Doubt it, Dig it and Dream

The year was 1999. The Internet was still pretty new, and I was just learning how
to “search the Web.” My wife and I were coming up on our 20th wedding
anniversary, and it was my job to find a great deal on a romantic cruise.

As usual, I had gotten sidetracked.

I sat before the computer, searching not for “cruise” or “cruise ship,” but for
“orphan” and “orphanage.” For many years, I had felt an internal need to help
orphans and abandoned children around the world. An intense feeling swells in
my chest when I think about how parents could desert their children, or why
neighbors wouldn’t welcome lost children into their homes and care for them.

I was crushed by the helplessness of so many children in the world, specifically

Central America. The more I searched online, the more devastated I was. At the
time, I had recently discovered the vast global network of EOers, so I decided to
test Member Exchange. I sent a request for information from anyone in Central
America who had personal knowledge of orphanages in their region. I received a
response from a member in EO El Salvador. He thought he might know of a local
orphanage, and he was willing to help me. I was encouraged by this response.

But I still had to confess to my wife that my late nights on the Internet had not
been spent planning a romantic getaway on an elegant resort. Instead, I told her
that I had a “hot lead” on an orphanage in El Salvador. It didn’t take long for her
heart to understand that we could make a very real difference.
In the first week of March 2000, we showed up at Delores Susa Orphanage in the
city of San Miguel. We were shocked to learn that only six adults were struggling
to care for 250 children. The poverty, the need— the entire scene was
overwhelming. We promised to return, and we came back four months later with
17 US volunteers and a team of 40 Salvadorians. In an attempt to exercise all of
our options, we founded Orphan Helpers, a nonprofit organization dedicated to
the betterment of the world’s orphans.

Since we founded the organization, it has accomplished a lot. We conducted a

vacation Bible school and a sports camp for the kids, and we mounted a huge
plumbing and construction project, since none of their commodes were
operational. Over the years, we established libraries, training centers and
dormitories, brought in medical teams and sent dozens of orphans to schools and
colleges.

The response from the orphans was tremendous. You rarely see gratitude like
that, especially when it comes to business. Still, things weren’t always rosy.
Running the organization is often arduous and confusing, and the planning can
be very tiring. We have employee-related problems, misunderstandings and
conflicts with government officials, but they blow over.

Along the way, we’ve had our share of naysayer. But when I hear “don’t” or
“can’t,” my entrepreneurial DNA kicks in and I strive to prove people wrong.
Here are three things I have learned during this unexpected journey:
What folks call “conventional wisdom” is almost always wrong. Oftentimes, the
world agrees that there is one right way to do something. Most people listen, and
they don’t think to look for another solution. Entrepreneurs have it in them to
doubt convention.

When things look bad, keep going. Things worth doing are usually hard to do.
Entrepreneurs dig in and prepare for the long haul.
Dreams are contagious, so dream well and dream often. If a dream is
meaningful, people will want to be part of it.

We now work with 1,300 orphaned, abused or incarcerated children in El

Salvador and Honduras, and our dream is to reach a million kids in 100 nations. I
continue my mission because I see myself and my children in their faces. l know
that for every orphan l help, they may go on to help a thousand more. There’s
something richly rewarding about fulfilling a dream. After all, entrepreneurs
dream, and they inspire others to dream, too.
The Not-for-Much-Profit Company
By David Deal
EO DC

I started working for a technology services company in 1994. The part of the
company that I led focused on serving nonprofit organizations. When the
company could no longer “subsidize” this philanthropic division, I was left with
a tough choice: find another job and let the philanthropic division be shut down,
or figure out how to make a go of it as an entrepreneur. So, in February 2001, I
led the division through a friendly spin-off and we launched as Community IT
Innovators. I decided to make this jump out of a sense of duty to our nonprofit
customers. I believed that the organizations we were serving would be hard-
pressed to find an alternative IT provider who could do what we do for them at
an affordable rate.
My company is unique in many respects, and this comes from the social mission
that has been the focus since our founding. One expression of these ideals is our
commitment to serving charitable nonprofits. To make this possible, we
implemented a sliding fee scale that makes our rates affordable for organizations
of any size. Jokingly, we refer to ourselves as the “not-for-much-profit”
company, as our margins have always been lower than they could be.
An upside of the sliding fee scale is that it enables us to continue serving smaller
organizations that often provide the greatest return in non-financial ways,
particularly the sense of fulfillment that the staff gets from serving them.
Connecting people with organizations they believe in is a key part of our value
proposition to prospective employees, and in that way, “doing well” comes full
circle as a competitive advantage. A downside is that our profitability is low (but
positive), so we have to be somewhat frugal in how we invest our limited profits.
The sliding fee scale is just one way in which we’ve established ourselves as a
beacon of social responsibility. Though we were helping our clients save money,
we knew we could use our experience to help make more of a long-lasting
impact. In 2004, we emphasized environmental responsibility by searching for
ways to help clients “green” their IT. We now recommend green Web site and
server hosts, and we measure the carbon footprints of IT solutions. It costs us a
little more to research these topics and include them as part of our service
offerings, but the market has grown to support it, and in some cases, demand it.
With this new approach to business, I’ve had to alter my way of thinking.
For our project to be sustainable long term, I had to find a more workable
balance. That entailed letting go of responsibilities and of having a say in some
things. It meant letting others make mistakes that I don’t feel I would have made.
Finally, I had to accept that we’d earn less money for the sake of philanthropy. In
the end, I’ve learned that some wealth can’t be quantified with dollar signs, and
that being successful also means running a company that is doing some good in
the world.
Students Are Acing Entrepreneurship
Can you imagine going to college full time while running a US$2 million-a-year
business? Daniel Negari of the University of South Carolina does just that— and
his hard work is definitely paying off. He just won second place in EO's Global
Student Entrepreneur Awards (GSEA) regional competition.

The GSEA program was created in conjunction with Mercedes-Benz Financial to

support current undergraduate students who run and grow a company while
attending a college or university. Through GSEA, EO hopes to spread awareness
of the organization and inspire these talented students to one day become EO
members themselves. In addition, the GSEA award program encourages young
entrepreneurs worldwide to increase their business knowledge, and it offers
them a support system by giving them access to a network of peers who have
successfully navigated the challenges of a startup business.

Student entrepreneurs are nominated for the GSEA program and then compete
at the regional, national and then the global level at the GSEA Global Finals, to be
held 1-3 November 2007 in Chicago, Illinois, USA.

Over the past months, GSEA has held regional competitions in conjunction with
chapters all around the United States and Canada, including EO Minneapolis,
EO Los Angeles, EO Dallas, EO Boston, EO DC, EO Calgary, EO Toronto, EO
Ottawa, EO Fairfield-Westchester, EO Philadelphia and more. In September,
regional competitions will be held in Australia.

Here are some of the GSEA regional competition winners who will advance to
the Global Finals and compete for the title and prize package valued at over
US$125,000:

GSEA Texas Regional Competition

First Place: Tim Hamilton, Astonish Designs, University of Texas. This 23-year-
old runs a four-person graphic design and web development business in Austin,
Texas, USA.

Second Place: Jeff Livney, Livney+Partners, Texas Christian University. Jeff runs
a business with 15 contractors and 50 customers from an office inside his parents'
home. The 18-year-old student owns and operates Livney+Partners, a brand
marketing company boasting clients like JP Morgan Chase Bank and Marriott
Hotels.
GSEA Minnesota Regional Competition

First Place: Zach Vruwink, Zach’s Computers, University of Wisconsin. At age

19, Zach has grown his business’ revenues to more than US$300,000 annually.

Second Place: Tyler Olson, HelpMeTy.com, University of St. Thomas (pictured

on left). Tyler created a unique business model in the crowded computer services
sector. HelpMeTy.com assists computer users with their technology troubles and
with home theater installations, networking and much more.

GSEA Los Angeles Regional Competition

First Place: David Fan, Inkjetremix.com, University of California at San Diego.

David is a student at UC San Diego, and his business sells ink and toner over the
Internet. Inkjet Remix offers savings to consumers by selling remanufactured and
compatible cartridges.

Second Place: Daniel Negari, Beverly Hills Mint, University of Southern

California. Daniel’s commercial and residential real estate lending business,
combined with developments of his own, have his 2007 revenues estimated at
US$2 million for the year!

Stay tuned for more information on the GSEA finalists— the next generation of
EO members. You may be seeing one in your Forum soon!
GSEA is always looking for undergraduate student entrepreneurs from any
town, city or country around the globe.

Please forward our website link – www.gsea.org – to any contacts in your

network who may find it valuable, or feel free to nominate any undergraduate
students you know who are running businesses.
Words of Wisdom: Member Leader Brandon Ames
Brandon Ames
President of EO Arizona

