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

Quick and dirty application of Hypothesis Driven Development  

John Wedgwood published this piece proposing a quick and dirty application of Hypothesis Driven Development:

  • Meet weekly (or more often if you can manage it)
  • Identify the single most important question facing the business
  • Break it down into parts that feel answerable
  • Figure out how you can get answers (or partial answers) quickly
  • Get those answers before your next meeting, then repeat

A key point he notes is that most of the answers did not need any coding or product development. That is true in my experience too, though it can be, for some reason, a counter-intuitive pill to swallow for someone with a builder mindset.

Why code something we won't end up wanting? It would take longer, and we can make phone calls today.

Kevin McDonagh on: How to attend a conference

Kevin McDonagh is director at Novoda, a development consultancy for the Android platform. He is also an organiser of the London Android user group and the UK arm of Droidcon.

Kevin caught my interest when he casually mentioned that he typically came out of one day conferences with over a hundred business cards to follow up on. Out of those he usually gets at least one client (which makes up for even expensive, international conferences like Mobile World Congress.

Here, then, is his advice:

Conferences are the best way to quickly extend a business network and, if done correctly, attendance and the follow up is an arduous but rewarding endeavour. Uninitiated networking professionals commonly attend conference days in hope of stumbling across opportunity whilst floating amongst their peers, but without discipline, the majority of business opportunities are likely to go unrealised.

I considered my early conference attendance as a pleasant distraction. I attended only the cheapest / free events, which usually ensured their topics were tainted by sponsors. This isn't always the case as it was 6 years ago, since grass roots conferences organised by enthusiasts are more common nowadays.

At my first conferences I met and shared knowledge with great people talking about exciting prospects but after the event I failed to keep any further contact. These days I return home from conferences with a cringeworthy amount of follow-up, but the opportunities created from this process have ensured cash flow for my company months down the line. This is why attending a conference is an investment of both time and money, and you should be well aquatinted with how to see returns on this investment.

Here's a check list before I elaborate further:

Preparation

  • Plenty of business cards;
  • A loose itinerary of possible contacts;
  • A ballpoint pen;
  • 1-minute demo / tablet pdf presentation;
  • Sound bites about you;
  • Charged Laptop, phones and chargers;
  • Planned route to and from the conference.

Attending: Excite and create opportunities

  • Speak to everyone;
  • Prompt them to lead;
  • Seamlessly lead into a short pitch;
  • Be quick;
  • Suggest next actions;
  • Write reference notes on their card.

Immediate follow up: politely present further opportunity

  • Use card notes as conversation points;
  • Append canned info responses;
  • Tie the knot.

Staggered follow ups: Plan to cultivate relationships

  • Building long lasting professional relationships;
  • Create calendar entries;
  • Notes on contacts.

The details

Preparation

Plenty of business cards

I take 2-400 business cards depending on the event. These cards should look attractive and contain info about your 'professional' social networks, along with any relevant web links. Leave some white space upon which your contacts can write notes about your conversation. Novoda encourages this on cards with a leading statement: "You spoke to at:". I often fill out the place we spoke before leaving them to add any further notes.

A loose itinerary of possible contacts

There is likely a theme to the conference, so preparing some aims beforehand might help your casual conversations lead into something. Depending on the registration service, conference lists of attendees and speakers may be available on the site.

A few good ballpoint pens

People will ask you for one and you'll need to take notes. Don't use the rollerballs as they smudge on some laminated cards.

1-minute demo / tablet pdf presentation, and sound bites about you

Bright, picture laden presentation slides, and then a live demo, are how I professionally introduce myself. If the climate is more casual I just demo. While chatting, I flick through the presentation slides on an iPad while chatting (until I can get a good Android alternative tablet!).

Charged Laptop, phones + charger

I have a separate demo device with prepared shortcuts, to help with demos. Obviously, this is useless if it runs out of battery. And, if you're using it all day, it probably will run out.

