Startup short-term & long-term mind splitting

October 30, 2009 by Nick Barker

I’m fascinated with the 80/20 theory which originated from the economist Pareto. I particularly like idea that 20% of what you do today results in 80% of the future. Visa-vi 80% of what you do today only counts for 20% of the future. The challenge is finding that  elusive 20%  in the here and now. Its especially difficult in the fast moving tech sector compounded by having  too much short-term stuff to do in a startup.  However startups need to be both short-term reactive and maintain a long-term strategy to survive.  The problem is our brains find it hard to handle both thought processes simultaneously. The answer for startup founders is to learn to regularly split and switch their mind-sets or where possible divide the roles between founders.

NormanBates

The character Norman Bates (Psycho) going too far with split thinking

I didn’t agree with Eric Ries Gigaom’s post on ‘Myth: Entrepreneurship Will Make You Rich’. However Eric did highlight the dichotomy of startup founders dealing with short-term v’s long-term decisions simultaneously. The lifetime of startups is very short compared with larger companies. Startups don’t have the luxury of time. The startup needs to continually change to survive.  This results in continually switching between short and long-term planning or reacting.

I recently attended a panel discussion at The British Libary which included Doug Richards (of Dragon’s Den fame) & Nick  Wheeler founder of Charles Tyrwhitt, a specialist shirt manufacturer. Doug’s early tech startup days in LA he was extremely reactive to selling Sun Microsystem whatever the business opportunity presented at his feet.  This is a good strategy. It gets immediate prospect/customer feedback on what they do or don’t like and brings in much-needed immediate revenues to put food on the table. However short-term selling means your only react – jumping from one customer need to the next. This can lead to excessive diversification and no focus within startup.

The Nick  Wheeler was determined to ‘stick to his knitting‘. Nick only wanted to sell shirts. He knew, obviously, that there would always be a need for men’s shirts. He knew in his own mind that he would be the ‘best’ shirt maker. This is a long-term strategy and vision. Again this is a good strategy. Its has the potential to bring growth, clear direction and commitment. However too much long-term strategising does not  pay the bills  and if the strategy is wrong i.e. the customers aren’t interested in the product the founders won’t know until it’s all too late. Nick did say ‘they nearly went bust‘ based on his long-term goal. But then I’m sure Doug Richard’s must have sailed close to bankruptcy with is short-term selling.

It’s a difficult balancing act managing short-term long-term goals like so many other peculiarities of running a startup.   It can hurt the brain to keep switching between the two thought processes required for short-term and long-term thinking. You have to learn to cope with the constant flipping between short and long-term thinking. It is vital skill but make sure it does not drive you mad ;)

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Entrepreneurs: Beating the employee out of you

October 14, 2009 by Nick Barker

Being a startup founder is poles apart from being an employee. During my 20 year employment career I’ve worked for small tech companies and large software manufacturers. I’ve now had a web app startup for the last two years. Like many I’ve been taught by successive employers how to behave as an employee. My attitude has had to change with our startup because uncertainty abounds and as founder’s we’re responsible for everything.

FightClub self beating

Edward Norton beating himself out of employment
in the movie FlightClub.

Last year I met Ben Way who started running companies at 15! Ben’s now the grand age of 29. I spoke to Ben about his startup life and he said ” I’ve always known it this way and don’t know it any differently.” Having a startup, particularly one where you are trying to build a product, requires a very different approach from being an employee. You have to change your outlook and the way you manage your time:

  1. Job security - There is none!  Remember what it was like when one of your past jobs was in jeopardy and uncertain abounded. That is what it is like everyday in a startup, get used to it.
  2. Salary – In a startup, particularly if you are building a product, there is no money posted into your bank account every month. Get used to living frugally.
  3. Structure – You don’t have the hierarchy of a company to rely on. You have to do everything. From setting strategic direction to putting out the trash (rubbish)
  4. Discipline – There is nobody telling you what to do. This sounds great, however it does mean you have to be totally self disciplined.
  5. Direction - Too much freedom can be a bad thing. You can become paralyzed by uncertainty. You must maintain a focus on where you are going.
  6. Massive Overload - There is too much to do in a startup. Much more than any other job I’ve ever had. And I’ve worked for small 10 person companies before. You have to prioritize.
  7. Tough decisions - You continually have to make difficult decisions which have significant downstream effects. If you’re a procrastinator stop it and make decisions. Afterall a decision is better than no decision at all.

