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The processes that drive your business

Once your business has been running for a little while, and is starting to make a bit of money, it's worth spending some time to figure out what it is that drives the activity in your business.

Every business will have a different type of "driving process", but in all cases, they are activities (often meetings) out of which many tasks flow out.

The driving process for a project to deliver a piece of software will be the weekly or daily meetings to assign the tasks for the coming day or week. The driving process for sales is a sales meeting where currently active leads are reviewed and actions decided. The driving process for a service being provided to a number of clients might be reviewing the status of all the clients and deciding on next steps for each of them.

Some of those business activities need a certain rhythm in order to pick up momentum. There are various ways to achieve that, but meetings is certainly one of the most common ones. However, in a young company, meetings don't happen unless you make an effort to keep them happening - there's always something else to do that seems more appealing than having a meeting. Unlike the corporate environment, where meetings seem to thrive and multiply until the only thing being done is having meetings, startups have the opposite problem: startups are a toxic environment for meetings.

If, however, you know that a certain kind of meeting drives a key, critical process in your business, you will probably find it much easier to summon up the effort to keep that meeting alive - especially once you see the effect of the meeting on getting stuff done.

Two concrete examples

Here are two concrete examples of meetings driving key processes, taken from my own business, GrantTree. The two most important meetings we have are both weekly, and are scheduled on Monday morning, to drive the work for the rest of the week.

The first one is a sales meeting. We keep all our leads in Highrise, and the meeting consists of simply going through all the active leads in the database, adding any that are missing, updating the information on each of them, and deciding next steps for each lead. This creates a number of actions and follow-ups which end up driving the sales activity over the next few days. It's a clear, tangible, useful meeting.

The second meeting is the tax credit process review meeting. We track the status of all our clients in Trello, and go through all of them (active or inactive) to make a conscious decision as to whether actions are needed, what actions should happen this week, whether a client needs urgent attention, etc. This creates a number of actions and follow-ups which end up driving the tax credit process for the week. It's also a clear, tangible, useful meeting.

Those are the key drivers for GrantTree: sales and delivery. Each business will have its own specific driving processes, which will result in different types of meetings (or even things other than meetings!). I'm not suggesting that your business should have the same structure as mine - however, what you should do is think about what those key driving processes are for your business, and see if giving these activities a weekly or daily rhythm helps to make them more effective.


How to reply to an angel investor intro  

Excellent stuff, by Elad Gil:

Unfortunately, a lot of otherwise savvy entrepreneurs don't follow up with investors well. You have to remember that every thing you do can signal to an investor a lack of urgency/interest in your company, the fact that you are taking your startup casually, desperation, or a lack of ability to follow through. Also, if you don't create urgency or a sense that the investor may miss out on something interesting, then the angel may drag their feet in meeting with you, extending the time of your fundraise.

Elad proceeds to give a solid example of a good investor reply. Bookmark and keep in mind for the next time you need it.

Your job as a CEO  

Elad Gil presents an approach for dealing with the task overload of being a CEO:

  1. Once a week, take a step back and ask yourself what you are trying to accomplish, and what are the 1-2 most important things that will get you there.
  2. Every morning, make a list of the 1-3 things you absolutely need to get done that day.
  3. Get those things done.
  4. Don't get distracted by the easy low hanging fruit that doesn't matter - it just wastes your time even if you get satisfaction by doing it.

He also mentions that on an ongoing basis, a CEO should:

  1. Make sure the company doesn't run out of money;
  2. Hire and fire.

A third responsibility often mentioned is setting the company vision and making sure everyone is aligned with it.

Don't wait to work on exciting ideas  

Gabriel Weinberg:

If you truly have a powder-keg idea, you should be doing everything you can to launch without formal investment because the second you spark that powder-keg your valuation will skyrocket. Traction trumps everything.

In other words, the more exciting the idea you're working on, the less plausible it is to say that you're waiting for investment to work on it.

Does this mean that only unexciting ideas require investment to get going? That's partially true (you can't start a corner shop without upfront investment), but it would be misunderstanding Gabriel's point.

The key take-away here is that "I have this awesome idea, I just need $100k to get started" is a bad pitch and isn't going to convince any smart investor.

How to work as a CEO/COO team  

Sometimes, the best solutions are the simplest.

Joel Gascoigne:

I asked Leo to become COO in November last year. (...) The problem we found, was that it was almost impossible to clearly separate these two processes. If Leo was working with someone to try and set goals and keep to them, he inevitably had to make decisions which affected our direction.

It felt like with the new structure we were suddenly both involved in every decision. The goal of the new role for Leo was to speed things up, but with both of us discussing every decision, things were sometimes grinding to a halt, especially in cases where we didn't immediately agree.

