Thinking, learning and just interested….

I get asked for my advice on new startups alot and I like to give it.  I have also been very fortunate and had great mentors, advisors and investors.  So, I can say that the best relationships are ones where the entrepreneur works hard to manage his advisors.  This generally includes;

• very regular updates – I like to do every 2 weeks.  This gives enough time for substantive progress, but not too much time to forget what is going on.  It also gets an early entrepreneur on the right cycle for future board meetings (monthly).  It can also usually be aligned with a software sprint releases so you usually have some good product news to share. Stay on schedule and do them religiously.
• provide the context  as backup – sometimes I can give advice with very little context of the exact specifics of the business, but if I think I need more detail, provide me links to supporting docs, your thinking, the choices you are weighting (pros/cons)…  You can also provide a summary of other thoughts from the team or other advisors to help me know the overall context of the decision.
• ask for specific help  - investors and advisors are usually busy and yet they really want to help. So make it easy for them to focus their time, effort and expertise on the things you really need as an entrepreneur and where they have specific expertise.  Laying out where you need help in an email, an update or a meeting is really useful to direct an advisors focus.  And, if applicable or when sending out to a larger group, be even more direct and ask a specific person to do a specific thing for you.
• choose the right venue – sometimes email works, sometimes a call, sometimes a 1:1 and in many cases you are better off to get the group together to discuss a more complex or important issue.   Choose the right venue  with a focus on the most efficient and timely way to get the input you need and no more.
• keep track of time - most of us advisors have a mental model of how much time we have to give to any one company.  This varies depending on our level of engagement and/or the specific needs of the company at any one time.  But, as the entrepreneur, keep this time in mind and try to balance it across advisors and across a timespan so we can stay fresh and alert.
• give credit and say thanks – it is always nice to give public credit to people who are helping.  it shows that you are listening, appreciate help and it often spurs other advisors to raise their game and do more.

As for the specific updates, I have written about that here and here and here so hopefully I am giving enough, specific advice.

Customer Development = The pursuit of customer understanding

Part of Customer Development is understanding which customers make sense for your business.  The goal of listening to customers is not please every one of them.  It’s to figure out which customer segment served his needs – both short and long term. And giving your product away, as he was discovering, is often a going out of business strategy.

The work he had done acquiring and activating customers were just one part of the entire buisness model.

via Killing Your Startup By Listening to Customers « Steve Blank.

I work on lots of new ideas for companies. I have developed the following tool that helps me (and it seems many others) to quickly develop and evaluate these ideas.

In the simplest form, it helps create an elevator pitch, (e.g. for www.gist.com – We focus on relationship centric professionals like sales, PR and recruiters (C) and, save them time (V) as they prepare for meetings, by creating dynamic full-contact dossiers (F) and charge them a monthly service fee (B).  It is not critical for this to be the marketing pitch, but it helps.

To get started on finding the “MVC” (minimum viable company), you need to start with the “smallest idea that is big enough” (a few customers, 1 value, 1 key feature and a clear biz model).

You need to identify real people you know (we built Gist for me and 2 sales guys, thx Kendall and Brandt) who can validate the idea, value, key features and their willingness to pay (which should be very high).  As you find representative people, you can abstract key attributes of them to start to generalize into “personas” which becomes your real target customer.  And from here you can start looking for the best beta users (more on that here)

You can then compare different parts of the model to see how well the idea works.  A few examples;

• C–V – does your target customer value what you are doing (e.g. saving time, qualifying leads, increasing revenue…) and how much (scale of 1-10)?  Is the value a real pain or just nice to have?  How do they solve this pain now?  How would they quantify value?
• V–B – is the value your delivering correlated to the business model?  If you save someone time, do you charge more depending on the amount of time you are saving?  Work hard to correlate these things by changing one of the other.  This ends up relating to ROI (return on investment).
• F–B – are the features you are building organized to support the different price points?
• C–B – does your customer usually buy in the model you are proposing?  What other services/products do they buy that are similar to yours and is the model similar for these products?  How much do they pay for related services?
• F–V – are the features you are building aligned with the value and in similar priority order?  If your value is saving time, do you consider each feature on how much time it can save the end user?

Finding the right early users can make or break a startup. If you find the wrong people, they will either waste your time with irrelevant suggestions or could easily send you off in the wrong direction. Here are a few suggestions on strategies to find the best early users.

Today I participated in an annual call with The Corum Group, a Seattle based M&A group focused on trends and opportunities for 2012 across the broad software, internet and mobile spaces. I was part of a panel that included some friends and people I really respect, including;

• Dan Shapiro, Google — Social Domination
• Chris Bray, IBM — The Year Ahead
• T.A. McCann, RIM — Revolution in Mobile
• Peter Coffee, Salesforce — Cloud Strategies
• Steve Singh, CEO, Concur — SaaS in 2012
• Reese Jones — the Berkeley Lab Sage
• John Heyman, Actuate Partners — “Selling for a Billion”

I made the following key points about “revolutions in mobile” Read the rest of this entry »