10 rules for web-startups

The man who created Blogger has some interesting thoughts here

http://evhead.com/2005/11/ten-rules-for-web-startups.asp

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Bloody heck

Blogjet is misbehaving and I've created some image rich articles. It was working before, posting images happily to this blog and now it isn't. Frankly, much as I love you, it's gonna be a pain in the arse to copy the article here without some serious work.

They're good honest mister and you can find them here

http://innovation2execution.blogharbor.com/blog

Enjoy

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When product management goes bad - T-mobile come on down!

Okay you're sat in Starbucks wanting to access the internet. You know they have a T-mobile wireless hotspot but what you don't know is that T-mobile have developed a cunning process to make it almost impossible to buy their product without upsetting customers.  Read on for a rant with a few lessons hidden inside.

You know they have a T-mobile wireless hotspot and last time you were there you gave them £5 for instant access to the net for an hour. It was all done via the computer by credit card in a minute.

Now they have a very tempting offer of a monthly subscription at £23.50 for unlimited wi-fi access at any of their hotspots. How hard can it be to buy? Well you go through a similar process and put in Direct Debit details and also credit card to pay for the first month. You hit buy and wait.....and wait. Then it tells you that a SIM card will be delivered to your home in 2 days. A SIM card!

So by now I was panicking and wondering what the hell I had ordered but after checking for 10 minutes I then phoned T-Mobile and asked what was going on. First, their voice mail system has no option for wi-fi. Next it loops around a few times selecting options for itself.

Eventually you speak to a customer service person. They are tremendously helpful before telling you the SIM card will arrive in 24 - 48 hours. Why do I need a SIM card? Well apparently they issue a 'dummy' mobile number to you as a customer so that they can recognise your account if you ring in!! So can I connect now (like I could when I paid the £5 for an hour's access). Well sir, in 24 - 48 hours a SIM card will be............. you get the idea.

So I purchase an hour's access as I can't actually use the monthly subscription I've just paid for. Then when I am online I read my email and there are my account number and password to use with my new monthly account. Except you can't get to them unless you can get on the net......and you can't get on the net until the bloody SIM card arrives or you are somewhere else with Internet access.

So, to summarise, the process is designed around their internal needs.

• What a daft idea to send a bloody SIM card. Why not reference accounts off my name, address, inside leg measurement or any of the other bits of information they got off me
• Why can’t they authorise a £23.50 payment instantly and give me instant access like they can when I pay £5!  I might fail the credit check for the subscription but they have the first month’s money so why not let me on there and then
• Why send the authorisation information to somewhere that can’t be accessed unless I am on the net (which would mean I wouldn’t need their service there and then).

Poorly thought out and a real pain when the offer itself is so good.  Now I have to moan to get that £5 back that I needn’t have spent in the first place if………. Oh sod it – rant over.

I’ll leave you to draw your own lessons from this debacle.

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7 things investors do wrong...

Having laid into people pitching their ideas to investors and resource managers, I was challenged to come back with a blog about daft things investors do to provide some balance.  Well, balance in this case is going to come from a chip on both my shoulders so let’s move into the shadowy and sometimes arrogant world of investment.  A few dont’s and dont’s with the odd bit of personal experience thrown in…

• Never invest against your better judgement.  If you have a bad feeling about investing in people – don’t do it.  You’ll regret it later when things are tough (as they will be at some point) and you realise that the management team should have straight jackets instead of matching polo shirts.
• Don’t embarass yourself by moaning and crying like a little girl (not me honest) when the VC’s term sheet arrives for a company you’ve made an angel investment in.  Yes it’s dramatically in their favour - they always are! 
• Don’t invest if you don’t speak the same language as any of the mangement team and their head man is a slippery accountant.  You’ll probably never figure out exactly how the operation allegedly turns a profit and I mean even with the accounts and a whole lot of concentration I still couldn’t figure it out. 
• Never invest on sentiment.  If a company you are working with has seen it’s shares plunge then assume there’s a reason.  Don’t then invest when the shares go up slightly – it’s known as “the dead cat’s bounce” and will swiftly be followed by a further plummet in all probability.
• Don’t invest in a team that won’t listen.  If you can make a difference to a company’s success then you’ll be wasting your efforts if the team won’t listen.  It’s frustrating and you might as well spend your time elsewhere.
• Don’t imagine everyone has your standards and values.  One CEO was essentially trying to crash a company to pick it up and re-finance it cheap (rumours were going around that the funding was in place for this little scam) but he honestly didn’t seem to see this as a problem.  Sometimes what walks like a duck, quacks like a duck and looks like a duck is a duck and one that is going to get you into big trouble unless you head them off at the pass.
• Don’t accuse the people opposite you of drafting a letter from a potential customer themselves – even if they obviously have.  It makes them grumpy, means they stick around longer trying to justify their (in this case) daft idea and can put you right off your double de-caff, skinny latte.