Planned route to and from the conference

You don't want to waste two hours trying to figure out how get there only to get lost. Print out a google map (not susceptible to connection problems) and consider visiting the location the day before.

Attending: Excite and create opportunities

Speak to everyone

In the worst instances, I've known shy friends to only manage short conversations with a handful of people besides whom they were inconveniently stood or sat, at a conference of thousands.

This is a terrible shame for everyone involved. Attempting to literally speak with all attendees would be fruitless and boring, but please make the effort to meet a significant number of people. Subtlety is appreciated, rather than stepping from one person to the next like a machine, but the very reason everyone is in attendance is to share in a theme with others. The majority will thank your asserted approach, and are looking forward to your conversation.

Prompt them to lead

Don't just run up and start pitching, but don't leave them dangling for too long without relevant information either. Start by asking them questions rather than with a monologue. Ask them to explain their business interests. This will help identify if they are someone with whom you would like to work.

Seamlessly lead into a short pitch

Keep their interests in mind while speaking about yourself. Be memorable by speaking passionately, with obvious expertise about relevant business. Help your new contact find potential in your product.

Be quick

Everyone recognises a pitch. Get through the best areas until they are satisfied they are speaking to an expert. Don't bore your newfound contact. If you are continually seeing glazed looks, consider shortening your presentation. If they want to hear more, they will prompt you for it.

Suggest next actions

Don't rely on your new connections to flourish without a lot of painstaking effort. Respect is earned in a relationship, but you are likely going to be the only one who cares in the beginning, so it will likely be yourself who suggests any immediate opportunities. Play your cards right, and further down the line they will be honoured to do the same in return.

Write reference notes on their card

After the conversation, take notes to help remember:

  • intros
  • actions
  • companies
  • products.

Not an essay, just short memorable tags to trigger your memory. Don't be too obscure, or reviewing the cards days later can become confusing. Take notes after speaking with someone, or just as you are leaving, but see what works for you best. Sometimes writing in front of a contact will prompt them to also write on your card.

Immediate follow up: politely present further opportunity

The real work begins after the conference. Build relationship ties, now that you have faces to go along with names.

Use card notes as conversation points

Each of your emails should be customised to discuss matters noted on their card. A good initial email will be relevant and engaging, but most importantly, it will actively pursue further interaction and leave as few reasons not to follow up as possible.

A few good techniques are:

  • immediately present valuable information;
  • ask for their advice on a particular matter while ending with a question to encourage recourse;
  • suggest two meeting times and places to speak further.

Append canned info responses

Regardless of how interesting you are, I'm sure the majority about yourself and your time at an event will be similar. Rather repeatedly typing it out, write one or two generic responses and paste them into the starts of your mail. Don't send them verbatim, as you are not a robot! Instead use them as cues to write over and adapt.

Tie the knot

After sending your quick email introduction, please don't ask for their hand in marriage. Instead, start lightly, but keep them closely connected for future follow ups. Avoid legacy technology like rolodexes and paper tombs of client directories. Social networks and CRM tools are more useful and practical.

After sending an initial email, connect with the recipient through LinkedIn, as they are now likely to know your name. Occasionally, at the same time, I'll follow an interesting twitter stream, comment on a code changeset, or comment on their blog post. It is the culmination of many considerate little acts which will add character to your relationship.

Staggered follow ups: Plan to cultivate relationships

Building long lasting professional relationships

If your new contacts can immediately benefit from your further introductions, make sure to proactively introduce them to one another. Making professional introductions at your own expense is often rewarding at a future date, as a relationship is not a one time deal. As pointed out by Paulina yesterday, there is no better way to earn friendship and trust than through offering opportunities.

Create calendar entries

Put notes in your calendar to revisit contacts two weeks, a month, and three months after your initial contact. Chances to work together are fleeting, as are people's attentions. An inevitable majority of your new contacts will quickly fall silent, but as your reputation increases, you will see this percentage decrease. Silent leads do not mean that there is no longer an opportunity. As I discussed, relationships are for the long term, so keep in regular contact and repeat the previous step but with new information.