Up at 4 a.m., to bed by 10 p.m., and then get up and do it all over again. Even on
Saturdays and Sundays. I was told this was the life of an entrepreneur. I was told
wrong.
Now it’s a tale of two lives: the one I lived prior to 1999, and the one I live now.
See, there were several things that I had done wrong as a young entrepreneur,
and as the son of a rancher, it was pretty simple: “Son, you have to work hard.”
Prior to 1999, I did just that. I reacted to customer complaints, dealt with
employee issues and ran a 60-person business every day. I didn’t have time to
build a mission statement or create a set of values. I didn’t have time to create an
identity outside of work. In my opinion, that was all “textbook stuff” that didn’t
have anything to do with the real world of business. So I continued to put in the
hours, and from 1995 to 1999, I slowly worked my way toward bankruptcy.
I should have gotten the hint when lawyers started telling me that I needed to
seek legal counsel immediately, but not for my business— for my personal life.
While I had been terribly focused on my business, my health, family and
spiritual life had all gone to Hell. My wife had had enough. It was only by the
grace of God that her father passed away the day she was filing the divorce
papers, and that was my opportunity to put things into perspective and see
things more clearly.
It’s a common theme among entrepreneurs that we get our roles and identities
mixed up and that we have huge issues with work/life balance. What I try to
remember is that identity is who I am, and a role is what I do. My roles include
father, husband, deacon, runner, CEO and volunteer. These roles must be
balanced, or else I – and the ones around me – suffer.
So how did I change? I developed a personal mission statement around the roles
in my life to help build a successful life plan. When I started with that, the rest of
my life started to come back together.
I’ve also learned that when I spend disciplined time on what I used to think of as
“textbook stuff,” the payoff is amazing. Improving my business culture –
including my company’s mission, vision, values and goals – was the quickest
way to free up time in my business. This invisible thread that has tied my
business back together has enabled unbelievable, tangible results, including a
340% growth rate and five weeks of vacation time with my family this summer.
If you’re killing yourself with work like I used to, it will eventually take its toll.
I’m just glad I woke up. I have a lot of other things in my life to enjoy than just
my business.
A Billion Business Opportunities Await You
At the EO New Delhi University, you’ll be able to experience once-in-a-lifetime
events that connect you to your EO network in ways you never imagined.
“‘University’ truly deserves its name. In terms of learning and experience, it feels
like drinking from a water hydrant. It’s a perfect mix of learning from great
speakers and networking with fellow entrepreneurs,” said René Seifert of EO
Bangalore.
More specifically, the real-life experiences and intimate discussions that take
place at EO’s University Learn-Arounds are one of the most popular features of
EO events. From the Chicago Board of Options Exchange at the EO Chicago
University, to Fuji TV at the EO Tokyo University, to eBay Germany at the EO
Berlin University, Learn-Arounds provide a wealth of opportunities to learn and
grow.
Experience the business side of New Delhi, India, while attending a Learn-
Around at one of the following three companies:
MoserBaer:
Moser Baer is one of India's leading technology companies and ranks among the
top three optical storage media manufacturers in the world. A pioneer among
globalizing Indian firms and headquartered in New Delhi, Moser Baer has a
presence in more than 82 countries. At this Learn-Around, Executive Director
Ratul Puri will discuss how he played a pivotal role in reinforcing Moser Baer's
focus on maximizing shareholder value and driving the company’s product
diversification.
HeroHonda:
When Hero Cycles and Honda Motor Company of Japan announced their joint
venture in 1984, few could have imagined that the two would go on to make
history. In a little more than two decades, the world's largest car manufacturer
and the global leader in motorcycles have created the world's single largest
motorcycle company and the most successful joint venture for Honda Motor
Company worldwide. This Learn-Around includes a tour of the manufacturing
facilities and a boardroom meeting with Chief Executive Pawan Munjal.
PerotSystems:
Perot Systems – a Fortune 1,000 corporation – was founded in 1988 by Ross Perot
and is a leading provider of technology-based business solutions. Near New
Delhi in a southern suburban town called Noida, Perot Systems has a 25-acre
campus that houses applications solutions and infrastructure solutions teams,
including the company’s 27,000-square-foot global service center and Enterprise
Command Center (ECC). Join this Learn-Around to explore one of the world
leaders in information technology services and meet with Anurag Jain, President
of India Operations.
Where There's a Need, There's an Entrepreneur
Farayi Karumazondo

2007 GSEA Finalist

EO is gearing up for the Global Student Entrepreneur Awards (GSEA) Global

Finals on 1-3 November in Chicago, Illinois, USA, where up to 24 of the world’s
finest undergraduate student entrepreneurs will compete in front of a panel of
high-level CEOs and entrepreneurs.

Read on as Farayi Karumazondo – a top contender for the GSEA Global prize
and a recent graduate of Africa University in Zimbabwe, Africa – shares how he
went from selling roasted ground nuts to pay for college to heading up his own
successful company.

During my three-month summer breaks, I traveled to the communal areas of

Mutoko in Zimbabwe to collect ground nuts. I would carry 17-50 kg bags on the
bus and then store the nuts at home to add to their value, since the economy is
hyper inflationary. Before a new academic year started, I would roast the ground
nuts, package them and then carry them back to school with me. I would supply
the university shop with roasted ground nuts at an 80/20 rule. This means that
for all the sales they made, the student union would get 20% and I would get
80%.
I also sold some of the roasted nuts to students in the residence halls and during
lecture breaks. I did this to be able to support myself in terms of tuition fees,
meals and other sundry expenses.
I also purchased chocolates from wholesalers in the city of Mutare, which was 17
km from Africa University. These I would sell to students during lecture breaks
and in the evening. In 2007, I partnered with a lady to sell cream doughnuts to
students in the residence halls.

In 2006, Africa University had a matriculation ceremony, where new students

were entered into the register to become official members of the university. A
few friends and I realized that there was only one photographer on campus, so
we decided to purchase a camera and take photographs. After getting
permission, we located several students in the residence halls, made a register for
them according to their faculties and took their photos on the day of the
matriculation.

And so Virgin Solutions – a film editing, printing, photography and consulting

business – was born. In February 2007, we acquired a printer and then started
offering printing services to university students. The university library printing
services closed at 4:30 p.m., whilst there were students who still needed to print
their assignments, projects, dissertations and posters.

In addition to our current services, Virgin Solutions is preparing to open a

private television station and becoming a major tourism promoter around the
globe. We’re also looking forward to establishing “poultry and piggery” projects,
an asset management company, a management training institute and water
treatment plants. The management training institute will offer programs in
budgeting and budgetary control, project investment analysis and cultural
heritage management.

We see Virgin Solutions as a major competitor in Africa and in the whole world.
Our desire is to get industrial experience in global business corporations to
enhance our expertise. We want to further our studies by getting a Masters in
International Business, Entrepreneurship, Marketing or Finance. With this
knowledge, we can help Africa move in a positive direction.

Stay tuned for results from the GSEA Global Finals in November. If you have
any student entrepreneurs you would like to nominate for next year’s Global
Student Entrepreneur Awards, email Erik MacKinnon, Emerging Programs
Manager. Nominations and self-nominations for the 2007/2008 GSEAs will
officially open 1 October 2007.
The Power of Social Networking
Jonathan Smith
EO Detroit

I keep getting stumped with questions that I cannot answer, and it frustrates me.
I am a guy, and, as many women can attest to, guys are better at solving
problems than they are at listening.

My fiancée, Jennifer, had some questions about how we should handle certain
situations in our life. Being the guy that I am, I immediately tried to find the right
answer. When I answered with a positive spin, she would play devil’s advocate
and give me all the reasons why the negative answer was more plausible, and
vice versa. Does this sound familiar to anyone?

This conversation was not going as well as I would have liked, so I went to my
fall-back plan: the Internet and the world of social networking. I suggested to
Jennifer that she consider posing these questions to a greater audience, and
maybe we would gain some wisdom that we could not come up with on our
own.

Jennifer is pretty innovative and open to new ideas, so she immediately went
online to Yahoo! Answers and started tapping into the network. Within 30
minutes of asking her first round of questions, she had 16 answers. Twenty-five
percent of the answers were very helpful, 50 percent were neutral and twenty-
five percent were not helpful.

After reviewing the answers to the first question, she realized that she needed to
refine her question in order to dig deeper into the wisdom of this online
community. The answers she received helped us come up with a mutually
agreeable plan of action, and they ultimately saved us hundreds of dollars in
counseling fees!

Of course, Yahoo! Answers isn’t an infallible source of infinite wisdom. But, as

legendary American football coach Vince Lombardi said, a group effort usually
leads to better, and better-rounded, results.
The beauty of social networking is that the tools are right at our fingertips. We
just need to be aware of them and their potential applications and be willing to
experiment with them to create outstanding results.
Secrets to long-term entrepreneurial growth:
Why do some companies “break through” while so many others do not? Author
and business consultant Keith McFarland has spent years researching thousands
of private companies in an attempt to answer that very question.

After studying the performance of more than 7,000 companies that have
appeared on the Inc. 500 list of America’s fastest-growing private companies,
McFarland, a former Inc. 500 CEO himself, wrote the best-selling book The
Breakthrough Company: How Everyday Companies Become Extraordinary
Performers.

Here are 10 secrets to long-term entrepreneurial growth:

1. The sexiest businesses don’t always win.

2. It’s not all about the entrepreneur.

3. Entrepreneurs aren’t always risk takers.

4. Founders don’t need to let go.

5. You don’t necessarily have to stick to your knitting.

6. You don’t need OPM (other people’s money).

7. It’s not all about hiring the right people.

8. It doesn’t matter where you went to school.

9. You don’t have to let the MBAs take over.

10. Strategy isn’t just the job of the CEO.

Source Yahoo Finance

A Couple of Rules for Startups
Here “My” and/or “I” Refers to Author Mark Cuban.
My buddy Jason had a GREAT post about rules for startups. Read it, love it learn
it.

Of course, anyone who has started a company has their own rules and
guidelines, so I thought i would add to the meme with my own. My “rules”
below aren’t just for those founding the companies, but for those who are
considering going to work for them as well.

1. Don’t start a company unless it’s an obsession and something you love.

2. If you have an exit strategy, it’s not an obsession.

3. Hire people who you think will love working there.

4. Sales Cures All. Know how your company will make money and how you will
actually make sales.

5. Know your core competencies and focus on being great at them. Pay up for
people in your core competencies. Get the best. Outside the core competencies,
hire people that fit your culture but are cheap

6. An expresso machine? Are you kidding me? Shoot yourself before you spend
money on an expresso machine. Coffee is for closers. Sodas are free. Lunch is a
chance to get out of the office and talk. There are 24 hours in a day, and if people
like their jobs, they will find ways to use as much of it as possible to do their jobs.

7. No offices. Open offices keeps everyone in tune with what is going on and
keeps the energy up. If an employee is about privacy, show them how to use the
lock on the john. There is nothing private in a start up. This is also a good way to
keep from hiring execs who can not operate successfully in a startup. My biggest
fear was always hiring someone who wanted to build an empire. If the person
demands to fly first class or to bring over their secretary, run away. If an exec
won’t go on sales calls, run away. They are empire builders and will pollute your
company.

8. As far as technology, go with what you know. That is always the cheapest
way. If you know Apple, use it. If you know Vista… ask yourself why, then use
it. It’s a startup, there are just a few employees. Let people use what they know.
9. Keep the organization flat. If you have managers reporting to managers in a
startup, you will fail. Once you get beyond startup, if you have managers
reporting to managers, you will create politics.

10. NEVER EVER EVER buy swag. A sure sign of failure for a startup is when
someone sends me logo polo shirts. If your people are at shows and in public, its
ok to buy for your own folks, but if you really think someone is going to wear
your Yobaby.com polo you sent them in public, you are mistaken and have no
idea how to spend your money.

11. NEVER EVER EVER hire a PR firm. A PR firm will call or email people in the
publications, shows and websites you already watch listen to and read. Those
people publish their emails. Whenever you consume any information related to
your field, get the email of the person publishing it and send them an email
introducing yourself and the company. Their job is to find new stuff. They will
welcome hearing from the founder instead of some PR flack. Once you establish
communications with that person, make yourself available to answer their
questions about the industry and be a source for them. If you are smart, they will
use you.

