swombat.com

daily articles for founders

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

Don't underestimate simple ideas  

William Wilkinson, a designer at MetaLab, makes the point that you shouldn't discard simple ideas just because they're simple or appear stupid. He acted on a simple idea for a Russian Roulette simulator for the iPhone, and made $16k in one month from it.

This is not all that dissimilar to threewords.me. As Gabriel Weinberg reasoned, building a small thing that takes off is a good way to get started as an entrepreneur. And, being an entrepreneur is all about finding opportunities where others don't see them, and exploiting them.

Startups need a strong vision  

Des Traynor:

Setting a vision lets everyone know what direction they're going, even in small teams. It helps you understand what activities are beneficial and which ones are valueless distractions. It tells you when to say no, and when to say Hell Yeah. As Michael Porter wrote in "What is Strategy", "Overall advantage or disadvantage results from all a company's activities, not only a few.". A vision let's you define those activities.

When you see all activities as being useful, no activities are useful. The problem with a plan like "Let's keep adding good features", is that it's hard for people to agree what's a useful thing to spend time on. This is fine during exploratory days when you're fishing around for a niche or an angle, but when you're specifically trying to achieve something you need a common vision to help you define what you should be doing. When you don't know where you're going, any road looks good.

This matches with my experience working with a fair number of technology companies over the last year at GrantTree. Once you're past the initial phase where you're figuring out whether you have a business that can make money, vision really ties things together. My observation is that there seem to be two types of business out there: those with vision and those without.

Those with vision seem to move deliberately and aggressively towards and objective, and their progress is often very impressive. Those without just react to opportunities that come their way and plod along. One could say that the true definition of a "lifestyle business" is that it lacks vision.

Deploying like a pro  

This is a good overview of basic deployment practices that any self-respecting startup should have in place, namely staging servers, source control, and automated deployment workflows.

If you aren't lucky enough to work at a company that has good engineering in its very DNA, you're likely to not know much about them.

My main quibble with this would be that you don't have to work at a top tech company to know this stuff. Anyone in the Rails community, with its emphasis on testing, obsession with git, and Capistrano, will be aware of all those concepts.

Many corporations, like banks or consulting companies, which are not strictly technology-focused, will also be very well acquainted with these practices, and many others that help deliver robust software (which is not to say they're always applied rigorously).

That said, if you have any doubt about staging servers, source control or automated deployment workflows, read the article.

Driving, and the art of running a business

Learning to drive and learning to run a business are surprisingly similar endeavours.

When you learn to drive, you don't know what you need to pay attention to. There are, seemingly, a million things going on, and some of them might kill you if you fail to heed them. This can cause a sense of panic in the beginner. When you know how to drive, you rely your experience to know what to pay attention to and what you can simply ignore or deal with without thinking about it.

Learning to run a business is similar. There are a million things that you could do, and some of them will kill your business if you fail to heed them. This can cause a sense of panic in the beginner. When you know how to run a business, you rely on your experience to tell you what you need to pay attention to and what you can simply ignore, delegate or outsource.

When you learn to drive, there are a lot of new habits that you need to build into automatisms. Learning to use the clutch to change gears rapidly while accelerating onto the motorway, surrounded by speeding cars, seems very difficult at first. But the more you do those things, the more they become automatic and unconscious. When you know how to drive, you don't even really think about changing gears, you just do it.

Learning to run a business is similar. There are a lot of new habits that you need to build into automatisms. Learning to detect that the person in front of you is a lead, pitch them in the correct way, follow up, and close the sale, seems very difficult at first. But the more you do it, the more it becomes automatic and unconscious. When you know how to run a business, you don't really think about pitching and closing sales, you just do it.

To learn to drive, you have to actually sit in a car and drive yourself. No amount of reading or talking about it will enable you to drive. You could study driving for years, and even watch someone else driving for years (most of us watch our parents driving for our entire childhood), and still it won't replace the actual experience of driving. While it is possible to build car simulator, even that is a poor substitute for actual driving.

Learning to run a business is similar. You have to actually run a real business yourself. No amount of reading or talking about it will enable you to run a business. You can do all the MBAs you want, and study entrepreneurs and entrepreneurship for years, and still it won't replace the actual experience of running a business. While it is theoretically possible to build a simulation of a business, it's a poor substitute for actually running a business.

