This article compares Paul Graham’s “Six Principles for Making New Things” with Bob Bemer’s “Do Something Small But Useful Now”, Gary Hamel’s Innovation Hacker, and Peter Drucker’s list of seven places to search systematically for opportunities.
Many entrepreneurs find themselves in the grip of an idea, captivated by it’s seeming brilliance. But success comes from understanding a prospect’s pain.
Here are three tips for minimizing misunderstandings among co-founders: get clarity on the problem before arguing over solutions, maintain full transparency about spending, and work from a one-page operating plan.
Software companies typically have to convince prospects to adopt new technologies based on their shared history, their service track record, and their ability to accurately predict and deliver real results that overcome the cost and friction of adopting new tools and methodologies. There are a number of lessons we draw on to help startups fostering technology adoption to attract their first paying customers.
To “see the elephant” entrepreneurs must work toward a holistic perspective by integrating advice and conflicting views from a variety of sources.
Here are the social networks I participate in. I find them a good source for practical advice for running my business.
- LinkedIn www.linkedin.com
- Intuit’s Jumpup www.jumpup.com
- Bank of America Small Business http://smallbusinessonlinecommunity.bankofamerica.com
- Bootstrappers Breakfast www.bootstrappersbreakfast.com
Check me out, my screen name is tshafer.
I always find it surprising:
You sign up for a beta invite. Time passes. One day, you get an email after all stating the app, project whatever is now live. You sign up, you log in, and then, when you try to see who’s behind all this — nothing. No names. No pictures. No (real) address. No background info whatsoever about the founders or the team or the management or the backers or the first customers or their mother or their cat. Nothing. Nada. Zilch.
Sorry, but what do you think this is? Hide and seek?
I think it stems from a fear of failure. But unless you commit how can you expect other folks to spend time (and ultimately bet a chunk of their business and/or career) working with your application. I am coming to the conclusion that “stealth mode” as currently practiced by many firms (often a variation on “I’ve got a secret”) gets the team off on the wrong foot. I think it’s better to tell what truth you can and to say who you are.
Dharmesh Shah wrote about this in “Stealth Mode Schmealth Mode: the Real Reasons Startups Don’t Talk”
- Lack of Direction
- Lack of Focus
- Lack of Commitment
- Lack of a Solution
- They Have a Secret
Before you decide to clam-up and guard your “super secret business idea”, make sure that you have something worth guarding, and that it’s in your best interests to do so. More often than not, you’re better not being coy, and doing some talking.
You can’t go wrong with Ogden Lilly at Boitano Sargent and Lilly. Odgen has done my taxes on the business side for more than a dozen years and helped on the personal side for some complicated returns. I have referred a number of folks to him over the years and always had good results, even when they were facing serious issues in an audit due to prior mistakes or poor practice.
Don’t imitate Google: there are many criteria to consider in a hiring policy for a sales person, but college GPA has to be one of the least useful indicators of future success.
So we are starting to pump a little hot air back into the bubble every week now. The streets of Silicon Valley witness young entrepreneurs looking for department store Santas venture capitalists to listen to their list of needs and make their dreams come true. It’s “not as nuts as 99” but not as sane, or dour, as 2003. Roger McNamee blogged for the better part of 2004 on “The New Normal” with this as his inaugural post:
Wake up and smell the coffee. This is not your father’s economy. And it’s not the boom that inflated our expectations and then exploded. But it’s also not the doom and gloom we’ve been mired in for nearly three years now! So, wake up. Pull yourself together. Get on with it. With what you ask? With the rest of your life. It’s a bright, fresh world full of opportunities. I know that runs counter to many of the opinions all around us, but it’s true, and I can show you why. It’s true for the investor, the entrepreneur, the CEO, the unemployed, and the human being seeking balance. This blog will be dedicated to insights and discussion about life, business, and investment in what I call The New Normal.
Please join in!
Now I regularly have conversations that remind me of 1997-2000. I am routinely admonished that “the old rules no longer apply” and advised that successful firms spend much of their treasure on
PR social media and viral marketing (regular marketing is a waste of money since viral marketing is free). YouTube’s 1.6 billion dollar exit is the exemplar burned in 10 mile high neon letters into the back of everyone’s retinas.
This is not a lament nor a longing for the early 90’s (or early 80’s), now is the best time to be alive and an entrepreneur. It’s a wish that more firms would aim for creating value for their customers.
Note: This is cross-posted from “Report from Silicon Valley” on FunMurphys, my brother’s blog.
Related Blog Posts
The temptation is to use a on-line survey tool to save your time, but I think for your early customers a questionnaire may only give you the answers that you are looking for, not the information that you need.
Conversation Works Best With Early Customers
One on one conversation works best in my experience.
It’s important early on to ask open ended questions and to consider your product more of a hypothesis (See Steve Blank’s “Four Steps to the Epiphany” for more on this framework) than an accomplished fact. Even though it’s been debugged and ready for rollout it doesn’t mean you understand the benefits that customers (much less prospects) perceive that it offers.
You should also consider instrumenting your product if it’s SaaS (or adding a “flight recorder” if it’s on-premises software or delivered as an appliance) that with the user’s permission can “phone home” some usage patterns. In particular you want to be able to assess how much use (and what commands, command options, service areas, etc.. are being accessed) they are making. It’s not uncommon to start removing commands, options that are little used.
You should pay as much attention to your “dropouts” as much as your “frequent flyers.” With the kind of customer counts you are talking about you should be trying to e-mail/IM/Skype/call as much as construct a survey. Even up to a 100 or so early users you want to be as open ended in your data collection as possible.
Don’t Wish For Smarter Customers Or React When They Call “Your Baby” Ugly
It’s easy to become frustrated or wish for “smarter users” when your customers look at the value of your offering differently than you do, or don’t adopt certain features or commands that you thought would be compelling. Sometimes it can help to have a third party interview customers and non-customers as they will have less of a “you are calling my baby ugly” reaction.
One thing to focus on as you scale up and add more prospects is how your existing customers invite new folks to evaluate your offering. What is the value they promise if someone new adopts: this “language of referral” is extremely important. You should probe for it in your conversations and incorporate it into your messaging. It can help you to identify distinct types or segments of users who get different kinds of value from your offering.
Maximize Learning by Being Efficient With Customer’s Time
The temptation as engineers is to look for a technology solution that’s efficient with your time, but surveys and the like to channel answers along pre-determined paths. This can cause you to overlook real benefits, and real problems, with your product–especially on the part of your early customers.