What we web folk can learn from plumbers
This morning I found a link on the front page of delicious titled: 6 reasons why my VC funded startup did fail. Do you know what the main lessons from the failed start-up attempt were?
- The customer is the most important thing in your business
- The best business plan is to sell people the things they want
- Your business is successful if your earnings are higher than your spendings
Back to basics then! I have worked in big technology companies. I have worked in small technology companies. Along the way I have met and worked with some unbelievably smart people. And I find myself saying the same thing over and over and over.
“The best start-up CEO is the rare marketer who also understands technology deeply”.
Not the smartest technologist in the world who will add marketing later in their business plan.
In this business we tend to like to spend a lot of time thinking about how things are going to get done. We get caught up in the nuance of the project and all the little technical details that will “allow the app to scale”. If I hear one more person talk to me about how they built an app so that it “can scale” I’m going to throw my iPod at their head or kick them in the toe. Forget your scaling. How about trying to find some customers? You think scaling is hard? How about getting people to give you enough money to pay your bills every month. I worry about it constantly.
Our business is full of people who are pretty smart. Maybe too smart for our own good. We leave Microsoft, Amazon, Real or Google after years of “working with some of the smartest people on the planet” and then we’re ready to conquer the world. Quite honestly, I think sometimes it would be a good idea to work as a restaurant manager or a plumber for a year first. Ok, I’m joking but it would certainly force us all to stay focused on the REAL basics. The kind of basics where you drive your deposit envelop from the day’s sales down to the bank each night after work. The kind of basics where you don’t have some secret plumbing process unknown by other plumbers so you have to instead resort to great marketing, longer hours, great advertising and incredible customer service.
In this technology business there are two kinds of “smartest people on the planet” (a phrase you’ll often hear in tech circles). There are those who are really, really smart and whom can build anything. The other “smartest people on the planet” are the ones who can get anything built one way or another and convince people to give them money for it. Steve Jobs seems like one of those latter guys.
Because our industry is primarily full of Type A over-achievers, we’re often perpetuating a feedback loop that is perhaps works against us sometimes. More specifically, we don’t spend enough time up front asking ourselves “what do I really suck at?”
Success is sure hard to come by. If my next start-up doesn’t work out, I want to write a really mind-blowing blog post about why it happened. In any case, I promise I won’t say that it was because I didn’t know I needed to sell something. I think what I’m going to do is pause for a moment and ponder. “What am I not very good at which might be preventing my start-up from being successful today.” I like to think I’m a fairly smart guy so naturally my list won’t be that long 
See…there we go again.
Rubitone=Rubiks Cube and Pantone
Dusk in the Wishpot, Pressplane, Zooppa office
What to make of this financial mess
So the US government has just bailed out private enterprise on a scale not ever before seen. Coming up next is the same plea from the US automakers and then the airlines. Five years ago this type of activity would have been called Socialist, Communist and everything in between. Now people are realizing that macro-economics is just that - global. And certainly not as simple as everyone thought. Not so simple as to make it easy to justify why it is important for all governments to take these kinds of actions. But, I see something else going on here. I see great companies getting cheaper and cheaper and cheaper. By the day. What do I mean by great companies? I’m talking about companies who offer products into lucrative markets for which there really aren’t any other good choices. And I’m talking about companies who are giants in their sectors whose core fundamentals and value propositions remain unchanged. For example:
Does anyone sell products to service the graphics creation industry other than Adobe?
Does anyone doubt that more printing orders will be done over the web going forward? Vista Prints is the Goliath of that market.
Will people stop watching their cable TV? Look at Comcast!
What about GPS? Yes the car market sucks. But look at what happened to Garmin in the last 12 months.
People will lose a lot of money during this recession. No doubt about that. But others will literally make their retirements by buying great companies who got caught up in the this mortgage crisis.
If you think about it, its something to get really excited about. Buy low. Sell high. Everything is now on sale.
Not work related…but fun
Check out these photos over on my personal site of the America we’re leaving behind. Great images:
One of the best, least known entreprenuers in Seattle
I had lunch with an old friend today.
Doug Colbeck founded Trails.com about 8 years ago. I won’t tell you how much money he raised to get that company going but I will say it was less than $1 million. Heck, it was less than $500k. By a good amount. Trails.com wound up selling to domain giant Demand Media back in August 2006. His investors made 10x their money.
What made me think to write this?
We had an interesting conversation about the evolving start-up scene in Seattle. There are so many voices now. So many blogs. And we think that’s a really great thing. But, I couldn’t help but remind Doug why I respected him so much. He just quietly worked away on his project without being motivated by the limelight of it all. He didn’t try to be the center of attention. He just executed his vision. There are a lot of guys in Seattle like this and from whom we can learn a lot from. Alex Algard of Whitepages.com comes to mind. He’s been working on that project since 1996!
