The 10 hour idea for your next startup

Most of the time, you hear founders of startups talking about their great idea that is sweeping in scale and scope. But last night I went to a meetup where the exact opposite was proposed: an idea that will take you exactly 10 hours to put together: or, as the presenter Dylan Hassinger tells it, “one long night of coding.”

It bears further thought. Because as you flesh out your idea, you find out that it is going to take you a lot longer to really pull everything together. As an example, consider last week’s subject, Juristat. It took them the better part of a weekend to formulate the kernel of the company, and now, many months’ later, they are just seeing an actual product.

But the 10 hour idea is a good goal to keep in mind. The current term is “minimum value proposition” but this really strips things to the barest, most essential part of your startup. What is it that you are trying to get across? If you can figure something out in 10 hours, you have your elevator pitch, your have the essence of what you are trying to do. You have your hook for hiring new help. It gives you a lot of leverage.

At last night’s meetup, Hassinger boiled his own presentation on the “bulletproof startup” into a sound bite: “”Use your skills to build a tiny product with real value for a growing market that excites you.” That I like. He told us that he originally started out by saying an idea should take three months, then one month, then a weekend. I like that he arrived at 10 hours. One all-nighter. That has some appeal (although lately I value my sleep higher and higher).

Too often I see startups that are all over the place. They are trying to do too much too soon. They have multiple great ideas, and flip from one to the next, trying to satisfy the whims of their last mentor or last customer or the defects that they uncovered at their last coding session. Sure, there are a lot of blind alleys that you have go down as part of the startup process: that is to be expected. But if you have this laser focus, you can strip away everything else that isn’t essential for your actual business.

Sometimes, the 10 hour idea also means that you drop features from your product, because they are taking you away from what is that essential essence. It is easy to get into the feature war: just one more feature, really, I promise. I see this all the time in the software products that I review for major publications. They add and add and add features until you can’t find your way out of a menu tree. In review sessions where I face down developers and marketing folks (often the first time that they are actually in the same room together, which is sad and should be the subject for another column), they see how complex they have made their product and where they went astray. “But our biggest customer asked for that feature!” Sure thing. Then you add another. Resist the temptation to add complexity.

Eaton blog: The anatomy of the death of a social network

Remember Friendster? It was the go-to social network for, say about ten minutes back in the early 2000s. But then came Myspace, then Facebook, and that was the end of that. But what really happened? The academic article, “Social Resilience in Online Communities: The Autopsy of Friendster” was written by three Swiss engineering professors (David Garcia, Pavlin Mavrodiev and Frank Schweitzer) and is worth taking a closer look at.

You can read the entire post here on Eaton’s The Plug blog and my comments on their work.

TV: All about business blogging

I was one of the featured bloggers on the latest episode of All About Business TV. Episode 51.  (It would have been nice if they got my name correct). We discuss what blogging is all about, what are some of the approaches that the various bloggers use and inspirations, and why businesses should blog.

 

Why eWallets still are bad news

I had a chance conversation with one of my neighbors recently where one of them casually mentioned that they have never bought anything online. Ever. That gave both my wife and I some pause. Not that we are big shoppers, on or offline: but we both think of online shopping as a natural extension of what we do, like breathing. We even know people who buy furniture online, which I think a bit risky.

Against this backdrop, there are yet another round of eWallet innovations that are destined to make the mistakes of the past. There are multiple solutions, usually involving your smartphone and a payment provider, such as the recent announcement from Visa and Samsung. Then there was the deal between Starbucks and Square so you could pay for your lattes by tapping your phone near the register at checkout.

A lot of this activity is motivated by having more near field communications on our phones, meaning we don’t need physical contact to conduct a transaction. While that is very sci-fi, it isn’t going to motivate people like my neighbor to start conducting ecommerce. Let’s go to the video tape of the past botched plays.

I dredged up an op/ed piece that I wrote 14 years ago for Computerworld where I concluded, “If you have a Web storefront, steer clear of e-wallets for now. Let your customers pay you as easily and as quickly as possible.” That advice still holds true today.

To set the context for this piece, you need to know that Microsoft had its eWallet software as part of Windows 98, and during the latter part of the 1990s there were probably a dozen or so vendors who were developing Internet payment schemes of one sort or another. Only Paypal survives from this era, and ironically they had their origins as a piece of software that was used on Palm Pilots to beam payment information using their built-in infrared technology. Many of us consider the contact manager on the Palm still better than anything we have today, but that is a fight that I will leave for another day.

So what happened to all those payment companies? They made several mistakes.

First was the chicken-and-egg of non-universal coverage and too many “standards.” I wrote back then: “Imagine going shopping at a physical mall store and getting ready to pay, only to find out that the store accepts one obscure credit card issued by a single bank in Tuvalu. How long do you think that store would stay in business?” Exactly. All these vendors need to get around one solution, and do it quickly. Imagine how long credit cards would have lasted if you needed separate machines to scan your Visa, Mastercard, and Amex at the checkout line.

