swombat.com

daily articles for founders

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

Max Levchin's hiring tips  

Max Levchin's hiring tricks, put together by Bill Trenchard:

  • If there's a doubt, don't hire them
  • Hire people you know already
  • Stay away from diversity early on (controversial!)
  • Differentiate your company through its hiring process

The article is interesting. Sadly, I don't think it will help. Call me a cynic, but I think hiring is one of those things where people listen to the advice but then do their own thing anyway. Then they learn.

An interesting point from the article:

It’s easy to think you can’t possibly know enough good people from your network to build out an entire team. While in some ways that’s true, Levchin’s experience is that almost everyone actually knows more good people than they believe they know. The challenge is that most founders rule out top talent because they think they’ll never be able to actually get them to join their team.

Levchin learned early on not to make this mistake. When PayPal was founded, he sat down and created a list of potential engineering hires. When he was done he had a single name written down. Levchin recounts demoralizing exercise, “ Peter [Thiel] sat me down and he made me write down every smart person I knew in college personally. Turned out to be a list of about 30 people and we ended up hiring about 24 of those.” You can’t rule potential hires out just because you don’t think you can win them. He went on to note, “We had this cascading effect where our team would be forced to write down everybody smart they knew that they were absolutely confident they could never hire. We then went after them like banshees and they would eventually crack."

Enjoy the read.

Iqbal Gandham on: Generating B2B and B2C leads systematically

Iqbal Gandham acts as a C-level executive or as an advisor to companies, in the web and mobile space. Whether it's understanding the technology to build a product or service, or creating and executing sales and marketing plans, he has extensive experience in both product and customer development.

Over the course of his career, Iqbal has founded, co-founded, advised, and taken companies from one man entities to valuations exceeding $50 millions, and employee counts eclipsing 100+. Most of those companies are still in operation today.

In this article, he shares some advice for how to go about getting that crucial list of early leads for your startup, when you're starting as an industry outsider.

Lead generation is difficult. We are all required to do it during the lifecycle of our startup. We imagine it’s easy, and often it’s the one thing we get wrong.

Traditional lead generation was a little easier than it is today (I know the old-timers will not agree, deal with it!). You selected a vertical, or approximately divided the world's population into groups you thought may like your product or service, purchased a mailing / calling list, and then started cold calling.

Over the call you would attempt to deduce if there was any interest, and spin-sell your product into their requirements. Times have changed. Cold calling, although still used, is being phased out in favour of a more strategic approach.

Today, we are told to ‘guess’ less, and instead ascertain where consumers are talking about the problem your product solves. Instead of just narrowing down to a vertical and then jumping on the phone, drill a little deeper, and see if those people are discussing the problem.

Besides the ‘sale,' lead generation is also needed if you wish to carry out customer discovery. They all require you to reach and interact with people whom you do not employ, and who most likely are outside your immediate networks. You're not likely to bump into them at Geek ‘n Rolla.

So how does one go about breaking into an industry, in the modern age?

Basics: Why are you contacting?

Unless you figure this out, you will end up contacting everyone, and on the day of the ‘pitch’ you will not really know what you want from them. Never go to a meeting unless you know what you want from the meeting.

The best way to do this is to answer two simple questions:

  1. What do you want from them?
  2. What can you give them in return?

You may be contacting a person for a ‘sale’, for a ‘review’ or perhaps just some ‘customer discovery’. So, ‘What you want and what you give’ may differ in each scenario.

Once you've got this figured out, the next step is to find those leads.

Who to contact?

Now, we need to build the list. This is akin to buying mailing lists and calling lists. There are several methods you can use to aid you in building a list of potential contacts:

  1. Networking: This is the obvious one, but one which we all get wrong. Why? Simple: we tend to network at events where we feel comfortable. Unfortunately these events are rarely places where our customers are.

  2. Online search: Hit google, see which companies come up, send them an email... and receive no response. Or, see the tools listed lower in this article.

  3. Referrals: Although, strictly speaking, a subset of the aforementioned, it is the optimum method. It's also the most problematic to apply, especially if selling in an industry where we have scant knowledge.

I have found all these methods have their own space, but I find offline networking more appropriate for B2B and online preferable for B2C.