I love to blog, communicate and share with the Seattle start-up community. I’ve made a lot of new friends as a result of my career. But all the blogging and speeches take time. Just be sure to leave yourself enough time to make your business a tremendous success. It’s about balance I suppose. Starting a company is the best way to get attention if you want that kind of thing. I admire anyone who even tries. I admire those who try and fail. But I sure have a special admiration for those quiet souls who just work away for years building value while only occasionally dipping into that spotlight.
What photos represent your company color palette?
The idee Multi Color Search Lab is pretty amazing.
You enter a few colors and it shows you how their engine could go into any big photo repository to return photos that closely reflect the few colors you chose. Their online demo example sources from over 2 million images from the Alamy stock photo house.
We entered the core colors for our new Pressplane project just to see what all the photo returns actually looked like. Very fun and cool.
Jon Shirley’s Ferrari garage
Jon Shirley left Microsoft this year after a LONG time. The car lovers out there may know that he is one of the most prominent vintage Ferrari collectors and restorers in the country. Check out his garage. In some cases, there are just one of these models left remaining in the world.
On crashing markets, common sense and obvious things.
By now most everyone that reads web blogs has heard about the leaked Sequoia deck.
And then there was the Benchmark memo from Bill Gurley.
The moral of the story? Slim down or die.
I’ve since received copies of these slide decks from at least 15 different sources over the last week.
Little wonder given the week we just had. The Dow industrials finished down 128 points, or 1.49%, at 8451.19, the lowest finish since April 25, 2003. Some investors who normally would be jumping to buy beaten-down stocks after a 22% drop over eight trading days just weren’t convinced. And the reason for that is because this downturn isn’t like all the others. If you haven’t already taken a look at the Sequoia presentation you really should. Most Americans just don’t get this kind of perspective emailed to them. Something of a perk for those of us who work with smart folks in the tech sector perhaps.
The challenge that I had with this material is that I just really didn’t know what to do with it. I’ve always believed in doing as much as you can with the least amount of money. I never spent salaries on staff that we didn’t need. I don’t buy software we don’t need. I don’t hire people to do work that I think we can do ourselves. That includes hiring PR and tradeshows. We don’t pay rent for more space than we need.
I don’t know that our perspective is the right one but it’s one that I’ve always been very proud of nonetheless. By spending only the money we need we feel that we provide more opportunities for our investors and our employees. Even though Pressplane recently closed $1.7 million in Series A venture financing we still only have 4 full time people on staff. One of the reasons that I’ve been attacted to start-ups is because I enjoy working in a more disciplined atmosphere that is largely governed by the limited resources we have available to us. The start-up game usually involves uncertainty around revenue and when that revenue stream kicks in to start offsetting your burn rate. Interestingly, most people actually believe their projections. Don’t! Your initial streams of revenue will always be lower than you projected and your growth will be slower than you predicted. With the credit market getting tighter and tighter it isn’t hard to see that it may not be easy or possible to raise more money. And, go ahead right now and assume that future funding will come at a price.
Slide decks like this make me sleep better at night. Do you know why? Because it feels obvious. That’s right. This stuff should feel obvious. It should BE obvious. More start-ups go out of business for really stupid reasons than for really good reasons. People built really dumb things. People hired too much. People spent too much on PR and advertising. People spent too much on tradeshows. How many times have you heard about a start-up that went out of business and the reason for it was something that was really incredible - something you never might have caught yourself? Not that often right? Usually the clues were obvious. Really ornate offices with front desk admin, Aeron’s for everyone, free bowling and beer in the basement are always a sure sign that a pre-revenue start-up is probably not appreciating every dollar they have in the bank. This last summer I visited a Silicon Valley company that had virtually every kind of cereal and granola bar you’d see in a Safeway for free to all employees inside their 1,000 square foot kitchen. Doesn’t take a rocket scientist to figure that one out.
In many ways that’s exactly what this game is about. When your car isn’t running right do you immediately tear the engine out and rebuild it? Or, do you check the tank first to see if you’re just running out of gas?
Use your head.
Get the basics right.
Don’t believe your own BS.
Ask common sense questions all the time, every day.
Don’t assume any little detail is too little to stop caring about.
The rest of the things you probably couldn’t have prepared for anyway.
Charity Code Jam
Ali Daniali isn’t a guy that I’ve had the pleasure of meeting personally but I see his name around Seattle quite a bit. I really commend his efforts. He’s found a tremendous way to use his technology experience to give back to those less fortunate. Watch this video. A varied and diverse group of technology folks gave their time to develop a new web application for Second Harvest Food Bank in San Jose CA. There isn’t a lot of glory in these types of projects. The hours are long. The work is hard. These guys just believe in supporting those less fortunate.
Just another Wednesday in the office
The wishpot, pressplane, zooppa office.
Welcome to the office of the ad network
Sound familiar?