The solution? Split the CEO responsibilities across the two roles, with each doing what they do best!

This may seem really simple in hindsight, but it's the kind of solution that's just not all that obvious when you're first going through it. The article is well worth a read.

Acquiring startups for a living  

Excellent story by Rob Walling about acquiring a product called HitTail from a larger company who neglected it, and starting the process of turning it into a bigger success.

So I tend to focus on ideas that have a 1000x higher chance of success than the next un-monetizable social website you have in mind, but the success I strive for is a bit more modest. Probably close to 1/1000th of the payout of a big exit.

But I believe this approach is far more likely to make you happy, and far more likely to actually make a difference in the lives of more than the handful of people who hit the startup lottery each year.

That can't make his investors happy. Oh wait, he doesn't have any.

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
Perils of founder fighting  

Mark Suster advises us to bring in third party counselling/coaching when there are founder issues:

If you struggle through similar issues - which means nearly all of you - please consider how and when to bring in help, to embrace mediation. It's hard to be open with your co-founders without somebody helping to broker the conversation. In many cases it's easier if this person isn't a board member or VC unless you have an extremely close or trusting relationship with them. You want to be able to be open without your board members losing confidence in your future.

My suggested approach is to do this much sooner. By the time previously hidden (or previously nonexistent) major founder disagreements come out in the open, it's too late to bring in the doctor. It helps, for sure, and if you can find a good mediator, trusted by both parties, then definitely bring them in. But the time to act is now when there are no problems.

Quoting my own article on the topic:

There are a number of subjects which seem almost embarrassing to discuss when things are going well. For example, "What if one of us decides to pull out?" Your first reaction to this topic might be "What? We're barely getting started, and already we're talking about what happens if one of us pulls out?"

The reality is that people's life circumstances change through time. They get married, or decide to leave the country, or get engrossed in a different pursuit, etc. Many things can get in between a founder and his start-up. Similarly, many things can go very wrong with a start-up. When those things do go wrong, or when one of the founders decides to pull out, is not the time to discuss these things. You need to discuss them with a clear head when no one is thinking of pulling out and the business looks healthy and hopeful.

Discuss those things early, following the steps in my article. It's easy, if slightly odd, at the beginning. Then you won't have to start thinking about bringing in a mediator when the shit hits the fan.

Running a business vs building a product  

Elad Gil writes:

As the CEO, you need to keep your eye on the underlying product and business fundamentals of what you are doing. If you can not keep focused on the business side you must hire someone who will. Otherwise there is a reasonable chance your company will die. The two most common ways for a startup to die are founder conflicts and running out of cash. Running out of cash is often avoidable.

This is why I often advise people who want to play the startup lottery but have no business experience to try building a profitable bootstrapped business first. You learn a lot from running such a business that is just as essential when running a funded business.

Failing in an interesting way is hard. If you fail at the basics of running a business, you've not failed in an interesting way. If you fail because of some predictable startup issue like a founder conflict or building something nobody wants, you've not failed in an interesting way.

Failing in an interesting way means avoiding all those obvious traps and failing for some reason that is actually challenging and unforeseeable - for example, a smarter, more aggressive competitor stole your lunch, or if a political event simply made your product unsellable - those are interesting ways to fail.

Principles of pitching

Learning how to pitch an idea effectively is an enormously useful skill that they never really teach you at university or at school. It's the kind of thing you learn from personal experience. There are many articles providing formulae for pitching or presenting your startup, but few about the principles behind those formulae.

Back when I was still at university, I spent a whole Easter holiday building a prototype for a chemical spot auction site. In this I made many mistakes (among others, I started by building an elaborate user management system rather than focusing on the key dynamics of the auction process), but the real killer came when we pitched it.

I was working with a guy who was just as inexperienced on the business side as I was on the programming side. His father happened to be a top-level executive at a big chemical company, and so through this huge foot in the door we got an entire hour booked to pitch this product to a panel of senior people at this blue-chip company. I remember sitting on my bed and naively thinking of how we would spend the billions of dollars a year we were undoubtedly going to make from this surefire deal.

Golden opportunity

Was this meeting a golden opportunity, or just a formality to please the boss? I don't know. But what I do know is how much we screwed up on whatever this was.

On the technical side, everything fell apart. This was the day the ILOVEYOU virus hit, and all the corporate networks were down. Our site was unreachable. I had not thought to have it running locally on the laptop so that I could demo it without internet access (über-rookie mistake). When the server finally became reachable again, the meeting was over, with only one sympathetic soul staying behind to have a look at it. I felt mortified. My entire purpose had been to build this prototype for the demo, and that had completely and utterly failed. Two months of work for nothing.

