Evolution Of A Founder: Up, Down, Up, Down, Up, Down, Sideways, Up, Down…

Much has been written about the founding experience yet I still feel like more needs to be said about the journey.  Since it is unique to all of us, no one article or blog post will be a sufficient summary of what to do and how to do it.

Life is never that easy.

Hilly RoadThe thing is, you will read one post from someone who is on the upswing, just having raised millions of dollars of funding or sold to Facebook and they’re all giddy about life.  Good for them!

Next article you will hear from someone who has just seen their business tank and is reeling in pain and defeat. Bummer for them.  You will start to notice it’s up and down, up, down, up, down and maybe a little sideways sliding in the middle of all of it.

I think the best approach (and the one I am employing) is to make a daily habit of reading other people’s perspectives and experiences, especially as founders and investors.  This helps me achieve and maintain a pulse of how to best navigate the choppy waters ahead.  I don’t pretend to know everything and don’t expect any one person to know it all either.  So, I make it a habit to cast a wide net on my daily learning.  I grab from other founders and entrepreneurs.  I pull from investors and VC’s whom I have an affinity for in their writings.  I gauge how the startup community is doing based on TechCrunch, Pandodaily, GigaOm, TheNextWeb, VentureBeat, BusinessInsider and other media outlets.  I cast a wide net, gather the information, digest it and make it my own.

The beauty of entrepreneurship is that it is unique in circumstances for each one of us.  Some of us have it easier.  Some of us have it harder.  Some were born into money and instantly have financial backers for their projects.  The rest of us – we must feel and find our way through the room with no lights on.

You, as an entrepreneur, need both perspectives.  You need to learn about how to deal with the good, the bad and the ugly if you are going to survive as an entrepreneur.  Om Malik, founder of GigaOm wrote a great piece recently on his journey as a founder.  Below, I have grabbed a few lessons I saw in it I felt were pretty telling:

Lesson Learned: You have to walk before you run. As a founder, you often don’t understand the gulf between your vision of the future and the reality in which a business exists. It is important to find the right balance between the two.

Lesson Learned: Shun consensus. Don’t be shy about making difficult decisions. If you have conviction, zig when everyone is zagging. After all, the worst that can happen is that you fail. If you don’t try, you don’t fail. You don’t fail, you don’t learn. You don’t learn, you will have failed anyway.

Lesson Learned: People who believe in you also want to succeed. They will work better if you encourage them, not micromanage them. Empower them to win.

Expanding on what Om is eluding to, I believe founders don’t really understand what they are getting themselves into and where they are going right out of the gate.  And that is OK, even expected.  At the time of founding (the)Facebook, how was Mark Zuckerberg supposed to know he was going to create one the largest web service in the world, reaching over 1 billion people (and still growing) making him a billionaire.

No way he could have known that.  If he knew that it would have scared him so much he probably wouldn’t have continued.

Yet he walked before he ran.  He knew he needed to get other smart people around him to help build out his vision.  He started by just focusing on Harvard.  Then Yale.  Then the Ivy League.   Then other universities.  Then high schools.  Then everyone.  Walking.  Before.  Running.

At times, it’s almost easier for founders to have too large of vision and be blinded by what they see.  They end up frozen by the blindness and not even focusing on the right foot being placed in front of the left.  If you didn’t catch it, that’s all that is required for walking.

Right, Left, right, left….

If you don’t try, you don’t fail. You don’t fail, you don’t learn. You don’t learn, you will have failed anyway.  

A truer sentence has never been written.  Failing, or learning, is the essence of entrepreneurship and must be embraced by anyone setting out on the journey.   Success is only a result of entrepreneurship.  I think we get those two facts confused as we blindly pursue our ventures, pushing forward with all our might and not taking into account what we are learning in the process.

I am lightyears ahead of where I was when I started Seconds just 15 months ago.  Yet, if I am not careful I will take a bianary view of my last 15 months and see there has not been a huge round of funding raised, acquisition to Google or IPO on the NASDAQ.

Does that mean I failed?  Hell no.

But that is what the media tries to tell us when they write posts saying “XYZ shuts down!”  StartupX fails to raise money, CEO quits

I urge you to dive deeper into the details when you read that stuff, since they are playing the age old game of news reporting. If you dive further into the story, researching the founders and finding their blogs, you will learn a lot more about the journey and probably the real reason why they chose to go a different direction.  Although lack of resources lead to dying companies, those founders will teach you more about how to start and grow a company than any “XYZ startup raises $10m series A” funding article will ever teach you.

Study the ups and the downs and figure out how others navigated the choppy waters of entrepreneurship.  Cast a wide net and allow all perspectives to sink in to your subconscious so you can make it your own.  No one person or blog post can tell you how it is and what to do.  It takes years to learn all there is to this game.

Actually you will never learn it all.  Just enough to be dangerous.

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The Evolution Of Digital Payments Says Anything Made Of Matter Is Toast

The payments landscape is changing almost daily and the overall industry is truly one of the most exciting business studies around.    Payments?  Exciting you say?  Yes, well if you don’t’ think $1 trillion up for grabs in the next 5 years is something to get excited about I would check your pulse.