Many employees dream of having their own company. The reality is that it’s whole new world. In a startup the highs are higher and the lows are lower. It much more of an emotional roller coaster of a ride than being an employee.  The challenge of building a company is extremely exciting. And the ability to create in a startup is immensely rewarding. However the workload, responsiblity and uncertainty can sometimes make the whole process  seem overwhelming. There certainly is never a dull moment in the life of a startup.

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The pointbreak of a live demo & product launch

October 5, 2009 by Nick Barker

There’s been much talk of demo’s and launches over the last  month with TechCrunch50 and DEMOfall09. It’s also been at the fore front of our minds with our startups launch and live demo at FOWA, London. I’ve posted about the pro’s and con’s launching at startup conferences. Launching at an event is an emotional roller coaster of a ride with the preparation effort required, pre-event expectations and then the post launch reality. Looking  back the launch peak is a brief moment in time after a long development  journey and before the journey to acquire real customers begins.

Killer WaveKiller Wave (Source: Telegraph ‘Beautiful but deadly’ )

Great  advice on  live demo and launch for startups includes: RRW and Jason Calacanis – Part 1 and Part 2.

Sean Power: “It may be the single biggest traffic spike you’ll ever experience.”, “After the bump, you’ll feel a tremendous rush of adrenaline, then deep, soul-sucking disillusionment as your traffic dwindles back to its former levels.”

There is so much effort needed to build and develop a product in preparation for a five minute launch demo (forgive me for my reminiscing links to many of my past posts):

  1. Finding the team - Getting a great team together is not easy but it’s key to a successful startup.
  2. Identifying the opportunity – Finding a killer idea first of is near-on-impossible or at least improbable.
  3. Getting the investment – Making the money last long enough to build a working saleable product is a ‘Scrooge’ like challenge.
  4. Building the app – Staying on target and not veering off on another exciting project is tricky.
  5. Polishing the app - This takes time and you don’t have much of it. The devil is unfortunately in the detail.
  6. Making it scalable – To prepare to scale or not to scale is a difficult question. No one knows the traffic and usage you will get.
  7. Preparing a memorable demo – In summary Jason Calacanis says: show the product quickly; give a succinct presentation; temp the audiences; talk about accomplishments rather than roadmaps and show understanding of the competition.

Wow, what a journey!! This is why many startups fail to ever get a product  finailsed and launched. The decisions made during each of the above stages directly affects the outcome of the final 5 minute demo. However  this onstage  peak is only a brief  moment in time and a pause before the start of  a new journey.

After the curtains have closed at the conference its when the real hard work starts. You now have to convince customers and investors. The good news is that your startup will be taken a little more seriously because you’ve got a product. However, doubt will remain and very few really believe you have a good idea that will succeed because you have no customers. You now need to be flexible,  customer centric and have  a renewed determination to succeed.

The live demo launch is yet another emotionally intense thrill ride for startup founders. It is a deadline which gets things done and moves your startup towards the all important goal of getting customers.  “Buckel up because Kansas is going bye, bye.” – For the  5 minute demo anyway and then it’s back to reality ;)

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Do-It-Yourself startup PR

September 23, 2009 by Nick Barker

Even with today’s social media channels such as blogs, Facebook, Twitter, etc Press Releases remain a popular  form of communication.  PR for a startup is about establishing a new reputation and trying to get people talking about you and your product. However the press are a fickle bunch and tricky to deal with. Getting a mention in a press article or story can be very valuable and worth the effort trying.

Big megaphone

We launch our new website monitoring app to the world live on stage next week! I’ve discussed how to launch a web app before. As a bootstrapping startup we’ve needed to keep costs down. I wanted to get a PR freelancer in to help with the launch however cash is becoming increasingly tighter and so we’re running the PR ourselves.