Second is that credit/debit cards just work too well. We all have them, we all carry them with us at all times, and we all know how to shop with them. Trying to compete with this universal solution is madness. Indeed, they have largely replaced the need for actual cash. I remember when my dad wouldn’t leave home without several hundred dollars in his wallet. Even when I travel, I rarely have more than $20 or $40 in mine, and usually a lot less. Everyone takes plastic nowadays.

Next, I don’t want to manage yet another cache of cash. It is bad enough that Paypal exists, and that I have to track what is in my account and how quickly I can get any dollars in or out of it when I am buying or selling something. Why do I need yet another account to manage?

The last straw is that I usually need a specific piece of software, browser version, or phone. Check out what you need for the Google Wallet: “an NFC enabled Android device with a Secure Element chip running the most recent Android operating system.” That isn’t a very long list of phones, none of which I currently own. We tried this before and the number of variations means that almost always you don’t have the right mix of things to access your eWallet some of the time. See my remark about Tuvalu above. And note the roll call of failed Internet payments companies of the past too.

So our phones may have gotten smarter with all sorts of new protocols and wireless radios, but ultimately the real gating factor in having the carbon life forms suffer through using them, same today as back in 1999. It is not too late to learn from the past.And maybe sometime soon my neighbor will feel confident enough to buy something online.

My fears about my own cloud migration

I try to eat my own dog food, as the saying goes. Nonetheless, I found myself going through all the various steps in Maslow’s hierarchy of needs when my mailing list hosting provider sent me an email last week telling me that they were moving my server to the cloud.

Funny, isn’t it, when it happens to you? Exactly my thoughts. For the past several years I have been using the North Carolina-based ISP EMWD.com and their very reasonably priced Mailman list services to distribute this newsletter. I am very happy with EMWD: they are very service-oriented, the fee is low, and as I am very familiar with Mailman, there is nothing for me to learn. And over the last several years, I have given them referrals from people who have wanted to start their own mailing lists, and these friends are happy as well with their service.

Mailman isn’t as pretty as Constant Contact or Mailchimp or other Web-based emailers: it is just for sending out text-based emails to a bunch of people. If you want HTML hotlinks or embedded graphics, these two are probably better services for running your list.

So anyway, last week I got an email saying my provider is going to the cloud. My first thought was unprintable. My next thought was what was I going to do? Was it going to be secure? Would I have to spend a lot of time debugging things? What did this really mean for me?

Then it hit me: I was acting like a customer who had never used the cloud before. Stop it! After all, what difference did it really make to me whether my server was sitting in EMWD’s data center or somewhere else? All that mattered was an IP address, that the server was running, and that it worked the same. Calm down, Strom.

But that is exactly the issue for many of your own customers, who may not have as much knowledge or understanding of what is involved. And these days it is getting harder to tell what is in the cloud and what isn’t, as new products blur the line even more so.

My hosting company was moving to the cloud for all the usual reasons: quicker provisioning, lower costs, more flexibility and scalability. Now, I am not a very demanding customer of theirs: all I use is their Mailman hosting, and that wasn’t changing.

So the migration day is today. I put a new IP address in my DNS, and a few hours later, all is well. At least I hope so. Everything looks the same from my end. And so much for my cloud migration story. But perhaps you can learn from this too, and understand that sometimes change isn’t all that big of a deal.

Internet Evolution: When It Comes to Your Brand, Every Customer Counts

Over the holiday break, my wife and I had two memorable experiences when we went to Morton’s and the Olive Garden for dinner. These chain restaurants sit at different ends of the market, and we had very different experiences — but not in the way you might expect.

I am not talking about the food; I am talking about how the marketing staffs at both chains responded to me as a customer after I left the premises.

We had a bad experience at Morton’s, a top-end steakhouse, and a great experience at the Olive Garden. As an experiment, I posted comments on both chains’ website feedback forms, and I posted two tweets on my Twitter account. This is when things got interesting.

You can read more on my post today on UBM’s InternetEvolution blog here.

A tale of two restaurants: Morton’s and Olive Garden

Over the holiday break, my wife and I have been eating a lot of restaurant meals. Let me tell you about two memorable experiences when we went to Morton’s and the Olive Garden. Both are chain restaurants at different ends of the market, and in both we had very different experiences, but not the way you might expect.

Morton’s is a top-end steakhouse. Everything is ala carte, and you end up paying a lot of money for your meal, your wine, and the white tablecloth and near constant hovering of the wait staff. You get a very good cut of meat or seafood, and a very relaxing meal with excellent service. Or so I had thought, until we went last week. When we sat down at our booth, we noticed that the seat had salt spilled all over the place, and my wife mentioned that to our server. Odd, but not a big deal. As we progressed through our meal, though, we found the cause: our saltshaker had a plastic plug on the bottom that was loose, and it was gradually emptying itself all over our table. We called over the floor manager and he was very apologetic, but that was about it. At one point, he tried to clean off the salt all over our table with a crumber and his palms.

