daily articles for founders

Here are 10 quality posts from the Founder's Library:

Civilisation, productivity, and choice  

Here are a couple of very insightful posts from the prolific Seth Godin...

The first, about Civilization:

Given the opportunity, people almost always move from a place that's less civilized to one that's more civilized. Given the resources, we invest them creating an environment where we can be around people and events that we admire and enjoy. We move to places and cultures where we are trusted and where we are expected to do our share in return.

And yet...

There are always shortcuts available. Sometimes it seems like we should spend less money taking care of others, less time producing beauty, less effort doing the right thing--so we can have more stuff. Sometimes we're encouraged that every man should look out for himself, and that selfishness is at the heart of a productive culture. In the short run, it's tempting indeed to trade in a part of civilized humanity to get a little more for ourselves at the end of the day. And it doesn't work.

The second, about redefining productivity:

Machines can be more productive than people because once they're set up, they create more output per dollar spent. Lowering labor costs is the goal of the competitive industrialist, because in the short run, cutting wages increases productivity.

This is a race to the bottom, with the goal of cutting costs as low as possible as your competitors work to do the same.

The new high productivity calculation, though, is very different:

Decide what you're going to do next, and then do it. Make good decisions about what's next and you thrive.

First, apologies to Seth for quoting most of his posts here (not really in the spirit of quoting and linking), but I blame him: Seth has gotten into the habit of being so incredibly concise and succinct that most of his best posts are basically condensed down to the most important point and nothing else. That makes it very hard to quote just a bit.

Secondly, this is somewhat related to my recent article about doing more by doing less.

Being more effective in choosing what to do is what defines great productivity, not doing the same thing faster, because most of what we do is a waste. This concept is also at the core of the Lean Startup methodology, which aims to eliminate waste by eliminating things that have no value. It is at the core of good strategy, which is about applying limited resources in a way that maximises their impact, and saying no to ways that dilute their impact. It is at the core of most philosophies of improvement, because there is a fundamental truth at work here.

So here's a question to conclude this: who chooses what you do?

Do you make those choices and do you take responsibility for them?

Build, polish, polish, polish  

Oscar Del Ben:

It’s very difficult to get it right the first time, so it makes sense to spend more energy polishing your products.

The old truism for software projects in big corporations was that 75% of a project's technology cost is maintenance. In the world of tech startups, where a product that stops being developed is a product that's on the (sometimes slow) way to the graveyard, you can replace maintenance with polish, and change the 75% to 90% or even 95%, if your MVP is minimal enough.

This is one of the reasons why outsourcing rarely works for long-term product development. Working with a vendor who has other priorities is rarely a great way to add polish. You need the person in charge of putting the technology together to care about the polish.

Should you really be a startup entrepreneur?  

Great read, by Mark Suster, about the difference between being an entrepreneur and being a VC. The description of being an entrepreneur is pretty spot on, and if you cannot read that story and think, "wow, ok, I'm alright with that", you probably shouldn't start your own business... yet... maybe...

The one thing that those "Entrepreneurship is scary" posts always miss is the progression in one's character. I am a very different person than who I was when I quit my safe Accenture job to jump into my first flaming disaster of a startup. Most entrepreneurs I've talked to agree that you learn a whole lot about both how to run a business, and about yourself, when you spend a few years running a startup.

I'd argue that most people who start startups aren't ready for them, at the beginning. They progress towards this Zen-like resistance to risk, stress, and rejection, but it takes a couple of years of constant terror to get there. So, even if you don't see yourself in that list of characteristics yet, it's probably enough if you think you might be able to see yourself there sometime in the next few years.

How to work with designers  

At some point in your startup life, you are going to have to work with a designer, even if you're a designer yourself. Knowing how to give good design feedback is a useful skill in that context.

Here are the key points:

  1. Make sure you're giving the right feedback. Don't give feedback on the content when it's all filler content.
  2. Evaluate based on whether it achieves the design objectives, not whether you like it.
  3. Not knowing anything about design doesn't stop you from seeing whether the design meets your business goals.
  4. Don't try and spare the designer's feelings. When the design doesn't work, say it.
  5. Be direct. Don't spend 5 minutes to say "This design sucks".
  6. Start with general feedback over the whole design and then drill into specific elements.
  7. Relate feedback to goals and user needs. Don't be subjective ("I don't like this") or prescriptive ("Move the buttons over here").
  8. Don't redo the design in photoshop and send it to the designer as feedback.
  9. Ask questions as the design is being presented.
  10. Don't give contradictory mandates.
  11. Set up a time to go over the feedback in a structured way.

Worth reading for the details on these points. I would add one more point, in the spirit of Orwell's famous essay:

  • Break any of these rules sooner than accept a design that just doesn't work.
Don't register your idea as a company  

Me, in January 2011:

I want to start this new year with an admonition, for all those who are still working at a day job, and thinking that at some point they may want to run their own business, but who haven't decided to do so yet.