The press are notoriously difficult to get hold of and engage with, however there is a small chance your message may get through. Doing the PR yourself has it positives. The founder’s know the product and are more passionate than anyone else.  Guy Kawasaki is positive about going it alone PR. Here’s a guide to developing and managing a startup Do-It-Yourself PR launch plan:

  1. Target audience – Be clear in your own mind who they are and be certain you know where they hang-out i.e. what sites they visit and which blogs, newspapers do they read.
  2. Key messages – Decide what they are. Some of this comes back to your marketing straplines and what the company/product stands for.
  3. Target press list – Who are you going to contact and what are their contact details. Find out what  excites and interests these journalists.
  4. Story – Develop a story that the press maybe interested in. It could be feel good, topical or a current trend. Above all the message needs to show how you are different from your competitors. Find good example press releases and learn how to write one. Here’s a useful article on writing press releases: ‘How to: write the perfect press release for journalists’.
  5. Press release – Draft up a press release based on the key messages. Also make sure you have a news and resource page on your website/blog including a range of screenshots and logo’s. Then send out your story.
  6. Pitch - Next get on the phone like crazy and pitch the hell out of your story to the press contacts. Entrepreneurial determination makes the difference here.
  7. Targets – Set some targets for your PR campaign. That way you keep focused and motivated.

Chris Lee, a PR freelancer for startups, has some further advice on managing your own PR.

Timing is also an extremely important factor. Everything including your message and press release needs to be prepared the week before your launch and press contact made during the launch week. Good luck. Your message may get through.. The press are tricky to deal with, however if you don’t try you never know. Remember “Who dares wins” ;)

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What the heck is startup brand identity?

September 17, 2009 by Nick Barker

We’ve been thinking about startup branding for a while. I recently touched on branding when I posted ‘Do startups really need branding straplines?’ and concluded that top level marketing straplines embody the vision of the startup. This brings clarity of purpose, consistency of understanding and direction. It seems to me that ‘brand identity‘ is a vague and fluffy term.  However branding is not just for the big boys. It’s also great for startups. Brand identity helps brings credibility to a startups customer, investor and partner relationships.

Print

“It’s the Real Thing“

Startup branding certainly isn’t anything like coca-cola with their big budget corporate brand personality. However  both big company and startup branding is about personality. Branding is very, very, very important for the big companies. It’s worth an awful lot to these giants. It is also really important for tiny little startups like our new web monitoring service. Branding sends out a consistent recurring and reliable message of what the company and product stands for. Customers love consistency. They want to know what they are going to get and they will be satisfied. This builds brand and product/service trust.

In a startup brand personality means the founder’s personalities. Like it or not its about  the founders character’s!  The startup is a reflection  the founders values, beliefs and the way they behave. Startups have the ability to be much more human and friendly than the big faceless corporations. This means startups can use their founders personalities to their advantage. They can be so much more human, personal and engaging.  This is particularly effective in the new world of social media. However startup founders need to have a clear message on what they stand for and who is their the target audience. The founders also have to live and breath the brand for it to be real.

Mindtouch Aaron tattooMy friend Aaron Fulkerson, the CEO of MindTouch, has taken branding
to the extreme by tattooing the company logo on his leg!!

Most business relationships, whether B2B or B2C, are based upon trust. Potential customers need to know that a supplier will deliver on their promises and they will be around in the future. The challenge for startups is  that branding and trust takes time to build up.  If the founder chops and changes  messages or brand personality too much this trust will not buildup. It takes patience and persistence on a single course to buildup branding identity. This is what makes it so valuable for both the big companies and startups alike.

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“Running a start-up is like being punched in the face repeatedly”*

September 10, 2009 by Nick Barker

In my experience of working for a large global software manufacturer and now having my own software startup Paul Graham* is spot on. Paul said  “Running a start-up is like being punched in the face repeatedly… but working for a large company is like being waterboarded.” (Waterboarding is a form of torture involving simulated drowning.)

I’ve found the bigger the company the more market power you have  but the less freedom you have as an individual. However having startup’s freedom means getting  rejected   (‘punched’) continually as you have virtually no market power. Get used to it and come out fighting because startup and small companies are more fun.

matrix_punch

The ultimate punch in Matrix Revolutions, 2003

During my career I’ve worked for several small and medium companies and one of the world greatest ever tech corporations, Novell Inc. People generally open doors warmly when you’re from a large corporate enterprise but in the startup they often don’t even give you the time of day.