12. Make the job fun for employees. Keep a pulse on the stress levels and
accomplishments of your people and reward them. My first company,
MicroSolutions, when we had a record sales month, or someone did something
special, I would walk around handing out 100 dollar bills to salespeople. At
Broadcast.com and MicroSolutions, we had a company shot. Kamikaze. We
would take people to a bar every now and then and buy one or 10 for everyone.
At MicroSolutions, more often than not we had vendors cover the tab. Vendors
always love a good party.These are all off the top of my head. But they have
worked for me so far.
Creating media empires
Many bloggers dream of creating media empires. Few of us come even close.
Having a popular blog is just one minor step in the process. It’s what you do next
that’s critical. Many people start selling advertising or try and build revenues
through affiliates. Some create e-books, offer white papers, or branch off into
consulting services based on their expertise. All good things, but all relatively
small steps.

Of course, it’s understandable. Few of us blog full-time. It’s not easy to blog full-
time and be able to pay the bills. The amount of time, dedication and expertise
required is immense. But when we see examples of people building out mini-
media empires like TechCrunch, GigaOm, ProBlogger, Know More Media,
Positive Media Blog Network, and others, we feel like it’s possible for us as well.
And it is.

Wendy Piersall has just proven it.

She recently announced that she’s converted her extremely popular blog eMoms
at Home into a small media empire. She’s launched 6 additional blogs/channels
all related to stay-at-home, working parents. Wendy now has her own blog
network, although she’s re-defined it as a “magazine.”
This is a great move for Wendy. It helps her extend her brand but remain focused
on her specialty and niche. In a couple years when people think about “working
at home parents” they’re going to think “Wendy Piersall” or “eMoms at Home”.
And you can’t understate the value of that.

So how did she pull it off? Really, you should ask her yourself, but from where
I’m sitting (and having thought about building mini-media empires myself)
here’s my take:

Build up a popular blog on a specific niche. You need to have a strong voice in
your niche. You need to do all the things required to build up a popular blog:
write well, focus on content, use headlines effectively, have a great blog design,
market heavily, leverage social media, build relationships. There’s more to
developing a popular blog than that, but you get the point.

Develop a strong brand. Without a strong brand it’s harder (although not
impossible) to build a popular blog. More importantly, without an effective
brand, it becomes difficult to translate blog success into other endeavors. So it’s
critical to have a great brand (which should be considered personal brand) and
make sure it permeates everything you do.
Make lots of friends. The blogosphere is built on the concept of connections and
friends. It succeeds because it encourages and rewards those who have
conversations with others. You need to become part of the blog community.
Check that: You need to be at the center of your blog community.

Master monetization. Your media empire will die on the table if you can’t
monetize it. And using Google AdSense isn’t enough. You need to learn about
affiliates, sponsorships, text link ads, sponsored reviews, and much, much more.
Learn more about marketing. There are certain techniques you can use to market
your blog. But the world of marketing is oh-so-much bigger, and once you get
into media empire territory you’ll need to understand a lot more about
marketing, both online and offline. Learn about email marketing and auto
responders.

Find opportunities offline. As you’re mastering the online world, look to offline
opportunities as the next step. Speaking engagements, coaching and consulting
gigs are a great way to branch out, learn about business from a different angle,
and develop your reputation beyond a “blogger.” You can build a successful,
money-making blog as a blogger, but you can’t build a media empire that way.
You have to be known as an entrepreneur, media strategist, and business person.
And there are plenty of examples of people who bridge both the online and
offline so well: Penelope Trunk, Gina Trapani and Jeremiah Oywang.

Get help. You can’t build a media empire alone. You need great people around
you. Over time your role will be less about writing and day-to-day minutiae, and
more about overseeing the entire operation. You’ll need people to help you in
those areas where you’re lacking expertise, and also people to take on tasks that
you can’t devote your energy to. People like Dawud Miracle, Derek Semmler,
Lorna Doone Brewer and others. As you hand over the reigns of day-to-day
affairs to others, make sure you incentivize and motivate those people daily.
You’re a boss now, not a single person working alone.

Be a teacher. You’ve accumulated a certain amount of knowledge to this point,

but unless you share it your media empire will suffer. You need to share that
knowledge with the outside world (to attract visitors, build reputation, grow
karma) but more importantly you need to share that knowledge with your team.
Don’t expect each person you bring on board to be as good, experienced and
motivated as you. You’re now their boss, but you’re also their teacher; and the
more they know, the more they excel, and the more you benefit. Get teaching.

Realize it’s a business. You’re past being a blogger now, you’re running a
business. That means more learning in the areas of operations (accounting,
finance, etc.), marketing, startups and more. You won’t be an expert overnight,
and there’s a good chance if you come from the blogging world that your
business experience is limited, but that doesn’t mean you can’t succeed.

Expand slowly but promote like crazy. You can’t build a blog network like
b5media in a day. Grow slowly, experiment, test your assumptions, tinker and
keep growing. You most likely won’t have a lot of money to support your efforts,
so don’t expand like a fiend. But promote the hell out of what you’re doing.

Don’t hold back when it comes to tooting your own horn, beating the drum and
making noise. It’s not about being an egomaniac, it’s about maximizing
everything you’ve learned towards generating tons and tons and tons of buzz.

I’m a huge fan of the mini-media empire. And we’ve started to see real value
come out of ultra-successful blogs. Just look at the purchase of TreeHugger for
$10 million dollars.

So if you’re ready to invest a crazy amount of time, get into startup mode, take a
risk and leverage your knowledge, go for it and build your media empire. And
follow Wendy Piersall’s example.
What’s the Motivation to Start a Startup?
By Ben Yoskovitz

Starting a company is hard. Even umber-successful entrepreneurs like Marc

Andreessen will tell you so. And no matter what you think you know about
starting a business, you’ll be proven wrong time and time again.
Austin Hill beat me to my own post on the rollercoaster ride of startups, but his
point is a key one: emotionally, be prepared for one hell of a topsy-turvy
experience.

When starting a company, expect to face financial and personal uncertainty.

Your own money may be at risk. You may be bootstrapping; watching the
pennies disappear from your account is frightening. Troubles with partners are
bound to happen. If they get too severe, you may have to get rid of them. Your
family life will suffer - too many hours and too much brainpower invested in
your startup…

The whole process of starting a business can get really, really ugly.
So what’s the motivation? Why do it?

Ask any entrepreneur and they’ll openly tell you all the reasons not to start a
business. All the frustrations, difficulties and painful times. But then they’ll
launch into all the reasons why you absolutely must start a company, and do it
right away. Most entrepreneurs are like late night infomercial maniacs when it
comes to promoting the startup life to others. Here’s what they’ll be pitching:

Passion: The passion you feel as an entrepreneur - for the startup life, for your
company, for your vision - is all-encompassing. You’re driven to succeed, to
experience everything a startup has to offer, and to make things happen. Passion
is a prerequisite to starting a business, and it’s also a huge motivator, because
through your startup you fuel your passion.

Creating Value: Entrepreneurs are builders, Creators. We need to produce

“stuff” in order to succeed. And that “stuff” needs to create value. It’s extremely
motivating to know that something you’ve started has created value for others.
And part of creating value is contributing to the entrepreneurial community on a
whole. For me, this is a particularly motivating factor; I’m able to build a
company, blog about it and communicate to others about my experiences.

Changing the World: Not every business has the potential to change the world,
but many entrepreneurs take this mantra to heart. Lots of entrepreneurs believe
their businesses will change the world. It’s part of creating value. Starting a
business and tossing yourself into it with unequivocal passion, gives you the
chance.

Being in Control: Entrepreneurs are control freaks. We believe we can do things

better than others, and off we go! Having that opportunity is on one hand
motivating and on the other hand scary - you’re in control, you’re the boss, you
better get out there and make things happen. Luckily, being in control feeds
many of the other motivating factors, so it all comes together.

Money: There’s no question that money is a motivating factor, although it

belongs at the bottom of the list. The truth is that you can probably earn more
money at a fairly high paying job, over enough years, than you can start a
business because of the likelihood of failure. But the only way to hit a financial
home run is with a startup. You get to take your swing at the plate and aim for
the fences.

Very few entrepreneurs start one business and stop. Whether they succeed the
first time or not, many entrepreneurs are “repeat offenders” because the
motivation for starting a business is so strong. The emotional rollercoaster that so
many people describe borders on an addictive rush.

Entrepreneurs crave the feeling of starting something new, disrupting the status
quo, changing the world, creating value, generating wealth. It’s what
entrepreneurs do. Few working opportunities will give you the same possibilities
as starting a business. And few jobs, if any, give you the same motivations and
rewards.
Top 10 Reasons to Join a Startup
By Ben Yoskovitz

Joining a startup company is a no-brainer. The pros far outweigh the cons.
Whether you’re just graduating, or you’ve done your time “working for the
man” now is the perfect time to make the jump.
Go work for a startup company.
Here are 10 reasons why:

More influence. With a smaller team, each person at a startup has more say. You
should have more opportunity to voice your opinion and influence key
decisions. And you want that, right?

More ownership: You might not be the founder, but you’re darn close. You
should have some equity (or stock options.) Both a sense of ownership and actual
ownership are wonderful things; they’ll give you one more reason to work better
and harder.

More meaning: The best startups are built on top of a strong purpose and vision;
a raison d’etre that truly resonates. It’s a startup’s rallying cry and it provides
other likeminded people with true meaning in their work.

More comraderie: Startup teams have to gel beautifully to succeed. Doesn’t mean
you’ll always get along, but a little Saving Private Ryan never hurt anyone.
More diversity: There shouldn’t be much pigeonholing at a startup; you’re going
to do and see a lot of different things. You will be thrown out of your comfort
zone. You will get a chance to expand your horizons.

More learning: Startup environments are crash courses in business and life.
You’ll learn more in 6 months at a startup than you will in 4 years at university.

More connectivity: With less (or zero) levels of bureaucracy, everyone is closer to
one another. You should be well connected to your CEO as well as the network
of customers, vendors, VCs, friends, etc. that surround the startup.

More emotion: Working at a startup isn’t a constant high. Far from it. But it is
intense, and the emotional charge you’ll get on a regular basis is a worthwhile
learning experience.

