Posts by Chris Schmitt
Update: Roger now has a TED talk as well: Six ways to save the internet
There’s so much value in watching this video, I hardly know where to begin. Elevation Partners director and co-founder Roger McNamee gives The Paley Center For Media his 10 hypotheses for technology investing. At his core of his hypotheses is that HTML5 will bring incredible changes to the web. Some highlights:
On HTML5
- The way the world wide web is responding is to “out Apple, Apple”.
- This is an environment where all of us have a chance to be market leaders.
- In HTML5 everything is an App.
- Instead of flitting around, an HTML enabled page becomes a control panel.
- The message to media companies: “The time to diversify what your doing is right now.”
On the iPad:
- If you don’t have an iPad yet, your job today is to get one.
- iPad is as big or bigger than the introduction of the IBM PC
On arhictecture:
- Cloud allows you to get access to content no matter what screen your using (a smart phone, your laptop, your TV etc.)
- Google, Microsoft, Facebook and Apple have demonstrated no talent what so ever in exploiting this
- This opens up opportunities for new companies that can exploit the cloud and HTML5
- Investing in social apps is over; social is now a feature
- Every product has to have social – you have to have it to play
- Old Spice doubled deodorant sales in one month from their social campaign
- The last 500 social companies funded by VCs are worthless
- Stop focusing on new social apps – instead focus on creating something new using
HTML5
- Apple makes more margin on each smartphone then other smart phone companies make on gross revenue
- The amount of effort to duplicate something will be very hard due to the interaction from HTML5 enabled sites
- It will be harder to duplicate than a song, a movie or a television show
- Don’t worry about content protection – focus on content creation
- If you’re worried about protecting something, you’re not putting the energy into creation
- The Mona Lisa was created from paint; HTML5 is just the paint
- Make something that works, get the revenue, then worry about content protection
Six ways to save the internet
Many “startup gurus” will tell you that if you’re working on a startup and things don’t look good you should “fail fast”. I like to look at it a little differently; I believe that rather than failing fast one should put more effort into starting right.
The word “fail” brings with it connotations of ‘F’ grades and wasted time on canceled projects. Fail is a negative word; it generally means “you suck”. That leaves us with a bad feeling. Having an objective of failing fast is simply another way of saying: give up when the going gets rough. In my view, if you start with the idea of failing fast you’ll lack the perseverance and tenacity you’ll need to make a go of it.
Instead, when developing a new idea for a startup set realistic goals and then test against them. In his book “Start Small, Stay Small” Rob Walling suggests setting a goal of generating $500 in revenue for the first year of your online startup. Five hundred bucks. How hard can that be? (Actually it is, but that’s a subject for another post.)
The point is, if you pick a number, it makes you think about what you would need to charge, how many customers you would need to sign up every month, and working backwards, how many visits you would need to your site and what channels will bring visits.
Now you can start forming a hypothesis, i.e. if I my product reaches a target market of x people and I spend y on advertising (or whatever) it will generate z in revenue. This is something you can literally do on the back of an envelop. It won’t take long for you long to see whether your idea is viable. If your hypothesis passes scrutiny then go for it.
Now you have an objective. Every website visit you get, every conversion that translates into a sign-up tests your hypothesis. From there you make adjustments, you tweak your idea, you work with your customers, you try different channels, etc., etc., but you don’t fail fast. You persevere.
I’m not saying you spend the next 3 years banging your head against a wall. Nor am I suggesting you mortgage your house trying to make a bad idea work. If you need 100 signups per month and you’re only getting 1, then you better rethink things, and perhaps abandoning your idea is the right thing to do.
But even then, you haven’t failed. Think of what you learned from your mistakes and how you’ll be able to apply them next time. That’s what they mean by the “school of hard knocks”. But it’s not failing.
So abandon the idea of failing fast. Instead, think about starting right: have a hypothesis, test against it and adapt.
- Chris
PS – thanks to Ian at The Code Factory for inspiring this post.
I really liked Robert Graham’s post on cold calling customers for customer development. Talking to people you’ve never met before within your chosen niche market to get ideas for developing a product or service can be really tough. Too often, we get overly focused on making a quick buck and we forget that what we’re really trying to do is help our customers to be successful. It’s also why so many mass marketers (i.e. “make money online!”) make us developer types sick to our stomachs : they’re really out for themselves, not their customers.
