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daily articles for founders

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

Get more out of your startup reading

How many startup-related articles do you read every day? If you're anything like me (i.e. addicted to Hacker News and other startup news sources), this ranges from 1 or 2 on slow days to more than half a dozen, maybe even a dozen.

How many can you remember reading? If you're like me a few months ago, not so many. There's the odd article that stands out, and, with some effort, sometimes you can recall what the point was. While you're reading it, it feels like you're learning useful stuff, but as soon as you close the article and move on to something else, it fades into the background noise and you forget any actionable information you had encountered.

Reading articles about startup advice should be good and productive for startup founders, but the reality is that most of the time people spend reading startup articles is much like productivity porn - something that you do to procrastinate instead of actually building your startup (or even, instead of even starting it).

There's a better way.

The benefit of taking notes

A couple of months ago, I started this site, swombat.com. Its purpose is to make use of all this time I spend reading startup articles, and turn it into something useful for others. There was a hidden benefit that I haven't realised until recently, though: I remember the good articles and their points much more clearly.

The reason for that is simple, and nothing new. When you quickly read an article (as you must if you're regularly perusing a source of news like HN), it doesn't leave much of an impression. You forget it quickly. On swombat.com, however, I try do several more things with the article:

  • I extract the key points;
  • I determine whether it's worth sharing with swombat.com readers;
  • I summarise the article so that readers will be able to decide whether they want to click through;
  • I try to relate it to previous articles that I've posted about;
  • I try to relate it to my own experiences and come up with an insightful comment where possible;
  • I write this down, make a post, and summarise it even more into a tweet.

Doing all these things forces me to really assimilate the article. Not only that, but I often glance over the articles I've previously posted to judge, a few days or weeks later, whether I posted the right kind of stuff. This reminds me of the key points from these articles and so I forget less of what I assimilated.

Involuntarily, I've created a note-taking system for startup advice articles, and the result is that I'm much better at remembering the points that were made in those articles.

You can do this too

Use whatever note-taking tool you're comfortable with. I prefer a simple notebook for this purpose, because a notebook allows you to look over your previous entries in a way that an electronic notes application does not. But the key point is this:

Whenever you read an article:

  • Extract the key points and write them in your notebook
  • Look over previous entries and try to relate it to previous articles you wrote about
  • Write down your opinion about this article
  • Try to summarise the most important point of article in one line
  • Do the above as if someone else was going to read your notes later

Doing this will force your brain to really assimilate the points of the article in a much more permanent manner. It should help you make much, much better use of all this startup wisdom out there.

An additional benefit of this is that when you will become much better at recognising empty, time-wasting articles. Those are the ones where you have nothing worth writing down by the time you get to the end. Avoid those, or at least treat them as what they are: pure entertainment.


Standing out as a marketing strategy  

Under the guise of providing some practical examples of how they got the attention of big brands like Pepsi or AT&T while running a 3-person startup, Alex Debelov of Virool presents a great philosophy for getting early attention:

When I got there, I wanted to look professional, so I put on a suit and went to the panels. As it turned out, pretty much everyone in the room was dressed in suits. Since I was in my early 20′s most CMO’s/agency reps that I met assumed that I was looking for a job. When I would tell them about my company, they would just follow up with dazed, “cool, here’s my business card” and leave. I realized that I needed to do something different.

Good strategy is about pitting your strengths against their weaknesses. As a new startup, you are definitely not stronger at the traditional networking/marketing game than established players with a lot of resources. You don't even have time as an advantage.

Alex went on to trade his suit for a t-shirt asking "Need 1,000,000 views?" He boldly approached the CMO of PepsiCo on LinkedIn before meeting him in person. He irreverently placed letter flyers advertising his tiny company on every seat at a panel organised by one of his competitors.

What is Virool's relative strength? Nothing to lose. Some of Virool's approaches may infuriate competitors, but there's no chance they'll copy them any time soon. If Virool had done this at a startup event, they would have gone unnoticed, because everyone is in that position. But at a big industry event, it stood out.

The take away here is not to do things that will potentially piss off people in your industry, but to figure out what it is that you're willing to do to grab attention that will be effective and that no one else at the event you're going to is going to do.

That said, the techniques outlined in the article are all pretty cool and worth noting for future use...

Start-up vs consulting vs corporate vs all three  

One of the great fallacies of the corporate world is that you must have a corporate job to have any kind of security in life. The corporate world is exceedingly good at brainwashing people who work there into believing that, to the extent that most people are (quite rightly) terrified of what will happen once they step out of the jumbo-jet of corporate life into what they perceive to be as free fall.

