I’ve noticed lately that it really isn’t that often that I’m either blown away with a business plan or the execution of one. Most of the time, it’s because they miss the mark for me on the three pillars by which I try to adhere myself. They are:
1) Know your angle.
2) Don’t think you’re too smart
3) Execution is more important than features
A few words about knowing your angle. Firstly, your business angle doesn’t have to be obvious but it does have to be simple. The markets are pretty efficient so most of the time an “angle” wasn’t obvious until after the fact. It’s really just another way of saying “now why didn’t I think of that?” Salesforce.com had a great angle. In a nutshell it was ‘NO SOFTWARE’. Quite literally that was their tagline but they were really just saying that bloated, expensive desktop CRM systems were not the future. Web-based, subscription based CRM software was the future. Siebel and Oracle were just too entrenched in their ways to respond effectively even to this very simple marketing angle. For the guys at 37 Signals (who recently received investment from Amazon’s Jeff Bezos) it was ’simpler software with fewer features’. Turns out people don’t like having to work very hard to learn new software and Basecamp let you capture some value and confidence quickly. For our latest company, Imagekind the angle is ‘use the web to buy and sell original artwork’. Pretty simple.
A few words about thinking you’re too smart. Don’t do it. Let me give a very real example in my former employer, RealNetworks. How many people know that the guy who currently runs (and was instrumental in the development of) the iPod division worked at Real first? Yep. He was hired to make an MP3 player. He quit after three weeks. How many people know that Real had several acquisition offers for WAY more than its current market cap? Consider Broadcast.com. They were a customer of Real and had to fight tooth and nail to get good licensing terms from us because we were big, they were small and they needed us to survive. Then they sold to Yahoo for billions and in theory Mark Cuban could have subsequently purchased all the outstanding shares of RealNetworks with (A LOT) of money to spare. That’s a case of thinking we understood the market better than the other guys. That was a case of thinking most of your top lieutenants usually couldn’t do their jobs as well as you could do it for them. Thinking you’re too smart can be very, very expensive.
A few words about execution. For some odd reason this usually is not valued as highly as “features” in the software industry. Apparently, in our industry most people think that more features means better product. If this web 2.0 craze taught us anything at all it should be that fewer features and better execution is a better order of priorities. I enjoy being an advisor to a couple of local Seattle companies. I was thinking the other day that I find myself saying (or thinking) the exact same bits of advice to both companies. Can you make something simpler? Easier to understand? Can you make something work with fewer clicks. Can you make it look less confusing? Can you make it pleasant to look at? Unfortunately, I’ve convinced myself that good execution requires creativity and that’s difficult to measure. Many gifted engineers have a hard time seeing what separates a well designed product from another and that’s very hard to fault. It’s sort of like asking someone to be good at coding and design and product management all at the same time. If you’re a start-up you either have to figure out how to pay for all that headcount or have an above average ability in all three areas as the entrepreneur. Hard though it may be, it is still gospel. Good information architecture is more important than lots of code. Start-ups like Brightcove understand this very well and that’s why they are able to succeed in the crowded digital media sector even as a late comer. If you can make software very usable and enjoyable (dare I say FUN) then you can find users.
