Startups: Less Talking, More Walking

When it comes to startups there is a ton of talking.  This simply means that people like to talk a lot and do very little.

It’s easy to talk.

I like to talk.

And talking is important.  Startup co-founders need to get together and talk about what they are doing and creating.  They need to spend time figuring out what is important and why they are going to do it.

There is a limit to how much talking and thinking you do.  You need to be out there doing something to even start to think about succeeding.

Most startups don’t get started because they think they need to raise capital.

Most likely you don’t.

Many startups are not able to even get a web page up and running.

Why?

Because many do not have not developed the skills to create a web page.

Many startup co-founders think that creating a simple website that states what they are going to be doing and how to get in contact with the startup is work for a professional!

It’s not.

I have virtually never seen a successful tech startup (web based) where one of the co-founders did not create the first web page (I am not going as far as a whole website).

So, instead of telling me what your startup is going to be about, why don’t you take some time to learn how to create a simple WordPress site and get it up and running yourself.  Trust me, it is not hard.  Watch a couple Youtube videos and you got it!

You can do it right now on WordPress.com and not have your own hosting. Send me your website link and that will tell me what you do.  I think this is as good or better than a pitch deck. A pitch deck is important, but that just tells me you know PowerPoint. The website will tell us you cared enough and are able to figure something out that is really not that complicated.

You see, that is the difference between success and failure for startups.  Success simply means taking action.  Each action is a small success.  You have to start somewhere!

You get a bigger success each time you grow the business or idea.  And that is how you get started.  Hiding the idea away, working in secret initially works for some seasoned pros, but if this is your first idea, then you are not hiding anything from anybody.

And if your website needs to change because you changed the business around this week.  Go back and change it!

It’s not a big deal.  Practically nobody is critical of your startup.  Most people want you to personally succeed.  So just doing something, is the hardest part.

On April 20th, 2016, at 5:30 pm in Deerfield Beach, Florida (not far from I95 and Hillsboro Blvd.) we are running our 14th Tech Startup Pitch Event at SeedTronic.   We are expecting about 50 attendees and there will be panel of investors as well as up to 10 startups pitching. I will see some of you there!
Click here to learn more information about attending this event.

And have a great day.

Dan

Transparency And Responsibility In American Life

You are blind to the truth.

I am blind.

We are all blind.

And our ears don’t seem to want to listen, nor do we seem to care that things are the way they are.

I am talking about the reality of American Life. And if it where just one thing and not pretty much everything, then you could fix that one thing, maybe. From Healthcare to What You Eat to Immigration to Wars to Startups.

I mention all those areas in this article and challenge to add a few more.

Everything we do right now needs to become transparent, where we take responsibility, because most activities and processes in America right now are not transparent, and there are forces trying to keep it this way.

So what am I talking about really?

Ok, let’s start with healthcare. What does a simple doctor’s visit really cost? Do you actually know? I am not talking about the payment YOU make as you leave the doctor. I am talking about what was really payed by insurance companies to doctors, clinics and hospitals. Ever end up in the hospital for a short stay. You may be paying $2000 in deductibles, but what was the real cost? It could easily be $100,000. What is the monthly deductible? Add that up yearly and see what you pay as a percentage of your salary. Doesn’t matter if you are liberal or conservative. This is a matter of transparency. Until we are responsible for a bill, where you say to the doctor “hey you billed me three times, now fix it!” And you personally are responsible… the price will continue to go up indefinitely. We all need to be responsible to change the system. By the way, half the time I figure out my own illness myself by doing a little research and have had doctors often be wrong. They are human. Don’t just accept a doctor’s opinion. Get another opinion and challenge that one. Find a home made remedy instead of a pharmaceutical if possible! Trust me, I have.

This is just the tip of the iceberg.

Chocolate. You like it right? I do. I like dark chocolate. You get it on Halloween, Christmas, Passover. I eat it at least once a week, somewhere. It is always on a desk somewhere for me. You ever wonder where it all comes from… Well apparently Americans don’t want to know. If you wanted to really know the answer, you would google where it comes from and find much of it is created from chocolate bean farms worked by dirt poor people, practically slave labor and child labor whether in Africa or China. Needs to say on the package what it really is about so we can understand what we are eating.

Sugar. Something changed in the American diet about 30 years ago when they started to use high fructose corn syrup instead of sugar in many products, especially fast food. I don’t know the science but it is something that you need to avoid. I personally think it causes moodiness, depression and obviously it will lead to being overweight. We buy things with high fructose corn syrup all the time, like pretty much any fruit drink. But do we actually look at the label carefully. It is there in plain site on products we buy. This one is transparent, but you were not looking! Better to start now. The real problem is at fast food restaurants where you get high fructose corn syrup and don’t even know you are it in your system.

Your checking account. I have not been able to reconcile it in over 15 years since online banking. Who really knows where that monthly charge comes from that I can’t seem to figure out? Having things be easier doesn’t mean you need to look at it less and less.

Illegal Immigrants. All this fuss about people who come here to the US to work. The reality, if you wanted to know the truth, is illegal immigrants are lured and invited here by all kinds of employers who get them to work for a lot less than minimum wage. Those employers make a bigger profit, save money or stay in business whether pickers, lawn service, child care or whatever they do. Illegal immigrants are part of the US economy. And somebody is benefiting from them. But what’s best for those who benefit is to not discuss what immigrants do, where they come from and why they are here (trust me some big farms and small farms really depend on the low labor rates), but next time you eat an orange think twice about the fact that oranges are hand picked by people who are willing to work for less. Make them transparent. That means give them an ID card, have them pay medical insurance fees (because we are all paying for them now) and do it the right way, out in the open!