Generating B2B leads

Here are some steps to get started:

  1. Write down a list of companies that you would ideally like to be your customers.

  2. Create another list, this one of companies which have sold something to them (tangential to your offering - not your competitors).

  3. Create a list of events which they (have) attend(ed).

  4. Discover new people who have joined those companies or who have left them recently (use Linkedin to find this out).

  5. 2, 3, and 4 all give you one thing: access to the company, without specifically asking for access.

  6. Network with 2, 3 and 4. I find ‘4’ to be the easiest, since people who have just left a company are open to speaking to everyone (especially if unemployed), and those who have just joined will take calls, since they have no idea whose calls to reject.

  7. Use the network you build in 2, 3 and 4 to work your way into the company, with each meeting bringing you closer to the ‘target’. I would never go direct to the individual you need to speak to. Why? The chances are that your idea and pitch are so poor that what you describe will make little sense. Speak to people on the ‘edge’, and learn the language (both of the market and of the company). Use that to refine the pitch.

This takes effort. You can't just type in a few words in Google and magically end up with a list of leads. But where B2B is concerned, this type of systematic personal networking is an effective way to break into the market.

Generating B2C leads

To generate B2C leads, you should use online tools to discover where people are discussing:

  1. Similar products;
  2. Problems you solve or gains you provide;
  3. Generic industry trends.

Here's a selection of tools you can use:

  • Google: always a good start, but very poor at deep diving into forums, where the real discussions occur.
  • SocialMention.com: allows you to search by keyword, and see whether the sentiment of the discussion is positive or negative. This is good for an overall view, and to collect a few urls.
  • Technorati.com: search those blogs to build a blogger list of who to contact.
  • SproutSocial: this great little tool allows you to add multiple twitter, facebook and linkedin accounts, and then search for keywords across the web/twittersphere and string keywords together. You can also mark tweets, and reply to them later.
  • Twitter: create lists of people which have your keywords in their profile, or are discussing that topic currently. The best method is simply to find pre-generated lists and just follow them. Try Formulists: it will help you create lists, and even filter them based on how many posts have been made in the last 30 days and how many followers they have.
  • You can then filter the lists of people further, by using 140ctr.com, which highlights the click-through rates of each person, and choose those which could help you spread your message more quickly... in theory.
  • Quora: The 'new kid on the block’; someone somewhere will be discussing your problem, find out who and add them.
  • Linkedin Discussion: I personally find linkedin discussions of little use; they all seem to be discussing ‘life improvements’ or ‘funding’ but you may get somewhere in your niche.

In short

Lead generation is difficult to do, especially if you cannot clearly explain what you need from that lead, and what you can offer in return.

Once you can define this, there are several tools which can help in the B2C space. When it comes to B2B, traditional methods based on referrals are still trumps.

I hope this list of tools and methods will be useful to you in your own startups.

This article is part of a series.


How to give software demos  

Ben Popper offers a great tip about giving a demo of your startup's software:

Software is Magic. A Demo is a Magic Show.

It's worth adding that this applies to demo videos too, and in fact to any sales process.

I've made the point before that you should sell the emotional benefits first. The "Wow" moment in your demo is what gets emotions engaged and captures attention. Make sure that happens up front to capture your audience's attention.

What if your software doesn't do anything magical? If your software doesn't do anything that seems magical to someone, then the only way you're going to sell it is if you have a captive audience (for example, if it's in-house software built for a large corporation). But if that's the case, chances are you're not reading this article.

Only work on single-miracle startups  

Elad Gil:

If your startup needs multiple miracles to succeed, you need to go back to the drawing board and come up with an idea or product that has only one miracle. Otherwise you are multiplying out multiple low probability events and are extremely likely to fail.

Many people delude themselves on whether they are a one-miracle, or multi-miracle startup. They way to tell is to ask yourself what your product or business end goal is. Is your approach directly focused on achieving that end goal? If not, you may have a multi-miracle plan without realizing it.

Yep. Although I disagree with Elad's assertion that:

If your startup needs zero miracles to work, it probably isn't a defensible startup.