More future success: I don’t have any statistics to prove this, but I bet you that
startup employees go on to bigger and better things. Whether it’s higher paying
or more interesting jobs or starting their own companies, your resume and
personal story benefit considerably from living the startup experience.
More fun: Startup employees have more fun. It’s just the way it is…

The job market for startup and early-stage companies is very strong. There’s no
shortage of opportunity. Top talent can pick and choose amongst a slew of
startups eager to hire. The risk is low.

Granted, not all startups are created equally. Not all startups may give you the
benefits described above. You can’t dive in eyes closed and expect to find the
perfect fit. Make sure you ask the right questions before joining a startup.

Plenty of smart people have suggestions on the questions you should ask before
joining a startup, so you shouldn’t have a problem being prepared.
But make the leap. Join a startup. It’s worth it.
Enterprise 2.0 Startups - Know Your Market
By Ben Yoskovitz

I started my first company in 1996. A couple years later that company morphed
from a service business (offering web design and development services) into a
product business with the launch of our web-based project management
application. Those were the early years of Software-as-a-Service (SaaS). In fact,
we were referred to as an ASP (Application Service Provider) back then, and the
biggest hot button issues were the fact that implementing web-based / hosted
solutions was extremely new, security, and SLAs (Service Level Agreements.)

Truth be told, those were the early days of Enterprise 2.0.

Nowadays, very few companies are worried about hosting mission critical
applications outside of their own networks. Security is less of a concern, because
companies are generally comfortable with Web security. And SLAs still exist, but
they’re not the predominant issue. Most companies understand that web-based /
hosted applications stay up fairly well, but nothing is perfect.
But even with many of the biggest issues resolved over the last 10 years,
companies are still not adopting Enterprise 2.0 at the pace you would expect.

And many Enterprise 2.0 startups can’t get the traction they need.
So what’s up?
Bernard Lunn at ReadWriteWeb writes about 11 things startups should know
about Enterprise 2.0. He makes many valid points (well, 11 in fact) and touches
on some of the struggles I’ve experienced and witnessed in the past.
Ultimately, it all comes down to knowing your market. And in my experience,
many startups jumping into Enterprise 2.0 aren’t built off that solid foundation;
it’s more about launching something cool & innovative, making noise and trying
to gain traction. That strategy may work for consumer / B2C startups, but it’s a
very tough slog for enterprise sales.

Here are some things to think about when it comes to selling Web 2.0 social
software to enterprises:

Innovation vs. Status Quo Bernard touches on this in his final point, but I think
this is something Enterprise 2.0 startups struggle with immensely. They can
readily see what’s broken with existing, old-style software. They see how it can
be improved. And they want to scrap the old and innovate like fiends to bring in
something that’s so much better.
But the problem is that companies may like the status quo. Ignoring the fact that
switching from one system to another is tricky for companies, and just focus on
the fact that an enterprise might actually like some of what we (as newer people
looking into the market) think is bad, pointless and stupid. Enterprise 2.0
startups have to be wary about overselling innovation and change, while at the
same time not sacrificing the value they bring.

And the fact is, this point of “innovation vs. status quo” is true with respect to
everything an Enterprise 2.0 startup does. For example, you might want to
innovate your sales model, or your pricing, or support structure. And there’s no
shortage of innovation that can take place in those areas. But if your market is
still comfy in the status quo, you’ll hit roadblocks very quickly.

Who are you selling to? Every company, big and small, has a hierarchy. And
you’ll need to understand who you’re selling to within an organization. There
will be the gatekeepers (lower level folks who are tasked with doing research on
Enterprise 2.0), mid-level managers who have some budget, but probably can’t
spend more than $5,000/year without higher-up approval, and then C-level
executives - namely CFOs and CEOs. You have to be very strategic in how you
sell to enterprises, who you reach, how you move up (or down) the food chain,
and how the value proposition changes along the way.

How are you training customers? One of the biggest challenges with enterprise
software is adoption — getting customers to actually use what you’ve sold them.
Certainly, social software has a viral component that can increase adoption, but
there will always be challenges. For example, a CEO may buy something and
then in a top-down approach “force” everyone to use it. How well do you think
that typically works?

Even with relatively simple software, companies will often ask about training.
Most Enterprise 2.0 startups can’t afford to do on-site training, so what else can
be done to provide the necessary hand-holding and comfort level, without being
overly costly? In my experience, I’ve found that creating a video tutorial library
is a great way to give companies good quality training and support without
breaking the bank. Video tutorials are also great when new employees join an
organization, or they’re increasing the usage of your software within the
company; all they have to do is ask people to go through the videos to get up-to-
speed.

What level of customer support do you offer? Customer support is a huge issue
for Enterprise 2.0 startups. We know that most legacy software companies
provide piss poor support (and it’s generally quite expensive too), so there’s
opportunity to differentiate. But I’ve also seen too many Enterprise 2.0 software
companies take the “less is more” approach with support. “Well, our software is
free. And we’re focused on innovation and product development. So we don’t
have the time or resources to offer great support. So there.”
WRONG! WRONG! WRONG! If you take this approach, you’re dead. End of
story.
How are you perceived in the market? A lot of companies don’t like to buy from
startups. There’s more risk involved. What happens if you go out of business in 6
months? (I get asked that a lot!) Or they’re worried that they won’t get the hand-
holding they deserve (because every customer thinks they’re the most important,
remember that!)

Again, this comes down to innovation vs. status quo. You don’t want to pretend
you’re a big, old school company, but you also don’t want to look like a 2-person
garage-based startup. You can balance this by doing a few things:
Offer 1-800 # for customers to call

Use press releases to market in a more traditional way

Become well-known within your industry as a market leader (to prospects,
customers and journalists)
Publicize stuff about your company that exudes stability (Advisory Board,
venture capital, customer acquisitions)
Get customer case studies as soon as possible

Have a good-looking, sophisticated and not-ultra-Web 2.0 website

This is not about being an illusionist and faking people out, it’s about how you
present yourself effectively in everything you do.
The biggest question to ask (and I don’t think a lot of Enterprise 2.0 startups ask
themselves) is this: How do my potential customers WANT me to look and what
do they WANT me to present them in order for them to feel comfortable about
buying from me?

What are your distribution channels? This is of critical importance to any

Enterprise 2.0 startup. It’s unlikely you’ll have the time, money and expertise to
launch a huge awareness campaign, followed by heavy duty marketing and
direct sales. That’s going to mean finding distribution partners - resellers - who
can leverage their existing customer base, sales staff and knowledge of the
market. Companies already in your market will know it better than you, and
they’ll know how to sell to customers. Knowing your market, and by extension
knowing the players in it and who can serve as a distribution channel is key.

Note: Startups partnering with startups is very difficult. It might make sense
technologically to do so, but since neither startup has the sales team, distribution
channels, pipeline or customer base, it’s just a techno-mumbo-jumbo connection.
Enterprise 2.0 startups need paths to customers, and as quickly as possible, and
that means partnering with much larger organizations that might not have the
technical sophistication and innovation that you possess.
When are companies buying? Timing is everything. You need to know when
companies are in budget season, prepping for their next budget cycle. You need
to be top-of-mind when companies are deciding what to spend on, and how
much. Buying cycles for most companies will follow similar patterns, but there
could very well be some specifics in your market that you should know about.

What are companies buying habits? You need to know when companies buy, but
also how they buy. Enterprises are tricky beasts. They’re accustomed to long
sales cycles, approvals, demos, trials, more demos, and so forth. Changing those
habits is not always easy, and in some cases you’ll have to play by the rules to
get a foot in the door.

What are the nitty-gritty pitfalls? This is a catch-all bucket for me when it comes
to knowing your market. Whatever market you’re going after, it’s unique. You’ll
have to know it inside out before you can make a dent in it. And there are a lot of
little, sneaky details to understand. For example, some departments within an
organization are afraid of technology. Use the word, “software” and they
immediately respond with, “Well, we have to get I.T. involved.” Except part of
your value proposition is that it’s hosted and dead simple to use, so I.T. doesn’t
have to be involved. You have to know these things, so you can couch your
offering the right way, market properly and sell effectively.

Enterprise 2.0 Startups Rock!

I’ve told a number of people that my next startup (after Standout Jobs, which is
squarely in the middle of Enterprise 2.0 land) will be a consumer play. Direct to
consumers, all the way! But the fact is that I enjoy the B2B software-as-a-service
world because it’s more concrete. You build useful software applications and sell
them. Most days that makes a lot more sense to me than building something for
consumers, and trying to get millions of users before figuring out how to
monetize. Apparently 12+ years in B2B SaaS makes me old school.
Enterprise 2.0 has its unique challenges, especially for startups (especially when
they’re run by people without deep knowledge of their market, or deep
experience in the space). You have to really know your market to succeed, and
not assume you can go in guns blazing and change the world in a heartbeat.
Whether you put a 2.0 (or someday a 3.0) into the catchphrase, it still says
“Enterprise.”
Startups Launching at TechCrunch50 and DEMO Fall 2008
By Ben Yoskovitz

Launching a startup at a big event is a great idea. There are many advantages.
Hard Launch Date: Launching at an event forces you to launch. There are many
examples of startups that delay their launch (several times over) because they
can. An event means you’ve got to launch. Granted, I’ve seen a lot of startups
launch at events, and they’re not really launching … they’re announcing the
upcoming possibility of a beta product, sometime in the near future, maybe.
That’s not really launching and in my mind, shouldn’t be allowed at events like

TechCrunch50 or DEMO.
Lots of Press: You can’t go wrong with some buzz, and the more the merrier. PR
can be a huge boon to a startup, and there’s no better way to kick start things
than with a well-publicized event. Of course, the event buzz will die fast (it
almost always does), so you need a plan for maintaining and leveraging that
press and buzz going forward.

Lots of Networking: Put hundreds or thousands of people in a room, all there to

live and breathe startups for a few days, and the opportunities are almost
endless. You won’t get a similar opportunity, and you’re in the spotlight, so you
have to take advantage. I would recommend that every startup have a plan of
attack for who they want to speak to, why and how. Don’t just assume you can
walk around and meet people randomly, have a strategy in place.
Getting on Stage: For a lot of people this is a scarier proposition than death. And
it is scary. But once you’ve gone on stage in front of hundreds of people to pitch
your startup dream, you’ll find it gets infinitely easier. I cringe a bit watching our
presentation at DEMO 2008, but the confidence I gained from that is
immeasurable.

