Last week I finished a course on building a Startup by Steve Blank. The guy is a genius. Here’s 5 slides worth your time.
Recently Kickstarter made some changes to their polices and those who had been happily using the service and enjoying the ability to raise funds for their project might have grown a little anxious wondering whether these changes would be for the better or for the worse, and how in general it might affect them. Meanwhile tech analysts and others might have been interested by these changes and why Kickstarter decided to implement them. Here we will look at the changes from both angles – what it means for you, and why Kickstarter have decided to change the rules…
The Nature of the Changes
Kickstarters new policies cover a lot of ground, but the overall idea of the move according to Kickstarter’s own site was to make users feel ‘less like they are using a shop’. In other words the changes were implemented in order to remind people that they are choosing to support projects that aren’t yet complete, that they aren’t just buying things. This presumably is to protect the buyers and the bidders and thus ensure the cogs keep turning on the site.
Thus the changes include:
- Creators must fill out a ‘Risk and Challenges’ section to detail the risks and challenges that they might face in the process of creating their project, and to detail while they think they are suitable for overcoming them. You have to remind users that this could still go wrong, but you will also be given a chance to fight your corner.
- Product simulations are now no longer allowed. In other words you aren’t able to show image of your product doing things it can’t yet do. So if you’re inventing a jet pack, that means you can’t make an animation in a 3D modelling package and then show people it flying around – because that’s a little misleading. Working prototypes are fine though as long as you show the prototypes in their actual current form. Using 3D printing then and injection moulding to create working prototypes just got even more important.
- Finally you can no longer offer multiple quantities of an item as a reward. In other words, if you are creating a car you can’t offer someone five cars if they pledge five times the amount. The reason for this is that it creates the illusion again that the person is paying for a completed object. The challenge currently is creating one instance of your project so it’s a little rich to start offering multiple copies already.
What Does it Mean?
For creators then it means making sure to spend more time coming up with your creation, and to spend lots of time thinking about the problems you might face and how you’re going to get around them. While it might seem like it means you’ll struggle more now to get people to back your projects, in the long run this is very good news for creators as it means fewer Delboys on there who might scare off potential supporters in future. Kickstarter are focussed here on building trust and that shouldn’t be underestimated…
David Harrison is a business blogger and shares his experiences through guest posting. He is a part of the team at Berkeley Sourcing group, world’s best injection molding manufacturers.
Last night was awesome. I got to sit and listen to three guys talk about their journey starting a business and keeping their values in tact. I learned how they made really important, life-altering decisions. Like how Lance, as the original animator of the game, came to the major conclusion to make all the characters in the game penguins. His reasoning? “It was easier to animate a wobble than a walk.” In all seriousness, these three guys Dave, Lance and Lane built a really cool game, Club Penguin, and a really amazing business while keeping their values in tact. I am writing this blog post as much to share their unique story with you, as for myself, just to unravel what I heard with the kinds of questions I face every day.
I want to be part of a business that holds its values highly, doesn’t care about what “normal business” is, and creates a culture where everyone is free to become better. Sitting, listening, to these guys, reminded me just how much I want that. I’m sorry, but I don’t think money is the only goal. I think making money must come secondary to humanity. Every time. These guys really knew their values, and when big decisions came they didn’t have to run numbers and sacrifice their values. They let their values decide.
How many of you have heard the phrase “business is business”. I have, sometimes it feels like I am hearing it weekly. In my opinion it’s a copout. And after hearing these three talk, I really believe it is. It is saying that we don’t need to be accountable for how we are treating people because making more money is the highest priority. It’s sad, but that disease of thinking seems to have penetrated our business culture so deeply.
The founders of Club Penguin, Lance, Lane and Dave, told a very different narrative. They spoke of how they built a company with a culture that cared about each other. It didn’t calculate shares based on numerical value, but based on a fair partnership. When they sold their company to Disney they insisted that their company continue donating a portion of their revenue. When Disney acquired Club Penguin it instantly became Disney’s largest donation department.
When things get stressful or scary we can sometimes feel like we are unqualified to make the right decision. We look around to see what others are doing and we can sacrifice our values for security. Lance Merrifield said that every bad decision he made was when it was made out of fear. Why do we think fear is a good motivator if we make bad decisions when we are afraid? Lets know our values so well that when we are afraid we can stop and ask, does this really align with my core values? Or am I doing this because everyone else is doing it this way? As the old metaphor goes, just because everyone is jumping off a bridge doesn’t make it a good idea.
Club Penguin is an inspiration because they demonstrate that it’s possible to build companies differently. Let’s build great companies without sacrificing our core values. Let’s change the norm of business. One day we are going to look back and money won’t matter. What will matter is our family and how we treated those around us.