The Big Corporate Enterprise

When I joined Novell they were enjoying a temporary revival with Eric Smidt at the helm. Interestingly Eric is now the CEO of Google.  Even during Novell’s decline I always remember the feeling of power when I meet customers and partners. They all took you seriously. Even prospective customers, partners and ex-customers would welcome you in.  Novell and other corporate enterprise’s have huge amounts of market power.

Market Power

By market power I’m referring to a company’s credibility. Being creditable reduces the customers perceived risks and often increases trust. From my experience market power is derived from having several of the following:

  1. Customers - Referable large company and well known household name customers.
  2. Partnerships - creditable partnerships with creditable leading companies.
  3. International service/product – Effective provision of services across the globe.
  4. Scalable service/product – The capacity to take on new large scale orders and customers without over-stretching.
  5. significant assets – Whether is be customer base, IP, financial or contractual assets.

As an employee working for a large enterprise you are riding on this power. Unfortunately decisions and change happens very, very  slowly and painfully within the corporate enterprise. The large companies often rely on the status quo. There is certainty in the corporate world for the company and the employee.

To get on in the large company you have to be a good corporate citizen . This means towing the line, keeping you head down and doing as your told even if you don’t believe in it. It can become torture for many. What makes all of this worthwhile is the pay and the perks. However there is more to life than money…

The Small to Medium Size Company

This size of company sits somewhere between the giant corporate company and the startup. They’re often in partnership with the big companies, reselling or distributing their goods or services. The effect of having referable customers and being involved with a large stable enterprise company brings credibility. This increases the smaller companies market power.  However they often still lack market power because they’re not making an embedded product or service product.

The good thing about working as an employee for smaller companies is that you get paid and the decision making progress is shorter and therefore quicker. This means as an individual you have more freedom than within the corporate environment. However as a small company you have to fight alot harder to survive. Interestingly some larger companies like Virgin Group, Ltd and WL Gore & Associates, Inc have successfully divided into small units  to act  and feel more like smaller companies.

The Startup

You love your startup like nobody else. You believe  your product is a world beater but unfortunately very few will agree.  As a startup you have no market power unless you have a track record of previous startups. Again and again you will get “punched in the face” by people all around: customer’s,  partners and investors. Graham says “everyone has a problem with your product” .

As a founder you have to draw strength from somewhere. Graham says “uncertainty” abounds, “as well as a persistent fear that a single bad decision could doom the whole enterprise” and “the gut-wrenching period when you realize that success isn’t going to come quickly or easily”.

Your strength may be your family/partner, friends or an inner driver of your vision of the future. Something has to drive you. And it has to drive you hard to gain market power. However a startup is something very special. Many only dream of having one. A startup brings the idea of freedom. The freedom to create and grow something of your own.

It’s very interesting to see people from all three types of companies sharing public discussions. Now I look back on my career the differences are amazing. The corporate citizens often lack passion, individuality and an inner drive. From all my years of experience I enjoy working for startup and small companies the most. They give you a sence of purpose, belonging and fun. Unfortunately the pay sucks in a startup but then money is not everything ;)

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So-long Cancer Dude

September 4, 2009 by Nick Barker

It saddens me to bring the news that Jeffrey Walker aka Cancer Dude has lost his final battle against cancer. Jeffrey was my blogging inspiration and mentor. His RadioWalker blog images, humor and personal approach has greatly inspired my blog writing. In many ways he was my blogging Godfather.

Jeffrey Walker
Jeffrey jamming

Simon, my co-founder, and I met Jeffrey in June 2008 at The Enterprise 2.0 conference in Boston, USA. Even before then Jeffrey commented on my blog. Jeffrey warmly welcomed Simon and I to the Enterprise 2.0 community. In January 2009 when I started to loose the blogging faith and reflected on my first years blogging Jeffrey responded. He said “Be yourself. Let your personality through. Oh, and keep the images. And keep the faith, dude.”

Earlier this year when I heard Jeffrey’s cancer was back for the third time I wrote one of my favorite posts on fear, uncertainty and doubt. Within this post I refer to Jeffrey’s latest battle against cancer. Again, Jeffrey commented so nicely saying “Thanks for the kind thoughts. I really appreciate it. I am doing well.”