Now, for some reason I didn’t ask him for any financial compensation, mainly because it was so unusual a situation. And I kept thinking that at some point the manager would do something more than apologize, because every time that I have been to a Morton’s I have an excellent experience. But no, he shook my hand and wished me a happy new year and we were on our way.

A few days later we found ourselves in an Olive Garden, which is another chain with a very different vibe. We had a great meal and wonderful service, and the woman serving us was a long-time waitress who was proud of her service and was a delight. For some reason, she had to leave her shift and her manager came over to apologize. It took a bit longer to get our food, but not to the point where it seemed a problem. At the end of our meal, the manager came back and told us that desert was on the house because of the delay, even before we had said anything. That was impressive. He told us that it wasn’t up to their standards of service, and he felt bad about having to switch servers before our meal was concluded.

Now that was being proactive, and while neither of us has eaten recently in an Olive Garden, the next time we are driving around an area where these sorts of chains pop up, you can bet that we will think about going to an Olive Garden again and not a Friday’s or a Macaroni Grill. The Olive Garden manager understood what it took to build brand loyalty, and how to treat his customers. He didn’t wait for us to complain. The Morton’s manager fell down, to the point that the next time I want to eat at a high-end steakhouse, I will probably go to one of their competitors like Ruth’s Chris or McCormick & Schmick’s.

I sent messages via both restaurants’ websites and Twitter accounts (they both have fairly decent ones on both services). The Olive Garden comment form triggered an autoresponder that said it would take a week for someone to get back to me. Morton’s had no immediate response via their website but sent me contact info via Twitter to follow up.

Lessons learned from the Wash U. Hatchery class

One of my favorite times of the year is the end of the school term when I serve as a volunteer judge at the Washington University business school class called the Hatchery. Student teams present their final class projects, pitching a new business venture to a group of us in the business community who judge and rank them. It is an intensive day or two of presentations and rapid-fire questions, and generally a lot of fun. And the kids even dress up for the pitches.

Many of the pitches though had fatal flaws. Here are some of them that I found during the day’s activities.

• Capital requirements way out of whack. Asking for too much or too little. I heard presentations asking for as little as $10k and others for more than a million. Somewhere in between is the sweet spot.
• Confusion over net and gross margins. When the judges asked the students to explain their numbers, some of the teams got tripped up on understanding the difference between these two, which could mean the difference between a successful business and a flop.
• Channel conflict from the get-go. One team had a great idea, to work as wholesalers, but was adding their own direct service on top. That kind of channel conflict right off the bat isn’t encouraging. On the other hand, many of the teams came up with the idea of having campus managers to expand their reach nationally across the college market, which was quite clever and compelling.
• Paying the founders too much. If you are asking for lots of VC funding, plan on living off the land the first couple of years. Carrying a $750k aggregate first year salary nut isn’t a good idea. Bootstrapping is the name of game, and while a few of the teams got this into their DNA, it was a lot less than I expected.
• Not understanding the right people skill mix to get the business started. In some presentations, we saw pie-in-sky requirements for new positions on the management team. While there is high unemployment, you aren’t going to find this experience easily.
• Is there really a market for your service? This is a very hard question to answer easily, and none of the teams spent a lot of time addressing this issue. Some of them had really great ideas but not necessarily a market big enough or specific enough of buyers.
• Crazy price points. Do some sensitivity analysis to see if people are really going to pay what you think. You might be asking too much or too little for your product or service.
• Underestimating your web tech. One team was going to the cloud, and take advantage of Amazon’s free first year of hosting. That is great, but what happens in year 2?
• Using online ads to pay for your venture is so 90s. Click-through rates are plummeting rapidly. Betting on ads to carry you through is very risky. Diversify your revenue stream.

Now I don’t want to leave you with all gloom and doom. It was great to spend time with all the students, and seeing them very excited about starting their ventures (some are already up and running, even though the kids are still in school). I wish all these budding entrepreneurs all the best, and can’t wait until the next crop comes through next spring.

Internet Evolution: How to Use Field Observation to Improve Your Website

Remember elementary school field trips and how they broke up the school week. Sometimes, it isn’t just better programming or a nicer template but understanding where your visitors go or how they use the information that you present on your website. To do this, you need to do some research in the field and actually observe users as they navigate your site and go about their daily working lives. This kind of data collection can be invaluable in improving your website, attracting more visitors, and increasing your customer satisfaction.

You can read my story in Internet Evolution today here.

10 Ways to Screw Up Your Next Merger

One sign the economy is improving is that more mergers are happening as companies free up cash to invest in other businesses. Having seen a few of these firsthand, I offer 10 suggestions on how things can go wrong, and what IT managers and CIOs should look out for.

You can read my story for Internet Evolution here.