Notes on contacts

Once you email someone they are in your contacts list and their details will become a whole lot more valuable if you remember who they are. So flesh out the contact entries with notes about them and when you were last in contact. Filling out these often empty fields in your contacts is time consuming, but it will be worth it in two years time when they contact you through a referral.

In conclusion

These steps shouldn't come as any surprise. The logic in the above approach is obvious, but the discipline of enforcing the steps is what will guarantee fruitful leads and new business for years to come.

Applying a systematic, well-tuned approach to conferences will help you make the most of them. I look forward to meeting you at the next conference!

This article is part of a series.


How to ask for introductions  

Elad Gil on how to ask for intros:

One of the key things you learn when building a consumer product is to make things as easy, streamlined, and friction free as possible for your users. When asking an angel, advisor, or other person to make an introduction for you, the same rule applies. The structure below saves a lot of pain & back and forth for you, as well as for the person being asked to make an introduction on your behalf.

(...)

By spending a little bit of time up front you can make life dramatically easier for the person doing you a favor / offering an introduction. It also increases the likelihood dramatically that an introduction will actually occur and yield a follow-on conversation.

Elad rips into a couple of templates (good and bad intros) to show how it should be done. As someone who has frequently both been asked to make intros, and asked others for intros, I can only agree with his approach.

Make it easy for people to help you, and they're much more likely to do so! Worth also consulting this article, this presentation from Founder-Centric, and the "Reaching Out" section of this article for additional perspective (thanks Sal for the suggestions!).

Giving discounts impacts your brand  

James Nichols makes the case against giving discounts willy-nilly:

At its core, a brand's value is represented by the premium a company can charge versus its competitors. If I can get millions of people to pay $5.99 for Kellogg's Corn Flakes versus $2.99 for generic corn flakes, that's a strong brand. If I have to pass out $2.50 coupons to get folks to buy them, that's a weak brand. And if people get used to receiving $2.50 coupons all the time, they'll ultimately think less of the coupons.

It's a fair point, although this later statement doesn't ring true:

(...) he told me that they were in the business of giving consumers what they want. OK fine, but the consumers aren't actually paying his salary. Brands are.

Excuse my cynicism, but what the consumer wants is everything for free.

Even consumers don't want everything for free (in the B2B world, that's even more the case). They want good value, certainly, but they're willing to pay for quality, convenience, etc.

Some consumers do want everything for free - these are the people that get marketed expensive financial products like credit cards that give a sign-on bonus, payday loans, lotteries, and other similar dubious products. See for yourself (look at the adverts on the right hand side).

If you build a product specifically for that crowd, though, you've got bigger problems than giving away too many coupons.

Customer Development is not a Focus Group  

Steve Blank notes:

Any idiot can get outside the building and ask customers what they want, compile a feature list and hand it to engineering. Gathering feature requests from customers is not what marketing should be doing in a startup. And it's certainly not Customer Development.

In a startup the role of Customer Development is to:

  1. test the founders hypothesis about the customer problem
  2. test if the product concept and minimum feature set solve that problem

Collecting feature lists and holding focus groups are for established companies with existing customers looking to design product line extensions

Startups are short on time. Serving multiple customer segments requires more features and pricing plans and support and marketing and everything. That's tough for a young startup to bear and few would intentionally choose the extra work. Still, we can fall for the trap accidentally as Steve described.

By consenting to every feature request, you end up serving multiple customer segments. But focus means saying "no". Part of the early goal of talking to customers is in determining which of the many available segments you really want to focus on. Then you can say no to everything else.

How to: track your expenses (UK)

Last week we covered how to deal with your corporation tax. One of the things I mentioned is that as part of your system to deal with CT, you need to track expenses correctly.

There are a million different systems to track expenses, ranging from "stuff all the receipts in an envelope and get a bookkeeper to track them" to using accounting software and tracking everything yourself. It doesn't really matter which system you use so long as you're comfortable with it and you know that it works and how it works.