Citizens United. This is the biggest tragedy in American life today. Now we are expected to accept the fact that a multi-billion dollar corporation has the same freedom of speech and rights as an individual. Sounds reasonable, but it is anything but reasonable. It is used as a guise to say that corporations can spend anything they want to influence the system. Now we don’t know who or what is behind buying ads during elections. Somehow that became law. wow. It’s a major problem of transparency.

Iraq war. A war in Iraq that nobody seemed to care it went on eternally. Nobody seemed to care about the cost. Nobody could explain why we were in the war in the first place. Nobody investigated all the military corporations who charged extraordinary amounts to run the war. There were trillions of dollars spent, yet nobody seems to want to go over how much was spent or how much they are spending. Of course they don’t want transparency. None of us are taking responsibility for this. It is always somebody else.

Startups. I have met with or heard over 200 startups pitch to me directly or at an event in the past 3 years. I have worked directly for 7 as a startup consultant, employee or partner. Do you really want to know how many times I have met with a startup that tells me they have already spent $100k, $300k, $600k, $1 million and still are not clear about what they are doing exactly. Can people be so focused on what they think the world needs and not be willing to go out and simply ask people if they are willing to pay for it! Just ask. Be responsible. If they say no, move on. I understand, people don’t want to look at themselves in the mirror.

And for whatever reason, it seems like the lack of transparency or responsibility has become our American way of life.

Let’s boil it down to this. Are you the guy or gal who purchases an exercise bike from a TV ad where they say for only $16.95 a month you can start the process of owning your own exercise bike? Well, they never said how many months you pay. That is not illegal. You could pay $170 or $1700. Did you find that ding on your credit card for the next 5 years? Huh. Shouldn’t it be illegal to sell something where you don’t know how much it really costs?

Well, I do think people care about all these things that are not transparent, but say to themselves “what can I do about it?”

But you can do something about it. At least talking about it is a start.

Well, at some point I started to track down those extra charges on my credit cards. I even turned off most of my credit cards to eliminate whatever it was.

As far as the lack of transparency. You have to start by looking at everything with a different point of view. Ask your doctor as you checkout next time what was the actual real final charge to the insurance company plus what you are spending? When people say to you, get rid of all the immigrants, ask them do you know what immigrants actually do here in the US? Does your community use labor that is illegal? Hmm, well you may be personally benefiting. Take responsibility for that. When you grab your favorite RedBull, coke or fruit juice check the label carefully for high fructose syrup. Don’t buy it! Change your credit cards periodically to get any crazy monthly charges off of it. I am probably missing a dozen other things where people don’t really know what is really happening behind the scenes. Be vigilant and ask questions and don’t just accept fluff answers.

If you live in South Florida, on April 20th at 5:30 there will be a tech startup pitch event with networking in Deerfield Beach at Seedtronic (yet another startup). Up to 10 companies will be pitching to a panel of investors and experts at this event. If you register through Meetup before April 12th, the event is FREE. After April 12th the event will be $15. Click Here for more information.

Have a great day and go to my Linkedin Page here, if you want to comment on this subject:

https://www.linkedin.com/pulse/transparency-responsibility-american-life-dan-gudema?published=t

Using Periscope For #Startup #Pitch #Event Tonight In #BocaRaton

So we are gearing up to use Periscope tonight in combination with a tech start-up pitch event in Boca Raton at The Greenhouse.  The event will feature both entrepreneurs, about 10 in total or maybe 11 and a panel of investors. We have been doing this monthly for nearly a year in Boca Raton and have had over 70 companies pitch in our events.  We are expecting over 100 attendees at our event tonight.  Here is a link to join us if you are in the vicinity: Click Here To Learn More About Just The Event.

Start-Up Pitch Event Meets Periscope

What makes this event a little different is we are adding the power of Periscope to the event tonight.  So, if you are following me at @dgudema on either Periscope or Twitter you will see a tweet with a link that allows you to view our event.

What really makes this truly interesting is the companies giving their 3 minute pitches will have a chance to let people from all around the world hear about their product or service.  They are both looking for investors and pushing their new products and services.  In fact, I am going to interview a bunch of these start-ups prior to the event starting.  If you watch us on Periscope and want to contact any of these companies please contact us through the DSX Labs website.  Either call our number or use our form.

What you really need to know, and I am learning this myself as I go about doing this is, that your Periscope link for your live video should show up on Twitter when you are live with that address.  What I noticed is that by using my other twitter account at @dsxlabs, that I was not actually having the link show up.

So, from a Video Social Media perspective these things are true:

1. By creating a Periscope Video Stream you will automatically alert your Periscope followers.  These are people who have followed you on Periscope.  If they are following you, the video stream will show up at the top of their Periscope LIST.

2. By creating a Periscope Video Stream you will automatically (if set up correctly) send out a tweet to your twitter followers letting them know you are online.  This will generate a link that can be clicked to view the video stream.  That is why it is important to name your Periscope Stream carefully for users to know and search for what you are streaming!

3. By creating a Periscope Video Stream you will get NEW viewers from a geographic point of view. When people are surfing the Periscope map right now they will see you in the specific town/city you are located in and if they want to check it out, they can.  Some of these people may actually like you and follow you.  If they follow you, the next time you go online they get an alert on their Mobile device that you are streaming. Cool Beans.

