it while you’re working you’re likely to build your personal problems right into the machine itself.”

See Also

Matt Perez on How Nearsoft Leverages Yammer

Written by Sean Murphy. Posted in 5 Scaling Up Stage, Consulting Business, skmurphy, Tools for Startups

I met Matt Perez in 2003 just as I was starting SKMurphy.  It was the tail end of nuclear winter in Silicon Valley and folks were trying to figure out what was next. We kept running into one another at various networking events and as we got to know one another realized that we both had a passion for technology and innovation.

After I facilitated the Conversation Central roundtables on “Global Teams” at the 2009 Design Automation Conference I decided that a significant shift was underway where not only were teams in larger firms more often global but startups and small technology firms were going global much earlier in their life cycle than had been the case in the 1990’s.  One of the enablers for this is a host of low cost collaboration tools. Some that are synchronous like Skype and real time dashboards,  and others that are “quasi-synchronous” like wikis, distributed source code management and Yammer. These tools  enable faster decision making because the team is able to maintain a “shared situational awareness.”

After a lunch with Matt in December where we had discussed this trend he agreed to share some of the ways that his firm, Nearsoft, was using Yammer and other collaboration tools to enable them to keep distributed teams providing development services and ongoing support in sync.

Q:  Can talk you a little bit about what your firm does? I understand that your focused is on outsourced product development.

Nearsoft is a software product development firm with operations in Mexico.  We work best as innovation partner to ISVs, SaaS companies and consumer-facing sites.  These businesses understand that software is at the core of their business and they demand to work with people who are as dedicated and serious as they are about building great software.

We specifically avoid working with businesses that treat their software as a “backroom” operation or, worse, as a necessary evil.

Q: How do you work with clients?

We work in long-term relationships with our clients.  We create teams around each client, with the right skills in the appropriate technologies.  As the new team learns about the client’s business, they can contribute to all aspects of it, not just the raw coding.

Short-term, project-based engagements don’t work for us and I don’t believe they work for clients, either.  It may work for doing something of the side, some throw-away code.  But for the core product, you want to have a stable team of people that work well together.

We invest heavily in hiring the best and brightest and have created an environment that helps attract and retain that level of talent.  A big part of that is because of the opportunity to work with leading-edge companies in the Valley as part of their core team.  If we had people work on little projects here and there, we would not get the good ones; or, if we got them, they would not stick around for long.

Q:  What collaboration tools do you use internally and with clients to support your methodology and your engagement model?

A: The first that comes to mind is Yammer, a Twitter-like system but for private use.  Our folks are used to Twitter, so using Yammer was a natural.  It works great for geographically distributed teams because it helps maintain a team presence.

In the situation where everybody in a team works out of the same office, team presence is a function of being physically in the office at the same time.  Without consciously checking, you know when people are “there” and when they’re not.  Yammer serves a similar function in that even if I am not reading each posting individually, I get a sense of people being “there” as the stream flows through.

It’s also a casual environment where people can jump in and out without much protocol.  If I am looking for somebody, I can just ask “anybody seen Joe?” and one or more people will respond.  Also, if people are joking around a particular event, you can also jump in and do the water cooler thing that’s part of social cohesion of effective groups.

Besides Yammer, we use Skype a lot.  For example, a group of us keep a Skype “group chat” open all the time that we use a lot like Yammer.  The reason we do it on Skype is that it’s easier to switch to voice conferencing when the text chats get too convoluted.

One of our client teams uses video all the time.  They use both Skype and Adobe Connect.

Of course, we also use a number of tools to keep track of open issues, source code control, etc.

Q: What has been the impact of Yammer on your ability to deliver results?

Yammer and Skype and the rest of these real-time tools give us and our clients the benefit of being in touch constantly. Little problems and misunderstanding remain “little,” they don’t snowball into big, hairy messes.  One person may say, “I am going to implement X using Y” and immediately another will jump in with “No, you shouldn’t use Y for reason Z.”  They may go back and forth in the text stream, clarifying things.  Then switch to voice or video.  Misunderstanding is cleared before any major work is wasted building the wrong solution.

Without something as immediate as Yammer or IM tools, the question may sit in somebody’s email for a day before anybody looks at it.  By then, the wrong solution may be finished only to be thrown away.

BTW, that is true for the folks working physically in the same office.  In many ways, it is more convenient to casually ask a question or make a comment using one of the tools than in person.  You can ask your question without “imposing” on the other people to drop what they’re doing to answer your question.  The other people can choose when to respond.  If they glance at it and see a “Google It” question, then they can just ignore it.  If it looks important, then they can direct their attention to it at their convenience.

Q:  What, if anything would you do differently?

When I started the company I tried several models before settling on the way we operate today.  It would have been nice if somehow I could have gone through that part of it a bit more quickly.

We’ve had a couple of startup clients that didn’t make through the crisis in 2009.  I thought they were dynamite businesses and wished they could have been able to stay in business.  We helped all we could but in the end they didn’t make it.

