Start It is a documentary series on how Order SM, an early stage mobile commerce startup, is approaching the launch of their company.  It is intended as a helpful guide to anyone looking to build or grow a startup in today’s fast paced technology space. 

What you read may counter “generally accepted” startup practices in Silicon Valley or elsewhere but that’s what happens when you are a bit different. We are not Stanford Grads; we are not ex-Googlers; we are located in Seattle, not San Francisco; and we did not start off with a large network or initial funding sources. We are 21st century entrepreneurs and this is our story.  It’s a good bet most of you are none of those things either so we hope this may help you get off the ground.  Please feel free to reach out with comments or questions.  This is the first of many posts in the Start It Series.

Vision is arguably the most important piece of the Startup puzzle and has the power to chart your course as a new company.  While vision is paramount to startup success, it is amazing so few founders really take the time to determine what exactly is their vision.  If they can’t put into words, or worse, haven’t taken the time to fully grasp the reason for their company’s existence, trouble could arise down the road.

The Start It Series is a journey to the core of a young startup and an effort to bring to light major aspects of launching a successful company, which should be helpful to other early stage entrepreneurs and founders.  A plethora of startup incubators, accelerators and entrepreneurship classes are available to first time founders, yet there is not much coming directly from the sources – ones like us who are in the trenches.  It was clear to myself and my co-founders these sort of things aren’t written about enough; some secrets seemed held far off in the startup vault, not to be shared or spoken about in public spheres.

We wondered why… why is so much swept under the rug, left for the imagination when all of us founders encounter the same challenges, thoughts, fears, wonders, hardships and breakthroughs?  So rather than staying “mega-stealth”, we thought it was better to come right out and share our ideas on the founding a great companies.  It was in this realization we felt empowered to take the plunge ourselves.

Establishing a Vision Worth Pursuing

Vision, like Love, it is painfully difficult to describe and can manifest itself more as a visceral feeling or “sixth sense”.  Without vision, just as a relationship without Love, a pursuit becomes meaningless and self-serving.  But how do you turn a visceral feeling into a descriptive visual interpretation, complete with words and diagrams?  How do you take something vapor-like into something tangible?

Often it can be frustrating to be asked the question “So, what exactly is your vision?”   Your answer will depend on many different inputs, but mostly it starts with your purpose.

When forming a startup, one should start by asking themselves, “what will be the the purpose of this company?”  Another great thought is:  ”Why will the world be a better place because our company exists?”  The answers to these questions serve as beacons to what will emerge as your vision.

Since is is so difficult to define and describe vision, some may find it helpful to start by touching on what Vision in NOT.  This is not an exhaustive list, but it will help get across a very important point:

• Vision is not an add-on feature to something already built.
• Vision is not describing your company as “we’re Facebook for X” or Airbnb for Y”
• Vision is not copying a “hot” idea and forming a new company with a off-shoot name eerily similar to the market leader.
• Vision is not blindly founding a startup because it seems like the cool thing to do

Vision Is Transformative

Vision can be thought of as how you want the new world to function when your product or service is fully embedded.  It takes courage to look out over the horizon, piece together abstract concepts and proceed to built it with an unknown future.  Having Vision, by definition, is seeing what others don’t see and if successful enjoying the fruits others won’t enjoy.  Therein lies the challenge – coherently putting abstract thoughts together so you can accurately share it with others to maximize the impact of your vision.

Many questions, when answered, can lead to a detailed definition of your vision:

What does this new world look like?  

Imagine how the new world will function with your application or concept in place.  Think about today’s environment, what technologies are in play currently and what needs to change in order for your vision to be realized.

What has changed because of the value your company has created?

Looking at current markets and industries with “futuristic eyes” can lead to interesting conclusions.  Although most of us cannot see the future, we can deduce certain macro-movements such as mobile, social, environmental changes.

What is lacking or not present in the world today, that when your vision comes true, will be fulfilled and transformed?  

Visionaries are value creators; they create new industries and markets for others to play in.  The fundamental aspect of your vision can be found by answering this question.

In what ways can you look at older industries with new perspectives?

