Startup Growth Requires Making Your Own Luck

Great things don’t just appear out of thin air.   You have to nurture and cultivate them over time into what you envision as your dream company.

That, my friends, is the secret to startup success.

Yes, you have to build a solid product.  You will need to attract great technical talent.  You also need to have enough user engagement and financial capital so you don’t end up in Startup Death Valley.  But even if you have all that in your favor, luck is still required if you want to succeed.

Luck gives you the breaks you desperately need to go from a no-name into household name.

Seconds has been given an amazing opportunity to drive payments for a nationwide holiday event.  I will provide more detail as the event nears but suffice it to say this lucky opportunity is only possible because of what we have done over the past year.

It definitely didn’t appear out of thin air.  Day by day over the past year we made it happen.

Launch early

We launched the earliest version of Seconds about a year ago, under a different name and clearly aimed at a different customer segment.  The product was buggy as hell and to be honest, a bit embarrassing.  But that’s the point of an early release, isn’t it?  It does you no good to have an idea without a product others can touch, taste and see.  We knew we needed to get something into end-customers hands ASAP if we were going to receive any feedback – feedback that actually led to our next iteration.  I consider it lucky we were able to have a team willing to quickly put out a buggy product and gain much needed feedback.  In fact, we created that luck by committing to releasing immediately and listen to the feedback.

Speak loudly

Not surprising, I like to write.   Also not surprising, I like to write about Seconds and payments in general, on this blog as well as others more well known.   For a number of reasons, I believe this is why we are in the position we are in now given we have only been around 12 months.

If you search Seconds, we come up fourth, above the fold, right below a Wikipedia entry for the time interval and a few links to a movie also titled Seconds.   This is huge, as early feedback on the name was something akin to “great name, but how are you going to be found in Search?  Pretty tough huh?”  Well, that’s where writing comes in…. the more links to a website the more “relevant and valuable” it is in the search index algorithm.   I have no idea how many links are pointing to Seconds but it’s quite a few, based on how many articles I have written as well as how many others have written about Seconds.  This tactic also has helped Seconds gain media attention a lot earlier than other startups in the same situation.  At least we had something written about us and our vision the media could go off of, even if it’s from the founding team.

Founders need to speak loudly about what they are doing.  If you don’t, why should the media?  Getting your word out and better positioning your product are a few ways to create your own luck.

Spray widely

Discovering product market fit is probably the most challenging task for an early stage startup.  It’s one thing to sit at the white board and determine your products are meant for __(whatever)___ market; it’s a whole other ballgame once you get outside the office and try to grow a customer base in that market.  Not so easy…

Seconds is a payments system, a mobile focused one at that.  Amazingly, almost every industry and market vertical handles payments in one way or anther.  This poses both a great opportunity and a large problem.  The fact that our larger market is HUGE is quite the opportunity.  The challenge is trying to serve everyone right out of the gate, which is pretty much impossible.  So we spent the last 8 or 9 months spraying our message quite wide, gaining attention from a number of customer bases.  Some turned out well.  Some did not.  But the incredible thing is we have continued to learn from each and every customer discovery conversation, resulting in refinement of our pitch, company positioning and – at times – the very essence of our product.  Ultimately, this practice led to a few very promising markets ready and willing to run with Seconds.

We refused to be boxed too narrow in the beginning, and it has paid off tremendously.  A year ago, we were a text ordering system for local restaurants, struggling to fit our solution to their non-obvious problems.  This winter, possibly millions of people will be using Seconds to make donations to an important cause with a few quick swipes of their finger.  Everyone wants their payment experience be easier and more enjoyable, especially when making a quick donation.

Are we lucky?  I would say yes.  Did we create this luck?  You bet. You can’t sit on your butt and think the world will come to you.  If you want the world, you need to go out and get it.

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Startup Death Valley: What It Is And How To Get Out

I’m sure a large number of teams reading Techcrunch or other tech blogs right now are in the same situation my company found itself recently.  It probably goes something like this: you have a startup, a product, users and a maybe little revenue.  You are growing month over month but really you aren’t where you want to be.