As an natural observer I tend to look under the hood whenever something unusual is going on, since whenever peculiarity is present change happens.   Curiosity is actually what drove me to start Seconds, my mobile payments company.  It all started with observing how consumers interacted with merchants, repeat interactions in particular.  Isn’t it funny how we go to the same coffee shops, restaurants, retail stores, gas stations, and other everyday activities each day.  In fact, we do this so much the person at the counter who “swipes” your card actually recognizes you and may even know your name.

Although loyalty started my entrepreneurial journey, it did not end there.  I started to think a bit deeper about what usually happens each time you go to the coffee shops, restaurants, retail stores, or gas stations?  You got it – payment!  There it is, the one data point which can trace commercial actions, habits, relationships and trends.  Imagine being able to aggregate and see all those data points in your own life.  Things like where you spend your money, how much, when, buying what and how often.  Now imagine it on a merchant wide level.  How about a worldwide level?  I think you get the gist of where we are going.

This thinking brought me to Seconds, which is the fastest way to transact and interact with merchants.  I believe if you speed up a traditionally laborious process, make it available to the widest range of people possible and emancipate the data to be used in adding value to the system, great things will happen.

During this study it came to my attention how much the payment experience has evolved, and how much more it will change.   Below is a quick discussion on where we have come from and where we are going with digital payments.  You will notice this discussion is all about digital payments, since cash and coin have always been available and will still be around for quite some time.   The current focus is on the digital payment experience and the changes we should expect.

Payments 1.0

When plastic cards came into the market the obvious question became “how do we use these things?”  Naturally, swipe terminals popped up in retail locations everywhere, in addition to such places as gas stations and movie theatres.  Major players like Verifone, WorldPay and others transact billions of dollars each day through proprietary devices which translates information from your plastic card into electronic data and ultimately ending in a transaction.

Important to note is the placement and positioning of the terminal, which can be found on the specific merchant’s counter or apparatus.  Why is this important?  Without the terminal, I cannot pay.  No terminal, no card, no soup for you!  This gave credit card companies and the electronic payments companies a leg up in the economic chain.  But innovation has no master and things quickly change.

Payments 1.5

We are currently seeing new methods of swipe transactions involving the mobile device hit the mass market.  These swipe solutions enable a mobile phone or tablet to become, in essence, the terminal itself.  The terminal has jumped off the merchant’s counter and into their hands with products like Square or PayPal empowering anyone to become a merchant.  All anyone needs is a mobile device, the app, and the swipe dongle attached to the device.  They are now ready to take a card payment.

As amazing as these solutions may be I argue they don’t truly change the payments space, they only augment it.  They allow us to use our credit cards at more places – which depending on who you are that could be good or bad – yet it’s still a credit card.  Some people call this mobile payments but it’s really just a mobile terminal. The requirements of products and devices can be cumbersome and troublesome if lost.  Forward progress?  For sure!  But not truly an innovative new movement which will have landscape shifting effects.

Payments 2.0

True innovation upsets the masses and ultimately establishes a new norm, with new rules and new players.  Virtual transactions – payments made without having to swipe, show or display anything – will transform the payments landscape like no one has ever seen before.  Since people carry their mobile devices with them everywhere, it makes the most sense to streamline transactions through the computer in their hands.  True authentic mobile payments do not require any hardware outside of the mobile device.  With cloud computing and offsite secure services holding payment credentials for every consumer, people now have an ability to make simple, quick and easy mobile payments ANYWHERE.  As the consumer, the terminal is now in your hands.

Platform agnostic solutions will enable any mobile device holder to transact and make a purchase with any merchant or brand connected to the platform.  It shouldn’t require me to have an iPhone, Android or any other specific device.  I don’t’ think “sorry, we only accept iPhones” should replace “sorry, we don’t accept American Express.”  Everyone is created equal and every dollar bill is $1.00, no matter who is holding it.  This principle  should remain the same as we evolve into a purely digital society and work through determining the appropriate payment methods.

And as payments become virtual, platforms such as Dwolla start to make a lot more sense.  If you were a merchant looking to accept mobile payments, which would fee you rather pay – a flat 25 cents or between 2-3% of a transaction?  It’s no contest, Dwolla’s fee structure could put credit card companies directly out of business, unless they bring down their fees to a competitive level.

I have said this before but it bears repeating: what if SMS messaging was not only for communications?  What if, as a very efficient information transport  mechanism organically built into billions of mobile devices around the world, it was used for payments and transactions?  Seconds drives secure payments through text messages, allowing someone to quickly make a instant and automatic transaction by simply texting a keyword to a merchant.   Conversely, a merchant can ping your mobile phone with a message to complete the transaction by simply responding with a specific prompt.  How did they know to do that?  Your phone number has now become your payment credential, and interestingly enough they can instantly reach you via short message from pretty much anywhere in the world.  Imagine how things will change when we all can interact and transact with any brand in the world in Seconds?