So, that’s what is happening with Periscope tonight in Boca Raton tonight!

 

Sick Start-up Syndrome

While managing DSX Labs for the past year, I have come across a variety tech start-ups in South Florida, mainly because we were running tech start-up pitch events in Boca Raton at The Greenhouse.

They range from 1 guy with just an idea to 3 people with a full blown app or website. They can have 100 years of combined experience or none at all.  We had a few 15 to 17 year olds interested in starting their own tech company.  There have been 1 or 2 where the entrepreneurs were in their 70s

Out of the 100 start-ups we met with, there were common patterns you could immediately identify.  These patterns can be success related or potential failure related. I call them patterns because they appear over and over again.  This is a generalization. I am being specific about a start-up.  And you know that generalizations could be wrong.  So this is just opinion.

Here are my list of start-up syndromes you need to look out for.  It’s like looking at your body in the mirror.  Some symptoms are obvious, some are not.

No Strategic Advantage
I have run into this myself.  You get going in some specific tech start-up direction.  You have a product.  You have built out some serious code!  Yet, you or you and your partners can not come up with a strategic advantage vs. a competitor.  Face it, you are building a commodity product at this point!

How To Fix: If it is early on, you can pivot or change something slightly that makes you competitive.  But pivoting will take some serious pain and some capital.  It may not be possible. You have to have a compelling reason or value proposition for customers.  Find it immediately.  Sometimes it is right in front of you and you are ignoring it.

Tech Svengali Has Taken Over The Show
This I have seen many times.  The actual business owners have been mesmerized and persuaded by some tech guy to let him make all the decisions. Yet, either he or she is not really all that he says he is or really has no clue what the market wants.  The tech Svengali may actually have their best interest at heart for you. But they are not you!

How To Fix: Sadly enough, if this has gone on too far it could be the death of the start-up.  Start-up owners need to be in charge of their ventures and give it direction.  The solution is often to let him go and if it is too late, it could be time to shut down the operation.

Money Looking For A Place To Spend It!
Sometimes in some rare cases, there is a partner or a person with a boatload of personal wealth looking to hit the next one out of the park.  They are looking at Facebook and saying “hey I can do that!”  But they are forgetting one thing; they don’t know anything about tech, or their knowledge is cloudy because they themselves are not the demographic they are serving.  So they spend like crazy, hire tons of people and find themselves in a pickle.

How To Fix: My recommendation to these want to be billionaires is stop being the owner and start being the investor when you have the capital. There are a good 20 ventures in south Florida right now that could use $50k and have a great start-up that needs capital.  Instead of spending $300k on your “idea” (which is just an idea) become the investor and invest in 6 start-up ventures. At least then you will have 6 lottery tickets and not 1.

One Feature Does Not Make A Solution
I have had a bunch of start-ups come to me with a concept that is simply a smaller piece of a larger puzzle.  For instance, I have heard of a few improvements to dating businesses.  So the start-up concept is a small piece of what dating sites do, and can’t really be a product unto itself.  Or another good example is a site that just does nice 3D products for sale.

How To Fix: Typically I would recommend that the start-up goes back and rethinks the whole idea.  Just a small part of something bigger is not enough.  One way to fix this is to pivot into being a B2B software provider. So instead of selling 3D products yourself, your start-up provides the technology for other e-commerce companies. Different market, but then you can focus on a narrow feature you offer!

Nobody Is In Charge
A single person building a start-up without a partner or team is an issue. What is a bigger issue is a group of founders with nobody actually in charge.  When they ask you, the consultant, to be in charge and be the decision-maker, you know they have bigger issues than you can really deal with in one session.

How To Fix: One of the partners has to be the CEO.  There has to be an ultimate decision-maker.  If you can’t make that decision, then maybe the start-up should end now.

Can’t Describe What You Do
I have had this problem myself several times.  It is a common problem. Why does this happen?  My answer to why it happens to me is if you spend a year or longer on a start-up you start to lose you way (and you mind) and you end up changing the business around,  You get lost as to what you ultimate do. This is especially true if you are pivoting or evolving to something else. And we are always evolving. What is your service and can you describe it?  If not, you have to recognize the problem and fix it.

How To Fix: Best to meet to mentors and advisers and figure this out.  I had a great question asked of me recently about my start-up. That question was “What Was The Aha Moment?”  At that moment I went back in time and thought carefully about that moment. This is the moment when you first had the idea.  Sometimes that moment describes the problem you are solving and ultimately putting together a solution statement solves that problem.

That’s it for now.  I could add a hundred of these items to this blog, but I am publishing anyway.  Maybe there will be a part II.

Have a great day!

How To Run A Successful Tech Start-up/Networking Pitch Event

After 10 years of attending events by Gold Coast Venture Capital, the EDC, The Funding Post, MIT, eMerge Americas, SFIMA, SFTA, New Tech Community, Miami Innovation Fund and probably 5 or 6 other groups in South Florida, I decided we would run our own tech pitch event here at @dsxlabs in The Greenhouse in Boca Raton.   We ran the first event on Wednesday, October 15th. I heard it was a great success from the attendees.  We are running a follow up event on Wednesday, November 19th at 6pm at The Greenhouse.  To learn more click here.

Would I Pitch?

I am definitely not new at giving pitches to raise capital myself.  I have proven to be quite average.  But I keep on trying.  I have given about 4 pitches this year alone for my own start-up.  What I was trying to do with this event is to make sure the attendees get what they need from the event, the best I could help them.