Most likely you are answering questions with reflexive responses such as “well, we are just testing some assumptions right now” or “we’re heading in the right direction, just need a few more engineers on the team.”  Or, how about this one, “oh, we’re still in stealth, you could call it alpha…”

Give me a break.  Quit lying to yourself.

To put it bluntly, you are in Startup Death Valley.  And you need to get out as soon as possible.  If not, your startup will certainly die.  It might make you feel better knowing Death Valley is where most startups end up – not quite done but definitely not making anything happen.  If you do feel better thinking you are not alone, you are most certainly destined to fail.  Finding yourself in Death Valley is scary and should result in only one question: “how long until we’re dead?”


You and I know it wasn’t always this way.  Not too long ago your team was driving forward toward a goal, excited as hell to be at the office until midnight or later hammering away to the launch your latest concept.  And you absolutely knew, once you launched, millions of users were going to flock.  Revenues were supposed to grow.  Investors were most definitely going to call you back.

And then… Crickets.

Now, it’s become a lot more difficult to get out of bed.  You’ve noticed it’s not as exciting to load up the email or go into the office, and definitely not as fun to field questions about your startup.  Reading all the media out there you just wish you could be on the other side, reaching milestones and attracting investment dollars at record levels.  But you’re not.  You get up each day wishing things would be different instead of actually doing anything about it.  In a word, you are complacent.

If this is how you are feeling, you are currently in Death Valley and have little time left.   So, how do those select few companies – the ones gaining all the attention and money – get out (or stay out) of Death Valley?

First and foremost, they make their own luck.  They pick up the dice and roll them again – quickly.  They get out by putting it all on the line and betting the company, just as we did recently.  Oddly, when faced with inadequate growth too many startups just keep heading blindly toward danger only to drive right off the cliff.   This is, quite literally, insane.  They are not self aware enough to sense what needs to change, when, and how fast.  The ability to sense market shifts and adjust accordingly is an incredible skill that can be found in all of the successful founders, especially ones the ones you don’t find in Death Valley.

Without going into detail about my startup, here’s the playbook we just used to redesign and deploy a brand new product within a month’s time, reviving our company and paving the way for a whole new market opportunity.  If you are a founder or early employee of a stagnant startup, maybe this playbook will help you too.

Make a commitment to change
The first step is to determine what you are going to do and how you will go about it.  To get clear on those issues, you need to take an account of what you have or have not accomplished up to this point.  This requires a long and painful look in the mirror by the founding team, revealing truths that will hopefully save the company.

Has your vision changed since the last big development?  What has the larger market and your existing user base told you since your last product release?  What features are engaging users on the existing product?  What is not engaging and not being used.  Point blank, what’s not working?   What assumptions were proven true and what didn’t pan out?

Then it’s pretty simple – keep what is working and throw away what doesn’t.  Really, just scrap it.  In our experience it was smarter to cut the fat and trim features rather than just add new ones we thought might work.  For a number of reasons we actually decided to rebuild rather than make additions to existing codebase.  Contrary to popular belief, this is more challenging than it sounds.  Why? Inherently, humans tend to be scared and freeze when making drastic changes on things they spent long periods of time working on.  It all comes down to our natural fear of change.  This is no truer as an employee of a Big Co. than as it is as a startup team reviewing their V1.0 product.  The reason is we fear change.  Yet, this is exactly where we found ourselves with our product – growing but not growing very fast. Ultimately, we decided we weren’t scared of the consequences since we knew if we did nothing, nothing would change.  Actually, that’s not true.  It would have been the end of the line since “good enough” is actually not good enough in the big leagues.

State it VERY publicly
Almost nothing gets done until there’s a deadline.  Although dates set internally are the start of it, they are only as good as your team’s integrity.  Unfortunately, it’s way too easy to fudge on commitments when they are loosely agreed upon between a few team members in a private meeting. Fully committing to a new product release required establishing a public event and trying it to our new product.  To make it even more drastic of a commitment, we also stated this publicly and promised a large group of people they would be using our system, the very product that wasn’t yet built. This was really the only way to move the needle.  Similar to launch parties, larger public commitments set solid deadlines teams must respect.  In fact, DEADline is a great word since that is what you will be if, in fact, you don’t meet it.

