Tag Archives: Business

Hey – Get. To. The. Point.

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It’s harsh, I know.

We have short attentions spans.

And it seems like they are getting shorter by the year with each new brief messaging app that infiltrates our society.

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I am not sure this is a good thing or a bad thing, but one thing I have noticed more and more is people want you to get to the point, like now.  I have noticed this in my own life recently, and although tough to have someone “adjust” you in real-time it’s greatly beneficial to hear it.

Basically, I tend to “pre-empt” a conversation with background information, stats, or things I think the person I am talking to needs to understand as we are discussing a topic.  I sometimes do this because I think ahead – determine what they will probably ask – and then simply provide it to them beforehand so they won’t need to ask it.  And hey, it feels like I am more completely communicating to them what I need to say.

This doesn’t need to happen.  I should just say what I need to say and if the other person has a question or comment, they’ll say it.  And then I can respond the specific question.

There’s no need to ramble on and on when the other person really doesn’t want to know, or doesn’t care to know – even if you feel it’s a better way to communicate.  The lesson here is respecting people’s time is really important.

If you find yourself feeling the need to carry on and give someone every detail, maybe think about how to be more direct with people.  It’ll feel uncomfortable at first, but as you get more used to it you will start to naturally get to the point quicker.

And people will appreciate it.

Image by flickr user yamagatacamille

 

What To Do When You Don’t Know What To Do

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I remember it was a rainy, cold and downright depressing winter day in Seattle. The gray skies, piecing wind and nasty looks on people’s faces didn’t help what I was dealing with at all.

That was the day I realized I didn’t know what to do.

I had worked my ass off for almost 2 years on my mobile payment startup Seconds, but too no avail.   The writing was on the wall.  Yes, we had customers and yes we even had revenue.  But no, we weren’t growing and no we weren’t able to raise money to continue forward as a team.

The thing was I didn’t know what to do.

Do I simply shut it down completely?  Quit cold-Turkey?  What about our existing customers?  What about our reputations?  What would others think if we “failed” at our startup?

I was also broke.

I had gone 15 months without pay, barely living off credit cards and other things I scrambled together.  It was terrible.  Some days I didn’t have enough money to eat.  Some days I struggled to buy a ferry ticket home and so I slept on a floor in the office.  I was riding the ferry to and from the office each day because I had no way to pay rent,  so I chose to stay with my sister and her family – an hour and half away across the sound from Seattle.   Graciously, my family and friends helped out when they could which to this day I am ever grateful.

I was definitely worried for myself, not “OMG will I ever be successful” worry but more like “holy crap, I am really on a sinking ship here.”

I didn’t want to admit I needed to jump ship before it sank, I wanted to ignore the holes and guide it to smooth waters.  Why?  Because that’s what “winners” do, right?  But I knew the holes needed patching, and meant getting another job.   I just couldn’t admit to myself the dream was over.

But I just didn’t know what to do.   Then it finally hit me.

It all changed when I re-thought what the dream actually was.  I realized my dream wasn’t about what I was working on at the time, but more about the person I was becoming in the process.  The dream is about being an entrepreneur – the adjective – not the noun.

Entrepreneur – noun.  A proprietor who owns their own business.  A title.

Entrepreneur – adjective.  A person who embodies the qualities of being Courageous. Innovative.  Persistent.  Agile.  Intelligent.  Savvy. Strong.  Personable.  Creative.  Excellent. Fighter.  Winner. 

Once I realized all I needed to do is change the horizon I was gazing towards, everything changed.  I removed myself from the echo-chamber of my head and finally understood, “YIKES, YES THIS BOAT IS SINKING AND I NEED TO GET OFF!”

So I jumped out, found something part time that would plug the hole (support me finically) and was able to live another day.  I started to understand entrepreneurship is a life-long game and to win you need to embody the adjectives, not the nouns.  Once I took that heavy financial burden off my shoulders everything started to get better, my head got clearer and my smile got wider.

I got my mojo back.

Being an entrepreneur is not a title, it’s a person.  Or a persona.   Or a set of characteristics that allow you to dig out of any shitty situation you’ll inevitably find yourself in.

When I found myself in a situation where I didn’t know what to do I simply changed my mindset, which allowed me to see the world in new ways.   Sometimes simply looking at things from a different perspective is all it takes to change your own world.