More About Pitches

I am trying to classify these pitch events in his blog article. I attended 2 FundingPost.com events this year.  They are good at what they do and really serve the venture and angel community and not the entrepreneur community well.

Most of these funding events are centered around a successful entrepreneur, an Angel Investor speaking or a Venture Capitalist speaking or a panel or a combination of both.  And typically 75% of the event revolves around these speakers and panels.  These types of events are good.  I have been to quite a few and learned a bunch of stuff.   Some allow for pitches after the event, some don’t.  Some charge, some don’t. They are all different.

Problem for all the entrepreneurs with these typical events is they don’t really get the exposure they need and usually there is not enough time at the end for the entrepreneur to make the contacts with potential investors that is needed. What people don’t understand is trust is probably the number one issue when investors look at tech start=ups.  Will this tech start-up survive and can this guy, gal do the job?

What Is A Tech Start-up Pitch?

By pitch, I mean a person gets up and sells their concept to a crowd, which could have a bunch of investors, angels, etc.  So we have established pitching for seed capital, for instance, requires getting up and saying what you do, the market, how you are going to market, how much capital you need, etc.

What Is The Difference Between Pitch Types?

There are 3 types of pitches.

A Pitch Deck Pitch

There is the old standard Pitch Deck presentation.  It would typically be a 10-30 page powerpoint presentation.  There are a few alternatives out there like Prezi and Google Presentations.  At this time I would highly recommend against both those alternatives.  Prezi is a terrific app, but it is a bit of black hole in terms of your time and it can be distracting to viewers if not done well.  Google presentations may have gotten better but last time I tried it, it was just useless.  Plus you need a screen and hardware to run a pitch deck presentation.  This is an old school way of pitching now.

A 3 Minute Elevator Pitch.

In 3 minutes you need to cover 5 core areas for most investors to peak their interest.  They are what is it?  what’s your business model? what is your market size? how you get to market?  and what do you need and why are you pitching?  Not easy to cover in 180 seconds.  That is the pitch I prefer though for investors to get a sense of what you do and your capability to explain it.

A 1 Minute Pitch

I did one of these at a recent FundingPost.com event in Miami.  For about 50% of the people pitching it just turns into a disaster.  At the event I attended where I pitched 2 entrepreneurs never got past saying hello. They were totally not where they should have been at the 30 seconds/half time. It is virtually impossible to get  your points across in this manner, so I don’t recommend running a 1 minute pitch.  It is a waste of time.

My Philosophy

We are focused on running events which help entrepreneurs, by giving them time to pitch and giving them the time they need to network with potential investors, advisors, co-founders, tech partners, business partners and other resources.  So, we spend a little bit of time on letting companies pitch, have no or little speaking (that’s what other events do) and we let people mingle using CEO Space techniques.

So, when are we doing the next one.

We just announced our 2nd tech start-up pitch event and networking on Wednesday, November 19th at The Greenhouse run by @DSXLabs and The BRIC (Boca Raton Innovation Center). I am starting to search for the 10 companies that will pitch.  At the first event about 1/3 got their pitch on track.  2/3 were lost.  A few did not use our format to answer those specific questions or got nervous.  It truly is nerve-racking to get up in front of an audience, especially your peers.  So I understand the nerves.  That is why I recommend to people pitching to have a piece of paper in front of them that keeps them on track if they lose their mind when they talk in public, like me!

If you are interested in attending or pitching at our next event then keep an eye on both our EventBrite and Meetup Group.  The best thing for you to do is join our Meetup Group, see below:

http://www.meetup.com/Boca-Raton-Tech-Start-ups-Meetup/

We also have a separate EventBrite listing:
https://www.eventbrite.com/e/dsx-labsthe-bric-tech-2nd-start-up-pitch-event-nov-19th-tickets-13965576415

 

Dealing with Feature Overload in Web Product Management

Simplify, Simplify Again, and Simplify a 3rd time

Having come into contact with at least 20 different websites and start-ups over the past 2 months, plus having to manage all the features in our new start-up Krowde, I am starting to see the light on the words “Simplify, Simply Again, and Simply a 3rd time”.  Back when we were at Caffeine Spaces in Boca Raton, someone wrote this on the dry erase board.  It has a lot of meaning to me and can be applied to so many aspects of building out a website or mobile app from design, functionality, marketing, architecture and other aspects of these tech start ups.  I am focused on product management in this context.  (but I could write another article on any of those disciplines)

Feature Junkie

It has a lot of meaning to me because I am a feature junkie. Everytime I come up with a new product or concept, I can think of  a million cool features.  This is what we do as creative people and when you combine that with a technologist, more specifically a web developer, you can have a thousand little features that are cool and different and meant to change the world, even a world within a world.  But overall, what you are doing with complexity sometimes, is really showing off your ego.    We all want to show off what we can do, how smart we are, and we are, but not always in business.  Trust me, it’s my downfall.  In web product management too many features and quite often the wrong features can be the death of a product or at least delay it indefinitely before it goes live.

What’s The Delay And I Want It All Now!

Now, if you think about it, how can you produce all these features when your time is limited.  That is not the real question.  The real question is what features are really needed first, and what features can’t wait.  I can’t really expound on the features in Krowde that I am talking about, but I can come up with an imaginary app that I probably will never create.  Let’s call it Park Finder, and let’s say it was being built for iOS and Android.