Register a business, today.

Joel Gascoigne, today::

When to incorporate is one of those topics which comes up time and time again, and there is much conflicting advice out there. I’m lucky enough to have a number of different experiences and perspectives with this, and I now believe that by far the best option in almost all cases is to delay registering a company for as long as possible.

So who's right?

Actually, both of us are, because we're talking about different things.

I advise people who are hesitating on the cusp of starting their own business to register a business right away, because this will get them over one of the biggest mental hurdles and force them into the company owner mindset.

However, there's no forced congruency between this business, which is a step towards personal freedom, and "registering a business for an idea". The business that I propose you register today, if you haven't yet, is the a business that will largely represent you. It can be used for many purposes - including as an incubator or even long-term receptacle - for ideas, but that is not its sole purposes. Registering a business for what is merely an idea with no real validation is, as Joel correctly states, not a good thing.

However, that doesn't mean you should operate without the protection of a limited company. A great many successful entrepreneurs that I know have several businesses, including one that they use for their various consulting and speaking gigs. Just because an idea starts in one business doesn't mean it needs to remain there always. As the sole shareholder, you are allowed and able to transfer the assets to a new entity as and when it makes sense - e.g. when you need to take on shareholders.

So, do register a business, but register it for you - not for an idea.

How to reject a job candidate  

Now I tell candidates on the spot whether they pass or fail at the end of the phone interview. I give them feedback on what they did well and what they did poorly. I'm very candid with them.

Nathan Marz's suggestion is noble, but fraught with peril. Anything you say could be used in a lawsuit, particularly in the US. This HN comment by Lou Franco suggests a much better system:

  1. I don't reject candidates -- I choose a different candidate.
  2. The more they went through the process, the longer (and better) the letter. Rejected application, short thank you for applying. If you came for two interviews, but then we went with someone else -- I write a longer letter with references to the meetings.
  3. Good candidates that we didn't hire (because another was better) are invited into my personal network. I recommend them to others, I invite them to dev events, etc. I give non-specific-to-our-interview job hunting advice. We'll have openings at some point.
  4. I do the same for candidates that are just not a fit (they do X, we need Y). I might never hire them, but I have a personal goal to know every good developer within commute distance of my company (we live in a low population area).
Read up on SEO and Link Building  

Kristi Hines has put together this list of (reputable) blogs, articles and tools around the topic of SEO and link building.

For many tech founders, SEO is associated with spammers, direct marketers, and other "social media experts" - i.e. fluff. But that's a one-sided view. People like Patrick McKenzie demonstrate that SEO can be an extremely powerful part of your toolset.

This list of links, along with Patrick's blog is a great starting point if you want to learn more about SEO and link building.

Your product is not the product  

Ash Maurya, entrepreneur and author of Running Lean, makes the point that your business model is the product that you're building, and follows with a systematic method for developing a business model.

More than just a method, which may or may not work for you today, there's a deep insight at the end of this article:

As entrepreneurs we view the world with a strong solution bias. Once we acknowledge that the solution is not the whole product and that we don’t need to pretend to believe our made up answers, we shift from pitching to learning – from other people.

I believe the true benefit of creating a business model/plan is only realized when it facilitates learning from other people.

The things that are most likely to kill your startup are not the things you include in your business plan/model. They're the things you entirely forget to account for because you don't even realise they will be a problem.

Using your business plan or model as a source of ideas to discuss with more experienced entrepreneurs sounds like a great idea.

User activity streams and cohort metrics  

Great article by Dan Martell about how to use user activity streams and cohort metrics to learn from your app usage and build a tighter feedback loop. The article is full of concrete examples.

The main context within which very personal metrics (the user activity stream, principally) is useful is when you don't have enough data to conduct high-level tests or analysis of traffic, for example, at the very beginning of a startup. But even later on, it can be useful to drill into a few random users and figure out what they did and whether it uncovers an issue in your product.

Of course, this type of spying on users should only be used where there are no confidentiality issues, and with appropriate anonymisation where relevant. For a twitter helper application, though, it's very reasonable.

Finally, don't forget that metrics are only valuable if they are actionable and interpreted correctly.

How to use PR firms at startups  

Mark Suster offers some good advice about how and when to deal with PR in startups. Some key points are:

  1. PR is something ongoing, not something you do around specific events and then stop until the next event.
  2. PR is something that the key founding team needs to handle, and shouldn't be delegated to a junior person.
  3. A a startup, even a funded one, you should not hire a PR firm, because you won't have the budget to get the right amount of attention from them.
  4. Even if you do have the budget, it is often better to hire someone inside your firm, or have someone inside your firm as well as retaining a PR firm.
  5. Once you have the budget, a good PR firm is worth its weight in gold.

And some additional tips:

  1. Be authentic. Talk like a human, not a press release.
  2. Have a point of view about things, not aggressive but opinionated.
  3. Don't constantly make pointless announcements or they will be ignored.
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