I did not know Jeffrey particularly well, however I consider him a friend. I found him a very kind, fun loving and passionate man. Jeffrey had a thirst for life and living. When I interviewed Jeffrey last year I saw a man who enjoyed every little experience and everything he saw. Life is so short. Jeffrey’s death is a reminder to us all on how brief our lives are and how we can live our lives. We can choose to live like Jeffrey with “zest and  passion” as his family said.

Jeffrey’s last words to me were “Live Strong”. It seems to me that Jeffrey burned so very brightly and its always better to burn brightly than fade away.

So-long Cancer Dude!!

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Do student interns work for startups?

August 28, 2009 by Nick Barker

Interns are an attractive option for startups. The benefits are clear. They’re low cost, eager to learn and need the cash. We have two developer interns working for our website motioning startup right now. The alternatives to interns are either expensive freelancers/contractors, low cost but inflexible off shoring resources or permanent staff.  I’ve posted before about finding and working with freeelancers or off shore companies. Despite the benefits care needs to be taken in finding the right interns and setting an effective working relationship.

YoungOnes Students Potential interns? ‘The Young Ones’ students (Source)

Our experiences goes against Seth Godlin’s and Loic Le Meur’s. Seth believes “internships are overrated” and “we (employers) are doing them a favour”. We’ve found this is not the case if you find the right people,  pay them and work together on clear objectives.

  1. Finding the right people - We directly approached 12 Universities and assessed 20 students. Our criteria was  they had paid work experience; were skilled in our development platform and they showed strong initiative.  We were lucky to find two motivated interns who had worked at Google and a London digital agency. We also thought it was better to employ two interns rather than one. With two they can share ideas and work out problems together.
  2. Paying  interns – Despite being a cash strapped and starved  startup we think it’s better to pay interns. Paying them changes the nature of the relationship because they are expected to deliver on objectives. Also interns who have paid experience expect to be paid for their next project.
  3. Clear objectives – Like all employees they need managing and trusting. Student’s aren’t dumb. Treat them as adults. Let the interns set their own objectives and work with them. If you’ve found the right interns trust them to solve problems and they probably will deliver.

Our experiences of interns so far is great. Yes, it does take a chunk of management time to get them up and running. But that’s OK, because if they’re good you will get that time back later on in the summer as they become more productive. I know several other UK startups including EveryCity and Huddle who also have employed interns. And they think interns are great too. Sam at Chinwag posted his positive experiences of their intern at Chinwag.

Our interns Dave King and Phil Howell have done an incredible job for us. I dread to think how far behind our software development would be without them. From our experience I would highly recommend interns. They bring new fresh ideas to the project and they’re eager to learn. But like all recruits you’ve got to find motivated, responsible and self disciplined individuals for it to really work. You can’t just blame them if it doesn’t.

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Do startups really need branding straplines?

August 19, 2009 by Nick Barker

Branding straplines (also known as taglines) aren’t just for big companies or films. There also great for startups. Like a startup pitch the written word needs to state very quickly what your startup does and will do for potential customers.  They’re not as easy to create as you might think. However they are extremely important to bring understanding and direction.

Alice_drink_meAlice in Wonderland
read the label (source)

Prospective customers and partners will only give your written words a few milliseconds  to make their mind up if  your service is a fit for their needs. A strong strapline brings a clear understanding, direction and clarity of purpose to customers and employees. We’ve found that straplines are not easy to create. They take time, effort and commitment. Which is why they are so powerful and effective.

This is a good article on creating straplines.  Once made you also have to deliver on your strapline promise. Otherwise your statement is meaningless and trust will be lost. Over the last few months we’ve found some company/startup straplines we’ve liked:-

  • Invent – Hewlett Packard still remains focused on innovating. This dates right back to the time the founders made things.
  • Experience Fanatical Support – Clearly Rackspace are committed to proving the best possible support. Rackspace’s branding artical.
  • Painless Billing - Again a very clear message. This time from FreshBrooks. Outsource your billing to remove the headache.
  • You Send. They Sign. Its Done – EchoSogn’s use of the classic three short statements. Very effective on what the product does and will do for you.