Anyway,  you have spec’d out the mobile app.  You have come up with a dozen great features from a map with icons, a search of that map, a link to that park’s page, a listing and a small profile per park, the ability to share that Park with your friends instantly via Facebook, Linkedin, Twitter, an ability to talk about that park, an ability to upload pictures about that park for others to see, rate that park, a list of parks by ratings, park contact info, park office instant chat.  Wait a second!  Park office instant chat.  That needs to go into the list of “Would Like” stuff.  And that is the issue.  In fact, that list has a lot of cool stuff, but ultimately his park finder app could actually be live and working with just 3 features, a search, a map and a link to the website for that park.  All the other park finder features sound so good in your head and they are, but the customers don’t know what they don’t know.

Customers Don’t Know What They Don’t Know

I like saying this line and it has come back in many conversations, because it is really important and tied to the simplification concept.   The second issue with product complexity occurs in the mind of the technology founder.  Sometimes they think that more is better.  They think that the value increases with number and breadth of features.  But it is not exactly the same for the customer or customers.  Customers don’t always think the same or use the same features.  When only 5 out of 1000 users used that feature, then of course it was not very important.  Also, from a development standpoint, what about getting the thing finished and out to the market.  That is what is important.

Timing

Getting the Park app out into the market, with limited features is the best way to do it.  It is what Fried says in Rework, Brad Feld says in his blog and it makes common sense.  If you want to get your product out there and in the market, only include at first the core features, the features that make your product usable.  It will not fail because it does not have all the final pieces and bells and whistles you envision.  It may be that the park finder app may have been well received and done very well with only these basic features.  You have the time to add new features after that.  Add your sharing, commenting, rating and other features later on.  It is painful, but worth it and the difference in your app making or not making it to market.

What Can I Live Without?

In the end people are the problem, because even I have fallen into the “I want it all” trap.  And then I was the problem. You think you can have it all, but sometimes more doesn’t necessarily sell your product.  Sometimes less does.  Sometimes doing a small thing well is more critical than anything.  There are products and services that are bigger, feature rich, etc, but they are not for the small boot strapped start-up.  There is a cost associated with more, and sometimes those features never amount to anything or any usage.  The people you can’t always control, because they may be in charge and have the purse strings.  But at least you understand yourself what the issues are, and can say to yourself, what can I live without?

5 Critical Must Answer Questions For Start-ups

After interacting with 5 different start-ups in the past month or so at all different levels, from an idea and no pitch to well funded and right at the MPV stage (not most valuable player, but Minimum Viable Product), I have honed it down to 5 critical questions for start-ups that they MUST get right or at least have an answer that makes sense.  And, let me say that I have often been a passive person when it comes to pushing start-ups this way or that or anybody for any reason because I am also under the belief that I don’t know most things (like the mind of a 12 year old person’s market).  I would say, admitting you don’t really know the answer is the first step towards finding an answer to these questions.  My proclivity for passivity is starting to wane, because quite frankly if you can’t answer these 5 questions correctly, then either you need to go back and start all over again (even if you are in year 2).  So I am no know-it-all, I am just going to question your status quo on what you think will be a successful service, app or product implementation but asking directly the most important questions. You decide if you’re answer is acceptable.  I also, speaking with an old friend who is involved with a ton of start-ups as well said to him, “Remember to be tougher on the next start-up guy/gal, because we often let clients fail because we don’t have the inner strength to say, NO YOU ARE WRONG”, at the right time and place (which is usually right at the beginning).  Now we all want to get paid as consultants, developers, lawyers, doctors, etc, but come on just to get the business keeping our mouths shut helps nobody in the end.  In fact the start-up will just fail badly, and quite often we knew why in the back of our heads, we just kept our mouth shut and got the pay check.

So here are the questions to ask the next start-up you come across, as well as the retorts you need to have in certain cases, so they don’t end up on a highway with no exits where the highway just ends:

1.  What is your business model or how do you make money?

2.  Describe your customer (personally who they are, what they are like, where they hang out and something tangible about them)?

3.  How are you planning on getting to market or getting critical mass?

4.  Who are you competing with?

5.  Who is in charge, is there already a problem personality on the management team and who is going to run it and who is standing behind the desk answering the phone all day.

Notice I left out one really important question, what is your product or service?  Believe or not, I am now putting that below these 5 questions.  It is important, but not as important as these questions.   I am starting to think a product can evolve, pivot, and become something else if it has to.  And a great team with the right resources in place can probably overcome any product/service question.  A dumb product obviously is a problem, but once again I am not going to be able to tell you what is dumb, successful or not.  I was out pitched a few months ago for our start-up social app by a group of kids with a game which blows the head off characters (huh!).  They got funded and we didn’t.  So maybe blowing heads off your mobile app characters is a great product.  It sounds stupid, but I don’t know.  I am not 12.

I am going to follow this blog article up with my thoughts on each of these questions, and how/why I think you could answer them right or wrong.  There are definitely wrong answers, like Facebook and we are better and bigger (get the picture). My answer to that was Wrong, we need to collaborate not compete (especially with ginormace, my son’s new word he invented, entities), that you can not imaginably compete with directly.  Collaborate not compete that is a mantra I picked up from CEO Space, and it rings true, especially with Facebook, since you can build an app within Facebook to get started and they are happy about it…

 

 

 

Tech Mind vs. Business Mind

I heard a great quote from a client running events over the past 25 years which went like this:

“You tech guys come up with cool ideas and try to find a way to make it work for the market.  [Putting his hands in the air and staring up at the ceiling] I start with who’s got the money and how can I take it from them!

