Show Notes
Transcript
[00:00] Rob: In this episode of Startups for the Rest of Us, we’re going to be discussing how to capitalize on your unfair advantage. This is Startups for the Rest of Us: Episode 130.
[00:09] Music
[00:16] Rob: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
[00:26] Mike: And I’m Mike.
[00:26] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?
[00:32] Mike: I’ve got nothing done in three weeks. [Laughter]
[00:34] Rob: Is that right? What have you been up to?
[00:35] Mike: It’s all those stuff related to MicroConf. So —
[00:37] Rob: Yeah, I’m in the same boat, man. The last minute stuff getting it done – I mean this is going to air Tuesday which is the day that MicroConf is happening. I’m pretty stoked, man. I’m starting to feel a little anxious because I’m trying to finish up my talk to, you know, talk is going well in general. I ran through it and it’s over an hour. It’s like, oh, I got to cut 20 minutes off of this thing, just taking care some last minute details. I’m very excited to get on a plane on a couple of days and see everybody at the conference.
[01:00] Mike: Yeah, I’m on the same boat with my talk. It’s coming along well. I’m probably about two thirds on the way done right now.
[01:06] Rob: Cool. I have a pretty cool milestone from last week. We finally got Drip installed on customer zero which is HitTail. So, you know, we’re using our own internal app as the first proving ground to make sure everything works, to make sure the pop up works, collects e-mails, sends e-mails. It allows you to edit stuff and split test and all that kind of stuff. So, it was a milestone and we fought through it. Derek pulled a couple of late nights and we’re excited. So, the advantage of being your first customer, you know, of being able to get it on to someone site and we ran in to a couple of issues but since it’s our own internal thing, it was really easy to troubleshoot. We are on track to install it on customer number one like a paying customer and as of Monday morning but of course, we’ll be at MicroConf.
[01:51] So, I won’t be doing that. We’ll probably push it off maybe another week and then I think we’ll be adding new customers. I have 15 early access customers, kind of a short list of people who I know most of them I know personally who I’m going to start adding as quickly as possible. I think we’ll start off one a week and then I’ll try to do two a week and then three and then once all those people are on and we basically built out all of the things that they need, then I will go to the launch list and that will be a true, you know, public launch so to speak.
[02:20] Mike: Very cool. Yeah, I’ve been looking at what I’m going to doing with AuditShark and just because I’ve been busy the past few weeks. I think that I have a week that I have taken and set aside about two weeks after MicroConf is over and I think I’m going to sit down that week and kind of plan out the actual launch sequence and everything else that goes with it. I was hoping to be able to actually to do the launch that week but I just don’t think it’s going to happen. So, but I’ll at least be able to sit down and plan everything out and make sure that everything is going to go the way that I wanted to.
[02:48] Rob: Very good, so then are you looking at launching in May as well or are you looking at June?
[02:52] Mike: It’ll be the end of May or early June, maybe the first week of June or something like that.
[02:56] Rob: Very nice. Hey, I realized last episode I mentioned MicroConf Europe but basically if you’re in Europe and you’re interested in meeting other self-funded startup founders, software entrepreneurs and you’d like to see high-caliber speakers talking about how they’ve built SaaS, web apps, mobile businesses, that’s what MicroConf is going to be and we’re taking it to Prague and it’s going to be the first week of October. And if you’re interested in that kind of thing, it’s probably going to be fairly small this first year. I would guess it’ll be somewhere between a hundred and a hundred and twenty people and we are currently working on recruiting speakers. But if you’re interested in that, head over to microconfeurope.com and you can enter your e-mail and we’ll be in touch as details firm up. Right now, you and I, you know, are the only confirmed speakers I’ll say but we have a lot of folks Europeans and folks on that side of the world. I think it’s going to shape up nicely over the coming months.
[03:49] Mike: Definitely, that’s going to be a lot of fun. Hey, I got an e-mail from inDinero. Did you get an e-mail from them as well?
[03:54] Rob: I did. I got three e-mails from them. So, at one point, Mike, I had three inDinero accounts through different – with different businesses and I am very thankful that I have pulled, we pulled all the MicroConf, Micropreneur stuff and one of my other businesses off and I’m now using Outright for those.
[04:13] Mike: Well, they basically e-mailed me to let me know that what’s been happening with their inDinero self-service over the past few months and apparently, they renamed it to self-service which is completely new to me because they didn’t ever tell me that I was on this new self-service plan. But essentially, they said that they’ve been having difficulty building a profitable business model and they’re essentially pulling the plug on all of their lower end plans. So, they’re going to take everything and move it up market and they’re going to offer all inclusive accounting tax and payroll services starting at 399 a month.
[04:45] Rob: And here’s…here’s the issue I have with this. Number one, they gave us 60 to 90, somewhere in there. So, that’s the first thing. Second thing is they’re cutting it off in the middle of the year and I now – I can’t really go back to January and import things from my bank accounts and PayPal. So, I’m going to have to have someone manually take my stuff out of inDinero or out of the source accounts and go put them in another system. And the third thing is they – if they’re going to do this, they should have done it a year ago when they – I mean they’ve been crashing and burning for a year with just mad bugs in their system. They had – they actually had a solid working system. They had the best system that I know of for doing this type of online accounting stuff. It was automated. It had amazing rules that you could create really cool stuff.
[05:31] And then they either rewrote their backend or the frontend or they rewrote everything because the UI totally changed and there were ton of bugs after that and it never really worked right after that. And I was always trying to figure out why they were doing that or what the issue was but they just never seemed to recover and I recommended inDinero at least a half dozen people or maybe more and now they’re – I mean I feel bad for them. I didn’t see this coming and then everyone has been pulling off of inDinero just because it’s been buggy.
[05:58] Mike: I think buggy is an understatement but —
[06:00] Rob: It is.