Taking a totally new perspective on publishing a “daily” will lead entrepreneurs to rethink how to deliver information to subscribers.  What other traditional industries can be transformed by using today’s technology.  Hint: all of them!

How can you rearrange and re-write an existing market value equation to bring it into the 21st century?  

Similar to above, it helps to start by looking at traditional industries and evaluate the value creation equation.  Once you can see it drawn out, rearrange it to find where new, more efficient value can be created.

Because of new advancements in technology, who is winning?  Who is losing?  

Find where incumbents are suffering from the innovators dilemma… and exploit this change in technology for your advantage.

How can that be sped up or slowed down?

Here is where your own innovation can give you a leg up on existing ideas.  Look at what is working today (social for example) and then combine new pieces to shorten user flows and time to market.  Fastest one usually wins today.

The answers to all those questions will lead to new words, which when combined together will lead to descriptive sentences about this new world.  Put these sentences together and start reciting them continuously, in private and around others.  Patterns will emerge and people will start reacting.  This new world you are describing is your vision.

The Truly Mobile Enabled Society

Order SM was spawned out of a few major insights when combined, create an incredible vision. Below is a brief walkthrough of how we got here.

First, we started to observe how the mobile device was changing every aspect of our lives.  (And we mean every aspect – communications, social, commerce, relationships, health, education…)  We remembered back in the late 90′s how e-commerce gave consumers a new way to purchase and transact around the world.  Yet when we looked at the everyday life of an average consumer carrying a web enabled device with them everywhere, amazingly they still spend most of their time and money transacting offline with local merchants in the local community.  This consumer experience has not been significantly enhanced in 30 years and is quickly become archaic to even the most average Joe.

Second we observed average consumer habitual activities and how they relate within local merchants.   Interestingly, it is not so much different than our social relations – namely consumers have tight knit and highly concentrated ”circles” where they spend the majority of their time.  Said a different way, we all are very habitual creatures.  We tend to frequent the same coffee shops, restaurants, health clubs, clothing stores, gas stations, etc… Many causal interviews have reinforced  our observation.  ”Yes, I pretty much go to the same places each week… and usually order the same stuff.  It’s quite annoying I have to repeat myself so much.“

Time for some logic: if people tend to be habitual then why is the hottest idea in the local market promising consumers new experiences and at the same time promising local merchants thousands of new customers through emailing discount coupons?  And more interestingly, why has this general theme been the promise of the entire adverting industry for so long?  Won’t people just habitually go to the same places regardless of mass discount and not pay attention to all this crazy advertising?  To us, it’s actually a waste of money to try to convert “non-loyal” customers, since the lifetime value of these one-timers is so low.  The traditional approach just seemed backward to us…

So we starting thinking critically and came up with a new view of the world.  What if we could flip the entire economy on its head and start again from the beginning, only the beginning was each individual person.  We envisioned a mobile enabled consumer, one that values both efficiency and high touch.  This consumer, if provided a platform through their mobile device, could reach out to connect with the merchants and businesses they care about.  They could open a two-way communication channel to serve both parties best interests.  We realized consumer purchase intent was the single most important action in the local commercial space.  Empowering a consumer to easily communicate and lead with intent (place orders or communicate) with a merchant goes quite a bit farther than delivering an unwanted coupon in an email box.

What if I could just text “I’ll have the usual” to one of my favorite places…. and they took care of the rest?

We also realized this equation must be balanced for value to the merchant as well.  Loyalty – realized through convince, relevance, and respect – was the second most important action in the local space and paramount to any merchant.  Local business want to know who their most valuable customers are, how often they are making purchases in their business, and what they are actually purchasing from their business.  Consumers care about loyalty as well; going back to the earlier example as a consumer, it’s not about delivering me random experiences I might never use to my email box but rather making my every day interactions more seamless, purposeful and valuable.

What if local merchants could see, organize and talk to their most valuable customers directly through the mobile web?

So there you have it, establishing vision take courage and requires deep thinking of why your company should exist in the first place.  The beauty is vision is always dynamic and change is inevitable so you don’t have to get it right off the bat.   Therein lies the incredible opportunity to any startup strong enough to stick their head out of the crowd, look ahead and say some things that may be a bit out there.  Go ahead, gaze into the future and determine why your company should exist.