When I first heard this from this person, I laughed because it is so true.  And since I have heard this quote I have repeated this quote to clients, friends at Caffeine Spaces and at Gold Coast Capital Ventures and everywhere I network at least once a week for the past 6 months!

Finally, after six months, I am finally sitting down and writing about this quote in my blog, because it has so many implications for programmers and kid entrepreneurs I meet with who want to start a small tech internet company and want to succeed but just can’t seem to get a tech start-up right.  And though it is not a hard and fast rule used in making decisions on what business to go in, determining the market potential is still the make or break point of deciding what business to go into.  Most of us techies just have a cool idea, but have no clue of the potential value of the concept or project and really don’t know who is willing to pay for it or what they are willing to pay for it.  Among the successful, there are those who figure this out right away and there are those are just get lucky being in the right place at the right time.  The right timers are the ones to watch out for, since they think they know something and the second time around is not always the same.

A Miniscule Market Inside Of A Tiny Market

Getting together for lunch with one of the founders of JDate about 6 weeks ago, we found some common ground discussing the issue of being in a start-up with a small market, and how this just limits what you are doing and that can kill the potential for investors.  It is important to choose your market wisely, and often techies don’t understand the market.  They just want to start coding.  For instance, the dating industry is generally speaking not the greatest sized market over all.  I am referring to market size by measuring how much revenue a year markets can produce.  I believe the dating industry is like a $2 billion dollar market a year globally (and though I use the word billion… it is not a good word when it comes to markets, because you never get 100% or even 10%, we are often lucky to get 2% market share).  E-commerce sales is $4 trillion a year globally and that market is terrific!  And if you were to create a Jewish dating site within the dating business, that will pretty much leave you with a $30 million dollar potential market size and basically 95% of that is already going to JDate, so what is your Total Addressable Market (the possible chances of a market)?  It’s really crap for creating THE next Jewish dating site since you will not unseat the leader  It could be a $5 million market, of which maybe you can capture 5%.  That is looking like $250k a year in revenue as your max potential and with an employee and a 40% margin… Get a real job.  It will pay more! Really not a place you want to go!

So, Why Do People Jump Into Crappy Markets?

This is where the tech mind overcomes the business mind!  I know, I have done it several times.  Techies and rational people get caught up in not the revenue size but the finesse of the project, how cool would it be to do x, y or z and either we have no marketing skills at all or we ignore the exit signs on the highway.  I guess we like to hear ourselves talk in the mirror about a cool technology or like to tell people what cool problem we will solve.  And yes tons of cool problems can be solved with tons of cool technical solutions, but the facts are the facts, market size is market size.  I had an MBA finance professor at Farleigh Dickinson in Madison, NJ who looked around the room and asked us what industry we worked in.  I was in Telco, and he said “maybe”.  Some people were school teachers, he shook his head no.  Stock broker, he shook his head no.  As soon as somebody said they worked in the pharmaceutical business he simply said, “I don’t care if you are going to be the bottom secretary, stay in that industry and you will retire rich…”  Point is, choose your market wisely.  Yachts and golfing are terrific markets for instance!

A Product In Search Of A Market

This is where tech guys and gals like me start.  We start with a cool thing and try to apply it to markets.  Stop right there!  Now, sometimes a cool invention or technology accidentally finds a market, but 90% of the time it does not.  Me thinks I can take a piece of web code in this market and shove it into that market.  I implore you to start over when it comes to your product, not just switch the website around or change the coding framework.  I have done this as well.  You have to start with the money each time you have a new product and figure out the market size, what they are willing to pay for it, what it is worth to the customer if at all, what the asset value you are creating is worth or what intangibles you are creating.  You see there is also the consideration of what your asset you will be creating and what that will be worth to a buyer, but we are not talking about customers now, we are talking about competitors and buyers of software companies!  Creating a tool that needs to be acquired by a Google or another company is another form of measuring the market before creating the technology.  In fact asset selling, not revenue is the number one way techies make it big.

The Socratic Within ME

Now I am going to reverse directions a bit and give you the upside of being a techie and start with technology and how you can figure out a path to the market.  Like a recent blog article I did on “Why I Don’t Really Know Anything” in the article How To Respond To New Ideas proves that there could be something within the techie cool thing you have been building that can be re-purposed for something real and marketable.  But you have to start from scratch in terms of the final product.  You simply have to match a problem you are solving with different markets, and switch the problem to a different market until you keep increasing the size of the market.  Now you may have to stay in a niche.  I recently met the founder of Veggidate (yes for vegetarians) and its small but that is a good niche to hide in.  So, let’s start again with the dating site.  So you still have not given up on the Jewish dating market.  You are determined, you are a programmer and you don’t listen well. Well, let’s either introduce your product in a new and growing market (mobile) or a new avenue (events) or a new methodology (education) and re-enter the market.  Because if you were able to conquer one of these three areas of markets that JDate site does not have ownership of, you would be able to get maybe a smidgen of a market, but more importantly, your company would be on the target list of successful businesses they are looking to buy along with a bunch of other people obsessed with serving a small market just because you like to…  But leave your expectation for financial success at the door.

 

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How To Respond To New Ideas?

