A personal note on why I enjoy working with teams of bootstrapping entrepreneurs and the kinds of problems we help them solve.
A Personal Note: Why I Enjoy Working with Teams of Bootstrapping Entrepreneurs
I enjoy working with bootstrapping entrepreneurs in Silicon Valley and points East as far as Finland and South Korea: I find the opportunity to work with a variety of entrepreneurs who are trying to make the world a better place invigorating.
I like seeing the future take shape, I like working on problems that were previously intractable, insoluble, or just very hard. I like seeing constraints get removed, errors get reduced, time gets saved, pain go away. I enjoy reading science fiction for the same reasons–in fact a lot of startup product descriptions and data sheets are written in the future tense–because I am interested in the impact of technology on our lives. I am attracted to products that take inefficiency, waste, pain, or friction out of processes, out of tasks, out of people’s jobs, and help them to be more effective and more impactful. My real focus is on tools that augment human intellect, human skills, and human expertise.
A key theory we hold as a firm is that expertise has become the key source of differentiation in software. One of the primary things we look for is domain expertise on the part of the founders that they’re able to encapsulate into software or instrumentation or hardware. It may start out as a service where they’re just providing a structured engagement model with defined support process. Ultimately, they go on to develop specialized tools and specialized scaffolding or support structures around the service that enhance their effectiveness and increase the impact on the customer’s workflow and business. This may then lead to software tools or equipment that the customer purchases or licenses as the primary user and the startup’s service or support component becomes a small fraction of the revenue.
I like seeing tasks that used to be very hard to do become much easier. Where entrepreneurs often misunderstand is that while it’s helpful to have vision of a much better solution–or at least a sense that much better solutions are possible if they work at it hard–the way to achieve it is to start very small. Successful complex systems evolve out of simple systems. But there is a paradox: if you are looking at a longstanding problem or challenge many other firms have likely made small improvements over a long period of time. That means that you must explore solutions that are more radical and therefore discontinuous with one or more aspects of current practice or solutions. As Oren Harari observed, “the electric light was not the result of the continuous improvement of the candle.”
The challenge is that nothing new ever really works, certainly never the first time except accidentally and not repeatedly or reliably. You need to start with the smallest version of the problem or need that captures enough of the complexity to ensure that you are improving against current alternatives. You then need to take very small steps, adding more of the true complexity of the problem. You must look for test cases that have requisite variety, that have enough of the complexity of the full problem that you can start to debug your approach and determine if it’s sound and an improvement. One reason that geneticists study fruit flies to develop models of inter-generational inheritance is that a new generation of fruit flies takes seven to ten days if we keep the temperature where they like it. If you tried that with elephants you would have to wait 800 times longer since it takes 22 years for a new generation of elephants to arrive. Entrepreneurs must define the initial problems they address such that they can get answers in a short amount of time and therefore refine their approach rapidly.
Another feeling I enjoy is the sense you get working in a small team that’s trying to break new ground with a sense of urgency: there is a collaborative atmosphere where there is often a full and frank exchange of views that is enabled by mutual respect and a willingness to share half-baked ideas, point out problems and potential defects, and suggest possible improvements. Many times, one of the ways that we help some very talented teams is to “write the bad version” to help them get started. They quickly point out what’s wrong and suggest improvements and then we are underway.
Because we’ve spent a lot of time working with bootstrappers in various early markets, which is very different from the experience you get in large companies where you have a lot of resource and access to a lot of customers, we understand how to identify people who are likely to be early adopters and to build that shared trust and that working relationship that makes it a win-win for our clients and for their early customers. This is not as easy as it first appears, primarily because there has been a lot written about early markets and early adopters that is terribly wrong, leading to some terrifically miscalculated approaches. The folks we think have got the best handle on it for B2B markets are Saras Sarasavathy and her effectual entrepreneurship model.