Line in the Sand: Launching at an event creates a more marked point in time
whereby you can distinctly say, “We’ve launched.” It’s almost like your startup
has two lives - Before Launch and After Launch. If you recognize this fact, and
don’t get bogged down in obsessing solely about the launch, you’ll be very ready
and eager to get past the launch into the real business of making your startup a
success.

Launching at a big event is all about focus. It focuses you on a point in time, it
focuses your product development (because you can’t keep building forever and
ever), it focuses your presentation skills, and brings a lot of things to bear all at
once. It can be extremely nerve-wracking but I believe it’s 100% worth it.
Standout Jobs Launched at DEMO 2008
I look back fondly on our DEMO launch at the end of January. It was a great
experience for me, my co-founders and the entire team. It still carries weight
when we speak to people (be they investors, customers, potential partners, etc.)
and cements in our minds a certain amount of success: we rushed, we ran, we
screamed, we panicked … and we launched. I don’t hang my hat on that, but it
was still worth it.

TechCrunch50 vs. DEMO

This is a crappy debate. I find Robert Scoble’s post about the crappy websites of
the DEMO companies particularly embarrassing and pointless. What’s the point
of dissing those companies? Without getting into it further, I don’t get it.

DEMO is expensive. There’s no doubt about it. It costs $18,000 to present as a

company, and then there’s the cost of travel, marketing materials, etc. Given the
TechCrunch50 competition, I really don’t know what DEMO will do; maybe
they’ll lower their fees, maybe they won’t. I do know DEMO puts on one heck of
a professional show. Is it worth it? That depends on a lot of factors, and I can’t
possibly tell you one way or the other in a simple blog post.

And remember, TC50 charges for Demo Pit slots, and they make a lot of money
from the conference, so I don’t look at cost as being such a huge differentiator.
How are companies picked to attend TC50 and DEMO?

Is it a truly fair, open and honest selection process? No. It can’t be. Humans run
both events, and humans are human. I know the selection process is extremely
difficult - both conferences get tons of applications - and have to go through
them painstakingly. But over all the arguing and blustering over costs, etc. I
don’t think either conference can truly say that they absolutely picked the best
companies to present. There are always going to be outside influences that affect
decision-making. That’s human nature. I look at the debate and arguing and just
throw up my hands; it’s silly and serves no one (well, it does build buzz for
people so that’s a good thing - and truth be told might even benefit the startups
at both events!) Just don’t assume that one conference has a more fair and open
selection process versus the other.

TechCrunch50 has the Advantage

Without a doubt, TC50 has the advantage. TechCrunch (and those involved
outside of the TechCrunch people) have built up a huge community; and that
community will drive TC50’s success in a big way. The buzz is huge around
TC50. It has a ton of experts that people want to see. As exciting as it will be for
attendees to see 52 new companies launch, I’m sure many are going to see the
experts and meet them as well. TC50 plays to its strengths very well, and has
done a good job of making a lot of noise and pulling things together.

What about the startups?

The startups need to stay focused. Launch your company - do it as loud and
proud as you can - and leverage the absolute heck out of it, whether you’re at
DEMO or TC50. Allen Stern makes the point very clearly, “Stay out of the
drama.” I think that will be easier said than done, and I suspect that the folks at
DEMO are going to get asked a lot about “DEMO vs. TC50″ … and the TC50
companies less so. It’s a difficult, frustrating and in my mind, pointless situation.

I’d like to see both conferences succeed and find their place — and most
importantly, truly benefit startups.
I wish all the startups the best of luck. No matter what, presenting at a big event
is a great way to launch, and take as much from it as you can. Milk it for all it’s
worth and then move on as fast as you can … you’ve got a business to run.
How to Start your Company and Keep Your Day Job
March 1, 2008 by Mahesh M Piddshetti
About the Author (Tony Wright)
April 2006 - Brian Fioca and I [Tony Wright] sell Jobby, a web 2.0 resume
posting/search site, to Jobster

Having done this twice (started a company that eventually turned into a full-
time startup), I settled in to reply. Before long, it was clear that my response was
long enough to justify a blog post. I’ve done two part-time-to-full-time startups
(one resulted in a startup the sold, the second is Rescue Time– currently a YC-
funded company– cross your fingers).

At the end of the day, I think Paul Graham is right when he says:
“The number one thing not to do is other things. If you find yourself saying a
sentence that ends with “but we’re going to keep working on the startup,” you
are in big trouble. Bob’s going to grad school, but we’re going to keep working
on the startup. We’re moving back to Minnesota, but we’re going to keep
working on the startup. We’re taking on some consulting projects, but we’re
going to keep working on the startup. You may as well just translate these to
“we’re giving up on the startup, but we’re not willing to admit that to
ourselves,” because that’s what it means most of the time. A startup is so hard
that working on it can’t be preceded by “but.””

In the beginning, however, it’s not always practical to dive in full-time. And
sometimes, when your idea is off-the-wall and also easy to build a prototype for,
it’s smart to whip something out just to see if what you’re building is as cool as
you think it might be before you take the plunge.
So if you’re too poor or too unsure to do the right thing for your business and
dive in full-time, here are a few things that seemed to work for us when we did it
part-time:

1. You need a co-founder and some cheerleaders… If you can’t find 2-3 friends
who are really excited to be beta testers for what you’re building, ponder
changing your direction. The arguments for a co-founder are many and varied.
For a part-time effort, they are essential to keep you on-track and working. At
some point, you’ll hit a motivation wall… If you have a partner who is
depending on you, you find a way past that. If you don’t, you’ll often lose
interest and find something else to entertain you.

2. Pick a day or two per week where you ALWAYS work, ideally in the same
room as your co-founder(s). ALWAYS, no exceptions. We did 1 weekday
evening and 1 weekend day. That doesn’t mean we weren’t working other days,
but having a fixed schedule helps you through the phases of the project that
might not be so fun.

3. Have a boat-burning target. What will it take for everyone to dive in full-time?
5,000 active users? 10,000 unique a week? Funding? That should be a shared
understanding. You don’t want to have one founder ready to go full-time when
another has reservations.

4. Pick an idea that is tractable. Every business is a theory. If your theory is, “we
can build a better web-based chat client”, that’s something you could test
quickly. If you’re theory is “we can build a car that runs on lemonade”, that’s just
not going to work as a part-time effort.

5. Understand that your v1ia probably going to suck. Read David of Weebly’s
post on persistence. It’s a long road. My first startup was a ridiculous fluke (2
months and then sold). 99% of the overnight successes you read about were
slogging in the muck for 5 years before the night in question. Be prepared for a
long journey and be surprised if your startup is an immediate hit.

6. If you’re going to screw off at work (everyone does), spend it getting smarter
about the stuff you don’t know. If you’re a coder, read a few design/usability
blogs. Read up on what motivates angel investors. Research competitors and
write down what they do well. Get brilliant at SEO (it’s not hard). Write a LOT
more (blogging helps). Think about vitality and research the heck out of it. This
is all more valuable (and hopefully just as fun) as looking at LOLcats on Reddit.

At the end of the day, you want to prove whatever you need to prove as quickly
as possible, so you can dive in full-time. Near as I can tell, there are plenty of
startups that have started as “hobbies”, but you need to take it out of that phase
as soon as you can.
How to Ensure Your Startup Will Fail
By Mahesh M Piddshetti

There are a lot of Web 2.0 companies out there. If you don’t believe me, check out
Web 2.0’s archive. For every Digg or Twitter there are dozens of sites that
provide great services that flame out. Unfortunately, the fault does not lie in
fickle consumers or bad luck — it falls directly on your shoulders.
Luckily, most of the worst startup mistakes are things that you can change. What
better time than the beginning of the week to take a look at some of them?.

Obviously, the Product Will Sell Itself

This is the problem faced by entrepreneurs who start off as pure developers. The
idea seems pretty well founded. If you have a great product, people will flock to
it. This could not be any more wrong. If Web 2.0 has taught us anything, it is that
there are a ton of extremely talented developers out there and many of them
have made amazing products. Yet, somehow, there is only one YouTube and
Facebook.

What is the difference between a well developed product and a great product?
Implementation, of course. Truly great entrepreneurs are able to separate
themselves from their products and realize the one real truth of business, “no
one cares.” After you have your product put together it is time to get it through
your head that your only job now is to cut through the public’s inertia and make
them see how important your service is to their lives. Market, market, market.
Get yourself out there and scream your unique value proposition from the
rooftops.

If you can’t give someone a general idea of why your product is great in one
sentence or less, then it isn’t.

People Care about Features!

People could care less about your tag clouds and OpenID support. In general,
people really only concern themselves with one portion of a product. Most
people use YouTube to watch funny videos. Most people use Flickr to show off
their great photos. Each of these products has a metric ton of additional features
that power users really get behind but the public at large is completely unaware
of.
Make sure that your most important features are impossible to miss. Let your
users see up front why this product is a handy addition to their lives. Once they
are hooked they will look around and see all the other great stuff you have put
in. You must understand the difference between product adoption and user
retention. Features retain users, they very rarely get them.
What Do You Mean We Don’t Need A Private Jet?

No, I am not going to let the CFOs off the hook. Too many young startups newly
flush with venture funding; forget that business finance is a lot like personal
finance, “a penny saved is a penny earned.” Remember when you were
bootstrapping and you bought all those Dell PCs wholesale for $300 a pop? Why
does it seem prudent, now that you have a little capital to burn that you should
need $2,000 Mac Book Pros for every employee, even the ones who need
computers for little more than Excel and email?

Unless you are turning a profit, most of your money should go towards
development and marketing. I am not saying that you should work out of a
closet, but wait until you have revenue before you spring for that 5th Avenue
suite. Also remember, there are free or cheap solutions for almost all corporate
infrastructure problems. You can pick up computers, furniture, and
telecommunications services at cut rates if you know how to look. The only
things that you should feel free to splurge on are servers and maybe enough
amenities to keep your employees content.

No One Told Us People Would Actually Use This Thing

Speaking of servers. The next most important thing to remember is that you
should have a plan in place to double your infrastructure at very short notice. It
is entirely possible that your user base could go from 5,000 people to 50,000
people in a month. If you haven’t prepared for this, it won’t be long before your
user base, annoyed at network failures and slow downs jumps ship and moves
on to greener pastures.