The best approach for learning to drive is to get an experienced driving instructor who will sit in the car with you and figure out what you know and what you need to learn, construct a teaching plan personalised to you, teach you those things, demonstrate them when it helps, and help you practice them over and over again in a safe environment, watching out for things that might kill you. Because this approach works, it is used throughout the world.

The best approach for learning to run a business is similar. You get an experienced mentor or coach or close advisor who will be lightly involved in the business, who will figure out what you really need to know next and point you in that direction, who helps you work through tricky business issues, and who watches out for things that might kill your business and that you haven't spotted. This is much less widely used in business than indriving, perhaps because good business coaches are much more rare than good driving instructors. But driving schools for business are getting more common every day.

There is a difference between learning to drive and learning to run a business. In business, there is no such thing as a safe environment. You're on the motorway from day one. And most people drive their first business without an instructor by their side.


Mutual Respect and the barking of dogs

Yesterday, I got involved in a little twitter spat where someone attacked Dave McClure to try and censor his company. The conversation is not important, nor is the person who was attacking him and 500 Startups. I won't link to them to give them greater attention, because they don't deserve it, but if you're very curious and you're reading this shortly after publication, you can look through Dave's tweet history and see parts of the sad excuse for a "discussion" that occurred.

In short, it involved someone getting terribly offended at what someone else was doing on the internet, and lashing out with all the verbal violence they could muster (which wasn't all that much, but was vitriolic enough to be quite sad to look upon). Swear words were used and reused and abused (on one side only), and there was a general lack of respect for Dave or his calm, measured, polite responses. Dave came out looking like a hero of good behaviour compared to his somewhat animalistic attackers.

What I find very interesting is that I got very upset at all this. I was clearly angered by part of this discussion. See, I find abhorrent the idea of a person trying to forbid another from doing something just because they find it offensive. It's deeply, deeply repugnant, scary, and ignominious. It brought to my mind this response by Philip Pullman about his book titled "The good man Jesus and the scoundrel Christ", where he responds to one critic who declares himself offended by the title:

No one has the right to live without being shocked. No one has the right to spend their life without being offended. Nobody has to read this book. Nobody has to pick it up. Nobody has to open it. And if they open it to read it they don't have to like it. And if you read it and you dislike it you don't have to remain silent about it. You can write to me. You can complain about it. You can write to the publisher. You can write to the papers. You can write your own book. You can do all those things, but there your rights stop.

That response made me buy and read the book (which was not all that amazing, though intriguing). I felt it was inspiring, and was a very measured and civilised response to a topic which, in me, provokes red, stupid anger. To me, the attempt by one person to censor another based on what they find offensive is a kind of intellectual violence akin to rape (yes, I use the word deliberately - bear with me) - why is it like rape? Because it is the (usually intellectual, but, in some parts of the world, frequently physical) violent imposition of your way of seeing the world on another person, and it is a violation of someone's mental integrity.

Some of you may think that my use of the word "rape" was excessive. In fact, I know that some people will react to this word emotionally, seeing red, feeling very angry that this is desensitising people to rape, and so on. If you feel like that, great - I apologise for making you feel this way, but this is exactly how I feel about the mob censorship described above. So now we understand each other, let me withdraw the misused word "rape", and please forgive me for using this device to rouse your feelings.

This kind of bigoted censorship is like someone stepping into your head, declaring ownership of your thoughts, and deciding what you're allowed to express, marking some kinds of thoughts as improper, others as allowable, and, fundamentally, imposing their way of thinking on someone who is not them, by force or by threat. To me, this is a straight path to the thought police and the kind of 1984-style world which I do not ever want to set foot in.

Here's the kicker then: because I really care about this topic, I found myself getting angry, and had to make a conscious effort not to devolve into the kind of uncivil, frothing-at-the-mouth nonsensical verbiage that I was deploring in these very attackers!

The line between man and beast is oh, so fine.

Thinking about this further, and looking back at my own history of posting and arguing with people (particularly on the internet, where intellectual violence comes easily since you do not typically get kicked out of internet circles for being an asshole like you would in real life), I have myself descended into this sort of behaviour. I can't even claim it was rare: I'm quite certain it was very frequent, and even recent. Some subjects just get my goat and manage to make me see red, and want to fight, with words, to hurt the other side. It's as deplorable to observe this in myself as in anyone else.

