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3 simple ways we could have built our startup faster and cheaper!

Growing a Startup

Here are three of the things I would have done differently when originally founding my startup had I started with the knowledge and experience that I have today.

Testing grounds.

Originally when we developed our products we never really tested them. Instead, we built our products to work the way we imagined they would and then expected that our target market would overwhelm us with demand. Kind of like what happened to Apple when they released the iPhone. It didn’t work out for us like that. Today I would test our ideas in our target markets prior to investing a huge amount of money developing them. I would want to know three questions. First, do I really understand the need of my market? Second, is my product solving that need in a way that our target market will find easy to use and adopt. And thirdly, is there existing demand for my product or for a similar product?

Growth strategy.

When we launched StreetText our growth strategy was simple. We would go to trade shows, hire a few sales people and customers would sign up. We soon discovered that is not a growth strategy. It’s not even close to one. Today I would want to know who are the early adopters that I can target right now. Is there a segment of my target industry or market that is emerging or growing. That is likely where my early adopters are and I would set a 6 month marketing plan to target that group. After those 6 months I would reassess our growth, adoption rate and turnover rate and plan our next 6 months accordingly.

Investment.

We took investment early. That both helped and hindered us. It helped by offering a buffer until we became profitable and it allowed us some flexibility to learn as we went. However, looking back we spent money where we shouldn’t. We paid a sales staff before we had a product to sell, we over paid for product development that never saw the light of day, and we paid for our own mistakes. Depending on what stage of the startup I was in I would do things differently. If I were in the early stages I would raise money only after I was 100% certain that we knew we had an idea that would solve a current need in a growing market. Then I would carefully spend money on only the Minimal Viable Product (MVP). That means only the 1, 2 or 3 features that users must have to test the products adoption rate. If I had extra money at this point I would save it for some marketing and product tweaking as needed. I would not spend money on overhead such as sales staff or even pay salaries to founders that could work a second job (myself included). If I were in the later stages of startup I would only raise more money if I was either profitable and all the money would go into new customer acquisition or if I knew that the majority of my current customers would be extremely disappointed to lose the service and I had an exact number for the cost per customer acquisition.

Final thoughts.

Writing this now it seems like the steps I would have done differently are very logical. But at the time when we started it wasn’t. We read books about business and tried our best to make wise decisions but we still made some dumb mistakes along the way. Fortunately for us a lot of perseverance and a little luck have helped grow our company to profitability. But there were many times where we went through hardships, including no paycheques for a few months on end, when they could have been avoided. Business is dynamic, always changing, and we will most likely face new hardships along the way. But hopefully we will continue learning from them and I will continue writing about them so that others reading this might be able to learn from it. Hopefully these articles are helpful. If you have any requests or would like me to elaborate on a topic just ask in the comments below and I would be much obliged to do just that.

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On Business

Crowd sourcing customers 101

I watched this fantastic video by the guys behind Flight of the Conchords, a hilarious duo folk band by Bret and Jemaine. I’m sure most of you are familiar with their TV show Flight of the Conchords, a self-defeatist comical satire, if you aren’t be sure to watch some of the episodes. These guys got involved with the New Zealand Children’s Hospital and created a song and video to help raise money for the sick kids. What made the video so great was the way that they did it. They interview a bunch of kids and ask them to co-write this song with them. It’s a great example of crowd sourcing you customers.

At our office we have been hard at work segmenting our customers and sending out email surveys to better understand our customer’s needs and gather valuable insight into our consumers. So the timing of the video by Bret and Jemaine couldn’t have been more perfect. The video itself isn’t pretending to be anything more than just a hilarious song created by asking kids questions and getting their humorous responses. But whether by accident or by purpose the video demonstrates perfectly the goal of crowd-sourcing information. Creating a better product because you talked to your customer first.

I don’t think I have ever understood the importance of that basic principle better than in the past week. When you ask your customers the right questions you know what your customer actually needs, what shifts to make in your marketing and how to improve your feature offering. It’s the difference between brainstorming and guessing the next pivot (shooting in the dark) and actual consumer data that clearly outlines what customer expectations and demands are.

Enough chatter, here’s the lighthearted video.

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On Business

When luck meets learning is the outcome different?

When luck meets learning
Photo by Michellis

I’ve had a crazy week. Steve, Angela and I have been asking ourselves very important questions like, “What are the needs of our customers?” And we have struggled to come up with definitive answers. Last friday we sat around our boardroom with beers and taco chips hashing out the different layers of our customers needs. It was both fun and frustrating. After 2 hours our meeting had come right back to the beginning and our questions remained unanswered. The truth is we weren’t confident we had nailed it.