Robert tells how he first started his cold calls by asking for a 10-15 minute interview as someone who had a business idea around solving their problems. People smelled a sales pitch and “checked out”.
Then he changed his script. Robert decided he need to understand his customers better and that a better way to do that would be to write a blog on the subject. When he explained to people that he wanted to know more about what they learned through running their business, every person he spoke with said “yes”.
Why? Because people love to share their successes, and their problems, along the way. Robert’s approach allowed him to first gain trust that he was truly interested in their business and not just out to make a quick buck.
As software developers, and entrepreneurs, we need to “get into our customers’ heads” to really understand how we can use our skills and expertise to help make our customers’ lives easier.
Stop thinking about the “pot of gold” at the end of the rainbow and start thinking about helping your customers to be successful and you will automatically create value. In turn, people will be happy to pay you fairly for your services.
I can’t count the number articles, posts and books I’ve read on whether you should “bootstrap” an idea into a business or whether you should seek outside funding. As with virtually everything I’ve come across over the last 2-years, the answer is: “it depends”.
Clearly, if you have a good idea and the resources – tenacity, knowledge, time, skill, a source of income (or perhaps very forgiving parents) – you should try to bootstrap your company. On the other hand, if you lack one or more of those above attributes there are some fantastic angel investors and incubators out there that are willing to invest in your start-up, even before you get your first paying customer – usually for a substantial cut of your business (think of Angels as highly-paid consultants).
However, either way the principles of starting a business are the same no matter which direction you decide to take:
- You need a good idea: one that’s easy to understand and solves a real problem (notice I didn’t say a “great” idea);
- You need to find your target market and validate your idea before you invest a lot of time and money into into it; and
- You need to execute, i.e. build it and sign-up some customers - preferably paying customers.
We haven’t had one of these is a long time: PitchFest! Bring your ideas and see what the “crowd” thinks. No need for fancy presentations or 1000 row spreadsheets. Just bring your idea.
Where: The Code Factory, 246 Queen St., Ottawa (ring the buzzer to come to the 2nd floor)
When: 6pm, June 16th, 2011 (discussion starts at 6:15 sharp)
RSVP: here
In the immortal words of Lord Admiral Nelson, many start-ups find the best approach to launching a business is to “never mind the maneuvers, go straight at them”. But is this really the best way to approach it? In Nelson’s case I’m pretty sure he knew who his “enemies” were and realized that speed could be your best asset. But for a start-up that can be risky and expensive.
Believe me, I know how it feels when you read about that latest awesome technology and can’t wait to build that wonderful web application everyone’s going to flock to. But the reality is that your wonderful web app has to solve real burning problems if you are expecting customers to pay you for your service. The last thing you want to do is spend months building a product only to find out no one wants it.
At the next TeamCamp we’ll discuss two methods that can help you test an idea for under $100. While they’re blindingly simple, they will also force you to think through your idea before putting it out there.
If this interests you come join us at the next TeamCamp:
Where: The Code Factory, 246 Queen St., Ottawa
When: 6pm, May 19th, 2011 (talk starts at 6:15 sharp)
RSVP: here
On June 4-5th Vicki and I will be participating in The Weekend to End Women’s Cancers. The “Weekend” is a two-day, 60-kilometre walk through the neighborhoods of Ottawa. This is my third year participating in the walk.
We all know someone close to us whose life has been turned upside down by cancer. Your donation would really help to make a difference. Funding goes towards providing access to research and new therapies, reducing wait times, improving quality of life and providing care closer to home. Did you know that Ottawa is leading the way in cancer research?
60kms is a long walk so Vicki and I have been training hard, walking up to 15kms every Sunday. Soon we’ll be increasing our training walks to 20kms and then 25kms. It’s challenging and takes a lot of time, but it’s nothing compared to what women diagnosed with cancer go through.
If you’ve enjoyed TeamCamp over the past two and half years why don’t you consider supporting me? As you know I don’t charge anyone to participate in TeamCamp; it’s my way of giving something back to the community. This is your chance to do something special. Together, Vicki and I have committed to raise over $4000 for the Weekend. Any donation would be appreciated.