This is one of those times a little forward planning can really be a life saver. Have
a plan written up to tell you what type of infrastructure you would need to
handle each new flood of users. Make certain that your vendors know that your
equipment needs are in flux and be certain that you are ready to scale up well
before the server room bursts into flames.

Early Adopters Aren’t Real People

I know I didn’t use a clever turn of phrase for this one, but I think it’s too
important for that. What you need to understand, right now if you have not
already, is that early adopters are not real people. The geeks, techies, friends and
family that initially use your product are not representative of the public at large.
Their opinions on your product are not representative of what the mainstream
will think.
If your web service is designed to scale, be certain that your marketing machine
is not only targeting the digerati. Start getting the word out through newspapers,
magazines and publications in your broader field of interest. If you are making
an online video recommendation service, don’t only pray to the altar of
TechCrunch but also get the word out amongst movie lovers. Make certain that
the same people who use Netflix can easily get their head around your product.
Understand that, in general, normal people are looking for something that makes
their lives easier. They don’t understand Web 2.0 and social media collaboration.
In this case, sell the steak not the sizzle.

Huh, What’s Gmail?

This should have been point number one. Products can be destroyed before they
even begin if you don’t do the research. Take a look around the net and make
certain that you don’t have another huge player operating in the space that you
want to move into. If it turns out that there is, make sure that you can clearly
define how your product is different than their offering.
Also, research how services similar to yours have succeeded or failed. Some of
the best advice you can get will come from the horror stories of you competition.
An ounce of preparation is worth a gallon of regret.

Web 2.0 Roundup

There are a thousand mistakes big and small that can sink your startup, and the
ones that I described are only a tiny subset of them. However, I daresay that
these are the most important. Remember, that a web business is still a business
and knowledge is your best weapon.
The key to building a web app that succeeds and makes
you money
By Mahesh M Piddshetti

Thinking about building a web app? Not sure what web application you should
build? You probably have a few ideas kicking around, maybe you’re thinking of
building a project management application, maybe a video sharing site, or a
social networking site. Heres a tip to help you choose:
Build a web application that helps its users make money.
Why? Because people can justify paying for a service if it helps them conduct
their business and make money.
That’s ONE of the reasons for the success of 37signals products. Their core
products, Basecamp, Highrise and Campfire all help people conduct business
and make money.
If you help people make money you can also charge a higher cost for your web
app. Its not reasonable to spend $49 a month sharing your videos, you wont find
many people willing to shell out that kind of money on a recreational activity.
But it is reasonable to spend $49 a month running your business. If you build a
web app that makes people money they will pay more, a lot more, to use it.
Also if you’re helping people make money, there’s another side benefit. When
you’re in charge of running a business you usually want the best equipment. For
example, if you can afford it you would upgrade your typical office chair to an
Aeron. It’s somewhat similar when it comes to web apps. Entrepreneurs won’t
settle for a standard plan when they can upgrade to a premium plan. Choosing a
premium plan over lesser plans intrinsically shows you and your employees that
you’re serious about business.
It’s like choosing Windows professional edition over Windows Home edition. A
lot of businesses could get away with using Home edition but they’ll purchase
professional edition anyway. Business owners don’t want their employees seeing
HOME edition when they boot up, they want their employees to see their
running professional. There’s also an element of human nature, rather than
doing more work it’s easier to show your dedication by purchasing better
equipment.
Expect the same with your paid plans. If your application helps people conduct
business your users will be more receptive to upgrade their plans to a higher cost
premium plan. If you have an app that people are using recreationally it will be
much harder for you to convert them to higher paying plans.
So if you want to build a web application that makes you money, then build a
web application to help make others money.
The importance of launching early and staying alive
I first started working on Weebly in February 2006. I worked for about a year on
it with Dan and, later, Chris' help, and we launched a (very) early version of
Weebly in mid-November 2006. We were TechCrunch'ed a few days later, and
accepted into Y Combinator the same day. (On the morning of our YC interview,
we woke up to discover we were on TechCrunch).

Weebly has been growing ever since then, gone through two complete visual
redesigns, added numerous features, and doesn't even resemble the product we
launched with at all.

Here are two of our graphs from May 8th 2007 -- five months after we moved out
to San Francisco and had been working on the product full-time:

The first is a graph of our new signups per day, and the second is a graph of our
total user count per day. I've annotated the top graph with what events caused
the major spikes.

There are actually two very interesting things to note about the top graph: First,
we had already closed our angel round at this point -- looking back, our
investors placed a huge amount of confidence in us.

Second, the new users per day looks like it might actually be declining a little bit.
At this point, I'd been working on Weebly for about a year and a half, and we'd
been launched for over six months. Judging by the graphs, you might think
things weren't looking spectacular. This is the type of situation when people give
up.

I've seen it quite a bit among startups -- they spend more time developing the
product than they do running it after they launch it. Several have followed the
same pattern: build, build, build, launch, quit.

But you've got to keep with it to gain momentum. It doesn't usually just build
overnight, it takes time. Keep building your product, and eventually you gain
momentum and a critical mass of people who know about you and tell others
about you.

Now, here are the graphs from a couple weeks ago:

These graphs look a hell of a lot better. There's 2 things I'd like to point out:

First, the "build it and they will come" mentality is a fallacy. You need to build
something great and have distribution in order to succeed. And distribution is
hard to get.
There are many ways to get distribution. One of those is through press. If you
have a great product, the more people that find out about you, the more people
will know about you. And they'll tell their friends, who'll tell their friends, etc.

Another subtle press benefit: you're getting links from a bunch of very highly-
regarded sites, and this helps out your rankings in search engines quite a bit,
which builds more traffic.

There are plenty of other good ways to get traffic too, such as engineering for
viral growth, but press can have huge benefits for the right product.

Second, in order to get people to use your product, you have to stay alive. This
sounds obvious, but a ton of people spend 6 months building a product, launch
it, and give up within 3 weeks.

Plain and simple, it's going to take time for people to start using your product --
there are exceptions, but it's generally not the norm. So you need to expect that,
and be willing to give it time. If you give up within a month or two, your
product definitely won't be successful.
Once you launch, people start to know about you. If you launch early, you can
start earlier on the process of acquiring users. Don't launch with a crappy
product -- launch as soon as what you have is better than what is out there. But
don't wait for a perfect product -- launch as early as you can, get user feedback,
and keep improving the product.

I'm currently in a startup with exactly the same characteristics: also about 20k
users after a year, two TC posts, etc. It's tough sometimes to keep motivated.
These kinds of articles help a lot, as well as being a bit naive and staying true to
your thirst thought when you started the company.

And you're totally freaking right about the distribution part. That's something
most people overlook but also something you really want to think about early
on.
Alternative Marketing Techniques for Entrepreneurs

Owner-managers of start-ups and small businesses have a long hill to climb. In

order for the business to generate sufficient revenues let alone be successful
managers must get the word out to the buying public. The entrepreneur must
creatively marshal limited resources to promote, sell, and distribute the product.
This is clearly a challenge for the small business for a number of reasons.
First, start-ups and small businesses have limited capital to spend on marketing
campaigns. The capital they do have must be split between product
development, personnel, operations, sales, and marketing. In addition, the battle
for consumers’ attention from the growing number of companies and brands has
driven up marketing costs. Managers must find ways to make the most of the
marketing funds available, often relying on inexpensive and even free marketing
vehicles.
Second, traditional marketing techniques have become less effective. Television,
newspaper, and magazine advertising have simply become noise. Consumers are
bombarded with so much advertising that they often tune it out, change the
channel, or fast forward past it. In addition, consumers have become more and
more skeptical of and insensitive to traditional broadcast advertising.
Third, these traditional techniques may not reach the target market. More people
are heading to blogs for their news, satellite for radio, MP3s for music, and the
Internet for entertainment. These media are, for the most part, beyond the reach
of traditional marketing.
This post digs in to a number of alternative marketing techniques appropriate for
entrepreneurs and owner-managers engaged in business-to-consumer ventures.
The Challenge of Entrepreneurial Marketing Start-ups and entrepreneurial
ventures suffer from very limited resources, including personnel, time, and
money. Yet, every business large and small must learn to cope with less,
especially during times of downsizing, cost cutting, and reorganization. Even
Fortune 500 enterprises wish for larger budgets and bigger departments.
Marketing also plays a key role in attracting other critical assets employees and
capital. The start-up or small business must be visible, attractive, and look like a
winner; these are things that customers, employees, and investors all look for.
The start-up or small business must be visible, attractive, and look like a winner;
these are things that customers, employees, and investors all look for.
The Owner-Manager Difference: Decisions are made almost exclusively by the
owner-manager in a small business or entrepreneurial venture; there is little if
any delegation of tasks involving strategy, finance, control, and marketing.
Therefore, any marketing activities will rely heavily on the owner-manager’s
experience, expertise, and knowledge.
Marketing Strategy for the Entrepreneur
The small business owner-manager must often focus so much on daily
operations that strategy is something left for much larger companies. In
fact,entrepreneurs often start with an innovative product but little understanding
of the target market. They are content to use their intuition, throw the product
into the market, and see who buys. As customers start rolling in, the
entrepreneur simply tries to find more of the same. This is quite the opposite of
traditional marketing techniques where the target market is identified, a message
is crafted, and a strategy to reach the target is developed. The traditional top-
down approach of segmentation, targeting, and positioning is replaced by a
bottom-up approach that starts with identifying an opportunity, attracting initial
customer, and expanding by finding similar customers.
MarketingMix:
In choosing methods of communication, it is important to use as many methods
as can be executed successfully. Multiple methods will reach a broader audience,
and different consumers will be affected by different techniques. The investment
in marketing is a bet on future returns. Much like an investment portfolio, you
should spread the investment around to different vehicles. The trade-off is that
spreading too thin might dilute each piece to be ineffective. Also like an
investment portfolio, understand the potential cost and return of each option and
craft a mix that maximizes that return.
TheOffer:
While most entrepreneurial ventures are based on an innovative and therefore
differentiated product, it is important to understand why this is the case and the
subsequent responsibility of marketing. Simply because of their limited reach
and capacity, small firms perform best with a narrow focus. While the narrow
scope allows the small business to cater to a specific market, it is also likely that
the small market is not enough to attract the attention of larger competition,
allowing the small firm to fly under the radar.
MarketResearch:
It is rather common for an entrepreneur to start the business with only a limited
understanding of the product, the market, the plan, and the competition. They go
with their gut; they use intuition. They sense a need rather than rely on analyst
reports or detailed competitive analysis. In fact, many entrepreneurs start with
only a product or service idea, and then try to find a market for it. They focus on
developing a great product and only later shop it around, then focus on the
market that had the strongest response. Indeed it is innovation and creativity
that propels the small business to success, but this contrasts the customer
orientation that lies at the heart of marketing.
Word-of-Mouth-and-Buzz:
Word of mouth is the direct person-to-person communication in which one
person describes the attributes or experience of a product or service to another
person. It occurs when we tell a friend about a great movie or when we brag to a
colleague about a new car or a fabulous vacation. However, word of mouth is
just as likely; maybe even more likely, to occur when we tell someone about a
terrible meal we had at a restaurant or a new computer that constantly crashes.
Good or bad, the word spreads. Word of mouth spreads from those who know
about your product, typically existing customers, to those who are unfamiliar or
maybe familiar but not yet convinced or sold. Many start-ups rely on word of
mouth to attract that initial critical mass of customers, and many small
businesses count on the recommendations for all of their new business. In either
case, the high effectiveness or low cost of this marketing method makes it a
staple for any resource-constrained venture. According to a 2001 McKinsey
report, 54% of sales in the United States are affected by word of mouth.
ViralMarketing:
Viral marketing is a special case of buzz in which the product itself is the way
that word spreads. This term was coined by Steve Jurvetson who was one of the
venture financiers of Hotmail. At the bottom of every email sent through
Hotmail was the line Get your private, free email from Hotmail at
www.hotmail.com by using the product, customers were passively spreading the
word. This small start-up, with no spending on large media advertising, grew
and grew until it was acquired by Microsoft.
CustomerEvangelism:
A customer evangelist tells your story and tells it to everyone. He purchases your
product, believes in your business, recommends it to friends and colleagues,
supports you even when you make a mistake, and provides feedback even before
you ask. He wants you to succeed. This action and belief is based on an
emotional connection the customer has with your product, service, or company.
Customers become evangelists when they are so pleased with their experience
with the product or service that they want to tell others and even want to help
the business succeed. People love to talk about their experience with products
and especially like to be the one that pointed out a great product that everyone
subsequently adopts.
BuildingBrand:
While strong brands are typically associated with larger, established companies
that have had years to build a reputation and become widely known, a strong
brand can also be successfully built by the small business. The purpose of
developing a strong brand is in its ability to communicate the value proposition
easily and effectively.
Partnerships:
There are two types of partnerships that small businesses can take advantage of.
First, by partnering with another small business, the two can join forces and their
limited resources to promote, package, or distribute their products together.
Beyond simply sharing the bills, the two businesses can split up the work and
offer expertise that the other business might lack. Second, a small business can
partner with a larger, established company. While this is typically much more
difficult to accomplish, if a relationship can be forged, the small business can
benefit greatly.
Software Engineering Tips for Startups
Software is at the very heart of any modern startup.
The business ideas, new utilities for society and the next big thing all boil down
to code. If the code is good, the startup has a chance. If the code is bad, no matter
how brilliant the business people are the startup is not going to get far.
0. Must have code
The working code proves that the system is possible; it also proves that the team
can build the system. The working code is the launch pad for the business. After
it is ready, the business can happen.
In the old days, tech companies were funded based on the idea written on a piece
of paper. Those days are long gone. Today a startup needs to have not only
working code, but an assembled system and active users. Software Engineering
transitioned from the post funding exercise to the means to being funding.
Software now needs to be built faster and more correctly. It needs to constantly
change to address the changing nature of the market and meet customer
demands. Fundamentally, software engineering in startups is now a different
game.