Recently I had to remind my long-term speed dating partner Vince (Pre-Dating.com), after covering a new concept that my team wants to try, that we are “old” guys and that we really may not know much of anything when it comes to deciding what is a good idea or bad idea.  Let me first preface the word “idea”.  When I refer to an “idea” in the Internet space we are mainly referring to a new business, a new website, a new mobile app, hardware, a new start-up company, or a new conceptual technology thingy that actually does something.  Actually the words he used were “But I know what I like”.  And those words to me don’t mean anything because what we like or think we like may only lead us to a big mistake.  Trust me, what we like will not exactly work for everybody, or even a small group of the mass market.

What WE Like May Not Mean Anything

To work with entrepreneurs with new ideas, you have to leave your ego at the door and be an open book.  So, when a few weeks earlier a young entrepreneur with a new concept wanted to sit with me and discuss his new Web & Mobile App, after hearing his pitch I  sat thinking to myself, “Wow, this is a dumb idea, this marketing plan won’t work, and this logo and business name does not work for me.”  So what did I do?  I sat there and just bit my tongue.  Just because I think it is bad or wrong, does not mean I am correct.  I may be right, but it may not matter.  The question is how to dish out the mentoring and get them to a point that you are helping and not being a jerk.

The Weekly Meetup & Mentoring

At least once a week an entrepreneur or a person I meet at Caffeine Spaces wants to sit with me and discuss their app.  It may be just a concept not yet on paper, or a full blown application especially if it is in the Dating space, Social Networking, Education Space or areas I have been exposed to.  I always take the meeting.  And I have to force myself to sit and listen.  This is not easy, because those who know me, know that I typically cut people off when they are talking and just start saying my own ideas.  I have to cut that out and buckle down to get the gist of what they are trying to get across.  Listening is really mentoring.  Giving some rational tactical advice on Next Steps is the answer.  Everybody is in a certain stage of development.  If they don’t have their one page Exec Summary or a Pitch Deck, that is where they need to go next, especially if they want to raise capital or just bring on partners or customers.

Small Steady Improvements

I also had to remind Vince that an idea is just an idea.  Conceptually any idea can be developed into a lasting entity or business, especially if the concept is tested.  Vince had this one business venture we talked about where he had failed to gain critical mass, and we discussed a little bit of why it failed.  He felt his “vision” had not been accepted by the market.  Basically it was a $400 bootcamp about how to start-up a company.  It was in fact a $20,000 value over 2 days, like getting an MBA shoved in your head.  He had lost a lot of time developing this concept creating the materials and felt people were not willing to pay for the whole shebang.  Well, the issue was simpler.  He did not have to spend 6 months on creating a monolith and start-up people don’t want to spend $400, they have a hard time parting with a $1.  So he should have tested the concept and broken it down into small pieces and gotten a web page up and running and just made small improvements finding his way towards success.  That is how you have to approach this business.

“Investing in the Internet is similar in a way to investing in a farm”

Read this great quote by Technology Pioneer Yossi Vardi.  Essentially you have to look at Internet related ventures like you do farming.  I have to remind all the people I meet with new ideas to think like this and to sell themselves this way.  90% of the results of our Internet ventures will take 3-5 years to show results.  And of that amount, many may fail, but many will start to come to their own if we continue to make those improvements and pivot and correct the mistakes we made at first.  It will always take time.  The start-ups that were overnight successes showed some progress, but event those are on a 3 to 10 year time frame till profitability and success.

South Florida Venture (Improbabilities)

There is a disconnect in South Florida between venture capital and new start-up ideas, that are not experienced in larger cities around the country with a great Start-up community.  And event he angel/venture guys around are not willing to wait.  They need to show results now, and always want results to be on the table.  Real dollars, real traffic and real databases are how we speak and work in South Florida, and that means there will never be a Tumblr, a Twitter or a Google produced out of South Florida.  You need the patience and the capital up front.  We are forced to make immediate decisions on how our businesses are built in order to bootstrap everything, and when you get some financing it is a dribble if you are lucky.  This is hopefully changing.  My answer to a lot of young guys are great idea, maybe you should move to New York or San Francisco.  Would love to change that, and things are changing, but not soon enough.

Web Feature Discovery Process – Part 2

This article is the second part of 2 articles on the Web Feature Discovery Process. You probably should click here and read article 1 if you are here for the first time.

Ok, so you have finally figured out the key assets and are starting to go down the road of making your new web feature happen… well let’s just say you are only 20% towards the finish line. There are some major hurdles involved for most of us, including even the big guy or gal at the top. The thinking part of discovering ripe juicy revenue or visitor producing features is the easy part. The difficult part is making it happen, navigating the human beings all along the way, especially when you know they are all trying to make sure you either fail directly, fail indirectly, fail just by the fact that you don’t have the energy to fight anymore, fail because you left the job or fail because the job left you. It is a fight to the death my friend and its all because you sorted through the company assets with a flashlight at night when nobody was looking and you had an idea, you brought it into the daylight, and now you are a pure unadulterated target for those who don’t want you to succeed. So how do you proceed in the most murky of environments…

Social Engineering

I first began to understand social engineering, when I was reading a great article about Kevin Mitnick, the infamous hacker who broke into Sprint and stole tons of information about their customers. He was not genius. He was not very technical. He was basically a petty thief. How did he do it? He used social engineering. If you think about it, social engineering (in the Mitnick version) is about figuring out how to use information and people of an organization to think what you want them to think and do, using that information wisely. Mitnick figured out that when executives names where mentioned, people lose their minds and do what you want. “Uh, Dick Lynch the VP said we need that report now!” Minick found out that if you know some small piece of information or just a name, you could easily navigate an entire organization, call around to people and they would hand you off like you were a friend. He would use person X’s name and say hey person Y, Person X recommended me. What really did is say the VP wanted me to get onto System Z, now so get me a login and password…

The point is, you need to understand the dynamics of the organization, the motivations of people in the organization and the hierarchy of decision-making. Getting the organization on board with you is what I am getting at! But ultimately, like I have said before, you can take the high road or the low road. Taking the high road means bring the organization along on a ride towards success (success means getting your feature implemented).