Last year, 11 months ago, Gizmodo posted an article claiming Grooveshark Will Soon Be Destroyed. Man, I am glad they got that one wrong. I love Grooveshark. I admit, I never used Grooveshark in the old days. In fact I only stumbled upon it in the last year. (After it was supposed to be dead). Since then I have fallen in love. How does that song go?
As an application developer I was initially intrigued with how they had developed their app. I thought it was really well designed. I love how it works. Then I started using it and I was hooked. It’s so unenvasive. I read a comment about Grooveshark that all its users were evil and didn’t attend any shows or pay for music. I thought, how can that be when my friend, a musician himself, uses Grooveshark to create playlists and share them with me. How I attended two awesome concerts this summer and purchased too much from iTunes. Thanks to Grooveshark I got into Bon Iver before rocking off to their show. Maybe I just haven’t met the evil ones yet.
I like the direction Grooveshark is going and I am glad that Gizmodo got it wrong.
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.
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.
A 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.
Facebook IPO officially went live a few minutes ago. Astonishingly, when businesses around the world are struggling to find financing, Facebook continues to soar, and people everywhere are talking about it. You can’t buy the kind of media attention and PR Facebook gets.
What does this mean for the rest of the tech community?
A lot of Facebook investors just got really rich. Apparently Bono is supposed to make more money on his investment in Facebook than on his entire music career. (I haven’t double checked that, but it does sound too good). Investors love to invest. So startups expect more capital to be available very soon.
A lot of companies slow down on innovation after releasing their IPO. Facebook has beat the odds so many times before, I predict they will beat the odds again and remain successful. However, they have already announced to world that they are ready to acquire apps that fit into their growth and revenue strategy. They just purchased Instagram for $1 billion. So there is an opportunity for startups to solve the problems Facebook has, with a great possibility of being acquired.
It is likely Facebook will have more competition and it is likely there will be more startups starting up. The trend is that when one startup gets massive traction and success, others are quickly to try to follow.
What to do?
If you are already a startup company, the best thing to do is to ignore the hype and buzz. You know your space, you know your business, keep doing what you are doing. Focus on solving the problems you know best.
Welcome to the world of Adobe. Where everyone is an elitist, oh sorry, artist.
During the Digital Revolution Adobe rocketed into success. PhotoShop destroyed Coral Draw, DreamWeaver squashed its competitors, and Flash created an entirely new media platform. Yet, at the height of their success, something significant happened. Steve Jobs announced that the iPhone would not be supporting Flash. A flood of media attention followed. It was the distraction that Adobe competitors were praying for. As a daily user of Adobe products I pay for the fact that Adobe took their eye of the ball. As a result today there is growing support for free open source alternatives to many Adobe products. The hold on digital media that Adobe once had seems to be rapidly dissipating. And yet there remains demand for the new release of CS6. What happened, and what’s sustaining them now?
It’s love and war!
The good: As a brand Adobe has achieved something truly remarkable, they have repeatedly sold themselves as the best long enough that we believe them. Subconsciously Adobe products are perceived as better. As a result, there is a mix of jealously, pride and frustration among the Adobe haves and Adobe have-nots.
The bad: Adobe products have developed a fascinating love/hate relationship among many of their fiercest supports. Bluntly, over the last 4 years Adobe has released subpar products. Professionals are dropping 1-2k on Adobe products that do not perform like they are promised to. I first switched to Mac in 2005 because Adobe products were stable on the Apple. I assumed that it was Microsoft that was producing buggy applications. For the next few years it was bliss! My Mac never crashed even when I pushed Photoshop to the max, rendering large designs. But then I upgraded my Adobe suite and problems began to emerge. Today I will do the simplest action on Dreamweaver, like opening a file, and CRASH! Everything is down.
The ugly: Many Adobe users, myself included, love Adobe. But they hate how they have released buggy products. They hate how much money it costs to upgrade their product from a subpar CS5 purchase to a hopefully par CS6 purchase. Especially when there are so many good alternatives out there. They hate that Adobe has spent all their resources creating CS6 rather than spending some on upgrades to fix the problems underlying their existing products. So some users are switching and some are supporting open source alternatives.
What’s sustaining them now?
Like a bad relationship, users of Adobe products love the feeling they get when everything works. They forgive the bad, ignore the ugly and hope for the good. They love it when a colleague looks over at their screen and says, “you still using Adobe!” Knowing full well the colleague is jealous. Adobe is still around because Adobe has successfully sold themselves as the best. That’s their genius.
What do you think? Are Adobe going downhill/uphill? Do you think they are worth what they charge? Do you think they should spend more time supporting their previous releases?