[06:01] Mike: …in away, I’m kind of thankful as well because I, you know, last year when they pulled this because they basically went and they said, “Well, we have to start charging for this,” which I get. You know, they have to charge at some point, you know, for their free plans in order to make it up but they kind of drew a line in the sand and they said, “Look, we’re not going to allow anybody on this free plan anymore. We’re actually going to pull the free plan and if you want to stay on it, then you’re going to have to start paying for it.” And I’m like that’s fine, I have no problems doing that but the way that they did and I think we might have talked about this a little bit last year but the way that they did it just seemed not well-thought out. It didn’t feel to me like they were taking the needs of their customers in to account or that they even talk to their customers at all to figure out, you know, how they might feel about this sort of change or what the best approach for that might be.
[06:46] So, I actually have two different systems running at the same time right now because I did not trust it and I did not trust them to start making the right decisions and at this point, I could just turn off inDinero and it won’t matter to me because I still have all of my accounting stuff going through another system as well. I’m paying for two which in a way kind of sucks but in retrospect looking at what they’ve done, that was probably a good move on my part in terms of insurance.
[07:09] Rob: Yeah, I remember when you moved that over and that’s about the time I moved, you know, two of those businesses over as well. I think the issue I have here is it’s really hard not to grandfather people in. If you’re going to make the mistake of going with a free plan and thinking that that’s going to work and then going back on that, you got to handle it better than that. And then if you’re going to have an app that’s been running for what, three years? I think I’ve been paying these guys for three years and you’re just going to cut it off and stop access to it and frankly, the e-mail was a little kind of like “Thanks for supporting us since the beginning.” And it’s like what do you mean thanks? Well, there’s no thanks. I mean basically, I, you know, I now opted either spend a couple of days of my time or hire someone which I will probably do.
[07:50] So, it’s going to cost me a few hundred bucks to move off of their system and it’s like, hmm, it should have been handled better than this. What was interesting is I have a $399 a month plan, now we had to handle all the bookkeeping and paychecks and all that stuff, I need that. I would use that but there’s no chance I’m going to do it now and I feel like if they’d handled this differently given a longer term, they’ve sunset the app of a long time, if they just said, “We need to make more money.” They need to raise their prices in order to make this work like any of that but for the past almost a year, the app has really not worked like it is buggy enough that I would say it’s on the borderline of not functioning. It does pull stuff in but it will often pulling multiple transactions for the same transaction, you know, there’s this all kind of stuff you have to go to manually fixed.
[08:33] In addition, their support turnaround time is between five and ten days when you e-mail them. So and that’s been that way for about a year or more. Now, that you’ve done that, you really shot yourself in the foot because I bet they have thousands of either free or paying customers that they could have pulled from in order to like ramp up in to this, this higher end plan but now who in that group is going to want to actually pay them 400 bucks a month because you just don’t trust that they’re going to – that they’re going to do right by you at this point.
[08:58] Mike: At the end of the day, that’s essentially what it comes down to is trusting whether or not they’re going to do the right thing or going to do what’s in your best interest as a supplier I mean because they’re providing you a service and at this point, they’ve just shown themselves to be completely untrustworthy in terms of making decisions that affects you as a customer and you know, like I said, I’m thankful that I’ve had all my stuff going through a backup system at the same time and that now because of that I don’t have to go in and do any of that porting that you’re talking about. I’ve essentially prepaid for their problems.
[09:30] Rob: Indeed. I guess this is one of the dangers of using a SaaS app is you’re not, you know, you’re not fully in control. So, if you’re on inDinero, I would recommend Outright. That’s what I’ve been using. They seem to work well. They don’t have a sophisticated, a rule system. There are some things that it doesn’t do that inDinero does. It’s been a pretty easy switch for me in general.
[09:48] Music
[09:51] Rob: So this week, we are talking about Capitalizing on Your Unfair Advantage and specifically, we’re going to define what are unfair advantages and then look at seven different types that relate to software startups. This post is inspired by a number of different sources. I’ve been thinking about this concept of different unfair advantage for a while. Jason Cohen has talked about it. I mean frankly, if you look at unfair advantage in business, there’s books written on it. I have a bunch of notes on my notebook. Everytime I hear about it, I add a new idea.
[10:16] But this particular episode is inspired by a recent post by Pat Flynn and he has a podcast and a blog called Smart Passive Income. He basically says he interviewed someone named Lain Ehmann who is in the scrapbooking niche and he says, “Lain Ehmann described an unfair advantage as a skill or asset that you have that no one else has or very few others might have in a specific niche. It’s your competitive edge, and whatever that edge may be, it’s your job to use it to your advantage as much as possible as you shape and create your business.”
[10:46] And I’m really inspired by this because I’ve realized as I talked to different entrepreneurs who are starting or who are scaling their businesses that people tend to take one of several different tracks to kind of building and scaling a business. So, I’m scaling a business in a certain way. Maybe Noah Kagan is scaling it in a very different way. Maybe someone like Sacha Greif is doing it in a different way because he’s a product person. He’s like a designer and he builds gorgeous products. And so, I was kind of wrestling with that and thinking it through and Pat Flynn really summarized it well in this post. And it’s basically, your unfair advantage is like the core competency that you have that’s going to give you advantage over other people.
[11:22] The first type of unfair advantage is your experience. It’s what you’ve been through. So, if you look at you and I talking on this podcast, the reason we have a podcast and the reason maybe people listen to our podcast instead of the thousands of other business podcasts out there is that we have experience to doing certain things. That’s an unfair advantage essentially, you know. It’s something that we’ve put in a time. We’ve gone through the years of being entrepreneurs. Launching products, failing, having some successes and that gives us more value to offer than another random business podcast if someone just coming on and saying, “Hey, this is my first product and here’s what I’m doing.” Now, they will likely have a different unfair advantage but in this case, this is what we have [0:12:00].
[12:01] Another example of using your experiences and unfair advantages, let’s say you have a really in-depth knowledge of a particular industry. So, like you do with the kind of the auditing industry, taking on AuditShark is utilizing an unfair advantage. For me to build a product like AuditShark I would have a huge learning curve. I would actually be in an unfair disadvantage compared to the knowledge you have.