The natural reaction, once you realise that most of us are born with a solid pair of wings that will allow us to fly around the consulting and/or small business universe without anywhere near the level of risk that corporates thought was there, is to oppose the original lie. And there's some truth in that opposition. Flying in a plane is itself terrifying, because if something goes wrong with the plane, you'll be dead quickly, horrifyingly, and with no control over your destiny. Having your own wings (running your own business/consultancy) is far preferable from that point of view: you have control over your own fate. If you run out of money, it's your own fault, and was entirely predictable months in advance.

But, as I've mentioned before, one should not go too far in this direction either. The sensible, wise perspective is, as usual, in the middle. In large corporations, you can rise high up in the ranks if you work hard, are lucky, and play the careers game right. And so with startups or small businesses: if you work hard, are lucky, and play the game right, you can build something solid and rewarding. Which one you pick is really a matter of personal preferences.

So, in that context, here's an inspiring article by Vlad Lokshin, who refuses to settle for the accepted wisdom of either crowd, and carefully balances all three options. He arrives at his own conclusions of what the best fit is for him: a combination of a steady, 40 hours a week corporate (but independent) job with time on the side spent either consulting or working on his own ideas, as he sees fit. It's an appealing goal (though not so easy to achieve). Have a read for his full thinking.

I'll finish with one final piece of advice, which goes slightly contrary to one of Vlad's points:

No matter where you are, make sure you're always growing on a personal level. Never sacrifice your personal growth for some "I'll make it if I only throw everything into it" martyrdom delusion. Successful people start successful businesses, and successful people are always growing.

Random acts of violence

Point (tru.che / imakeshinythings):

I’m very disappointed in Urban Outfitters. I know they have stolen designs from plenty of other artists. I understand that they are a business, but it’s not cool to completely rip off an independent designer’s work.

Double-point (consumerist.com):

Something is rotten in Denmark, or rather, in the I Heart Destination jewelry line of baubles offered by Urban Outfitters. Turns out those $19 danglers in the shape of the various United States of America with a heart cut-out are exactly like necklaces crafted by an independent jewelry designer named Stevie.

Double-tweet point (myaimistrue.com):

Today has been a fun ride. Behold the power of social media muscle. (...) What I do have – and the reason that my call for a boycott on Urban Outfitters spread so fast and wide – is a tribe. A tight knit group of independent artists and crafters that follow me. My cause resounded with them. They spread it, and their friends spread it, and a few big influencers on Twitter spread it, and then it was gone.

Counter-point (regretsy.com):

Now, I’m not generally the voice of reason, so this is an uncomfortable position to take. But I’m just not sure I want to start a boycott over an idea that many people have had, some for years before Truche even opened her Etsy store.

I’m not saying that Urban Outfitters doesn’t help themselves to the designs of others. They certainly have a record of pilfering designs, and they may very well have stolen this one. The question, for me at least, is who did they steal it from? And if we don’t know that much, how do we know it’s really been stolen at all?

Double counter-point (consumerist.com's ^H division):

While this particular seller may have thought up the idea all on her own, different versions of the necklace predate her shop, dating back to as early as 2008.

Maybe there really are no new ideas out there.

"OMG WTF is wrong with you" point (Urban Outfitters):

In her recent blog post and on Twitter Koerner claims that Urban Outfitters stole her designs or was inspired in some way by the items in her Etsy shop for our I Heart Destination necklaces. In fact, a quick search on Etsy for ‘state necklace’ reveals several other sellers with similar products (as seen here on Regretsy) who offered their wares as much as a year earlier than Ms. Koerner.

We are not implying that Koerner stole her necklace idea from one of these other designers, we are simply stating the obvious—that the idea is not unique to Koerner and she can in no way claim to be its originator.

"Let's learn from this" point (UserVoice):

This week a blogger with a mere 1,000 followers on Twitter discovered (apparently just the latest in many) an Urban Outfitters product that was a rip-off of an independent artist. She blogged and tweeted about it. The result was that thousands of people retweeted it, she & Urban Outfitters became a trending topic, and American Apparel removed the product from their shelves.

(...)

Any customer can deliver a killing blow, and any customer can deliver a fame-creating endorsement. Feel free to focus on courting “big” bloggers and tweeters for press - but don’t risk treating any of your customers badly. You never know what might happen.

My conclusion:

The internet is a batshit crazy place. It has brought a scale of millions to the lynch mob mentality every little village has been capable of for millenia. Like in all of history, many (most?) lynch mobs are uninformed, or actively disinformed, or even deliberately manipulated, but if they're hauling you up a lamppost or lighting a fire under your feet, that's of little comfort.