Pricing Is A Tricky Thing

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6a00d8341c03bb53ef014e606f4675970c-800wiI was recently asked my thoughts on how to approach pricing digital products aimed at the local Small and Medium Business.

Actually, the exact question was:

Basically, I’m looking at how new startups decide on a pricing structure when they’re selling to SMBs. Essentially, you’ve got your product/platform/system, and you’ve pinpointed your target customers—now how do you determine how much to charge? Obviously market research is important, but what specific recommendations do you have in terms of how to pinpoint the right pricing for a new digital marketing/hyperlocal platform? 

My answer:

Pricing is a tricky thing.  Price too high and you put yourself out of business because no customers will pay that high of price for your product.  Price too low, and you run the risk of giving away too much for free and struggle to keep the doors open – again possibly going out of business. Digital or not, a startup needs to be able balance the need to generate revenue with the opportunity to attract as many customers as possible.

I think it comes down to doing a few key things really early on.  First, study the current market to determine who is offering what and at what price points.  You should be able to look at the market and see the high end/low end products and their associated prices.  You then look for the holes in the market – where’s the point where customers are paying too much for not enough value?  That’s where you can bring something highly valuable to the table at a more affordable price and undercut the market.

Second, it’s really important to determine what problems you are solving and what value you are actually providing.  If it’s just the same as others on the market then it will become a price war with competitors – which you probably don’t want since it usually is a race to zero.  Ask yourself how can you do something new and innovative that hasn’t been done before, and then you’ll have more freedom on the pricing structure.  McLean Reiter, CEO of hyperlocal startup Knotis, echo’s my thoughts.  He says “Most SMBs have less than $1,000 to spend on marketing, annually, so it needs to be affordable and if possible, monthly, to help them manage their cash flow better. So It all comes back to value – what do they get in exchange for what they are paying for. You need to price yourself according to the market and your overall objective, while also maintaining profitability.

Lastly, it’s truly impossible to determine your exact prices before you go to market and interact with customers.  Smart entrepreneurs engage with their customers early on, ask them about price points and adjust/iterate as they continue forward.  Founders should also use these customer interactions to uncover the hidden needs of customers, which becomes the real value of your product and thus helping to determine a pricing model.  People pay higher prices for things they really need and can’t get elsewhere.  And ultimately, companies should A/B test certain price points (offer variable pricing to random customers through marketing and study the results) to see which convert better and then optimize from there.  

 Pricing can be tricky.  So agree to understand you will not know what your pricing will be out of the gate, you will only learn what it should be over time.

Founders RAW: Find Problems. Create Solutions. Scale Quickly

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As founders sometimes we dive so far into our own product we get lost, making everything more difficult than it needs to be.  It doesn’t have to be that way.

In a recent Founders RAW conversation I sat down with Adam Lieb, founder of gaming social network Duxter.  Early on in the conversation he brought up something I thought was interesting.

Wait…  Not interesting.  Actually, it was genius.

He basically said “find a problem, create a solution, and scale quickly.  It’s that simple.”

Wow, you would think we all figure that out.  But unfortunately we don’t.

What happens is we tend to 1) under-think the problem by not taking the time to talk to the target customer, thus missing the opportunity;  2) over-think the solution we provide and convolute our concept to the point of confusion; or 3) under-think the solution by simply copying another company.

Any way you slice it, the tendency for founders to veer off course is easy and happens often.  I call what Adam said genius because I am now convinced the real geniuses in our world are the ones that can take something complex and turn it into something simple for the masses to grasp.  People part with money only for things they understand.  Everything else, to the laymen, is gibberish.

From what I gathered during my conversation with Adam, he has seemingly nailed it with Duxter.  They do a ton of customer development.  They listen to what those customers are saying.  They then zeroed in on a problem, created a simple solution and then worked to scale it quickly.

Remember founders, it doesn’t have to be that complicated.

You can find more short clips of useful conversations at Founders RAW.

Talk To Enough Successful People And Patterns Emerge

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I am truly grateful for what have the opportunity to do each and every week.

We started Founders RAW a few months ago and are almost to our 10th full conversation with entrepreneurs here in Seattle.   For those who aren’t aware, Founders RAW is a new multimedia property where we showcase videos of casual conversations with other startup founders.  When I realized I was having great conversations with my founder friends at local startup events I decided we need to record this stuff and push it out to others.  Maybe you can learn something as well.

Check it out for yourself >  Founders RAW.