[12:21] Mike: Yeah and that’s more because, you know, I have worked at a company that did this kind of stuff in the past and I’ve seen a lot of the things that people are explicitly looking for when they’re looking an auditing software. So, that stuff that can be learned but it does take time to do that. It does take time to go through that process and that’s where your background and your experience really comes in to play.
[12:41] Rob: A second of type of unfair advantage is the niche you pick. It’s who you serve and your ability to do so. And we – I mean this is like a time to take a drink, right? We’re talking about how niches are unfair advantage. Think of any of our apps like look at AuditShark. You’re going to focus on a specific niche. At one point it was banks and it another point, I think at this point, it might be software as the service apps. For Drip, it’s the same type of thing. I’m going to be focusing hard core on software as service apps, may move in to E-Commerce site as some point.
[13:11] You look at a lot of products that are bootstrapped especially and starting with a niche and then growing out from that is by far the best way to go because you don’t have the funding or the manpower to go in every direction. Even look at the, you know, how this podcast or MicroConf, the conference had success. If we tried to just be another startup conference, I don’t think we would have been heard above the noise but instead we came out and we said, “We are the conference for self-funded startup founders.” And that’s choosing a niche and you know, that is essentially been an advantage for us over the past couple of years. And now there are other conferences coming up around this – almost the exact same topic as MicroConf and I see that as a good sign actually. It shows that there’s – the competition validates the market and it shows that there are lot of people interested in this niche.
[13:56] Mike: I think the point to make about using a niche as an unfair advantage is that the ideas that you want to go deep and narrow because you want to essentially identify the people who are going to strongly resonate with whatever the application or service that you’re offering is because there is always going to be this larger players out there who do pretty much everything when the problem is that because they do everything, they don’t necessarily do certain things very well or serve certain types of audiences.
[14:23] And that’s where – but essentially choosing a niche and making sure that you’re going to go deep and narrow in a specific niche to meet the needs of those people and essentially ignore some of the other people because you’re going to have either going to be certain things that you may think are interesting or that, you know, may appeal to a broader audience but you don’t necessarily want all of them. You want to nail that specific niche, get it right and then use that to essentially broaden your footprint as opposed to try to go as horizontal and broadly as possible but not necessarily do as many things that are useful to people.
[14:57] Rob: That’s true, who you exclude in your marketing is almost as important as who you include in it. A third type of unfair advantage is your rolodex. So, it’s the people you know and I’m going to quote Pat Flynn here. He says, “If your rolodex is an unfair advantage if you know and have access to the right people in your industry, people who others do not have access to. You’re a connector, and you can provide value to a specific audience by using the connections you’ve made over time.”
[15:22] And this is absolutely not my unfair advantage. I have never been Mr. Rolodex. I’ve never been good networker or connector but examples of people who are like this and this is exactly what got me on this whole track in the first place is someone like Noah Kagan or Andrew Warner or Jason Cohen. These are people that know so many people and have a broad network that is someone like Noah with no software experience. He isn’t a coder but he starts and grows these online businesses very quickly because of all the connections he can make and you see, he starts AppSumo. AppSumo is not a software company. What it is, is it’s something that only someone who knows a lot of people could put [0:16:00] together really quickly like he did because I remember as Noah was putting it together, it was a lesson in thinking how is he getting this going so fast? How is he cutting all of these deals so quickly?
[16:10] Because you and I, you know, try to get people like special deals for Academy members and deals for MicroConf people and we can do it but it just takes a lot of time because a lot of times you have cold e-mails that you’re dealing with whereas if you already have that big rolodex, you can get an idea like an AppSumo or you could put together a conference or you could, you know, put together those social types things really fast because of the number of people that you know you can get stuff done so much quicker.
[16:36] Mike: And this leads really well in to number four which is people who know you and if you have a large rolodex, then chances are that that relationship is both ways and those people know you. So, when you start putting yourself out there and you start making public the things that you’re doing and the things that you’re working on, people will actually reach out to you as opposed to you having to reach out to them. And you know, in some ways you can look at it as inbound versus outbound marketing but the ideas that if you’re reaching out to people, you’re limited by your own time versus if people are reaching to you, then, you know, you’re essentially filled in a request and those people are essentially already qualified for whatever it is that you’re working on to doing.
[17:13] So, you don’t necessarily have to spend as much time pitching it to people or trying to sell them on the idea because they’re reaching out to you. They already sold on that idea. So, it helps you scale up your efforts very, very quickly. This past week, I got an e-mail from somebody saying, “Hey, you know, I know that you’re working on AuditShark. Just letting you know that there is this request for news article out here that is in this particular space, you know. You might want to respond to it.” So, you know, just by putting yourself out there if there are people out there who are paying attention to it, they’ll reach out to you.
[17:44] Rob: Yeah, having an audience or just a group of people who will listen to you and this is whether you have a podcast or a blog or a large Twitter following, you know, it could be a lot of people who follow you on Facebook. As long as it’s within the niche that you’re dealing in, this is a very powerful tool. This is perhaps the only [0:18:00] reason we were able to pull MicroConf off that very first year and to sell enough tickets to break even on it was because we had built an audience and we had done the podcast probably for a year and a half at that point. And without that, I just I don’t think we could have done it.
[18:15] Jason Cohen says a real unfair advantage is one that cannot be easily copied or bought. And so, if you think about having an audience, it’s not easy to buy an audience and it’s not easy to copy one like to put an 18 months of recording a podcast every week is something that most people will not do. So, capitalizing on an unfair advantage like that on any of this is the way you should go. It’s just going to make launching your business or your app or your product so much easier.
[18:37] The fifth type of unfair advantage is your hustle, how much you put in and where you put it in. This makes me think of this quote that I always have on my head, “It’s those who work the hardest, tend to make it work. They tend to succeed.” And of course you can be a super hard worker and you just put your efforts in the wrong places, yes, that can happen but for the most part, the people I know who are willing to focus for extended periods of time and really hustle and focus on a single goal are able to achieve it much easier than people who are trying to work on three or four things who are scattered, maybe bounce from one app idea to the other or just won’t commit to focusing on a single idea for six months and actually getting it off the ground.