Be aware of that, be ready for random acts of wanton violence from unexpected sources, watch out for the sudden flash lynch mobs appearing out of nowhere and baying for your blood, and when they do happen, be on the ball and active in managing the mob.

Otherwise, expect to get lynched from time to time.


Non-violent communication  

First Round Capital's written a thought-provoking guide to internal startup communication:

When startups experience conflict — particularly between leaders — efforts quickly become uncoordinated, motivations get misunderstood, and results fall short of expectations. You simply can’t produce an incredible product if the team building it won’t agree on fundamentals.

Avoiding problems only allows them to fester and impact more people, while hasty, non-strategic communication can turn a small fire into a blaze.

It centralises around a commmon mistake:

Watch out, because the jump from observation to judgment happens almost immediately,

Which is often surfaced in unhelpful questions:

A. Will you get your work done this week?

rather than

B. What do you need to hit your deadline this week?

Open-ended questions ... acknowledge the level of effort you’re already putting in and offers to help. It asks for more than a one-word reply — it seeks valuable input.

While a lot of startups aim for modern team structures, they're still riddled with old-fashioned communication norms. A common one is assuming your perspective is complete enough that your assessment is accurate. Then, you start asking for things without communicating the context; you remove the others' ability to assess for themselves. The conflicting assessments are the root of more visible conflict, but those remain unaddressed.

A lesson can be drawn from large design firms that have become effective with functional silos - they make sure they communicate the options they're considering and the trade-offs between them, so others throughout the company can share relevant factors.

Mehl advises preparing constructive statements ahead of time before heading into any confrontational discussion. Doing this will help you stay focused and minimize incoherent or incomplete explanations. Preparing also sends the signal that you're invested in doing the right thing. It demonstrates good will.

Separate the person you’re in conflict with from that problem.

The post shares a few in-depth explanations of how to do this well, but it basically means assuming positive intent from the other person, respecting their time and sovereignty, sharing your feelings and needs, separating those from the outcome you'd like - and offering constructive suggestions.

They also share techniques for when team communication breaks down.

“It’s incredibly helpful to talk about the early days — the inside jokes, the long nights, what brought everyone together in the first place.”

“It's like a game of tennis — the longer you keep the ball in play, the more you learn from each other.” And, just as tennis players are happy winning best out of three or five sets, colleagues may need to go multiple rounds before a solution is reached.

If you're a startup founder, you probably have a big ego and a strong sense of direction. If you're co-founders, its' communication skills and empathy with your partners that'll manifest the multipliers between you.

How to approach an angel investor  

Andrew Scott, founder of location-aware recommendation startup Rummble and several others before that, has written a good beginner's guide to approaching angel investors.

A key extract:

Ask an Angel up front some basic questions. Don’t be shy. You need to know:

  • Do they have the money?
  • What is the typical size of the investment they do
  • What was the size of the last 3 investments and in to which companies

It's key to know these sort of things to avoid wasting time pitching someone who can't or won't invest. Another founder I know, who's building a startup that's currently pre-revenue and pre-traction, always starts by asking:

We're pre-revenue and pre-traction. Does it still make sense for us to pitch?

This makes it harder for the investor to then turn around (as european investors are wont to do) and say, after a long pitch process, "We'd like to invest, but come back when you have traction."

Have a read if you need a refresher on raising investment, or want to find out more about it.

Pick a goal  

Ivan Kirgin:

Deciding what the goal should be is hard. Startups are flooded with numbers: web traffic analytics, product event data, site speed & perf metrics, app store metrics, cohort data, and on and on. People see dashboards full of dozens of numbers, with additional complexity because you never just care about a number but also how it changes too.

One wise saying is that you get what you measure. Another wise saying is that you really do get what you measure, and nothing else, so be careful what you measure.

For any company, however, picking the most important metric and focusing on that is fundamentally important. For many profitable companies, the key metric will be, quite simply, profit. But that's at the company level. When you're driving a specific change, focusing on what impact you want to see out of that change is important.

However, don't let yourself be caught into mistaking the measure for the real thing. Measures can be misleading and can even distort things in such a way that a previous good measure becomes dissociated from real positive change. Whenever you measure things and aim for goals, keep an eye out for these distortions.

Still. As Eric Ries put it, if you cannot fail, you cannot learn. Goals are things you can fail at (or even succeed!). Read more here.

Habits of effective startup mentors  

I've argued before that mentors are essential to startup success, but who trains the mentors? Can you get a mentorship mentor? As it happens, you can, and much like most coaches are themselves being coached, mentors usually have their own mentors.