The working system is what gets you in.

1. Must have a technical co-founder

Any startup starts with the idea and just a few people. A lot of startup co-
founders these days are techies, passionate about technology and life. It was not
always like that. Just a few years back a purely technical founding team would
have had a hard time fund raising because there was a school of thought that you
need an MBA to run the company.
In fact, a lot of the reverse was true. A few business people would get together,
come up with the idea for a product and then think: Where can we get a techie to
get this done?
It is misguided notion that business and technology are somehow separate and
that the first one is the king while the second is marginal. It is not, because
technology is what makes the business possible to begin with.
So the first tip is to always have a strong technical co-founder. Someone who
shares or invents the business along with others, but also has the technical feet on
the ground. Someone who can make sure the business is mapped onto
technology correctly.

2. Hire A+ engineers who love coding

The software industry survived close to 30 years of crisis. Until recently, building
a large scale system that worked was black magic. Most software projects
suffered for years had large engineering teams and little consensus on what
needed to be done and how to accomplish it. The resulting systems were buggy,
unstable, hard to maintain and extend.
The problem was that there were just too many people who were not that good
who were working on the problem.
Startups can not afford to have less than A+ engineers. In a larger company there
is an opportunity to mentor and grow people. In a startup every hour is precious.
Not much time can be spent teaching people; you need to get people who know
what they are doing.
Qualifications for A+ engineer are:
Focused on results
Loves coding and fluent at it
Writes elegant quick code
Smart and quick
Loves refactoring
Values testing
Solid in Computer Science

3. Keep the engineering team small and do not outsource

A team of 2-3 rock star engineers can build pretty much any system because they
are people who are good, love building software, focus on the goal and don’t get
in each other’s way. The team of 20 so-so engineers will not get far.
The mythical man-month book debunked the notion of scaling by adding more
programmers to the project. The truth is that most successful software today is
built by just a handful of good engineers. Less is more applies equally to code
and the number of people working on it.
Once you embrace the idea of just a few rock star people building the system,
then outsourcing development becomes a really bad thing to do. Tech is your
bread and butter, why would you outsource it? There are not many things more
important than your code. Trusting people you never met to build the very
foundation of your company does not make sense.
Again, it is a myth that you can scale faster with more programmers. It is even a
bigger myth that outsiders can get your work done for you. This is not the place
to save money. Hire a few of the best guns you can find, pay them well, give
them stock options, make them happy and jazz them up about the company.

4. Ask tough questions during the interview

There is nothing worse than being soft during the interview and getting the
wrong person into the company. This is bad for you, but more importantly bad
for the person. In the end you will end up parting ways, but it would be best to
just not make this mistake to begin with. So be tough and ask a lot of technical
questions during the interview. What to ask depends on what you are looking
for, but here are the basics:
Ask standard computer science questions: data structures and algorithms. (If the
person does not know what a Hashtable is or how it works or how to write one -
that’s a big red flag)
Get a feel for knowledge of the language: It does not matter what language they
claim fluency in - confirm it by asking specific questions
Senior people need to know threads, queuing, distributed systems, databases
Senior people need to know design patterns
Senior people need to know unit testing inside out
Most importantly, the candidates need to demonstrate love for simple and
elegant code
Always ask for code samples - a lot can be revealed. Give written timed tests,
even if it’s over the web. And always check references before making an offer.

5. Avoid hiring managers

You do not need these types of people in a small team. If everyone is sharp,
knows what they are doing and executes on a task, why do you need a manager?
People who try to overlay complex processes on top your objectives are going to
slow you down and make you frustrated.
If during the interview someone who has been a manager says “I miss coding
and want to code again”, beware that soon they might want to go back to
management. Point being - the best startup engineers are people who are young
and hungry to write code. More experienced people who are looking to do more
management than coding will not be as passionate. And this is bad, because
startups need passion and drive to build the impossible.
What you need are experienced technical people who love coding. These are
going to be natural mentors for your younger engineers. Mentors and not
managers.

6. Instill an agile culture: Modern startups need to move very quickly. There is no
room to plan for 6 months and then execute because someone else will get there
first. The new approach is to evolve the system. Of course you are doing
planning for the release, but you are iterating quickly, doing frequent builds and
constantly making changes.
Coding becomes sculpting. Starting with a shapeless form you continuously
refine the code to satisfy the business requirements and make sure that the
system is designed and implemented correctly. This is agile culture which
values:
Clean and elegant code
Continuous refactoring
Focus on defect-free software
Code ownership and pride
Team work and little ego
Most importantly: use common sense
7. Do not re-invent the wheel:
A lot of startups go overboard with the infrastructure. This includes two types of
things - rebuilding the libraries and building your own world-class scaling. On
the first point - there are so many fantastic open source libraries out there that it
just does not make sense to write them in house. Whether you are using
JavaScript or PHP or .NET or Python or Ruby likely there are major libraries that
can help you. Re-writing existing libraries is a waste of your time and you are not
likely to do it better.
Building a large-scale system is a different matter entirely. First you need to get
to scale and then worry about it. The guys from 37Signals have written about this
on many occasions including their Get real book. Why worry about having
millions of users while you do not have any at all right now? Spending time
making sure that you will scale big is a waste of your time. Focus on what your
product does best instead.
And to that effect, we have been using Amazon Web Services and are now
supporting > 1M BlueOrganizer downloads. The Simple Storage Service (S3)
allowed us to build a truly distributed and scalable system. We have not started
using EC2, Amazon’s compute cloud service, but are planning to re-evaluate it
soon.
The point is that there are tools, solutions and services out there that can help
you get to scale. It is better to use them than to spend huge amounts of time and
energy and money on building these systems in house.
Wrap up
Software is critical to any modern business. So the key to success of any startup is
to have rock star technical team that can quickly turn the vision into a piece of
software and then evolve it and iterate it until it turns into a real business.
The Factors of Entrepreneurship.
Mahesh M Piddshetti
Author: TroutGirl Delinates

I should first say that success means different things to different people. If you’re
20 years old, you might be pleased as punch to build something and get a few
hundred grand for it a few months later. And hey, as long as you don’t get all
kinds of wacky expectations from the experience — if it’s just a way to get a
condo and a nice car and a good job — then more power to you. Go forth and
build Facebook apps as fast as you can! But I’m sort of assuming that all these
guys I’m meeting are not that realistic — that their aspiration is more YouTube
than Reddit — and that in fact they’re pretty much interested in what we call the
“venture-backable business”. So please keep in mind that my comments are
mostly applicable to the latter case rather than the former.
The bare minimum you need before entrepreneur can found a venture-backable
startup:

* EITHER a substantial work history (e.g. you were a key contributor to a very
well known product) OR hundreds of thousands of users of your product OR a
serious computer science background (think PhD) with major patentage in the
relevant area. If you don’t fall into at least one of these three buckets, it will be
exceedingly difficult to get initial meetings with any funder much less convince
them to invest.

