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Entrepreneur File
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.
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.
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.
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.
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:
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
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.
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
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.
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!
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.
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.
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.
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.
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
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.
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.
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.)
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
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.
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.
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.
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.
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.
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.
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?.
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 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.
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.
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.
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
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.
* 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 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.
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
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.
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.