At the end of the day, as the business's founder, you are personally, legally responsible for your company's record-keeping. If you screw it up, you can't turn around and blame someone else. You're the Director, it's your fault, and "not knowing" is not considered an excuse. If the bookkeeper screws up, it's still your fault.

Keeping track of expenses is really not hard at all, so if you do screw it up in a big way, it is really through your own sloppiness. Read this article, and this hopefully won't happen.

Many books about accounting (and many accountants) end up recommending a horrendous, antiquated system like SAGE or QuickBooks. This is often because they're written by accountants who are familiar with those systems and would rather everyone used them so they don't have to learn new systems. That's fine for the accountants, but from personal experience, most of those legacy accounting systems make me prefer to stick a sharp pencil in my eye rather than launch the horrible software.

What I'm going to recommend should work until you get to the stage of having a few (up to 10 or 20) people on (profitable) payroll - a small, profitable company. If you're VC-funded and you've hired 50 people, you probably won't be allowed to do this, but for most people bootstrapping their own business, or who have taken a small amount of seed capital, this system will work and will be relatively little effort.

My expense tracking system is based on a web-based product called FreeAgent (referral id included). It's slick, it's modern, it can track transactions and receipt scans together, and it's cheap (if £30/m breaks your bank, you have other issues). I don't normally recommend that people take on fixed, recurring expenses early on in their business's life, but this is one that is worth spending money on right away so your accounting is entirely sorted out from day one.

However, a tool is not a solution all by itself. "Buying FreeAgent" is no more a solution to your expense tracking than "Buying FogBugz" is a solution to your bugs. People, processes and tools, in that order, as I've said before.

So let's look at those three aspects of a possible expense-tracking system using FreeAgent.

1. People

What people do you need involved in solving this?

Well, when you're by yourself, it's just you. And yet, even then, you might find it helpful to get a virtual secretary to spend an hour a week doing the manual, boring part of the work (linking receipts to transactions), so that it happens even when you're distracted or simply can't be bothered. We (GrantTree) pay £30/hr (inc. VAT) to a freelance personal assistant to spend one hour a week doing this (I'm happy to recommend her if you email me). Even (or perhaps especially) if you're by yourself, you may wish to hire such a person to get rid of the drudgery. However, I recommend doing it yourself for at least a month or two so you fully understand what's involved.

However, even with a PA doing the reconciliation work, the rest of your team (that includes you) needs to be committed to the idea that expense tracking is not optional. If you don't scan your receipts in time, there's nothing your PA will be able to do for you.

So, the "people" side of this process includes anyone who's capable of paying for things out of the company account, or of charging expenses to the company. They need to understand that having messy accounts is not acceptable, and so they need to be diligent about scanning invoices and receipts correctly and on time so that they can be reconciled with banking transactions without too much fuss.

2. Process

This is the way GrantTree's expense-tracking process happens, which you can use as a model for your own expense-tracking.

First of all, all business expenses are, ideally, made on the company card. This ensures that they're not missed in the reconciliation. Of course, you should only give a company card to people who can be trusted not to misuse it - but even if they do charge inappropriate expenses in, you can always deduct those from later payments. FreeAgent supports tracking this type of mishap.

The second step is that any payment should result in a receipt scan in a pre-agreed "new receipts" directory. This is actually very easy to do without fuss, by using an iPhone app called MobileAgent, which costs a whopping £2.99. Go on, treat yourself. What MobileAgent allows you to do is to point to a DropBox folder and scan receipts directly into there, on the move. This means you don't need to keep paper receipts. Hurrah! So, every person with access to the company bank account should be scanning receipts into there as soon as possible after making the expense. MobileAgent will include the date in the file name, so that it's easy to reconcile later.

Thirdly, on a regular basis (e.g. once a week) you should import expenses from your online bank account interface into FreeAgent. So long as your bank support export in QIF format (which pretty much all of them do), you'll be able to do that.