The real killer, though, was our pitch. To my partner's credit, I must say that he handled the whole thing himself, and certainly did it better than I would have - but it was still a disaster, and unlike me, he had no technical difficulties to blame. As I watched the pitch unfold and observed the audience, I felt my heart sink further.

We had an hour booked. Here's how my partner structured the pitch: for the first third of the presentation, about 10 minutes, he talked about how startups were changing the world (which was interesting timing, considering we were two months into the dot-bust); the second third focused on how B2B was a growth area and predicted to make many billions of dollars over the next few years; finally, the last third talked about the customer, and repeated things they knew about themselves, and finally maybe one or two slides were about the product we were pitching and what problem it would solve for them.

So, in short, out of about 30 minutes of presentation time, only 2 minutes answered questions that the audience actually cared about.

I can't remember exactly what sort of questions there were, but if I recall correctly, the "panel" took the excuse that the prototype wasn't working to leave before the hour was out. At the time, it seemed that they left because the prototype didn't work, but, in hindsight, I'm pretty sure they left because they hoped to still be able to do something productive with the little bit of time left in that wasted hour slot.

Hindsight 20/20

Fast forward 11 years later, and I still remember this story, I can still bring back to mind the feeling of sitting through that disastrous meeting, and the insights I got from it. I've now pitched hundreds of times, various different ideas. I've watched our Woobius interns fumble together a pitch with no preparation (they did better than I did back in 2000). I've pitched at competitions, during sales meetings, sales calls, networking meetups, and so on. I even spent two weeks cold-calling 20 people a day to pitch them my "voice on the web" startup (I hate cold-calling).

But the most important lesson about pitching, I learned in this very first pitch:

1. You have to tell people what they want to hear.

With this, I don't mean that you have to make up stuff. What I mean is, out of the vast infinity of facts at your disposal, you need to ruthlessly zoom into the small handful of key points that the people in front of you care about. Back in 2000, our audience didn't care for startups, B2B, or well-known factoids about their company. In the context of this meeting, they cared about two, maybe three things:

  1. Are these guys pitching something I should care about?
  2. Are they credible?
  3. (probably) Can I get out of here sooner without pissing off the boss?

The whole pitch should have been focused on answering these questions quickly, smoothly, effectively. This could probably have been done in 5 to 15 minutes, with most of the hour left for answering questions and building up our credibility further.

Since then, when pitching anything, I always first try to figure out what the "audience" cares about, what they want to hear. For example, your pitch to a customer and your pitch to a VC must be vastly different. The VC cares about whether you're building a startup worth investing in. The customer cares about whether you can solve their problems. Your friends care that you're doing what you like and not heading for disaster. Your parents care that you're not wasting your life chasing unicorns and rainbows. This brings us to the second most important lesson of pitching:

2. You have to know who your audience is and understand them before you can pitch them effectively.

Any pitch where you don't know who you're talking to is a shot in the dark. It might hit something, but who knows what that might be? So, before answering that oft-asked question, "So what do you do?", make sure you first try and figure out what the other person does.

Finally, there's a third critical aspect of pitching that we failed at, back in 2000, that I've become more aware of as the amount of sales work I do has increased.

A long time ago, Aristotle wrote about rhetoric that it was "the faculty of observing in any given case the available means of persuasion". Pitches are a minor application of rhetoric. They do not exist in a vacuum. You don't pitch just for the pleasure of it. To be described as "good" in any way, a pitch must have a purpose, something you're trying to achieve, and a "good pitch" is one which achieves its purpose.

Let's say that, against all odds, the chemical company's executives had liked us and liked our product. What then? They would naturally have asked, "So what are you looking for?" And the reality is that, naive as we were, we hadn't even thought of that before going into the meeting.

So this is the third most important lesson of pitching:

3. In order to deliver a successful pitch, you have to know what you want to get out of it.

There are many things you can honestly want out of pitching: customers, funding, esteem, friendship, rapport, advice, insight, introductions, and so on. Depending on what you want, your pitch will need to change. You don't pitch for business in the same way that you pitch for advice or to build a relationship. Thinking about what you want ahead of pitching is not just helpful, it is essential in order to get anything out of it.

In conclusion

Ultimately, there is one great teacher of the art of pitching: practice. This is why entrepreneurs get very good at pitching: they do it all the time. But hopefully, these three principles can help make your practice more deliberate:

  1. Tell people what they want to hear.
  2. Know who you're pitching so you know what they want to hear.
  3. Know what you want out of your pitch.

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