Do whatever it takes to deliver
Staying at the office until wee hours of the morning, having intense discussions of where buttons and other little details should be placed, and not spending time with friends or family because a deadline is fast approaching, these are all signs you are doing whatever it takes to make things happen.

The biggest sign: you are more afraid of not delivering and failing in public than anything else in the moment.

We found ourselves performing at levels we hadn’t reached in quite some time, if ever.  The last few weeks were a blur, and we didn’t sleep at all the night before our release, not because we were excited like Christmas Eve, but because we HAD to deliver.  Although not amusing at the time, the moment media was suppose to go live (6am EST) announcing our latest release, our site was actually down.  How fun!  Even more challenging, throughout the entire launch day our system was incredibly buggy due to a DNS change and other small issues.  Yet I was as proud as any startup CEO could be watching our entire team set aside all other distractions, doing whatever it takes to push out a successful new release.

The lesson here is simple – without a predetermined public commitment connected to a larger event we would never have pushed ourselves as hard as we did.  We would have stayed in Death Valley, remaining complacent like the other 90% of startups out there.   We smartly made a commitment others outside our organization could hold us accountable and expect us to deliver on.   It was very risky.

Yet, through the very late nights and stressful moments an awesome feeling started to emerge:  Damn right, we will most definitely make this happen.

image via Flickr user Michael Ransburg.

Lift Off… In Just A Few Seconds

…6… 5….4….3…2…1…

WE HAVE LIFT OFF.

This is exactly what I am feeling right now as we prepare for our latest release.  And it’s a huge release.  In fact, it’s a company defining release and will launch us into brand new territory.  It involves a Seconds launch event Friday night in Seattle, with hundreds in attendance.  It involves national press coverage.  It has involved weeks of (almost) all-nighters from the team – blood, sweat and tears.

It, by all regards, has been the most challenging but exciting time of each one of our lives.

It also involves a hell of a lot of dev work on the product.  We basically rebuilt Seconds from the ground up, keeping what worked and threw away the unnecessary.  At the time, I didn’t think we could make a more streamlined payment experience, but we did!  This could be taken as blasphemy, but the Seconds payment experience is unlike any other.

If you are are a frequent reader you know we have experienced growth each and every month yet we were struggling to onboard new customers/find the right market.  Based on that situation, during this summer we decided it was time to expand what was working and remove what wasn’t.

If it’s on or after Sep 28th, check Seconds out now!

Here’s a run down of our changes.

1.  We stripped away much of the old merchant experience, it was too clunky and confusing and have drastically redesigned the experience from the ground up.  Seconds is truly a new age payment system, built mobile first. 

2.  We realized the payment experience must be available to everyone (device agnostic), available and functional anywhere the consumer finds themself (proximity agnostic) and merge together communication and transaction for a quick but complete commerce experience.

3.  We created a clean interface for both individual and merchant accounts, easily usable and quicker to complete a task.  The product is even leaner than before and in my opinion, way more potent.

4.  The Seconds experience starts with a simple search bar asking you “who do you want to pay?”  You can make payments by searching name, email, twitter @username, phone number and possibly location, if they are not in our system there will be an option to send a quick invite.  If you find them, you then enter an amount and click pay.  That’s it.  The new interface is an interesting direction we are leaning towards…. The merging of Search and Payments.  It’ll be exciting to see how this will be used and where it will go from here, especially with merchant’s ability to create keywords. ☺

5.  We reimagined what “accepting payments” meant, and have now placed the opportunity one click away from a general Seconds user.  Basically, anyone can instantly upgrade to a “merchant account” if they want.  The cool thing is merchants are users by default, so they can make payments as well as accept them.

