Friday, October 7, 2011

Order of Magnitude is 10x: tasks change at each step

Ash Maurya ( @ashmaurya ) has posted a very interesing Post about the 10x Product Launch. 

This captures some of the key issues around building a business. As you progress through the stages of different numbers of customers, you shift and need to use different tools and different focuses. When you are just starting out, you have zero (0) customers. At this point, your goal is to get one (1) customer. When you have one (1) customer, your goal is to get to ten (10). The task and process of getting the first customer is very different and more personal than getting the 10th. By the time you get to the 100th customer, you have enough data and enough history to be able to automate your processes successfully. It is always a bad idea to automate processes which you can not accomplish by hand for the first few cases. 

For your first 50 customers, you should definately be working to talk to them in person. This does not mean you can't use surveys or email or ads to search for and find potential customers. But it does mean that you should get out of the building and talk face to face to them early on in the process. As you begin to see the patterns, you can then focus on the area where you are most likely to make traction.

Thursday, June 23, 2011

Startup Weekend Around the World , What would it look like.

As we are coming up on the Bellingham Startup Weekend on June 24-26, I was looking at some of the other cities engaging in Startup Weekend at the same time

It is heartening to see all of these different cities all engaging in the process. 

Seeing all these cities doing it on the same day makes me wonder about the process of doing a  multi-city team that would engage in the process where there was someone working on the project 24x3 , around the  clock.

What tools would you need to enable this process. Would the current use of google docs + hosting + a chat channel work?  What are the tools that you would use for a startup weekend sprint?  ( ) 

At lot of interesting work happens at the coffee table and at the food table as people get to know each other and work on corners of the project. What would be the remote version of that? 

Would using skype be enough of a tool to connect people between cities?

How would remote teams end up finding each other and forming?

Would you need to pre-seed the conversation by having someone at each event already part of the proto-team that did local recruiting?

How would it be different than using oDesk to do part of the project?

I look forward to learning about a team that actually does this.

Thursday, May 26, 2011

Should I walk the outside Funding Pathway?

Earlier today, I saw a question that essentially boiled down to:

"I see this great opportunity, it takes more resources than I have, should I put it on the credit card, get a loan , ask an Angel or get a VC?"

I had many thoughts as I read this. Let me see if I can put them into any type of order:

First, being in the midwest is not a problem for accessing capital. There are several Angel networks and more growing all the time. Rain Source Capital is based in the midwest and supports several angel groups across the country

You can use Angel Soft as a way to locate Angel Groups -, so finding Angels is not hard at the initial stages.

However. Getting loans, getting Angel money and getting VC money are all very different animals for very different reasons. They look like they are the same (getting money), but they are not. VC money is other peoples money, in large chunks with specific expectations. Angel Money, if it is to be really useful comes with expertise, attention and introductions into the industries. There are appropriate times for each of these and there are many more times when you should not take outside funding.

The best place to get funding is from your customer. If you have figured out how to get to the right place with the customer base, then you will have flow and you can use outside money to grow faster. If you spend outside money on operations instead of growth enabling changes, then you will have wasted the opportunity. Most people have a hard time seeing the difference between operations and growth enabling changes.

You have the opportunity to build connections and relationships with Angels before you ask them for money. If you find the right Angels, you can have conversations that will transform how you approach your ideas even before you get to the point of asking for money. The angels would much rather have a deep sense of who you are and where you are going and where you have been, than to have a quick pitch and have to make a bunch of guesses.

I sense that you have a new direction. This suggests that you are about to pivot. As such, you are still in the discovery phase of things. And you are still trying to validate the idea. And this suggests you can be focusing on testing and experimenting to know if this idea really has legs. If it does, you should be able to get orders booked. If you have orders booked and you have a product that people want, you will not need a lot of outside capital at this stage.

Build the relationships now with the funding agencies (banks, angels, advisors) , but save the request for outside money until you have a backlog of orders.

Wednesday, March 23, 2011

Twitter Pitch and the Clarity it brings

As I am doing the planning and preparation work for a Pitch Clinic, I am reminded of an April Fool Post by Brad Feld @bfeld had on April 1st last year - ( shifting-to-twitter-for-deal-evaluation ) 

One of the biggest issues in the startup process is developing clarity. Being able to get to the point in a very effective way. Often my ideas are crystal clear to me, but they are all dreamy in some parts and all too detailed in other parts, in a way that makes it very hard to communicate.  When you spend the time to go through and think out enough of the process so that you can get a clean and crisp communication of your idea, you have often done some of the core work that needed to be done to move the business idea forward.

While people suggest creating an elevator pitch, there is a certain poetic quality to writing a business idea in 140 characters. If you remember to put a URL in the post, it probably should be 120 characters. 

If you can create  this level of clarity, where the twitter post captures the essence of your business idea, you have gone a long way to being able to communicate your project. With that comes a significant momentum that will move you forward.