This week I attended the GrowTalks in Vancouver with Steve. It doesn’t take a genius to become successful, that’s something I’ve learned over the last three years running a startup. What it takes is the ability to remain focused and apply the good things we learn along the way (and a little bit of luck). Our 48 hours in Vancouver at Grow was a mix of learning and luck. The first speakers of the morning came out, they were fired up and told everyone in the audience that they were inspiring leaders, in fact they were visionaries.  *Cough, then they spit out what they really thought. “You are not visionaries!”

The crowd kind of laughed awkwardly, hoping they were kidding, but then fell silent after realizing they were not. I loved it, they caught my attention and I knew the day was going to be good. The next speaker spoke about UX/UI. Well she spoke about User Experience actually, and not very subtly drew a line in the sand arguing persuasively that User Experience was very different from User Interface and must not be confused as such. Right now there are UI/UX bloggers rolling over in their graves, I mean their beds, towards their keyboards to differ.

But quickly as the day progressed the talks began hitting closer and closer to home. They were discussing how they had solved the very questions we were struggling to answer. I had this uncomfortable feeling that either every speaker was secretly spying on us and planned everything they were going to talk about by watching what we were doing, or every single company in the room was struggling with the exact same problems we were. Neither conclusion seemed very reassuring. Either we were unique and naked or we were similar and uninteresting. In the end it didn’t matter. What mattered was that we lucked out. We were privileged to be in a room with people willing to talk about how they had solved the very problems we were facing.

There is something magical when luck and learning line up. Ultimately, though this magical week of learning would be useless if we did not apply it. Upon arriving back in the office today, Steve and I shared our new found insights with the team, drew up a simple strategy based on what we had learned from the conference and started executing. It’s true, I’m not lying. We have drawn up a two week discovery strategy and have already started implementing it. After many attempts at trying to implement status-quo shattering strategies we have discovered that habits form quickly, but significant shifts in behaviours and patterns only take place when we are intentional about executing the strategies we form. Learning is great, but it is useless unless we apply it. We, as a team, don’t want to be the hard ground that good words fell on and then died. For soil to grow good crops the seeds need to be planted and the work needs to be done.

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On Business

The power of focus

The power of focus

About 3 weeks ago I wrote an article about remote teams. It’s a new experiment for us and so far it is working out well. But being only a short while into it, it’s really too soon to call it successful. However, there is a secret here that I believe will make it successful. Focus.

You may have noticed that I haven’t written any new articles in a few weeks. It’s not that I haven’t wanted to, I have. I just have been really focused. Focused on creating streamlined systems for our team, focused on the current projects that we need to complete, and focused on training and team management.

I’ve been thinking about focus a lot lately. Having focus is really important. Without focus it would be very tempting as a company to run after every good idea we think of or hear. Especially because as a start up lab, that is what we do, we create ideas, and there is nothing more tempting than a good new idea.

That is where focus comes in. Success comes from being intentional with the things that will lead you to it. Now success means a lot of different things to different people, so I am not going to put it in a box, but rather talk about it as it applies in this instance. Success in this instance is about seeing the goals we have, realized.

So in short, I believe that it is important to have a direction where you want to go, then think about all the steps that will take you there, and then start with the step that will give you the most reward for effort. After that it might get hard to remain focused with working towards your goal (work feels hard sometimes). But with practice, focus and endurance gets easier, and I believe that success will happen more often.

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On Business

Remote teams

Remote Teams World

As of yesterday, our company, Simple Engine [media], has embarked on a new journey, remote teams. We still have our main office, the HQ, with our core team working from there. We are just excited to add some new members to our team, who will be working remotely.

Remote teams brings with it some big challenges. We are passionate about building the best solutions, but building great products means we need great project management and great communication. Great remote project management may prove challenging with the different timezones. Also, we have a unique culture in our office, how will we be able to make people feel part of that culture when they are working from hundreds or thousands of kms away? Then there is the issue of trust and security.

This is a new journey for us and I will be posting some articles in the future. I might write about remote hiring, remote managing, remote source control etc. If this proves successful for us I will post some articles about what we did right, and if it proves to be disastrous, then I will post some article of things to avoid. Have you had any experience with remote teams? I would like to know your thoughts.

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On Business

Crossing “the chasm” by telling your story

Crossing the chasm from early adopters to late adopters

Note: Building a startup myself, I have heard a lot about the “chasm” that exists between aquiring your first early adopters versus attracting the early majority of your market. But, I have heard almost nothing about how to cross it. I hope this will help inspire some people to tell their stories.