That is true only in a winner-takes-all market. Some markets are naturally fragmented. You don't need a miracle to build a successful web development company, you just need competence, hard work, skill, luck, good business relationships, and a dozen other tricky but achievable ingredients. And, depending on your definition, those can be startups too.

The right kind of ambition  

A comment by Marcus Frödin pointed me to this excellent article by Ben Horowitz, that I somehow missed when it came out.

Ben offers some great advice on how to select the right kind of people to join your company, particularly when it comes to salespeople:

People who view the world through the me prism might describe a prior company’s failure in an interview as follows: “My last job was my e-commerce play. I felt that it was important to round out my resume.” Note the use of “my” to personalize the company in a way that it’s unlikely that anyone else at the company would agree with. In fact, the other employees in the company might even be offended by this usage. People with the right kind of ambition would not likely use the word “play” to describe their effort to work as a team to build something substantial. Finally, people who use the “me” prism find it natural and obvious to speak in terms of “building out my resume” while people who use the “team” prism find such phrases to be somewhat uncomfortable and awkward, because they clearly indicate an individual goal which is separate from the team goal.

(...)

Throughout our interview process, candidates would take sole credit for landing extremely large deals, achieving impressive goals, and generating company success. Invariably, the candidates who claimed the most credit for deals would have the most difficult time describing the details of how the deal was actually won and orchestrated. During reference checks, others involved in the deals would tell a much different story.

Read the full article here.

What font should I use?  

Design is an essential part of most successful startups. Having some, even relatively basic, design skills is useful in many areas of business.

Dixit Smashing Magazine:

Over the last six months or so we've been trying very hard to improve the overall quality of the articles published on Smashing Magazine. One of the improvements we introduced is the so-called 'Smashing Magazine Experts Panel' where our articles are reviewed by experts (who are invited and paid for their reviews) before these articles get published online. There are also other things we do to ensure the good quality of the articles. We want to be a professional, reliable online publication for designers and web-developers.

It shows in this article. Excellent overview of key principles for picking fonts. Here's a summary, but do read the article.

  • Use appropriate fonts. Don't go for individuality above all else.
  • Know the font families: Geometric, Humanist, Old style, Transitional, Modern, Slab Serif.
  • Use decisive contrast, fonts that look significantly different. Either keep it exactly the same, or change it a lot.
  • Don't over-use particularly stylised fonts.
  • Break any of these rules sooner than design something truly barbarous
4 steps to starting a startup  

Joel Gascoigne's four steps:

  1. Have an idea
  2. Cut it down
  3. Share the idea, get feedback
  4. Go with your gut

Of course, Joel gives a fair bit of detail about each step. Have a read, and then throw in the following points:

  • First of all, these steps are not sequential. The idea needs to keep evolving and mutating based on the feedback you receive. Don't let the idea become static.
  • Follow these tips from Paras Chopra if you want to increase your chances of actually making money.
  • The importance of getting feedback cannot be overstated. Feedback from potential customers and fellow entrepreneurs needs to happen throughout the whole process.
  • Once you think you're ready to get started, don't start by building code. Start by listing out your hypotheses.
How to buy parked domains  

Every day, entrepreneurs with new ideas are discovering that the domains they’d like to build business on have already been registered, most likely by a domain speculator.

(...)

Before you make [the mistake of choosing a misspelling or invented word] for your startup, get familiar with practices you may be able to use to acquire domains with terms acceptable to you. To get you the scoop on what’s worked for the industry, we talked to a number of experienced domain buyers, sellers, and brokers about how they handled their deals.

Solid advice, worth a read to get a better understanding of how to approach domain brokerage as a buyer. Also worth reading alongside this: How to choose a domain name, Keep your domain name by registering it right away, and Tools to find available startup domain names.

Here's also an article on how to grab expiring domains, via Aditya Chadha, and a Fred Wilson article about finding and buying domain names.

Analysis of 32 startup post-mortems  

I'm always wary of "Top N startup mistakes" type posts, because they're generally too specific to a single person's viewpoint, shaped by the specific events that happened to them. Moreover, being an expert in how startups fail does not necessarily give you the tools to make one succeed.