I am not sure how much quicker we can make things but a second is pretty damn quick.

@jnickhughes

Like It Or Not, Here’s How Your Startup Proves Evolution (Controversial)

It’s crazy to think a simple idea of starting a company can prove the controversial concept of evolution.  Yet, like it or not here’s how it does.

Before I go in depth on the idea of evolution in the business world, my disclaimer:

This may be controversial so let’s put aside our beliefs and perspectives on faith or religion and speak only on the concept of evolution, as in the Darwin perspective as we know it.  Ya know, natural selection and all associated phenomena.  I am not an expert on the subject and will not pretend to be here.  I only want to bring  upthe concept of evolution into the context of entrepreneurship and building successful companies.  

An interesting observation is how most world changing technologies or ideas actually start as thoughts and go through a transformation into ideas, onto sketches on napkins, to prototypes, to working models, and onto businesses.  Although almost too obvious to note, all things must start with a thought.  A spark of genius.  An idea.

*ding*

That idea, brilliant or stupid, is just the beginning of a (un)predictable path towards life and eventual death.  If in the right place at the right time, and the right decisions are made to take advantage of opportunities, the idea will transform into something more visceral and experience an extended life.  If not, most likely the idea will die a quick death into obscurity.

This is why you hear “ideas are everywhere” and “execution is everything”.  I can just hear Darwin whisper similar words in the same vein.  In his context, execution would have referred to “the strong” or “genetically enhanced”.  Not to get sexual, but if a highly attractive and sexually active member of a species “executed” properly, they would have passed on their genes to influence the gene pool and the evolution of their species.

Your startup must mirror the same as the highly attractive and sexually active member to survive.  What do I mean?  You need to be attractive to customers, users, investors, media and potential employees to succeed.  If not, you will never be discovered and will eventually die.  Attractiveness can come in many forms but the most obvious one is your unique idea.  Does it make sense?  Is it something most people would be attracted to and want to use?  Does it elicit emotions of excitement or intrigue?  Is it unique enough to not be lost in the clutter of all the other same “species”.

Also required to be attractive is the core members of the founding team.  Is there expertise on the market subject?  Are there proven individuals who get results, or more referred to as JFDI?  Are they fun to be around?  Do they attract people to them or do they drive others away?  This is huge, since any successful startup finds ways to attract employees, investors, users and media attention.

That is why you hear investors say “we invest in people, not ideas.”

Your start up must aggressively mate as well.  Wha??  Yes, I said your company must be promiscuous and interact with other companies if it wants to be successful.  This is how you integrate within the larger framework of the ecosystem and spread your gene pool for future generations.  Facebook is the best example of this with their open graph and the like buttons found all over millions of websites.  Their tentacles are everywhere and indeed they have solidified their gene pool in our world for decades to come.  Do other companies find your startup attractive enough to mate?

How do I know all this and why the heck am I thinking about evolution and your startup having sex with another startup?

We once were the ugly duckling but quickly evolved into a better suited mammal geared to mate with the royalty of the land.  My company Seconds, was originally named Order SM and intended to be a mobile ordering startup for the food industry.  (All S & M jokes aside, the name was supposed to be meant for SMS ordering).   It became clear the name and the basic concept needed to evolve if we were going to continue.  Yet this was not our intention initially, it naturally happened as others started to interact on the platform and suggest use cases outside of our original plan.

Last fall we released out beta product and our initial customers provided enough feedback to realize we were onto something A LOT BIGGER than we originally planned.  We realized ordering was a form of communication – just one aspect of the iteration between merchant and customer.  Questions were another part of the relationship.  Requests and thank you follow ups from merchants were also a part of natural communications.  And the biggie – transactions – are at the very core of the relationship between customers and merchants.

It was at this point we decided to change the name and the fundamental value proposition.  Seconds – quick communications and mobile commerce.  Helping merchants and customers more easily interact and transact.  We are providing consumers a unique mobile commerce identity that will span the entire globe.  And we are giving merchants the ability to identify those most important to their business.

We realized the world was mutating right before our eyes, but one “species” was going to be left behind unless we did something about it.  More than 8 trillion text messages were sent around the world last year, yet none to local businesses or merchants.  It’s crazy to think we can text our friends and family with the widely popular communication medium, yet you or I cannot communicate via text with our favorite local coffee shop or the 5 star resort we intend to visit next week.  We are changing that, and  have quickly found ourselves in talks with everything from emerging startups to multinational, multibillion companies.

Just as Darwin found “one species does change into another” as he looked at Galápagos mockingbirds from different islands, startups must go through phases of transformation if they are to succeed.

The idea that your initial idea – in it’s most basic genetic form – will be required to mutate into a different species for survival has to be understood by founders and investors.  This is more generally called the Pivot, and Lean Startup proponents such as Eric Ries have graciously helped our community unearth one of the most powerful phenomenons to hit the business culture to date.

I think that is enough talk on companies having sex for today.

@jnickhughes