6.  We split payment acceptance in two options: a web only account (people are only able to make payments to that account via the web) and a text enabled account (involving both the web and messages sent via text/keyword based payments).  Web only is free.  Text enabled is $5 per month.  All merchants are charged $.50 per transaction through Seconds.  We believe the free monthly option will be a big winner and help increase merchant account creation.

7.  Creating a merchant account and accepting credit card payments can happen in just a few minutes – all on a mobile device if necessary.  It’s truly an amazing experience.  This was not the case just a week or so ago – a recent discovery of a new payments partner is going to open doors previously unimaginable.

8.  Based on these changes our margins are becoming even more awesome.  We enhanced how we are facilitating credit card payments and digital cash payments to create not only a better merchant onboarding but a better overall business.  This is huge and will allow for a nice cashflow in the short term as we get going.

9.  We have decided to focus Seconds on the college/University/Greeklife student market.  We have been told over and over how desperate they are for a sleek payment system where mobile users can quickly make a payment on the fly when they need to.  There is also strong interest in non-profits and donation collections for the same experience.  These two markets have one big thing in common: the payment is the product, in the sense there’s typically no physical product to be served.  This is where we’ll start and should get some strong growth from there.

Below is just a few of the events on our calendar:

Sep 28th – Media Launch of new Seconds payment system

There will be solid media coverage of the launch of our new system.  Sky’s the limit.

Sep 28th – Startup Crawl Fights Poverty

I have organized an event for the startup Seattle community and which will double as a launch party.  It will be a great night, should grab some exposure for Seconds and you are definitely invited if you are in Seattle.   https://soentrepreneurial.com/2012/09/18/the-seattle-startup-crawl-fights-poverty-september-28th-at-5pm-rsvp-now/.

Oct 1st – 3rd. – DEMO Conference

We will be down in SF for the DEMO conference, the trip we won during the SURF Incubator pitch competition.  It will be fun and we’ll be working on meetings and connecting with people there.  If you are in SF, please connect with me.  @jnickhughes.

Oct 16th – 18th –  TwilioCon

Twilio (the platform we use for communications) has invited Seconds to be a part of the event, one of a select group of startups to demo/highlighted during the event.  TwilioCon will be an awesome time for Seconds to get some solid attention from other startups, users, investors and media.

Soon – Dwolla partnernership

Dwolla will be making some big announcements and they have asked us to be associated with the event.  More on this soon!

The Future of Mobile Payments Will Be ‘Artificial Intelligence’

This is a section taken from a recent article I wrote on PayPal’s x.com network.  

How we interact with computers—and to an extent the rest of the world—is changing. As you know, we no longer log on or are required to go to a computer to get online. We now carry computers with us all day, every day; we are always connected.

We do not have to reidentify ourselves and re-enter our credentials each time we go online. And with the inception of Siri, along with other crude artificial intelligence (AI) interfaces, it is now apparent that we will leverage new blends of AI and intelligent data systems integrated within our mobile devices to create very personal consumer experiences.

These technologies and more will drastically change our purchasing experiences. I see a future where the specific mobile device you carry doesn’t have any bearing on how you make a mobile payment. Take simple text, for example. It is fair to say that text messaging has taken over as the most common form of digital communication on the planet, with 6 billion capable devices and more than 8 trillion messages sent in 2011.

But what if SMS and messaging technologies were not only created for basic communications, but for commerce as well? Imagine being able to say things like “send a message to the coffee shop telling them I will be there in 10 minutes and I will have the usual,” and by the time you get there, your correct drink is sitting on the counter, already paid for.

This is not too far off. Actually, the technical requirements are manageable, and the right pieces just need to be put in the right places. The next few years will bring a fundamental shift in the economy as merchants and business adopt this popular method of communication and use it as a new form of commerce. It is already being accomplished through simple text, voice, and gestures, thanks to natural language processing within your mobile device.

Personalization will also become prevalent and is another key component in the future of payments. Today, most merchants still require voice calls to communicate with them; when it comes time to transact, the customer must actually be present with cash or credit card in hand. Think about how far brick-and-mortar retailers need to go to catch up with the e-commerce world. Even today, when I call a local merchant I’m asked to identify myself and to read my payment information (aloud) if I want to make a purchase.