 

 

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Startups - how to blow it with potential investors

Oh dear. I’ve had a day when I’ve seen another very enthusiastic person with an early stage business and absolutely no clue how to get their idea across. Okay to be honest he wasn’t that enthusiastic………… and he smelled a bit strange……………and smoked the smallest ‘roll-ups’ I have ever seen but anyway – back to my point. How is it people blow investment opportunities so badly? It appears like a sub-conscious wish to fail it can be so bad. To save people who really want to screw up but don’t have the energy to figure out how to do it, I have compiled a list of real ‘show stoppers’ when you’re looking for investment or approval for a new corporate venture.

• tell the potential investors that you are working across several businesses – they will be ‘delighted’ that you are going to spend all your time on other endeavours and let the idea (and hence their investment) die worse than a blue comedian in a convent
• say that you’ll let them know about the core idea after they invest – people putting resources and/or money your way always enjoy a mystery
• be vague – no-one likes a number monkey who is on top of all the facts about the business. Build up the sense of excitement by not really know what you are talking about
• make sure you haven’t over-burdened yourself with knowledge about your market – in fact it’s really ‘impressive’ if you know less than your audience. That makes them feel superior and puts them in a good mood
• bring along the cigarette packet you had the idea on and ask for a couple of million – come on, it’s a good idea and must be worth at least that
• predict sales aggressively – if you have a hockey stick you can trace around the curvey bit to model your sales in the first years. If your sales growth isn’t near vertical after a couple of years then you’re not trying hard enough. Take some more drugs or whack yourself on the head until the numbers appear sensible
• do remember what I call the “10% of China” syndrome and back up your business model with sensible facts like that the numbers for you software startup are ‘only’ 10% of Microsoft’s revenues

There are a few others but my brain is already twitching with horrific incidents of the above.

Note: The tips above should be taken with a sense of irony and the ridiculous…..if you don’t have these personal attributes then just try just doing the opposite of what I say above. I take no responsibility if you learn nothing from this blog as you’d probably have to be the sort of person who runs around the office blindfold with scissors in their hand.

Copyright Richard A D Jones 2005

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Free innovation - "What's in the cupboard?"

I tend to ask this question in quite a lot of companies, although it is particularly important in the development of new products/features/ventures!  When new initiatives are put in place, everyone seems to somehow forget the past.  Ongoing projects are respected but innovation pipeline, idea banks etc. are ‘created’ and then people studiously start to fill them up with new stuff.

I was the same until someone opened a filing drawer in their desk once and I spotted a strange bit of plastic.  After a bit of conversation it turned out this was actually an idea for a medical device that the person had thought of a few years previously.  I’d like to say it was a stroke of genius but it wasn’t.  Actually it was so bad it would probably only be good if you decided euthenasia was a growth area.  However, the more people I talked to, the more I realised that there was interesting stuff that had been canned in the past for various reasons but which might hold value now.

It stands to reason if you think about it.  A good innovation process will put some stuff on hold while you await specific conditions to be met.  That might mean a component needs to hit a certain price point or someone has to invent something new.  You’re just keeping it in a holding pattern waiting for the world to turn enough that it becomes worth something.  Well, this was the same situation.  A lot of good ideas in this company had been halted because there was not enough money, willpower, time, management attention and intelligence to carry on.  Some of the ideas were just hobby projects that never saw the light of day because the person changed jobs, lost enthusiasm or a myriad other reasons.