[19:16] Because the problem if you bounce around is you never actually get anything to launch but if you can focus and can push it through, then you can actually, you know, start making enough money to buy out your time and then you just build on that and build on that and that’s where you can really scale up a business.
[19:31] Mike: I think this is where a lot of entrepreneurs just kind of run in to problems because obviously if you put in a lot of work and effort on to a single idea, your chances of doing well with that idea are going to increase dramatically assuming that that idea was a good one and just going to be successful because obviously you could choose to do something and just has no chance of ever making it. You know, a lot of people try to hedge their bets by doing a lot of different things or trying out different things to figure out what’s working and what’s not. And they do that in an effort to [0:20:00] essentially find something that is sort of working that they can double down on and I don’t know if there’s a good answer for how to strike that balance. Obviously, if you put in a lot of effort, you know, your chances of making it over somebody who is in putting in that effort are going to be dramatically higher.
[20:15] Rob: Yeah, and I don’t this is justification for working 60 or 70-hour a week because the people I know who has been successful, yes, they do put in time but it’s more about being effective and it’s more about focusing and if you can just stick with one idea or one thing long enough to get it launched and making enough money that it allows you to then focus on the next thing, then you’re going to be in a much better place and it’s also knowing what to work on, right? It’s eliminating the things that aren’t that important either getting them to a virtual assistant or someone who’s helping you out.
[20:47] It’s outsourcing things like tier 1 support. I mean it’s becoming a super effective person so that as you are working, you’re only working on the things that essentially at your pay grade and that anything else that can be handled that you don’t need to personally handle, that you’re not handling. Once you do that and you continue to work and focus on, you know, on a single thing, it’s just amazing how much you can get done in a matter of even a couple of months.
[21:10] Mike: Yeah, I mean a lot of that is about making sure that you’re doing things that will incrementally make the business better overtime so that you can focus more of your energies on growing that business as opposed to maintaining them.
[21:21] Rob: A sixth type of unfair advantage is your ability to build a great product. And I talked about this a little earlier but these are the people who go out to build whether, you know, whether it’s an info product or whether it’s a software app or whether it’s just an e-book or something. It’s the folks who focus on design and they just build gorgeous UIs and UXs. And so, think of like 37signals, think of Mint.com and how they look in the early days. Think of Sacha Greif, think of the people in the design community who may not focus on things like split testing, Analytics, SEO, metrics, lifetime value, cost per acquisition. They don’t focus on that but they build really good products and they are known for building products so they have…they have the attention of the world in that realm.
[22:06] Because I got to be honest, just being a really good designer and building a really interesting product is not enough. I’ve seen many well-designed products with exceptional UIs fail because they missed all these other stuff. They don’t look at the metrics and they haven’t chosen a target market but putting together a great product with a couple of other things like finding a target market and building it for people, you know, who actually need it in solving their problem, you really can make it work. It may not be as optimized as the people like maybe myself, Patrick McKenzie, like people who look at the analytical side of things, but it almost doesn’t matter because you’re focusing on your unfair advantage and you’re not trying to go outside of your area of core competency.
[22:45] Mike: Another good example is Fog Creek Software with a lot of the things that they do and obviously, they started out with CityDesk and then kind of transitioned over to FobBugz but building that initial product and making it an exceptional product for that particular target market really served them well because then they were able to leverage that to go out and find more customers who were like the existing ones that they have. And by focusing on the product and not exclusively or at the expense of all other things but focusing as much as they could on the product to make it a better product will certainly serve them well because it kind of allows you a little bit of leeway to I won’t necessarily say to completely ignore the metrics, but it allows you to not pay attention to them as much especially if you are at least moderately successful with that product. Once you get to a point where you do start paying attention to those metrics, if you already have a moderately successful product, then you can massively increase revenues and sales by concentrating on those metrics.
[23:41] Rob: Yeah, I think Joel Spolsky is an interesting example to look at actually to see like which of the seven unfair advantages that he have and he definitely had number one which is his experience. He’d already been at Microsoft. He’d been building software for years and so, he had experience to build new apps but also to start blogging about them which was a great marketing approach. Step two is his niche. I mean he basically chose the niche of developers. Unfair advantage number three was probably the people who know you. He built an audience quickly and you know, because he was one of the early bloggers in his space. And then I think the other unfair advantage he have his is, yeah, you’re right, his ability to build a great product.
[24:16] I don’t think it was like amazing UX like 37signals or Mint.com but at the same time especially the early versions of FogBugz, they’ve just had some really well-designed UIs that are easy and intuitive to use. So, you can see that having multiple types of unfair advantages combined can obviously, you know, propel you and not having all three of those means that you instantly have a disadvantage if you’re trying to compete against, you know, something like FogBugz.
[24:42] So, the seventh type of unfair advantage is your ability to listen, build, measure and learn. And I think a shorter way to say this is this is the analytical approach. This is how I see people. It’s the people who look at the numbers. It’s maybe, you know, a Hiten Shah, a Sean Ellis. I like to include myself in this camp of I – I get in to the numbers. I like to see the numbers. I try not to get buried and I’m – which of course, you can but I really like to build, measure and learn. Fight my way through it in that respect. I would say, you know, I build decent products. I build good enough products. I don’t know if I have the unfair advantage of being able to build amazing products and frankly, that’s why I hired someone my product manager Derek happens to have an exceptional eye for UX and UI and that’s one of the good reasons he’s involved because Drip is turning out way better than it would have if I built it myself.
[25:34] So, the idea is to hopefully stack a couple of these unfair advantages if they aren’t uniquely mine but kind of combining them and putting them all in to one bucket so that that when an app like Drip launches that you’re instantly out ahead of other people, you know, as competitors are going to come out of the woodwork for sure combining these and stacking them is definitely an advantage.