How secure is that?

Interestingly, this lack of personalization does not change when I am present. As I walk in the door, the merchant has no idea who I am, how many times I have visited that location and what my purchase history there might look like. In a word, these retailers are ignorant. They lack the necessary and vital information to not only improve their operations but also make my customer experience much, much better. And why do I still need to stand in a line for them to swipe my card and write my signature before I leave?

A whole new world of possibilities opens up when personalized connections between customer and merchant are made available through mobile technologies and artificial intelligence.  Customers will be able to quickly find and interact with a merchant, requesting more information or making purchases when and where they feel most compelled. Since identification and payment credentials will have already been verified and stored securely in the cloud, transactions then become frictionless.  Merchants are not only afforded a more efficient method of communications and transactions, but also a unique perspective on each customer and a clearer picture of their entire customer base—in real time.

Visit x.com/devzone to read the whole article.

Lesson: Be Careful With Cofounders, You Haven’t Seen Their True Colors Yet

While doing some research for a different post I came across this golden nugget from Paul Graham. His post was titled What startups are really like – and it’s the truth. In it he describes how he sent all his founders an email asking what surprised them about starting a startup. Their number 1 response was around cofounders. Boy can I relate!

1. Be Careful with Cofounders

This was the surprise mentioned by the most founders. There were two types of responses: that you have to be careful who you pick as a cofounder, and that you have to work hard to maintain your relationship.

What people wished they’d paid more attention to when choosing cofounders was character and commitment, not ability. This was particularly true with startups that failed. The lesson: don’t pick cofounders who will flake.

Here’s a typical response:

You haven’t seen someone’s true colors unless you’ve worked with them on a startup.

The reason character is so important is that it’s tested more severely than in most other situations. One founder said explicitly that the relationship between founders was more important than ability:

I would rather cofound a startup with a friend than a stranger with higher output. Startups are so hard and emotional that the bonds and emotional and social support that come with friendship outweigh the extra output lost.

We learned this lesson a long time ago. If you look at the YC application, there are more questions about the commitment and relationship of the founders than their ability.

Founders of successful startups talked less about choosing cofounders and more about how hard they worked to maintain their relationship.

One thing that surprised me is how the relationship of startup founders goes from a friendship to a marriage. My relationship with my cofounder went from just being friends to seeing each other all the time, fretting over the finances and cleaning up shit. And the startup was our baby. I summed it up once like this: “It’s like we’re married, but we’re not fucking.”

Several people used that word “married.” It’s a far more intense relationship than you usually see between coworkers—partly because the stresses are so much greater, and partly because at first the founders are the whole company. So this relationship has to be built of top quality materials and carefully maintained. It’s the basis of everything.

This hit home given the fact that I am going through this issue currently. I have never been married but it really does feel like a divorce. Respecting the unnamed (and by no means is this a personal attack), I can only tell you how disappointed I am in this individual. And maybe I am just disappointed in the overall outcome but I can’t help but be bothered at how it ended, with one of us making a B-line for the door once it was obvious this was actually going to take some hard work. For the sake of our “kids” it’s a good thing I am still around to help them grow and mature.

Let this be a lesson to all entrepreneurs and silicon valley wannabe founders out there:

Life is tough and unfair.

Startups are a hell of a lot tougher and more unfair.

Most ALL startups and iPhone applications DON’T GO VIRAL overnight. They take a shit ton of work and thus require a shit ton of commitment.

And know this: the founder who stuck it out and eventually grew a company to be large and successful is more wise, more battle tested and way more respected in the community than an overnight success who usually had no idea why he was successful. That person will fail to repeat it when he tries again because as an overnight viral success you don’t understand what worked and what didn’t. It just happens.

The time-tested individual builds lifelong skills along with a treasure trove of wisdom he can then apply to any other endeavor with a high potential of success. So if you are a founder I would suggest you swallow the pill and make long term commitments your goal.

Please, give success a fighting chance.