The effectual entrepreneurship model encourages you to start with the relationships, skills, and resources you have in hand. This is the inventory we help teams take when we first get started. We then assist them in phasing the implementation of their vision into a sequence of steps in the adjacent possible, the ends that are directly enabled by the relationships, expertise, and resources they already have. We tend to work with teams that are in their early thirties or older, so we’re working with people that have got some real expertise and industry experience, who are now trying to bootstrap their own firm or bring their first product to market get started. You work from what you’ve got in hand to who you can talk to in a very step-by-step process that requires building trust by delivering on your promises. We normally work in niche markets where we don’t have the luxury of treating a prospect as if we will never see them again or that they will not talk to other prospects we may encounter. Many methods get written about that encourage entrepreneurs to treat prospects as disposable lab rats for their experiments. This shortsighted approach is a recipe for failing fast in a way that locks you out of a niche B2B market.
When you find people who have realized that they have a problem, are looking for help addressing it, and are willing to change their processes to help fix it, I find that the conversations you have are very energizing. Unfortunately, early adopters are often characterized in a way that is just not accurate and not helpful for an entrepreneur. This mischaracterization confuses early technology adoption with a kind fashion statement. It encourages the entrepreneur to look for people who want to be au courant or the cool kids using the new tools. In my experience, at least for B2B tools, that’s not what makes for an early adopter. An early adopter has got a serious problem, and they’ve tried to solve it, they may have tried to solve it a couple of times, and it’s still having an impact on some aspect of their job, project, or business. They’re normally crisp about what they need and what they’re willing to do to work with a startup to refine and perfect a new offering. Early adopters often have a lot of ideas for what might work or is at least worth trying: it’s a collaboration between the founders and those early customers.
Facilitating that collaboration is something that I did for the better part of 20 years before I started SKMurphy Inc. I was working either as an engineering services manager or a CAD manager in a couple of big firms, and then also worked as a product marketing guy at Cisco, bringing new products and new offerings we had to early sites that we were working with. Those relationships are done on a handshake and a plain English agreement: it involved a mutual recognition of each side’s competence, needs, constraints, and resources.
One wrinkle in hunting for early adopters is that you can talk to a lot of people who complain about their dissatisfaction with the status quo, but who are unwilling or unable to foster change effectively in their firm. People that complain but balk at adopting a partial solution, waiting instead for a “perfect” one, are not in enough pain to be early adopters. All early solutions are partial, barely good enough, and never perfect. If they are unable to spearhead adoption they are not yet an early adopter. A real early adopter has a track record making other process improvements, or bringing new tools, equipment, and methods into the firm. They are dissatisfied with where things stand, are willing to explore new alternatives and take action. They will accept and use partial solutions that leave them better off on, making continual improvements as the startup refines its offering against an ultimate vision.
We help our clients sell partial versions of their vision to prospects who are in a lot of pain or otherwise inclined to collaborate with a startup to address a critical business need. There is a sequence of iterations, each involving the integration of a partial solution to a subset of a problem such that the customer is better off than if they hadn’t engaged. They’re not where they want to be yet, nor nearly as far as they’re going to be in six months to a year, but you start to get this flywheel effect of increasing improvements. For whatever reason, I’ve always enjoyed that process of continual improvements and the shared problem-solving interactions needed to facilitate it. At its best, it’s a situation where the startup and customer co-create a strong solution after several rounds of improvements. The customer gets a significant head start with a new solution that has a strong impact on their business and the startup has a product that is ready for wider adoption with much less hand holding.
Why Startup Founders Choose SKMurphy As An Advisor
This is Sean Murphy of SKMurphy, I want to talk to you today about why startup founders choose to work with us as an advisor We believe that everything that we do is both teachable and learnable and can be defined by principles or rules of thumb. We work with engineers and scientists who like to see models with numbers. We have found the best way we can assist them is working side by side, in rehearsal or preparation, in interviews or presentations or demos, and in after actions reviews. We believe that startups selling to businesses need to target the intrapreneurs or internal change agents. They are the most likely early adopters in a firm. I have played change agent roles in a number of large firms. I understand how they think and act and I am comfortable writing, selling and working with them We believe that selling in niche business markets is a conversation that is personal. We have invested a lot of effort in deliberate practice to master interviewing experts and facilitating small group discussions. It's in these conversations that most new information and knowledge is first exposed. Helping our clients get good at this substantially increases their competitive differentiation. We help our clients with thought leadership, content marketing, lead generation, and negotiation to close of complex deals. Our focus is early customers and early revenue.
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