[25:55] Mike: I’ll definitely put Patrick McKenzie in this camp as well and it’s not just about analyzing numbers and looking at numbers, it’s about, you know, kind of shifting the way that you think about things and you know, being able to see things from different perspectives especially from your customer’s perspective to figure out what questions you should be asking and what numbers you should be paying attention to because it’s not enough to just pay attention to the numbers, you have to be able to pay attention to the right numbers and understanding which numbers are the right ones and the important things to pay attention to versus ones that are probably going to lead you down a rabbit hole that don’t necessarily mean anything. There’s a big difference between those two different sets of numbers.
[26:32] But yeah, I mean having an analytical approach is definitely, you know, one of those unfair advantages that if you’re able to see things with somebody else’s eye and see them from a different perspective than your own, it’ll definitely help you figure out what’s going to work and put you in a better place than somebody else who’s trying to build the exact same thing.
[26:49] Rob: Yeah and what I like about this list is I don’t believe that any one of this is better than any others and so, if you’ve always felt like oh, I don’t really want to get in to the numbers, the LTV, the cost per acquisition, all that stuff, then have one of these other unfair advantages and you could absolutely build a successful business doing it. I think that’s what I like is it kind of shows that there are all this different facets of each of us and that if you hear someone speaking and they say you absolutely must do it this way, I mean you hear that all the time, right? You must build a great product. If you don’t have a great product, it’s not going to work.
[27:20] I disagree like that is a for unfair advantage and that maybe how you personally, the speaker on the stage did it this time. But there are many other ways to do it. We’ve listed seven here, there have to be more as well. So, you know, feel free to chime in with your own in the comments or you can call us at our voicemail number or drop us an e-mail.
[27:40] Music
[27:43] Rob: The first is your experience, what you’ve been through. The second is your niche, who you serve and your ability to do so. The third is your rolodex, the people you know. The fourth is the people who know you, in other words, your audience. The fifth is your hustle, how much you put in and where. The sixth is your ability to build a great product and the seventh is your ability to listen, build, measure and learn.
[28:04] Mike: If you have a question for us, you can call it in to our voicemail number at 1-888-801-9690. Or you can e-mail it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us on iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 129 | 7 Tips For Becoming a Better Manager
Show Notes
Transcript
[00:00] Mike: On this episode of Startups for the Rest of Us,we’re going to be talking about Seven Tips for Becoming aBetter Manager. This is Startups for the Rest of Us: Episode 129.
[00:06] Music
[00:15] Mike: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
[00:23] Rob: And I’m Rob.
[00:23] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the good word this week, Rob?
[00:27] Rob: Two good words, MicroConf Europe. I’m…I’m excited. So, we have a little announcement to make. If you go to microconfeurope.com, we are putting on a conference and it looks like it’s going to be in Prague in early October. We don’t have all the details ironed out at this point. But if you are at allinterested, we’d love to hear from you. I’ll have a little e-mail sign up there and they’re trying to get an idea of how many folks want to come but we have nail down pretty serious talks with hotel and getting the logistics up. And we’ve had a lot of request over the past three years to have another MicroConf like either on the East Coast of the US or somewhere in Europe because a lot of folks aren’t able to make it out to Vegas.
[01:07] Mike: Yes, so that’ll be really excited. It’s interesting being in the pre-planning phases of putting together the conference. So we’ll just — we’ll definitely be working pretty hard towards that and especially since, you know, we’re still kind of just finishing up the current MicroConf.
[01:18] Rob: Speaking of that, how is it going with the planning?
[01:20] Mike: I feel like I have zero free time.
[01:22] Rob: We do this every year, right? Every year –
[01:24] Mike: Right.
[01:24] Rob: …we talk early on and we’re like, “You know we should hire a coordinator. We should figure out to outsource more of this.” And then we decide not to. And every year about this time, it’s like, “Oh man, now I know. Next year, next year we’re going to figure out how to delegate more of this.”
[01:36] Mike: So, yeah, I mean, I’m just spending a lot of time on that. You know, I don’t even have the time right now to plan out the AuditShark launch which I was hoping to do like two weeks after MicroConf. So, because of that I’m not even able to put stuff in place to kind of follow through with that. So, you, know, it’s unfortunate but I think I’m just going to perhaps turn my attention to it back once MicroConf is over. But other than that, I’ve started realizing that I need to kill certain things. So one of the things that I’ve decided to outright kill, remember when we discussed some of our goals for the year early on? One of them was for me to write a book. And I’ve decided that at this point I’m just going to kill that.
[02:11] And it’s kind of dead in the water right now. I’m just not going to spend any more time or effort thinking about it or looking at it just because I got so many others things going on and it doesn’t really makes a lot of sense for me to dedicate that time when because that was such a long-term play, I feel like I can come back to it later. And it’s not going to materially affect the things that I’m working on now.
[02:33] Rob: Right. Because you were looking at that both as an experience of writing a book but also as a potentially a marketing opportunity for AuditShark and it’s kind of like until, you know, until you hit the app out there and get people using it, it’s not, in my opinion, worth all the effort of getting a book out purely. If you don’t have the app, it’s really not worth the effortof getting the book out there.
[02:52] Mike: Right, right. So, yeah, I’ve decided to kill that. I’m looking at a couple of other things that are potentially on the chopping block to just cut down on the demands on my time.
[03:01] Rob: Yup, twice a year I do this exact process you’re talking about. And you have to. I’m a big believer in eliminating couple of times a year making a point of going down that list and killing the things that either aren’t working or that you’re just never going to do that have kind of — I find that things that sit on my to-do list for a long, long time that I never do, they stressed me out because I feel like I’m slacking or I feel like I’m,you know, giving in to the resistance to not doing them. And just making the decision, you know, this isn’t worth doing and that’s why I haven’t been doing it. I’m taking them off the list, does wonders for my mental stress.