Q: What else have you learned from working internally and with customers in this fashion?

The most salient thing for me is that cultural alignment is key.  Effective communications include a ton of stuff that’s never said; it literally goes without saying.  There’s a lot of “you know what I mean?” in there and it would be too costly, emotionally and in time, to explain every little subtlety that goes on in a conversation.  Likewise, it can very expensive when people miss out any of those subtleties.  To deal with this you need to make sure that everybody in the team is aligned with the goals of the business and that they “know” what it takes to get there.

One example I can think of is when a developer is asked when he can get something “done.”  If we both don’t have the same understanding of what “done” means, then we are going to end up in hot water.

Q: Thanks for your time

For some outstanding examples of how to blend humor into an explanation of a complex service I would encourage you to take a look at  two of Nearsoft’s videos:

I really appreciate Matt’s willingness to talk about some of the practical challenges in working in a geographically distributed organization. If you would like to talk about lessons learned from your startup or innovative business practices that you would be willing to talk candidly about, please contact me and we can explore an interview that would be of interest to bootstrapping entrepreneurs.

Bootstrappers Breakfast® Invites Milpitas Entrepreneurs to “Eat Problems for Breakfast”

Written by Sean Murphy. Posted in skmurphy

steaming hot coffee and serious conversationGiven Milpitas’ strong commitment to entrepreneurship and new business development, the Bootstrappers Breakfast promise of serious early morning discussions among bootstrappers will have many local entrepreneurs feeling right at home. The focus of the monthly meeting is on technology businesses whose next stage of growth is based on internal cash flow and organic profits.

Entrepreneurs who like to “eat problems for breakfast” bring business issues and challenges to discuss with peers. The Bootstrappers Breakfasts have been meeting on the second Friday of the month in Milpitas since 2008. Other Breakfasts are held in Minneapolis MN, Mountain View CA, Palo Alto CA, San Diego CA, San Francisco CA, and Sunnyvale CA.

Date: Friday, March 12, 2010  7:30 a.m. (2nd Friday of the month)

Location: Omega Restaurant, 90 South Park Victoria Drive, Milpitas, CA 95035  (Off Freeway 680 at corner East Calaveras Blvd. and South Park Victoria Drive)

Cost: $5 Advance Registration, $10 at the door Register

Info: see

At last month’s meeting the roundtable topics included: forming a new business and getting it off the ground. It also included discussions about tips on building a customer base.  Members are saying great things about us:

  • “A great group of entrepreneurs in start up mode and restart mode. The greatest value of these meetings is that they refocus my thinking of what is possible.”
  • “I attended my first Breakfast on Feb 13th in Milpitas. It’s a great group, I wasn’t sure what to expect, and I learned a great deal more about Patents, Trademarks, and Intellectual Property matters from the guest speaker. I met a dozen people and learned about the needs of others involved in small business endeavors. However, I felt a genuine camaraderie with these folks and will actively adjust my schedule in order to attend future meetings.”

About Bootstrappers Breakfast®

Bootstrappers Breakfast® is for the founders of early stage technology startups. It is a chance to compare notes on operational, development, and business issues with peers. These breakfasts were designed for entrepreneurs to share ideas and leverage thoughts with other folks who are serious about growing their business.

Early Proposals: Avoiding Consulting for Free

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

A lot of bootstrappers start out by selling their product or services to friends or people they know and/or have worked with in the past. One of the early thresholds a team crosses is making the transition to “selling to strangers” (see the “Startup Maturity Checklist” for some relevant questions) and they can get tripped up on a number of points.

Two key challenges

  • Free Consulting: strangers may want to learn more about the technology area you are addressing and request one or more sales calls while they listen attentively. The net effect is that you are offering free consulting to someone who has no intention of buying. Tipoffs: always encouraging, “tell me more.” They talk very little about their own challenges but are very interested in your offering or the technology arena that you are focused on.
  • Column Fodder: potential buyers at large companies may need to solicit a minimum number of bids in addition to the team that they want to do business with. This means that they will put you through the exercise of generating a bid just so that they have three, even though they have no intention of working with you.

Here are four steps to take to immunize yourself against the default assumptions you made when selling to friends.

  1. Balance time invested against size of deal, probability of a win, and competing alternatives. Establish a marketing budget in hours in advance (e.g. default might be 15 minutes for an inquiry, 60 minutes for a phone call) and adjust it as your understanding of deal size, probability of a decision, and probability of a win evolve.
  2. Always put an expiration on any quote or proposal, if nothing else it gives you a reason for one last E-mail/call.
  3. The first payment is always the most difficult, if appropriate ask for a token payment after you have expended some marketing effort to assess interest level.
  4. If you are not certain of interest in getting started, float a later date (e.g. six weeks instead of two) for the follow up and see if they pull it in. If you are not having conversations every week or two then the deal is in percolate or nurture mode and is not active.

Quick Links

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