This import needs to happen before the reconciliation (done by yourself, your virtual PA, or someone else), which is the fourth and final step. Once a week, your PA should go through all the unexplained transactions in FreeAgent, and match them with receipts in the common folder. Unless you've got a lot of transactions, this should not take more than one hour a week.

As part of this final step, any transactions that can't be explained, and any receipts that can't be matched, should be highlighted to the people with access to the business card. Since we're still only a week away from the oldest unexplained transaction, it should be easy to figure out what happened. What you don't want is a situation where an expense from 3 months ago is unexplainable. That sucks, and ends up causing you worry, especially when you need to file a VAT return.

Does this process need to be weekly? Not necessarily, but the more regular it is, the less problems you will have. I recommend weekly, but it's up to you.

If you just implement those 4 steps, your expenses will be tracked properly so that you are well prepared to file correct accounts. There are other things to think about too, like capitalisation, categorisation, and other such concepts, but those are things to know rather than things to do. The process above can remain the same for quite a long time into the life of your business.

3. Tools

We've already covered this, but basically the tools to support this process are:

  • an online accounting tool (FreeAgent, Xero or KashFlow - any of them should do);
  • a mobile app that can scan receipts as they happen, either directly into your accounting system or into DropBox; all three of the solutions mentioned above have iPhone apps.

Final notes

Part of the process of reconciling expenses is to categorise them. That's a whole topic in itself, and I'll write about that next week. Capitalisation is also an important concept for larger equipment expenses.

The process we've outlined will put you in a good position to ensure that you always file your VAT returns correctly and without fuss. VAT is a whole topic in itself, so it will also be covered in a later article.

If you make expenses by cash or on a card that doesn't belong to the company, you can still enter those. Every person who can make such expenses should have an account in FreeAgent, and they can then create the expense manually in the system, or with MobileAgent. FreeAgent will automatically track who is owed how much for expenses, and how much of those expenses has been paid back to the user, which is a really nice time-saving feature. These types of expenses should be done just as promptly as normal expenses, by the way, for the same reasons.

The key take-away from this article should not be that you need to follow my system to the letter (or even at all). This is just an example of a system that works. Tailor it to your own business, adapt and evolve it as you gain your own experience and opinions on the topic. The key objectives of the system are that every invoice or receipt is explained promptly and correctly, and with a minimal amount of time wasted running around trying to remember what happened 3 months ago. Whatever works for you to achieve that is probably the right system for you.


The series so far:

1. How to register a company in the UK

2. How to: deal with your Corporation Tax (UK)

3. How to: track your expenses (UK)


How to get users through business partnerships  

Getting users from another business via a partnership (what the author calls B2B2C) can be very hard to pull off. I've had several such attempts fail in the past. So it's with great interest that I found and read this article by Brian Balfour that provides a thorough guide with do's and don't's - well, as thorough as an article can get.

Enjoy the article here!

Formula for elevator pitches  

A simple formula for an effective elevator pitch, via Elliot Loh:

We solve [problem] by providing [advantage], to help [target] accomplish [target's goal].

And, once it makes sense, bolt on:

We make money by charging [customers] to get [benefit].

Business Basics eBook for entrepreneurs  

I haven't read it cover to cover, but I did have a read through several chapters and this ebook seems excellent. Great grounding in some of the basics of starting and running a business. Worth noting that it's US-focused.

Never say "no", but rarely say "yes"  

Great article and advice from Jason Cohen, about what to do if presented with the option to work with a customer who you don't believe is a great fit. Others might suggest sending those customers away, but Jason believes that you should set the price tag on "yes" high enough that you will gain some strong, very tangible benefit from serving this customer.

So the principle is easy: Set the conditions of "yes" such that:

  1. If they say "yes," you're happy because the terms or money are so good, it more than compensates for the distraction, possibly even funding the thing you really want to do.
  2. If they say "no," you're happy because it wasn't a great fit anyway, so it's not worthwhile for a small return on your time and effort.

In other words, make sure you get enough of a financial benefit out of those customers to be able to serve them, and then some.

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