Okay the cupboard is a metaphor………..or is it a simile……no, it’s a metaphor.  There will be things in cupboards, drawers, hidden on computers and locked away in people’s heads.  However, I’ve never seen this exercise fail to find interesting ideas whose time has come.  You can ignore all this previous work and thinking but why make life hard for yourself.

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Technology only rolls one way - downhill!

Hands up if you remember company presentations where 35mm slides were used. That was all you could do 20+ years ago - have a very expensive, time consuming and therefore, by necessity, static set of images. Then the repographic department got their hands on Harvard Graphics and suddenly these acetates with pie charts started appearing. Then, and keep it quiet, there'd be a rumour that someone in marketing had a 'copy' of it and could circumvent the wait and inconvenience of having to convince the repro' people to do something for you.

Wind forward a little and a few, then more, then many and now almost all professionals have access to Powerpoint on their machine.

Think of computers themselves. Some people on here started working with computers that took punchcards. You had to book time to get access and come back the day after for the results. The first work computer I used was an Apple II - no hard disk and it was shared across a department. Then an IBM PC appeared.... and then another. Again fast forward (with or without Scooby Doo shimmery screen effect in your head as you wish). Many of us have computers at home as well as work and some have separate computers for their kids.

It's the same effect - something is a specialist skill that only a few people can do and gradually it becomes more widely available, cheaper and easier to use (no punchcards now - only blue screens of death and sanctimonious Mac users to deal with).


Many great technology companies are the ones that have made a big leap down this line and conversely, many great technology companies are no more because they got stuck and time overtook them.

If you're nodding your head now, can you tell me why people in some businesses don't recognise this.

What you are doing completely by hand now, someone one is trying to automate in part. If it's part automated, someone is trying to make it a pure handle turning exercise. What needs intervention from a human, probably won't in a while - and if you're not thinking about your product in those terms then rest assured - someone else will!

Let me give you an example of how you can respond strategically when you accept the reality of this inexorable drive from costly and rare to cheap and more widely used.

I was on the phone to a nice guy recently with a service for Internet companies. He is trying to sell his time around a nice bit of software that does some analysis of a site. He's trying to get this off the ground and he's got a good and interesting idea (imho). So if he want's a sustainable business you've got to ask if part of the analysis could be fully automated (YES). Could it be bought off the web if someone pays and enters their website URL (YES). So a good directoin looks to be to complete the application and, instead of trying to stay up the top left of that diagram (providing a specialist skill at high cost), he could be one of the people driving users down that diagram.

Are you going 'downhill' or staying still?

Copyright Richard A D Jones 2005

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How to spot a crap technology startup 1 - "No competitors"

Here are the signs of how to spot if you are talking to a startup company that is doomed. Might be a bit harsh and an exageration but I bet I'm right almost all the time on this. Here is the first thing they say that should make you run out of the door screaming.

We don't have any competitors

This is the bit where I have to resist the impulse to push half a grapefruit into their face James Cagney style. (I'm a nice guy really - honest)Almost every company has competition. If not a directly comparable product, then ask yourself how someone is solving the problem now. When you figure out that question then you have either identified:

• what the competition is (even if it is a different technology/approach etc) OR
• that you don't have a business

Am I being a bit harsh with the second one? Perhaps, but if your potential customers don't have a problem then they are unlikely to be motivated to buy your product. If you haven't thought this through, then the odds are you have the high-tech equivalent of an armpit fluff remover. Yes you can suggest instant messaging, the walkman and text messaging as being exceptions - successful products where a problem didn't exist before they were invented. However I suggest you don't - I still have that half a grapefruit and I'm prepared to use it remember.

Is your product really that unique and that compelling that it can invent it's own new niche? My experience is not. In fact my experience is that people who say they have no competitors are not paying enough attention to the market and are just plain wrong.

Instead of using the grapefruit I tend to use my time to try to help them understand that there are competitors and maybe they should consider them if they want to drive off in a Ferrari, ditch their wives/husbands and trade them in for a younger version.

Copyright Richard A D Jones 2005

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