I typically sit down with one person each week, grab a beer and dive deep into what it’s like to start a company.  One of the big things I have taken away thus far is how patterns emerge during these conversations.

Founders RAW behind scenes

Sitting with Simon Crosby during our Founders RAW conversation at the WTIA TechNW event in Seattle.

What do I mean by patterns?

By patterns I mean in how these founders identify the challenges they face and how they dealt with and overcame them.  Not to say all entrepreneurs experience the same things, but as I peer deeper into my conversations and read between the lines, certain characteristics or principles seem to be emerging.

The founders also seem to allude to similar experiences of company near-death and despair – yet they continued forward when all seemed lost.  So yes, no one is immune to the inevitable challenges and tough times ahead.

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Sitting with Carlos Guestrin during our conversation at the WTIA TechNW event in Seattle.

Vision

Each founder I talk with embodies a strong sense of vision – they know where they are going and what they want to accomplish.  Vision is what sets them apart from their competition and allows them to navigate changing waters when their market matures and shifts with the times.  John Cook had a vision of digital media even when he was working  as a reporter for a traditional newspaper.  Amazingly, he pitched them on rolling out a whole new concept involving the web and digital properties, only to be shot down my management.  So he left and started it himself!

We know now who had the vision and who was stuck in the past.

Strength

The founders I have spent time with all have the quality of strength, meaning they are able to endure and deal with the challenges ever-present in entrepreneurship.   Whether it be dealing with co-founder issues, standing up to advisors and investors when their business model is challenged, or when push comes to shove they determine to out innovate the competition.  Adam Lieb, founder of gaming social network Duxter, displayed a strong sense of character as he detailed out his experience raising money from angel investors.  It’s not easy for startup founders to raise money, especially here in Seattle vs down in the Valley.   The lesson I took was investors want to invest in strong, vision oriented founders, not weak leaders who will bend at any sense of difficulty.

Flexibility

Lastly, as market forces change the tech landscape founders must be flexible and change with it.  Advancements in technology are only speeding up and drastically influencing how we build our companies.  Just a handful of years ago AWS/Amazon was nowhere to be seen.  Now, because startups can now host in the cloud using services like AWS and Heroku, startup costs have dropped dramatically and thus have allowed a founder to launch a company in under $5K initial investment.   Bob Crimmins made a huge point regarding this as he spoke about what he is seeing with the TechStars companies he mentors.  “They act quickly, test frequently and iterate often.”  That is why the successful ones are growing – the lowered cost to start and grow has allowed for more/quicker iterations of web products and services.

It’s been fun thus far and I can’t wait to see what happens next.  And I think you should do this too!  No, you don’t have to record your conversations like we are but I think Mark Suster was onto something when he says you should take 50 coffee meetings this next year.

John Cook

Chatting with John Cook of GeekWire during our Founders RAW conversation.

Did We Just Become The United States of Idiocracy?

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This post was originally published on BusinessInsider.com

Recently quitting my job and diving full time into entrepreneurship has allowed me time to step back and think about what is actually going on in the current tech space. It’s interesting times to say the least, but what I am about to say may not be what you expected.

A concerning trend is starting to bubble from within and I feel it is necessary to bring it to light. Reviewing the web’s latest news we see more companies going public, constant talk of Groupon’s massive growth and community destruction, Facebook tempting us (and current employees) with an inevitable IPO, Twitter’s ubiquity becoming every politicians nightmare and Google’s latest and always awkward attempt at the social web.  Seems like just another month in the frothy web market.

But take a close look at this infographic detailing Q1 investment dollars broken down into categories.  It is from an article a few weeks ago on GigaOm.  Click for a larger view.

So let me get this straight: If this information is correct, most of our capital resources and engineering talent are hard at work figuring out how to help people buy massages for 50% off?

Disclosure: my startup – Loyaltize Inc.- was initially focused on local commerce with our first version and it remains to be seen what we build out next but my mind is buzzing with new perspectives as of late. So I am also talking to myself here.

While trying to figure out what this infographic actually means let me just state the obvious – taken on the surface it tells a lot about what we value as a society.  Or what we don’t value.  Namely Health Care, Education, Security, and “all the others.”  This has massive future implications and should be a cause for worry – that is if you are American.