I think it takes supreme self-control to be civilised at all times, even in the face of a heinous lynch mob who wants your blood based on a misunderstanding (often deliberate) or downright fraudulent misstatement of facts. I take my own hat off to the man with 500 hats, for his impeccable behaviour in this particular instance.

Mutual respect

But there's a reason for writing this article beyond getting this off my chest and handing Dave a medal. There's a lesson for everyone here, I think, because I really doubt that I'm the only one who feels the lure of the beast in all of us from time to time.

Here's a thought: beyond the fairly advanced disagreement hierarchy proposed by Paul Graham, or beneath it, rather, there is a more fundamental principle at play: conversation between civilised individuals should always begin, proceed and end with mutual respect. Without this, there is no discussion, no argument - merely the noise of dogs barking at each other.

So here's my challenge, for myself and for any others who lack the buddha-like peacefulness of a still pond, which can never be disturbed by the barking of dogs or wolves nearby:

When someone challenges you by engaging you on a subject which really gets you, which makes you want to hurl words at them for no productive purpose other than getting your anger out - take a deep breath, calm down, and find a respectful way to proceed.

Even if the other side is not being respectful, you owe it to yourself to be so. After all, a gentleman remains a gentleman even in the gutter.

If I ever fail to do so in the future, please do call my attention to it.


How to do "forgotten password" pages  

A good analysis by Jon Duhig of a very common problem when designing web apps. The article goes through a number of common solutions to users forgetting their password (there are even more out there if you look), and arrives at a suggested ideal solution:

The best approach is to use a user-provided user experience that can prevent forgotten passwords in the first place; a password hint:

This provides an error-preventing, user-friendly approach to reduce the need for the password reseting loop. There is of course just one huge flaw; it passes the responsibility for security to the user, who is free to write completely un-secure hints like "Your wife's name followed by her birthday" or even the password itself (surely that might happen, if I know users?).

Ultimately, the solution you pick of course depends on the specifics of your app. A bank's password reset policy will rightly be a lot more involved and formal than the reset process on Reddit. The factors to keep in mind are:

  • How likely it is that the user will leave forever if your password reset process is too complicated;
  • How technically skilled your users are;
  • How valuable access to the user account is; what harm can be done by unauthorised access;
  • How high-profile your site is;
  • How much time/budget you have to devote to this non-feature.
When to sell your company  

Excellent article by Ben Horowitz, about how to go about making the decision whether to sell your company, both emotionally and intellectually, and how to explain the decision (present or future) to employees.

When analyzing whether or not you should sell your company, a good basic rule of thumb is:

If: a) You are very early on in a very large market AND b) You have a good chance of being number 1 in that market

then you should remain stand-alone.

Also:

... it makes sense to pay the CEO [a salary], so that the decision to keep or sell the company isn't a direct response to the CEO's personal financial situation as in: "I don't think that we should sell the company, but I live in an 850 square foot apartment with my husband and two kids and it's that or divorce."

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.

Running a startup without hiring  

Gabriel Weinberg, respected entrepreneur and angel investor, proposes that until you have significant and growing revenues, you should refrain from hiring any permanent workers and, instead, use freelancers or do it yourself. This is in contrast to the typical funded startup approach, and is very good advice for those attempting to bootstrap their business.

[...] hiring takes money. It increases your burn rate significantly. Companies before product/market fit, i.e. traction, need to stay around long enough until they get it. That can take a lot of time, like years. There are countless cases where companies folded only to miss their moment and see other companies rise up where they might have done so.

This approach will probably not work for everyone, but if you are an experienced and multi-talented founder, I agree that it can be a better approach - allowing you to keep your burn rate low and to spend money on things other than staff costs.

How to find startup ideas that make money  

Here's another excellent article by Paras Chopra of Visual Website Optimizer. He proposes and describes a "market-driven approach" to finding startup niches that make money:

Find a startup idea that: a) is already making money for someone else in a growing industry; b) interests you; c) aligns with your skill sets. Once you find such an idea, simply carve out a niche within the industry by a) addressing pains of an under-served segment within that industry; b) or, making it much easier to use than existing solutions; c) or, disrupting the market by making your product accessible to masses at a much affordable price. And once you dominate a particular niche, expand from your niche with your eyes set on the largest player in the market.

more