[03:35] Mike: Yes, so I’m thinking the exact same thing. So hopefully, that’ll…that’ll help out to just kind of move on, get other things done.
[03:40] Rob: Yeah, very good.
[03:41] Mike: So, what else you got going on?
[03:44] Rob: Well, I had a couple of things. One, I am starting to work with a couple of bloggers and content creators getting some kind of a pillar articles out on e-mail marketing. This is for the Drip Blog. So, right now the Drip Blog is completely bare and there’s no post. But I want to start that, both the content marketing angle and the SEO angle. I want to start that early. I had on a list to do a month or two ago and just have been caught up with other things. I’m putting that in full swing in the past week here and I have two leads on some looks like some very good bloggers and several ideas for posts based on bunch of research I’ve done. So, that I’ll be tackling over the next –well it’ll be on going, you know, every month we’ll put out a new content. But my hope is that we get the first post out here inabout the next thirty days and then build from there.
[04:33] Mike: Now for those bloggers that you’ve found, are they familiar with e-mail marketing or they’re just good writers that are going to be doing a research on that?
[04:41] Rob: I sought out both meaning people who have both of those skills and it’s actually really hard to find someone who has both of those skills. The two people I’ve found are both exceptional writers and they know how to write headlines and they know about marketing and conversions. And then they have some experience in e-mail marketing and they have written posts in the past on e-mail marketing. So although they may not, you know, doing e-mail marketing fulltime all the time, they do know the value of it and the concepts and all the verbiage and we’ll probably do, you know, some research in order to fill out the articles.
[05:13] Last thing for me is I finished the book. It’s called The Launch Pad: Inside Y Combinator. I’ve mentioned that last week. You know, I didn’t take anything super actionable away from it aside from thinking about startup ideas in a different way because of how…how Paul Graham thinks about it. I think if you’re easily swayed and it’s kind of sucked in to that world of the high gross startup and it turns out to be a distraction for you, I would say do not listen to this book or do not read it because it really like gets you fired up to get in to this…this magical world. But they…they follow the 63 startup teams through the Y Combinator series and they get — they go back and look at, you know, several years earlier and all the successes. They talked a little about the failures but to — in my opinion not enough, you know, it’s the natural selection biased.
[05:58] And since it is written by a journalist, there’s a certain amount of romanticism around things. It’s a slog, right? It’s a slog to get a lot of the stuff done and that isn’t — I don’t – didn’t feel like that was necessarily well-enough represented.But overall, it’s a very good book and I would recommend if you’re in to this kind of thing here in startup tales that that you do check it out.
[06:17] Mike: Cool.
[06:18] Music
[06:22] Mike: Today’s episode is – and titled Seven Tips for Becoming a Better Manager. And, I was thinking about it in episode 120, we talked a lot about Growing Your Business Past Employee Zero. But one of the things we didn’t talk about was how to manage the scaling of your business. So, today we’re going to do that. As part of scaling up your business, it tends to mean getting help from other people. And you know, as we talked about on episode 120, there’s a lot different types of people that you can bring into your business. And what we’re going to do today is we’re going to discuss the things that go in to managing those people that you bring into your business.
[06:51] Rob: Yeah. I think that these counts both for contract designers and developers, virtual assistants but it could also mean if you do make that choice to hire an employee to all of the supplies across the board, right? This isn’t just for employees, it’s contractors, consultants and VAs and all that.
[07:08] Mike: Yeah, that’s a really good point to make. The tipone is “To go online with everything.” It’s really hard to manage other people when you have any sort of paper-based system. And whether the paper that you’re dealing with is either orprocessing or accounting systems or legal paperwork or anything like that, you really need to be able to get as much of the stuff online as you possibly can. And this can include having your bills e-mailed to you or sent to a service like Mailbox Forwarding or Earth Class Mail and then these items are going to be available remotely and digitally without taking up any of your time or effort.
[07:40] Rob: Should this episode be Seven Tips for Becoming a Better Remote Manager or do you think this applies also to people who are actually working in a same location as their contractors or employees?
[07:50] Mike: I think this applies to both and one of the things that, you know, on the surface it may look it is geared specifically towards managing remote workers because obviously if you got a bill mailed to you and you have to0 then turn around and scan it and send it to somebody, then it makes it a little bit more difficult. But even if somebody is in your office, maybe they’re busy, maybe they’re not available, they are in a meeting, they’re doing other things, it’s a lot easier to e-mail something to somebody or use an online system and say, “Hey, here I need you to deal with this.” And then when they’re available, when it fits their schedules so that you’re not interrupting them in the middle of their work, then they can deal with it. As opposed to just walking in to their office and saying, “Hey, you know, I’m going to interrupt whatever you’re doing because this is “more important” than whatever you’re working on now and I need you to deal with itbecause it’s not worth my time.”
[08:33] Rob: Yup, cloud, cloud, cloud. I would say anything you’re doing with a new business, you should try to get it into the cloud and that includes accounting like I would always opt for in an online accounting package like a SaaS. Even though I’m, you know, not be paying more for it, QuickBooks, you can pay a one-time fee and then I guess a manual upgrade or something. But I just think having that all like up on a website and accessible is the way to go. And anytime there’s a question about should I have like my bill paying is all done online through my bank, everything I can possibly do. Time tracking is done online through a website. Just anything you can do to get off your computer and off of any single point of failure where it’s… it’s sitting on your laptop is better.
[09:15] Obviously, you know, if you’re listening to this podcast,you’re probably already using Dropbox to share bunch of stuff. I mean, you definitely did think about that when you’re working with remote or even on-site workers and it’s like you said because if you have a file on your laptop it still is a pain to get it to other people within the same office unless you have like a professional file…file share setup and Dropbox is just such an easier way to do that.
[09:37] Mike: And one of the things that you just said was about, you know, for especially for online accounting systems and having those things available it’s — even if it costs a little bit more money because typically those things you’re paying a monthly fee form and they do cost more money. You can buy a license for QuickBooks for, you know, a 150, $200, it’ll cost you$30 a month to get that as a hosted service. So, there’s obviously that money trade-off that you’re going to be making but it can be well-worth it in terms of, you know, the time that it saves you.