* A core team. These days the initial team must be almost entirely engineers, and
they must be willing to work on your product for essentially no money until the
demo stage at least. Among other things, this proves that you have sufficient
powers of persuasion or management or hypnosis that you can serve as an
executive for a little while.

* Some source of “enough to live on” money for you and your core team for
about six months. Without this, you are fatally at the mercy of funders and will
be unlikely to get a deal on terms that will make you happy for very long.
Actually without 6 months of cash, you probably won’t even be able to get
through the funding process even if things go spectacularly well.

* Excellent communication skills, both written and verbal. Pitching is no joke —

you will need every scrap of ability to convince others (often extremely skeptical
others) of your vision. This is one of the most mysterious factors, because you
often can’t tell how charismatic a founder really is after they have already been
successful — by that point they’re completely hemmed in by legal issues and PR
bunnies who prevent them from speaking their minds — but you should assume
they had the ability to communicate their ideas effectively.
* A billion-dollar idea. You better be able to say how your total addressable
market is multiple billions of dollars, and how your share is going to be at least
$100 million a year, and how you’re going to IPO or sell for at least $1b. This is
another mysterious factor, because often startups have to change strategies or get
bought for a lot less than this before they can really execute on the vision to that
level… but believe me, they wouldn’t have gotten VC money if someone early in
the process didn’t think that they could be worth a billion dollars someday.

* Friends. Along the way you are going to need dozens if not hundreds of small
favors from other people in the community: introductions, blind reference
checks, recruiting help, etc. Silicon Valley is a small town, and it’s hard to even
buy the necessary goods and services without being introduced to vendors by
someone. Hopefully your karma piggy-bank is good and full.

* Mental and emotional equilibrium. This has actually been one of the hardest
factors for me, and I suspect is the biggest barrier for most women. It’s so easy to
lose perspective — the most common way is by being overconfident and
overoptimistic, but it’s also possible to go the other way and give up — that I
would say it’s the #1 reason early-stage startups fail.
Market! = Idea
By Mahesh M Piddshetti
This impressive article written by Aaron Nemoyten, he is author @
Startupism.com

Now that we actually have something to show off which demonstrates that we
kind of know what we’re doing, Alex and I have decided to get back into the
habit of attending meetups.

Meetups are strange beasts. A bunch of people, bound by a broad common

interest, lack of other social outlets and/or real industry connections, gather to
awkwardly talk about their ideas, their plans for the future, and to try to figure
out who is a potential employee, coworker, manager, cofounder, contractor,
and/or insane person to be avoided at all costs.

Meetups are also a good place for newbies to go to learn the ropes of the industry
they’re trying to get into. I don’t consider myself an expert by any means, but
after months of constant reading and research, I’m not doing too poorly.

One of the types of people you may run into at a meetups is what I will call
Newbie Idea Guy. Newbie Idea Guy is somewhat aware of the industry, but
doesn’t know a lot about it. He comes up with a bunch of ideas that either
already exist, or that are slight variations on something that already exists.

Confronted by evidence that his (or her, I guess, though I’ve honestly never run
into any women like this) idea is not unique, he will defend its uniqueness with
some kind of circular argument that “yes, but I’d make it better/different”
without any kind of clarification as to how.

As a bonus, you may find that Newbie Idea Guy thinks his idea of copying a web
site “but better” is so valuable that he won’t even tell you what’s going to be
better about it without talking about NDA’s.
Thus I come to what I will call, for the sake of this post, Conceptual Algebra.

In the case of a meet up I recently attended, there was a Newbie Idea Guy who
wanted to build a travel site. Nevermind that he has no technical or design
experience - as a business-degree-holding-recent-Bay Area-transplant, he wants
to get into A MARKET. On THE INTERNET. It will work because “we’ll do it
better,” and of course the “doing it better” task would actually go to whichever
lucky audience member is allowed to work with Newbie Idea Guy on his
AMAZING IDEA.

Equation 1:
Market! = Idea.
Also: Market! = Business Strategy.

For my next equation, we will examine a more intricate situation. A person with
technical knowledge and boundless enthusiasm has an idea for something that is
very useful in theory, but requires a lot of user participation. In fact, it only
works with a lot of user participation involving people looking at, and
interacting with, content their friends have created.

That’s tough.

The problem with strategies like this is that they do not work. (That’s a pretty
important problem!)

Most of them have been focused on music: I can create playlists on Amazon.com
or other music services, which my friends can marvel at.
In practice, my friends know what music I listen to already. They do not need to
look at a list on a third party web site on the internet. They know I listen to a
bunch of weird music and a bunch of pop music, and they either think that’s cool
or they don’t. I’m going to tell them what I think they would like in regular
communication, NOT redirect them to my online play list.

Okay, so how can something like this potentially work?

Well, it would have to be a much more specific use. A narrow target market who
is already interested in sharing, in interacting. A market of people who value
communication amongst peers in a formal, controlled context, especially input in
regards to whatever their interests are.

But then again, most of that would have to be *a feature* on a much larger
community web site (see my previous post on this blog about that!). For instance,
a cooking community site could easily make use of top ten lists for recipes -
people who cook always want new ones and love sharing their knowledge.

At any rate, I asked this person with this idea what his target demographic was.
“Oh, you know, 18-35 year olds, independent, well-employed…”
No, no, and no. This is the market that EVERYONE wants a piece of, but it’s
damn hard to get anything out of us. We’re immune to advertising. Things that
work take time, and we’re very picky about adapting technologies and habits. I
could go on.

Equation 2:

Idea - Market = 0

A decent idea targeted at the wrong market will go nowhere. Guaranteed.

For my third, and saddest, example, I’m going to have to get even more
hypothetical. Say you’ve got great technical skills. You’ve built something VERY
impressive from a technical perspective, but those who are immediately
impressed by it are also the least likely to use it. In other words, it’s a complex
thing that makes it easy to do something that geeks need more control over than
it gives them.
Larry Page

We have a mantra: don’t be evil, which is to do the best things we know how for
our users, for our customers, for everyone. So I think if we were known for that,
it would be a wonderful thing.
The Star Trek computer doesn’t seem that interesting. They ask it random
questions, it thinks for a while. I think we can do better than that.
Basically, our goal is to organize the world’s information and to make it
universally accessible and useful.
You don’t need to have a 100-person company to develop that idea.
The ultimate search engine would basically understand everything in the world,
and it would always give you the right thing. And we’re a long, long ways from
that.
Our company relies on having the trust of our users and using that information
for that benefit. That’s a very strong motivation for us. We’re committed to that.
If you start to mandate how products are designed, I think that’s a really bad
path to follow. I think instead we should have laws that protect the privacy of
data, for example, from government requests and other kinds of requests.
We are targeting innovation. We believe mobile applications are essential.
Many companies are under pressure to keep their earnings in line with analysts’
forecasts. Therefore, they often accept smaller, predictable earnings rather than
larger and less predictable returns.
Sergey and I feel this is harmful, and we intend to steer in the opposite direction.
We’re trying hard to find user needs that aren’t being met at all.
I worry, but I’ve worried all along. I worried as we got bigger and there were
new pressures on the company. It wasn’t so long ago that we were all on one
floor. Then we moved to a new, larger office building and were on two floors.
We added salespeople. Each change was huge and happened over a very short
period of time. I learned you have to pay a lot of attention to any company that”
changing rapidly. When we had about 50 people, we initiated weekly TGIF
meetings on Friday afternoons so everyone would know what had happened
during the week. But those meetings have broken down because we now have
too many people, about 1,000, including many who work in different time zones.
We try to have a summation of the week’s work via e-mail, but it” not the same.
When you grow, you continually have to invent new processes. We’ve done a
pretty good job keeping up, but it’s an ongoing challenge.
We think a lot about how to maintain our culture and the fun elements. I don’t
know if other companies care as much about those things as we do. We spent a
lot of time getting our offices right. We think it’s important to have a high
density of people. People are packed together everywhere. We all share offices.
We like this set of buildings because it’s more like a densely packed university
campus than a typical suburban office park.
When Sergey and I founded Google, we hoped, but did not expect, it would
reach its current size and influence,” says Page. “Our intense and enduring
interest was to objectively help people find information efficiently.” Indeed, for
the past ten years, Google has been helping people navigate the Internet and find
precisely what they were looking for. From providing people with life-saving
information to helping breakdown global barriers, Google’s impact on the world
is undeniable. How did two university dropouts transform their simple idea into
a-billion-dollar-company?

Morals: Many critics have questioned Page and Brin’s attempt to maintain their
principles at the helm of a billion dollar company, calling it poor business sense.
But, these Google founders have managed to prove that being profitable does not
have to come at the expense of one’s sense of right and wrong. “Our users trust
Google's objectivity and no short-term gain could ever justify breaching that
trust,” says Page. Indeed, it is their mantra of ‘Don’t be evil’, which has allowed
them to prosper and has earned them the respect of their users.

Innovation: “Through innovation and iteration, Google takes something that

works well and improves upon it in unexpected ways,” says Page. From day one,
Google has staked its reputation on developing innovative technologies and
products that continue to change the way the world runs. Page and Brin
managed to soar past the competition at an early stage. But, they know all too
well that remaining complacent with their achievements thus far would lead to
their downfall. Thus, Google remains committed to serving the needs of its users
in the present while keeping on eye on the future.

Vision: Google does search. The company’s founders knew that by sticking to
one thing and doing that really well, Google could prosper. By being committed
to a single vision and refusing to get distracted by other potentially prosperous
opportunities, Google has become an industry leader.

Teamwork: “We are focused on providing an environment where talented, hard

working people are rewarded for their contributions to Google and for making
the world a better place,” says Page. By emphasizing teamwork and rewarding
innovation and creativity, Google has become one of the most desirable
companies to work for. The company has thus managed to attract the brightest
from all around the world and maintain its competitive edge.
Priorities: “Always deliver more than expected,” says Page. “Google does not
accept being the best as an endpoint, but a starting point.” Google’s number one
priority is on serving the user and creating the world’s most efficient and precise
search engine. “We try to make more and more stuff available to people,” says
Page. “We try to, when you come to Google; fulfill that need that you have as
quickly as possible.”
Brin sees the success of Google in broad terms. “To me, this is about preserving
history and making it available to everyone,” he says. Meanwhile, Page refuses
to stop and reflect, claiming that the work is never done. “In a couple of years, I
may be blown away by it, but now I’m just involved and worry about it,” he
says. “I don’t want to be too complacent.”