I read a great article entitled Your Story Is Your Marketing Strategy, and while I agreed with the concept that people often make a decision to choose a company when they know their story, I felt it was missing something essential. It offered some examples of people choosing a product after hearing the companies story, but didn’t explain why others would follow a similar pattern. Attending a local Ted “Brown Bag lunch” held at Accelerate Okanagan today may have highlighted the missing answer. The Ted lunch was anything but formal, a group of about 20 entrepreneurs sat around a large board room table while eating their packed lunch and watching a couple Ted videos. Ted videos are great, and meeting with like minded people is even better. Having previously watched the videos, I found myself relaxed, enjoying the lunch, looking forward to the coming jokes and preprocessing some of the points of the videos.

One of the videos is particularly good, How Great Leaders Inspire Action, by Simon Sinek. If you haven’t already seen it, I am including it here. If you have 20 minutes it’s worth pausing and watching it. It was in watching this video and from the conversation afterwords that it became clear why simply telling a potential customer your story is not enough to encourage them to buy.

When launching a startup product, it takes work getting those first early adopters, but it isn’t too difficult. Early adopters are generally people who want to be the first person to try something new anyways. So it makes sense that there were people who were willing to try your product before they knew much about it. As long as you raise enough awareness about your product, or share it with enough people, you will have some customers sign up (even if it is nothing to write home about). The challenge, however, is when the rush of early adopters slows down and sales calls start getting tougher. The challenge is in convincing the early majority, aka the pragmatists, to choose your product. Is telling them a simple background story enough?

I believe now that to move the early majority (the pragmatists) you need to tell more than a story. You need to answer the “why”. This is what the talk by Simon Sinek explained. Our brains are wired to be logical, but before logic, they were wired to be emotional and passionate. We are cognitively wired to behave positively towards the notion of “meaning”. Simon gives the example of Apple focusing on answering why they create products before answering what products they create or how they worked. They “are about changing the status quo”. Because it had meaning, because it was more than just a story, people resonated with their desire to break from mediocrity and they gave more of their time to listen about their products.

It’s true that a product still needs to solve a problem, if it is not solving anything, the early majority probably won’t use it even if they like why you created it. They are still pragmatists. But if you truly believe that your product is solving a problem, and you are passionate about what you are doing but are having a hard time attracting that early majority, maybe it’s time to start telling people why you created it. Not just what you have created or how it works. Maybe it’s time to start telling people what is at the heart of your company, tell them what motivates you to wake up in the morning, against all odds, just to provide them with your amazing tool that is going to revolutionize their lives. Simon Sinek argues this is the secret behind great leadership, I believe it is actually the secret to motivating the early majority to listen to you and it gives the early adopters something worth sharing about.

End note: I love that if someone’s sole motivation behind a product was to make lots of money, then their story sucks and this strategy won’t help them at all (sorry Kevin O’Leary).

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On Business On Companies

The 10 commandments of Steve Jobs

The 10 commandments of Steve Jobs - infographic

I recognize the “commandments” as summaries from the book Steve Jobs by Isaacson. It’s an interesting book, I would recommend reading it if you have the time. I wrote another post about some of the takeaways that I thought were worth sharing from the book. Overall it’s an interesting snapshot into the life of Steve Jobs. Infographic source: OSXDaily

If you are interested, here are some great Steve Jobs quotes.

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On Business On Companies

Executing ideas: The power of one… great team

Team Work

I used to think that one guy (or girl) with a great idea could change the world. I’m an optimist, so I still believe it is possible, but my view is changing. I learned pretty early on in my job experience that if you believe you can do something, you can do it. When I was 20 I built my parents home. It’s a nice home, I did a good job. But I didn’t do it alone, I partnered with my friend Dan, 19 at the time, and we hired a couple guys, Mark and Jonathan, around 16-17 years old to help. That was a huge confidence builder for me. People I meet are often shocked to hear I built that home, even more shocked if they find out while standing in the house. My dad, a doctor, wasn’t too comfortable with the idea of me building it at first. That was understandable. I had only worked framing homes for a couple summers, worked as a grunt the year before. Not a lot of experience. But the cool thing is that he let me, he let me build his house.

When Steve and Art (my business partners) invited me to join them in a tech startup, I wasn’t afraid, I didn’t even consider it a risk. I knew we would succeed. I was very confident that we could do anything we put our time into. Almost three years later, I have experienced burnout, got shingles twice (shingles is a later form of chicken pox that people sometimes get under stress but usually not at my age), and gastritus (stomach inflammation from stress). I learned a valuable lesson while I am still young. I can’t do it all myself, it takes a team, a really great team. Not once, but twice I have wanted to quit and throw in the towel. Fortunately for me I have two amazing business partners and the only reason I didn’t walk away was because of them.