@jnickhughes 

Pinning down the main idea of a business and determining your startup’s core value proposition is a difficult task, especially for first time founders. It’s even harder when you are innovating in a uncharted waters, with lots of intangibles and no clear leader.   As entrepreneurs we tend to focus too inwardly and only see problems or possible solutions from our point of view.  Most of the time this does’t connect with others.

Yet taking the early steps to correctly position your company in the general public is one of the most important tasks on a founder’s to do list.  So how the hell do you know if you are even heading in the right direction?

Thankfully, there are some specific ways you can gauge your value proposition and see how it is fitting with your target market.  Listening to people when you pitch and observing how it’s coming across can lead to deeper understanding of your business.

Here are 3 clear signs you and your product are heading in the right direction.

Listen: People Are Demanding Your Solution

I recently attended StartupDay here in Seattle and had an experienced I will never forget.  A very well known CEO of a well-known company started his talk by noting great entrepreneurs first look for problems in their own lives, and then determine how best to solve them.  Next, he proceeded to list off some problems he sees in his life, and pretty much pitched our idea to the audience.  He quickly described the problem Order SM is attacking and demanded a solution. He said “interacting with local merchants and restaurants is such an inconvenience… will someone please give me a system where I can order food, like a burrito, without having to call the business. I just want to text the order to them, pay for it and just swing by to grab it. Someone please build it, cause I would use it!”

BAM!  He just nailed one of the main value propositions of Order SM, and we are rolling out with our beta test customers this week!

When I heard this and about fell out of my chair, since this speaker is well respected and anything they would request falls into the “good idea” category.   Talk about validation.

Do you hear people causally talking about the problem you are trying to solve?  And are they vehemently asking for your solution?  Hmm, better listen up!

Lesson: You know you are heading in the right direction when well-respected people are publicly demanding your solution in their lives.

Watch: People Get Excited When You Pitch

Each day when I am asked “what I am working on” or when I talk about Order SM, I proceed through my basic pitch. Every time, without fail, people react the same way. “duuuuude, I need that! I would use that all the time! This is a great idea…. When can I start using it.”  

When you pitch your idea, do people respond with that much excitement and energy?  If not, I hate to tell you but your idea is not good enough.  It just isn’t.  If people are not moved by the value proposition your concept holds, the fact is not enough people will use your service or technology for it to gain any attention.

It’s a tough pill to swallow, I should know.  My first attempt at a startup, Loyaltize, did not have a strong enough value proposition for people to jump at it. They usually would respond with “so, let me get this straight…. you guys are like…. and you are doing X and Y, right? Hmm, that’s interesting?” I hated the fact that I had to describe what we were doing like 3 times before they really got anything from my pitch.

Lesson: If people don’t jump out of their skin when you pitch your startup, do yourself a favor and go back to the drawing board to either re-word around a different problem or find a completely different idea.

Embrace: More And More Competitors

Competition is a good thing.  I get the feeling most founders are deathly afraid of any company, large or small, entering into their market with a similar value proposition.  Unfortunately that is a sign of weakness and lack of confidence in your own business.  I say: Awesome!  This validates, measures as well as directs my overall strategic alignment.  Bring it.

It seems like every day we are discovering new attempts around mobile ordering/payments/messaging for local consumers. Some seem to be going in a similar direction as Order SM; many are not. This is fine in our opinion. The market is so young and fragmented; it still has a long way to go in terms of maturity before one platform emerges as the definite market leader.

But one thing is for sure – it’s validated as an incredibly big market, a trillion dollar market in fact.  Anytime a market see’s increased attention and activity, big things are about to happen.  Mobile payments, mobile communications, mobile ordering, social commerce, local CRM – all these markets are getting red hot and are experiencing abnormal attention lately.  It will now come down to who can execute with the optimal technology, team on an appropriate time line.

If you are not seeing more entrants into your territory you should probably do some evaluation. The market might not be very promising or it’s too mature for any new players.  Identify this early enough and you might be able to make adjustments before it’s too late.

Lesson: If you are seeing growing action and innovation within your specific market, you are indeed heading in the right direction.

@jnickhughes