That said, this particular list is extracted from 32 startup post-mortems, and so has at least a veneer of objectivity about it (but remember, the plural of anecdotes is not data).

Ignoring your users is a tried and true way to fail. Yes that sounds obvious but this was the #1 reason given for failure amongst the 32 startup failure post-mortems we analyzed. Tunnel vision and not gathering user feedback are fatal flaws for most startups. For instance, ecrowds, a web content management system company, said that “ We spent way too much time building it for ourselves and not getting feedback from prospects — it’s easy to get tunnel vision. I’d recommend not going more than two or three months from the initial start to getting in the hands of prospects that are truly objective.”

This, for example, is a very common reason for failure - if you're working on your very first startup. Most people seem to make this mistake. But it's one that burns so badly that you're unlikely to do it again. So, is the list really valuable? You decide.

  1. Didn't value customer feedback
  2. Built a solution without a problem
  3. Had the wrong team
  4. Poor marketing
  5. Ran out of cash
  6. Didn't have a viable business model
  7. Released the product too early or too late
  8. Lacked passion and domain expertise
  9. Didn't pivot
  10. User-unfriendly product
  11. Pricing issues
  12. Didn't leverage connections
  13. Disharmony with investors/cofounders
  14. Lost focus, got distracted
  15. Burned out
  16. Got outcompeted
  17. Unable to raise funding
  18. Started up in the wrong location
  19. Lack of full-time commitment
  20. The recession

More details in the article.

What is your definition of "success" as an entrepreneur?

It's very hard to pin down a universal definition of success, because there are many components that can go into your vision of a successful entrepreneurial lifestyle:

  • financial: survival, independence, wealth, extreme wealth
  • inspirational: making do, making a small or big positive difference, enabling huge positive change
  • emotional: being unhappy, happy, enthusiastic, ecstatic about your work
  • relational/life balance: having no time for others, having some time, having a lot of time, having complete freedom of how you spend your time
  • educational: learning nothing, learning a little, learning a lot, becoming a world expert
  • organisational: being chaotic, somewhat organised, well organised, running like clockwork
  • environmental: being neutral/negative, helping a bit, a lot, solving a major environmental challenge
  • fame: unknown, known in a small or large circle, world-famous
  • ...

One might find it easier to try and list the things that cannot be a component of a person's vision of success, than those that can. Success is an extremely subjective idea. Everyone has their own definition, and no generic definition will suit even a large minority, let alone a majority of people.

Even if we pick a specific context, like, say, someone working in a corporate environment and looking to get out, the definition of "success" can vary extremely widely depending on outlook, ambition, and personal circumstances.

However, unless you know what success looks like to you, it will be much harder to visualise it, work out what you need to get there, and achieve it. It's really worth making that effort for yourself. What are you trying to achieve? How will you know when you've done it?

Of course, that's all about defining one's own success. What about defining the success of others? With the question posed in this way, it is easier to answer, because we are generally more willing to simplify the goals of others than our own.

Finding a definition of "success" that a large number of people will agree reflects their own definition for themselves is almost impossible. Finding one that reflects what people mean when they point at someone else and say "this guy/girl is successful" is markedly easier.

Looking at it in that way, and focusing on purely the financial element (which is common amongst most, if not all, entrepreneurs), I think we can agree that there is a simple hierarchy of financial success for entrepreneurs:

  1. Survival: can generate enough revenues to survive without needing to take investment or get a job;
  2. Comfort: can generate enough revenue to be able to live well;
  3. Wealth: generates more than enough revenues (or sells the company) to be able to live wealthily ever after;
  4. Mega-wealth: generates ridiculous amounts of money.

I think it's fair to say that an entrepreneur who is able to reliably create businesses that will enable them to survive without needing external help is already successful to some respectable measure. However, most people are not satisfied with this level, and will go on to at least level 2, where they can live well off the revenues which they generate. Finally, few will progress onto stage 3, and almost none to stage 4.

There are many other possible goals for an entrepreneur, but all of them typically become easier to achieve with financial success, so in almost all cases, financial success is worth considering. However, many entrepreneurs fail to reach even level 1 (largely, as I've argued before, through predictable errors). This site's aim is to help founders reach at least level 1.


more