The easiest way to donate is on my personal page.
Thank you and God bless.
Find your niche
You think you’ve got a great idea for a web application: how do you determine if there’s a sufficiently sized market for your product to make it worth your while? How do you make sure that the market segment you’re pursuing isn’t so big that you’ll either be crushed by the competition or run out of money before you make a buck? You spend time evaluating your niche, that’s how!
Last week’s TeamCamp introduced the concept of the Micropreneurship. A “micropreneur” is a technical entrepreneur intent on stay solo that has learned how develop and market one or more profitable products. We talked about @robwalling‘s approach outlined in his book “Start Small, Stay Small” and we all agreed this was a great approach for TeamCampers.
Next week we’ll start to apply one of the principles outlined in this approach: finding a niche. For Micropreneurs niches are the name of the game. Finding the right nice to pursue will result in less investment in time and money to build a product, lower marketing costs, less competition and higher profits.
This will be a working session to explore together how to apply the approach to some of the great ideas we have twirling around in our heads.
When: Thursday, April 21st at 6PM
Where: The Code Factory, 246 Queen St., 2nd floor (ring the buzzer to take the elevator to the 2nd floor)
RVSP: here
Note: As we will be discussing ideas anyone attending this event needs to review and agree to the TeamCamp Participation Agreement
- Chris
Update: Rob Walling (@robwalling) was sent me 10 copies of his book Start Small, Stay Small. The first 10 people coming to TeamCamp tonight and have RSVP’d on Twegather will get a copy!
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This week we’ll be reviewing and talking about two startup methodologies: Lean Startup and Micropreneur Academy.
When: April 7th, 2011
Where: The Code Factory, 246 Queen St., Ottawa (ring the buzzer to take the elevator to the 2nd floor)
RSVP: here
The Lean Startup
The Lean Startup methodology derives its name from the lean manufacturing model. It’s about getting rid of waste. Applied to startups, the lean methodology entails developing a minimum viable product (MVP) as a fast way to discover customers, measure how they behave, and through experimentation, “pivoting” ultimately towards your customers needs.
Lean Startup is in fact a lean startup. Started as a blog, Eric Reis is a very high demand speaker, a consultant and has now published his own book.
You can view Eric Ries’ Lean Start up presentation at SxSW or if you have more time you can watch a one hour presentation in Udemy.
The Lean Startup is a trademark and service mark owned by Eric Ries.
Micropreneur Academy
The Micropreneur Academy teaches software developers how to launch a successful business using what you might call a lean methodology. A “micropreneur” is a technical entrepreneur intent on stay solo that has learned how develop and market one or more profitable products.
Rob Walling, one of the founders of the Micropreneur Academy has also written a book, “Start Small, Stay Small“. The first chapter is free and I highly recommend you download it. A lot of the points Rob makes in the opening chapter really resonated with me, particularly helping me to developer the proper mindset for a self-funded startup, understanding the need to do product marketing before building the product or prototype, how to determine of there is a market for your product. There’s a ton of practical advice here.
Which One?
If your a developer and would like to learn about starting your own company I would definitely recommend the Micropreneur Academy. First, it’ll help you understand and set your goals and offers very practical advice that you can start applying right away. I think Rob’s book is perfect for most TeamCampers.
If you’ve already had experience with a more traditional company and you want to learn about startups, and transforming your company into a more agile organization, then digging into Eric Ries Lean Startup model might be right for you. The Lean Startup methodology can be applied to any type of company, not just software companies.
Either methodologies are excellent and you won’t regret learning more about them.
- Chris
This week a pack of leprechauns pranced in and stole the pot of gold we all know as TeamCamp. Therefore, no TeamCamp this Thursday. Hopefully, TeamCamp will be returned in time for the next meeting on April 7th. God willing, we will be having a healthy discussion surrounding the Lean Startup model. If you’re really keen and want to do some prep for this meeting I highly recommend you spend a few bucks and get the book Start Small, Stay Small by Rob Walling. Or at least download the free chapter.
In the meantime, enjoy Saint Patrick’s Day and please, don’t drink and drive.