[10:04] Tip number two is “To make sure that your expectations are clear upfront.” Nobody likes to be told that they did something wrong or didn’t follow a process when you never either told them about it or never fully explained what that process was. You need to establish the rules and guidelines for new people upfront and you need to make sure that those things are clear. If they ever aren’t or they start deviating from them,follow up very quickly because if those expectations aren’t being met, then you need to correct whatever that processes that they’re supposed to be following. Everyone should be well-informed of exactly what is expected of them and they should have concrete goals so that they understand what it is that they’re working towards.
[10:40] Rob: Yeah. Last round when I hired a VA to handle support on the couple of apps, it’s funny that giving clear expectations is not as cumbersome or it doesn’t take as long as you think it does. I mean I’ve made some pretty basic statements of, “I want you to check, you know, check the support account twice a day preferably, you know, eight to twelve hours apart based on what works for you. It doesn’t really matter the time of day, you know, all things responded to it at that point or send over to me. And in general, like we are way, you know, customer-focused so, like if someone asks for a refund. When in doubt, treat them like you’d want to be treated and only if it’sreally a big deal, someone asks for three months of refunds or something, then you get me involve.” And it was a very short list by the time I get down to it. I think that setting clear expectations if you hire the right people is quite easy to do because they just tend to do…they just tend to make good decisions. They tend to make decisions like you would probably make them. And you just have to give them some very general guidelines.
[11:44] Now, if you hire people who maybe wouldn’t make the same decisions you do, then you run into a problem because now you have to start specifying every single thing they do. Oh,when you’re a solo-preneur, you’re working with a couple of contractors or maybe you have one or two employees, it’s critical that you do hire people who can — are going to be more likely to make decisions like you or going to –someone’s, you know, make the right call because that just cuts down on a lot of misunderstandings and you’ve – I find that you have to set a lot fewer expectations explicitly because they’re going to tend to do what you are doing in the first place.
[12:18] Mike: Tip number three is “To overshare” and this applies to providing more than the minimum amount of information to people when you’re delegating tasks to them. Tell them as much as you can, give them at least some background on why they’re doing this specific task because this helps them to make those good decisions that you’ve just talked about on whatever it is that they’re working on. If they don’t understand the end goal, it’s a lot harder for them to make good decisions and to do what you would have expected them.
[12:44] Rob: Yeah, I’ve definitely made this mistake in the past of not sharing enough and thinking that I could just put together a bulleted list of a process and a process or multiple processes and expects someone to follow that and then to make the right decisions because they may be able to follow that but making the right decisions requires more background. And you know, as you’ve stated it in here, requires a bit of oversharing that may not seem required at first but that down the line really helps you out.
[13:10] I think the best way I’ve found to overshare is not to put it into a document because people skim through long paragraphs of prose and they wanted to get to the process and see what they have to do. The best way is to record a screencast or at least the best way I’ve found. And that’s because you can sit there and you can talk with, you know, you have a human voice and you can have some intonation and you can show them, “You know, this is just — this is a really hard decision to make but when someone does this, here’s how I typically handle it. But if they do this other thing then you know, I’d probably do this.” And you really would never put that down on a document that would just seem ridiculous. But if you’re actually sitting there and you record a 5 or 10-minute screencast and they watch the whole thing through, they’re so much more likely to kind of retain the main point and the main mission or the vision that you’re trying to communicate rather than just think about, “Oh, what are the exact bullet points that I have to follow?”
[13:58] Mike: Tip number four is “To learn to stretch [0:14:00]delegate” and this means giving tasks to people who you think it’s going to be a stretch for them to meet those tasks or meet those goals. You need to be careful not to go too far over someone’s head but people really enjoy challenges. They don’t want to be bored with their jobs and this type of delegation is going to help them find their jobs more enjoyable.
[14:19] So there’s three things that doing this really accomplishes. The first is that it forces people to use their brains and really think about and understand what it is that they’re doing and what they’re trying to accomplish. Second is that it provides them with a sense of trust because you’re giving them an important task that is kind of on the edge of their skillset. And they’re going to know that this is probably on the edge of their skillset and they’re going to appreciate that, you know, youare entrusting them to this. And the third thing that it does is that it allows you to asses where they are with the new organization and allows you to figure out whether or not you can entrust them with some more advanced tasks and essentially move them along with your organization as opposed to using them for one-off task and then going to find somebody else for the next task.
[15:01] So, you’re looking to help establish a long-term relationship with whoever this person is. And it applies more to contractors than anything else but even internally if you have an employee who you’ve hire, you want to be able to gage what their skillset is and how quickly they’re learning and how quickly they’re understanding what your company is about and, you know, really be able to follow through on more important things later on.
[15:24] Rob: I’ve found that stretch delegation works really well with either a contractor or employee who you have a relationship with and who you’ve worked with for a while. But with new folks they’re not going to want to do that, right? Because they’re concern that if it’s an early project and they fail that you don’t have enough of a relationship built up that you’ll overlook that. And so, that’s the first rule I think is to look at someone you’ve been working with for awhile, you have a rapport and you know, you trust them and they trust you so thatif they did crash and burn, you know that they’re still super capable of what they’re doing. I mean that they don’t necessarily feel bad or guilty or something like they didn’t deliver for you.
[16:03] The second thing is I’ve kind of have a formula when I do a stretch delegation typically is via e-mail and I’ll write and say, “Hey, are you up for this?” And the first thing I do is say, “Here’s what we need to do.” You know, I’d say, it’s like it’s a team thing like, “We’re going to release this new feature and it’s going to take you a bit outside of anything you’ve done before. Are you interested?” And so I asked them and leave it in their core. But then, I let them know number one, “I know that you can do this. I know that you are capable and I know that you can step up to this.” So, it’s about their confidence. Number two, I say, “I will train you like I will show you how I would do it, I will show you the decisions we have to make and I will be there to support you so when things fall apart we’ll work on it together to…to solve it.” And then number three, just to let them know that, you know, this doesn’t rest solely on their shoulders. I’m not just going to bail on this thing and trust them to handle it all that I’m actually going to be there to make sure that it gets on right and they work together and that if they decided that they don’t want to do it down the line, that they don’t have to.