That said, it's interesting to try and write down what a good mentor should do. Here's a list, by LeanStartupMachine mentor Giff Constable, of ten best practices for being a startup mentor. The habits are:

  1. Always start by defining the fundamental idea behind a product or service
  2. Prioritize the startup’s biggest risks
  3. Get practical on the tactics to empirically mitigate risks
  4. Use your network to find them potential customers
  5. Challenge, play devil’s advocate, and poke holes in arguments
  6. Let the team come to its own conclusions
  7. Less mentorship may be better
  8. Don’t spoon feed, keep feedback crisp
  9. Collaborate with other mentors
  10. Be a mentor, not a CEO

Get the details here.

Startup skills vs startup ideas

There's an interesting but damaging perversion in the startup world, around ideas vs execution. Even among those who believe that "ideas are worthless, execution is everything", there is a practical, observable tendency to rate theory over practice.

If you were advising someone about how to build a top quality web application, and they didn't know how to program, you'd tell them that first they need to learn to program, probably spend a year or more practicing the craft, before they have a chance to build even a mediocre quality application. Programming is a highly complex activity that takes skill (built through experience) to do well. You wouldn't simply explain to someone the technical and architectural pitfalls of the application they want to build, give them a process for how to program, and set them off.

The same is true for most technical fields. There is a skill base that takes many months or years to build, and that skill base determines the success of any non-trivial endeavour, rather than the process they follow or the idea they have. Certainly, having a great process and a great idea is a valuable plus, but without the skill base, process, ideas and theories are mostly worthless.

But somehow, despite their renowned complexity, startups seem to be exempt from this rule. A large portion of the advice given to startups focuses on ideas (you should do this, you should do that) rather than practical skill-building (you should practice that until you're good at it).

Lean startup and the scientific method

One flagrant example of that is the Lean Startup methodology. Lean Startup is a process, a plan for how to go about executing your idea. I love it, because it presents a clear approach for applying skills which I've built over the last few years. It's a great distillation of a very rational process for going about building a startup, and I commend Eric Ries for presenting it in such a clear and cohesive manner. However, by itself it is no more useful than the Scientific Method.

Wait a minute, Daniel, the Scientific Method got us all of modern science! Surely that's pretty damn useful! I don't disagree. The Scientific Method, and the Lean Startup Method, are both very useful... when applied correctly, and with the right skill set to back them up.

If you handed down the Scientific Method to someone who is not a trained scientist, in theory they should be use it to derive new laws of nature. In practice, though, what would most likely happen is that they would mis-apply this method and come up with all sorts of crackpot theories about perpetual motion machines and life-altering magnetic bracelets. There's a good reason why we force wannabe scientists through 5-10 years of training before allowing them to do anything of consequence: it takes that long to build the skills to know how to do it properly.

In some rare cases, an exceptionally brilliant genius might manage to do "real science" without formal training, but the common case for an untrained scientist trying to apply the scientific method is failure. This is not a failure of the method, it's a failure of the person, a failure of skills.

The same is true for startups. No matter how good your method is, if you don't have the core skills needed to build and run a successful business, the great likelihood is that you will fail - not because you have the wrong method, but simply because you have no idea what you're doing and applying the Lean Startup method (or any other approach to company-building) is hard and takes skills.

Core entrepreneurial skills

The good news is, skills can be learnt and practiced. You can go from zero skill, to moderate skill, to high levels of competence. If you have the right framework and support, you might even do so quite quickly. But like all skills, you will learn them more quickly if you're deliberate about it, rather than waiting for chance to teach you the skills in its world-renowned "school of hard knocks".

I'll cover these skills in more detail in another article, but my initial short-list of what the core entrepreneurial skills are is:

  • communication (written, visual, in-person)
  • programming
  • design
  • financial control
  • organisation
  • management
  • recruitment
  • negotiation
  • sales

Someone (or a cofounding team) who is competent in these 8 key areas will be much more likely to be able to successfully build a startup than someone who has major gaps in several of them. If you look at this list and see something that you have no skill in, you should consider either teaching yourself that skill, or pairing up with someone who is competent in that skill.

One final note: of course, skills vary depending on context. You might be great at giving corporate presentations, designing motorcycles or managing a department of 500 people in an international bank. That doesn't mean those skills will translate to the entrepreneurial context, and so you should be aware of that before ticking them off as "done". However, for each of these areas, there is a commonality between different contexts, which means that some of the skills will carry over, so a corporate salesperson will at least have a good head-start over someone who knows nothing about sales.


Notes on raising seed money  

Chris Dixon's notes on raising financing. Solid, level-headed tips. Best read in conjunction with this article by Evan Reas, which proposes the following two-step approach:

You are never asking for money nor do you ever need it. You are either meeting with investors to talk about your business or asking them whether they want to be included in the round you are about to close.

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