The top level strapline can build out with more detail into sub messages. Freshbooks is a great example:

  1. Painless Billing
  2. The Fastest Way To Track Time and Invoice Your Clients – This second message brings more detail on the customers pain point and how Freshbooks will save their customers time.
  3. Send, track and collect payments quickly. Great for teams, freelancers and service providers. – Reinforcing speed and who the service is made made for.

We’ve worked hard on our straplines for our startup:

  1. Aware Monitoring – What we do is in the service name
  2. The easiest way to measure website performance – We make a complex thing much easier
  3. On-demand website monitoring with actionable alerts. Share reports in your business and with your customers. – We are a SaaS service (not software) and we bring useful results which can be shared.

So far we’ve used our strapline messaging for our service blog, launch page, company Twitter and on Crunchbase. Of, course we still need to deliver on the promise.. As Charlie Chaplin said “Words are cheap.”

Straplines embody the vision of an organization, no matter how small the company is. All product/company descriptions and messages  can be derived from the pitch and strapline. Its a like a pyramid of descriptions. This structure bring consistency of understanding and clarity of purpose to potential customers and employees.

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The source of entrepreneurial determination

August 12, 2009 by Nick Barker

My MBA in Entrepreneurship didn’t refer much to  the importance of determination. Yet I believe that being determined is a key quality for entrepreneurs. Since I’ve been immersed in the real world of startups I found this idea to be very true.

Rachel Elnaugh calls it the “pit” which you have climb out and Seth Godin named it the “dip” that you must see beyond. Paul Graham says its “The most important quality in a startup founder. Not intelligence– determination.” (point 5). But what does it mean to be determined?

terminator_fireThe Terminator movie

The Terminator machine has absolute determination to achieve its single objective. Entrepreneurs derive their determination from:

  1. Focus – There is alot of talk in business schools about vision and strategy.  A vision brings something to aim for. Laurence Peter said “If you don’t know where you are going, you will probably end up somewhere else.” With so much to do in a startup it can be overwhelming. Time can easily to burnt on doing things that don’t really matter.  Determination brings the focus needed to work on the things that do matter.
  2. Belief – Because startups have limited resources they have to believe in their vision.  The founders have to be determined  to energise  enough new resources to reach their goal. Mahatma Gandhi,  “If I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning.” If  founders don’t believe in what they are doing no one else will and others aren’t going to help.
  3. Committed - There’s is no getting away from it. Startups are hard work . The entrepreneur has to  fully commit and be determined to make the startup work. Peter Drucker said “Unless commitment is made, there are only promises and hopes; but no plans.”  The entrepreneur has to sacrifice other parts of their life’s to make it work.
  4. Consistency – Most business is based upon trust. Potential customers need to know that a supplier will deliver on their promises and they will be around in the future. The trouble is trust takes time to build up.  If the entrepreneur chops and changes too much this trust will not buildup. Patience and persistence on a single course is necessary. Build momentum through each successive achievement towards the startups overarching goal.
  5. Think skinned – Entrepreneurs are well known for their determination and tenacity. They have to be thick skinned to survive the startup emotional roller coaster. Everyone will give advice and “hundreds of people will tell you your idea is rubbish” says Richard Reed the co-founder of Innocent Drinks. They may even think the entrepreneur is insane. The entrepreneur has to be determined to press ahead if they believe in an idea.
  6. Flexible -  There is no point in flogging a dead startup idea! Once a new venture is started it can be difficult to see the difference between a set back or an idea that will never fly. Seth Godin believes that successful entrepreneurs know the difference between a dead-end and  natural dips. A startup vision and plan needs to be broad enough to accept change.
  7. Lucky – Entrepreneurs need to be lucky people. However, as  Ernest Hemingway said, “You make your own luck”. If the entrepreneur is  determined and locates themselves often enough in the right place where things can happen, they eventually will.

James Dyson is a classic case of determination. In 1983 his new idea was rejected by all the major house hold vacuum cleaner manufactures. He had the focus,  belief and commitment to manufacturer the new idea himself in 1993. During 2005 Dyson took a massive a 20.7% US marketshare compared to Hoover’s 15.6%.

Determination keeps us going when we loose all hope. Its when everyone and everything seems to be going against us. Determination is the spirit of innovation, entrepreneurship and being human. As Thomas A. Edison said “I have not failed. I’ve just found 10,000 ways that won’t work.”

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