Social Commerce attracted 22% of all investment dollars so far in 2011. Advertising, sales and marketing took home another 14%. and social apps saw 7% of VC money. That is almost 1/2 of startup investment dollars focused on improving how we socialize and spend money! (note: take away the amount invested in the Groupon bubble and the picture changes a bit, but hyperbole is needed here to provoke some deeper thought.)  The amount of money invested in “all other areas” of technology equaled the amount invested in Groupon and the like-clones.  You have got to be kidding me.

No wonder the United States of Idiocracy America is at record levels of consumer and national debt. An old maxim comes to mind: show me where your money goes and I’ll show you what you value. I will also offer another maxim:  Show me today what you are investing in and your future I will show you.

The sad truth is we value selling products over our children’s future well being and education. We value buying stuff right now over investing in a better future. We value gluttony over governance. With this current trend in investments, these “American” values won’t be changing anytime soon. There is no fighting or arguing this statement. It’s all right there.

This whole Groupon thing has gotten out of control. We are falling farther behind the world in education, yet we seem to excel in creating new ways to spend money quicker and eat cupcakes faster. The biggest and most anticipated IPO this year is going to be a site where mass consumers can purchase things at mass discounts? Sometimes I think I am hallucinating that Groupon is the major story of innovation on the web in 2011.

Is this the best we can do Silicon Valley? Chicago? New York or Seattle? Or is this just what investors think will make them the fastest dollar? That is one part ridiculous and another part sad.

This baffles me: Why are the largest issues of the past 4 years and the focus of the current political landscape – things that are paramount to the future of our country – receiving almost no private investment attention?

What about using some brain power and engineering talent to rework the healthcare system, a system which is in more dire straights than our shopping experiences? How about transforming education so children understand the world is full of information and it’s all right at their finger tips? They just need the access, be taught how to use and deploy it to their advantage all the while learning how to critically think. And if I was sitting across from the table from you and asked what is more important: 1) buying something from your mobile phone or 2) your personal security, I think most of you would admittedly choose the latter.

Hundreds, maybe thousands of companies have determined the best use of their time and intelligence is to copy Groupon and put out another daily deals site. Numerous talented engineers are inventing new ways for us to share pictures from our iPhone and scores of startups have been working on new methods of messaging groups of people.

Although all those ideas are interesting in their own way, it is the equivalent of Barry Bonds stepping up to the plate and bunting. Wha? Yeah, I ask myself the same question every day as I read another $5 million was just invested in a Series A round for another picture sharing/messaging iPhone application.

You guys are the best of the best… remember?

The reason I wrote in-depth about technology cycles was because it became clear to me the web will very quickly infiltrate every part of our life.  I cannot wait till the internet of things starts to power everything we use, from our toothbrushes (transmit data to help us maintain our oral health) to our shoes (real time data about how many steps we have taken, informing us when we need new shoes or the current state of our metabolic systems, etc) to the lamp I am using right now (instantly search and learn the history of this exact product to know if it was created Carbon neutral).  I can’t wait for stuff like that.

I am not here to rant, I am here to inspire better.

Founders: odds are you went to Stanford, have an MBA, or you came from a benefited family – and your company slings mass discount group coupons online? Why are you wasting your talent and intelligence?  I believe you are better than this.

And VC’s: that $5 million could have helped an entrepreneur who has a vision to transform your children’s’ future education?  Or maybe help lower your monthly health care costs?  Doesn’t that sound like a better future?

I honestly think these are valid questions to ask in today’s investment and entrepreneurial communities.

I am not saying I disagree with venture capital and the inherent goal of “invest X and receive a 10X return“, I understand the system has to return something and feed itself. I just hope we don’t grind ourselves into the dumbest, fattest, most uneducated, quickest to buy a 50% off dinner using our mobile device from our couch society. Because the path we are currently heading down is indeed pointing us in that direction. I hope we (investors, entrepreneurs, consumers) can see there are a hell of a lot more important areas of our society that need fixing.

I believe true entrepreneurship is about changing the world, not taking advantage of the world.  We need more entrepreneurs like Dr. Samir Qamar.  Please someone… anyone… answer my call and help turn things around. You will be forever referred to as a hero by me down the road.

Image courtesy of Flickr user Roger Smith.

3 Quick Thoughts For The Entrepreneur

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Here are just a few quick thoughts to help you think clearer today.

1.  Most successful founders or entrepreneurs have failed many times before.  Just keep getting up.

2. Most successful businesses come from Blue Ocean Waters, not Red Ocean Waters.  Look for the open waters around you.

3. You are just one decision away from changing your life.  Make it.