Education Camp

Sometimes unusual methods are needed in order to gain the trust of execs and the whole organization. For instance, some of the features I was trying to get implemented at my last company required me to make sure that the organization understood the features. What did I do about it? I ran a seminar. Now people in my company who came to my seminar looked at me in strange ways as I ran them. Once again who was I to run a seminar? I was just a programmer there, sometimes a manager, but in no way did I have the keys to the kingdom or really was in charge of much there. Fellow employees would look at me with confused looks. Who was this guy standing up there talking about things? I ran periodic internal seminars at the office. This means a short 45 minute talk, on WordPress for instance. I ran a seminar on Whois. I was planning a seminar on a variety of subjects. What was I doing in my crazy convoluted method was starting the social engineering process by planting seeds through my seminars. I wanted this company to adopt certain strategies and methods. Once again, nobody stopped me from running a talk at noon time in the conference rooms. This is a great place to flesh out your ideas and don’t freak if someone shows up to show you up. My answer to them would be, show me how to do it better!

Plan 32

One thing that a great product manager should always have is a pile of ready to go plans in their back pocket. You have all the plans (I mean PPTs, Power Points) that are company planned, on the so called “Road Map”. Actually I am going to digress here and tell you that if there is a Road Map beware! The kind of process and thinking a Road Map can create can be a real negative, because from experience nay-sayers love to use the Road Map as a way to block new Road Entrances. Never let the Road Map not allow the process to be re-prioritized and redeveloped. I have yet to see the Road Map (in the web feature world) be the best guide. Now, as far as plans are concerned, you have the top line plans already planned out from the execs and board. You have the plans that others know about that you are promoting, and you have a dozen others that they are not aware of, but you have them ready to go, in standby mode, in a file on your hard-drive or cloud, just in case the time is right. Why the three types of plans? Well, part of succeeding is not giving it all away too soon. You have to release plans periodically to the organization, who can’t handle all the plans at once. They have to be part of a series of changes over time. Once again, as a champion, of a lot of other people’s ideas (OPIs), you need to map out these features properly and get your presentations just right. Sometimes you have to sit on things and let osmosis occur. You wake up some morning and your brain somehow figures it out. Who knows why things work that way, but often they do. I would highly recommend sitting down with all the guys and gals who thought them up and show them where there idea is now!

The Shadow Government

Sometimes all the education and all the presentations and all the board room brawls are insignificant compared with the reality that something has to be done subversively. It is a rare thing to do, and there are some well documented cases where it is a necessity. A great example is the case of the James Cannavino at IBM. I read a great story about Jim in the late 1960s trying to convince management that he could speed up the IBM Mainframe. They rejected his notion, but in a subversive move, he had the technology developed outside the company and when it was finished went over his bosses and showed it to the board. He faced either being fired or being promoted. Luckily he was promoted. Hopefully it doesn’t come to this, but sometimes getting things done in an organization require unusual activity, because like I have been inferring there are many more forces at work trying to not make things happen than happen, even on the smallest scale.

Project Mercury

Those funny project names, that often mimic Nasa project names are not just wild imaginative words that are spread around at a company. They are used to get your attention, to try to get the organization to recognize a plan. These project names may sound strange and odd, but customer oriented, improved website features are often a shift and they may seem quite odd at first. Social networking stuff like Twitter and LinkedIn and Facebook. These are now household names, but 10 years ago they would sound strange. And it is only going to get stranger. When I say Tweet, Joomla, Droopal, lamp or soap to people in the web world, they better know what I mean… What should be happening in most American web firms is an injection of militarization combined with humor and something to spice it up. That’s what a project name is all about. If project names are not attention-getters, they should be. I would always try to make the name relevant, but a good bit of creativity is a positive not a negative.

Misdirection And The Book Of 5 Rings

Talking about military tactics, people’s military training can go a long way in corporate America. Just because I was not in the army, doesn’t mean we can’t learn from military tactics. They are important. At the end of my MBA program I took a class which revolved around Musashi’s “The Book Of Five Rings“. Musashi is a Japanese expert on war in the middle ages who survived to his old age and therefor, because he was only one of the very few warriors to survive, he wrote about his tactics. One of the tactics listed is a method of drawing an enemy towards oneself and at the last minute let the enemy run themselves off a cliff. In our language we call it misdirection. Sometimes you have to lead people down a path and not stop them from their self destruction. Often your plan has one way of doing things and another person has their plan. If you see their plan is faulty you don’t always have to stop it from failing. Sometimes it is best to let it fail. When I worked back at the phone company we used to leave documents around about projects that were never in existence in order to confuse people about what our real intentions were. Sometimes it is important to not reveal these intentions until you are ready to present and make it happen.

This the second of a 3 part articles. I have not yet finished article 3 about Making the Web Feature Happen.

This is the first article (You should read them in order)

http://www.strategicpoints.com/2011/06/22/web-feature-discovery-process-part-1/