Monthly Archives: January 2014

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Tech Co-Founder Roundabout

It’s hard to find a tech co-founder to build a business with. Ask Liz at YouChews. It’s even harder to build a tech business without a tech co-founder. The reason it’s an issue is a bit of a circular reference. Don’t Have a Tech Co-Founder: Startups are risky. So it’s hard to attract funding early. So you don’t have much money to pay people. So if you can’t pay people and you’re not a coder then it’s hard to create a product, that gets traction that gets funding to pay people. Maybe a 1% chance of success. Have a Tech Co-Founder: Startups are risky. So it’s hard to attract funding early. So you don’t have much money to pay people. Since you’re a coder, you make a MVP in your spare time. Your MVP gets some traction and either makes some money so you bootstrap or it helps you raise some money. Maybe a 5% chance of success. Other Reasons Why It’s Hard Uncertainty – building a new product that does a new thing in a new way isn’t just hard, it’s risky. You have to learn which takes time (if you are a programmer) or money (if you aren’t a programmer). Startup tech companies is a contact sport. You […]

First Flearner Advantage

One of the delicate contradictions that are important for startups is an impatience for action, but patience for results. Speed You have no money, you have 1,000 competitors, customers have never heard of you and you have 39 mistakes to make before you get it right. You need to move fast. Launching fast is critical. Not because of first mover advantage, but because you start the process of learning straight away. First mover is actually a disadvantage in innovation.* You are doing something new and you have to learn the lessons. That costs time. It only becomes an advantage if you learn faster than anyone else. Otherwise you expend all of your resources and the next business starts from first base due to your efforts. The other reason to launch fast is that no amount of work in advance can make it perfect. You don’t know what you don’t know, and indeed nobody knows. There are at least half the things you need to know that can only be learned by doing. The smartest, most experienced people developing the most feature rich, customer focused designed product is still a bundle of assumptions. Indeed the more thinking, the more you put into it the more assumptions that are combined together. This […]

Location still matters for tech businesses

Despite more communication and collaboration tools than ever, having a tech business team in the same location is still a big factor in increasing your chance of success. I got some flack when muru-D launched a ‘national’ program but wanted everyone to come to Sydney. From my experience working with more than 100 startups around the world and seeing many more is: Yes, it’s possible to run a team globally, but it is significantly harder than having them in the same room. This is why: Forming takes time. If the company or the team is new, it helps to  have lots of small moments which aren’t about the business to form the relationship. Your chance to have a chat over coffee, food, drinks goes way up and that is where trust and depth is established. Words aren’t enough. Online communication tools miss body language, emotion and other elements which are critical in young relationships but also in difficult moments. Emails, instant messaging, project management tools and user stories are limited. Tiny sharing. Getting a business working, especially a new, innovative idea isn’t about day long workshops, spreadsheets, or moments of brilliance. It’s 1,000 little conversations that slowly move you towards your vision. They sound like this: “Hey, what do you […]

Exit or Stay?

Next Wednesday night we’re having a discussion about exit or stay. I’m hosting it and the fire-side, audience included chat is with Mike Cannon-Brookes and Stu Fox. Mike tweeted some pre-reading which is really worth it. http://recode.net/2014/01/13/great-companies-dont-have-an-exit-strategy/ The point of the article is that if you really love your customers and really want to build a big company that changes the world then you don’t ever want to leave it. It’s like having a pre-nup for a marriage, you’re setting up to leave. So Stu Fox is taking the role of the ‘vulture’ capitalist, saying “Sell, sell, sell!!!”. OK, no, he’s not doing that at all. The reason I asked Stu to join us in this chat is because he made some great points about how exits can be good for the entrepreneur and also good for the ecosystem. From my chat with Stu, here are my thoughts on why an exit can be the right thing to do; Change. Your circumstances may change, the customers may change, the market may change. Any of these may mean that the original vision and the passion to build towards it is no longer strong enough to sustain you. In this situation it may be best to sell the business and find a new […]

The Simple vs Huge Startup Pitching Conflict

In any pitch one of the biggest challenges is to clearly demonstrate what your product does as while also showing it has huge potential. Tip: In any pitch, say one thing multiple times to ensure it’s remembered.  After looking at more than 300 businesses between Pollenizer, muru-D and Startmate over the past two months I can really see the difficulty in pitching well. Most investors see lots and lots of pitches and the founder pitches lots and lots of times. This means they are both in an opposed rhythm where the founder knows their own data so well that they can miss the obvious and the investor feels they all sound the same. This is made harder by the fact that investors want you to small, simple and focused because you’re early stage and they want a nice piece. Plus they they want you to have huge potential. Timing counts. Tip: In any pitch, say one thing multiple times to ensure it’s remembered.  “What are you?” The first challenge is for the investor to know what you are. This is where the X for Y, Gaddie pitch or other elevator pitch mechanisms can help. A demo is often the best way to really show what you do, but don’t just […]

Global Sales, Not Venture Capital

Some Australian entrepreneurs complain too much about not enough investment capital. I wonder if every capital raising event we held was replaced with a focus on sales whether we’d be growing faster. Raising capital gets far too much attention in Australia. Yes, it’s hard and there’s gaps but the sequence has always been and always will be; 1. Create companies worthy of investment and clearly reducing risk. 2. Then the capital follows. Part 1 is the hardest but there is not much you can do for part 2, so we should reduce our focus on it. So how do we get to step 1? The only real answer is real traction. The best answer I’ve seen for a long time came from hero Andrew Chen (see below). Zero to traction from Andrew Chen via Pollenizer.  Let’s focus on step zero which is to get customers to buy/use our product. The other challenge with sales in Australia is that we have a big country and a small population. It’s actually hard to get enough sales/use in Australia and if you do you may be in a cul-de-sac not being able to get out. I suggest a focus on global sales. It’s hard but worth it. You get a huge market, definite proof […]