Today we are really good at what we do. It was sink or swim and we all had to learn to swim very quickly. Because the startup business model is so young and books are only being published on the subject matter today. It’s all very new territory. So in the startup world we are considered very experienced. In my home city the local startup incubator is only 1 years old. I’m not saying this to pump our tyres, its just a fact for the startup business.

Right now we are working with an amazing women building a very cool community health startup. She came to us with a really great idea and a lot of motivation. In the past I would have probably assumed that she didn’t really need a company like ours. She already had everything she needed, a great idea and a ton of motivation. Today I see it differently, when moving forward with an idea you need a really great team. At minimum you need at least one other person who is as committed as you are and hopefully has a different skill set.

The power of a great team brings a lot of intangibles to the table. Things like encouragement, community, ideas, and multiple points of view. But the traits that move a team from the scale of good to great makes the idea execution so much smoother. A great team has experience in success and failure, knows how to get back up, when to push, when to wait, and understands its business niche (space) inside and out. When you pass a ball to your team mate, the last thing you want to be worrying about is whether or not they are going to catch it. You need to be free to focus on your next move, and know where to focus your energy. A great team allows you the freedom to do that and it encourages coaching along the way too.

I used to believe all you needed was a great idea, when you have a good idea a team will naturally form around it, and success will follow. Now I have to come to experience that teams aren’t secondary, they are first. It all starts with a great team with a shared vision. If you have an idea, finding a team should be your first move. New and refined ideas will come from within the team, the team will then execute the idea and turn it into a reality. It might still be possible to succeed without a team, but not a lot of new ideas are executed well during burnout. We often contribute amazing successes to leaders like Steve Jobs but without their ability to put together amazing teams it is unlikely that their dreams would have been realized.

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On Business On SEO

Don’t get punished for bad SEO

Google is literally punishing sites for bad SEO habits. Not just black hat tactics, but all non-ethical spammy techniques. (The grey area stuff). On April 24th of this year Google unleashed the Penguins. Here’s a link to Google’s official announcement.

Google Penguin Update

Any serious Google update gets a name. There was Google Caffeine, when Google started to account for page load times in their algorithm. Then there was Google Panda, when Google changed everything. Now there is Google Penguin, the SEO crackdown. What does this mean for you? If you have used good SEO habits, nothing unethical or borderline unethical then you have nothing to worry about. However, you may accidentally be doing something that Google will punish you for. Maybe you are already noticing that your traffic has dropped dramatically.

What SEO tactics are being punished?

Keyword Stuffing:

Websites that stuff their articles and blogs with keywords that either don’t make sense or are overused, are being punished. They do this to get more search traffic. That is changing very fast.

Unnatural Links:

Apparently Google is gunning after paid links. They use links in their algorithms to determine content value. To increase link SEO some people pay for links in other sites. However, Google is cracking down on any paid links, link spam, comment spam and or unnatural links within content.

So if you don’t do either of the above, you are probably going to be okay. However, if you have noticed a big drop in your traffic in the last 4 weeks, it is likely that Google Penguined you. You will want to remove keyword stuffing and unnatural links pointing to your site.

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On Business On Companies

Facebook’s IPO Part 2: Another one bites the dust.

Facebook shares have fallen in early trading on Wall StreetA few days ago I wrote an article about what the injection of funds to Facebook investors will mean for the startup community. Well, just a few days later, Facebook’s IPO stock price is falling and everyone is pointing fingers.

The initial investors have a nice payout, they walk away happy, but at what cost? Some blame Morgan Stanley others blame Facebook for the hype. Investment funds around the world are claiming to have been mislead and lied to. They were told that Facebook was oversubscribed, and that they would be lucky to get any stocks at all.

“Some investors say they felt misled by the underwriters. According to one London-based fund manager who asked not to be named, bankers indicated demand was so strong that he placed a bigger order than he thought he would get, leaving him with 40 per cent more Facebook shares than anticipated. He sold most of that stock on the first day of trading.” The Star.

So what does this mean for future startups looking to launch an IPO? It means three things.

1. If a tech startup raises their stock value a week before their IPO, expect distrust.

2. If a tech startup releases 25% more investor shares after raising their stock value, expect distrust.

3. If a tech startup claims over subscription, expect skepticism.

Facebook still has a big future, it is the largest Social Media site on the web (700,000,000 users). It’s future has little to do with the stock price. Unfortunately, however, due to their size and influence Facebook’s greed has probably tarnished the investors trust of most other technology startups looking to enter the stock market in the future, making it that much harder for the next one.