[17:01] So, I really give them a lot of outs to…to feel comfortable saying, “You know what? I’ll give it a try.” And nine times out of ten, it works really well and like what you said it actually keeps people happy because it’s expanding their skills, they’re learning new things and it adds some variants to what otherwise, you know, could become kind of a humdrum job.
[17:19] Mike: Tip number five is “To acknowledge people’s accomplishments.” When somebody does a good job withsomething, you have to make sure that you acknowledge that and you tell them. And this really applies much more to the new things that you ask of people rather than the daily or weekly task that you have ask them to do. Nobody wants to hear, “Thanks for the 39th consecutive weekly report e-mailed to me by 3 p.m.on Friday. Way to go.” But if you have a task or project that was challenging and the person really stepped up to the plate, make sure that person is aware that you appreciate them for tackling the job and being successful with it.
[17:50] Rob: The nice part about acknowledging accomplishment is it allows you to on the flipside also be very honest when someone makes a mistake or has a failure because people feel like you’re going to tell them both, the good and the bad. If you’re always pointing out mistakes, then people get discouraged. If you’re only pointing out accomplishments, then people start wondering like, “What is this guy? Basically, lying to me, not telling me when I’m making mistakes or just not being upfront and honest.” So I think you need to cover both sides of this coin. But definitely calling out accomplishments is the fun part. I think that’s the fun part of leading and managing people is letting someone know when they just totally kicked ass on a task and pointing out exactly why and how they did a good job like not just the, “Wow, this is great,” but say like, “Here’s how you executed, here’s how you totally stepped up to the plate on this one, and here’s the impact that’s now going to have on our business or our support process or a sales process like you really made the difference.”
[18:45] Because most of the time people aren’t doing a task surely that the clock hours they wanted to see how or what they’re doing makes a difference within the organization. And Ithink acknowledging someone’s accomplishment involves letting them know that just as much as it is patting him on the back and saying, “You know, you did…you did really a good job.”
[19:03] Mike: Tip number six is “To understand that people make mistakes” and by people, I don’t just mean the people who you are delegating task to but yourself as well. The fact is that nobody is perfect and you’re very likely to screw up management somewhere along the way. But making mistakes is critical to the learning process and in fact, sometimes it’s better to allow other people to make some mistakes so that they become a better worker down the road.
[19:26] Now, as a manager you’re taking responsibility for other people’s actions but the last thing you wanted to be responsible for is their mistakes too. You want to try to find ways to avoid mistakes in the future and to correct your processes to account for those mistakes. But you also want to be careful not to necessarily step in too early when somebody is starting to make a mistake. Sometimes it’s better to let them kind of make a little bit of a mistake or something that, you know, is correctable later on so that they’ll learn how not to do something as opposed to stepping in and immediately correcting them, you know, when you see things start going wrong.
[19:58] Now, if they’re going down a completely wrong path and you know that it’s just a rabbit hole that’s going to be filled with all sorts of things that you just don’t want to have to deal with or if you’re on a very strict timeline then obviously, you know, you want to probably step in a little bit earlier. But if they’re making some mistakes here and there along the way that are probably not completely critical or not going to totally blow apart whatever it is that you’re working on, you can generally get away with letting them make some of those minor mistakes so that they get back on track and they’ve learned how to do those things better in the future.
[20:27] Rob: When I first started delegating e-mail support, I made mistakes. I made the mistake of being too specific about what people should do during different scenarios. And so as an example, I’d have like the refund process and how it should be handled and here’s the reply email and all of the stuff. And I thought it had to be all detailed. Nowadays, I have a general rule for each of my products and when I hand that off to a VA or support person, I say, “Just handle it like you’re authorized to refund up to X dollars and you’re authorized to make the customer happy.” It’s so much better. They feel — the VA or the support person feels like they’re in more control, the customers are happier because they get really fast service and I’m happier because I’m not bothered now by — I used to get bothered by every refund request. I would say, “You know, don’t refund money until you show it me because I might have some prior history with this person or with the account and we may not want to refund it or whatever.” And that just has gone away.
[21:25] And for every 19 times it’s done correct, there’s maybe one time where it’s like, “Hah, you know, I wouldn’t have made that call.” But the fact is getting all 20 of those off my plate and never seeing them and never being a bottleneck is better for the customer, it’s better for my support people and it’s better for the entire business. And so, I think…I think that’s a big part is thatunderstanding the people may make mistakes but it’s better to have a small amount of mistakes than to have all these oversight. And I don’t know if you’ve heard the expression about building a$10,000 fence around a $1,000 product, you know. It’s like you’re almost spending more time [0:22:00] and headache to protect from something going wrong when one thing that goes wrong really isn’t going to make that much of a difference to your business.
[22:08] Mike: Tip number seven is “To treat everybody fairly and with empathy.” And everybody is different but the way you treat them shouldn’t be. You don’t need to establish official policies or procedures for absolutely everything but you do need to make sure that you’re treating people fairly. And one of the issues that I’ve seen before is that policies can get in the way of doing something that guidelines and goals could be used for instead. So, rather than using policies for how to handle a specific situation, you can just use general guidelines and goals for the company that will allow you some flexibility. And you don’t want to be put into a situation where you absolutely have to do or follow the letter of whatever the policy states because you wrote a policy for it.
[22:46] You’re much better off being in the position where you can kind of make a judgment call based on the situation or the circumstances and things like that. And that as — you’ve talked about earlier with the — your support people, you say you givethem some general guidelines and just kind of turn them loose. And one time out of twenty, they’ll make a different call than you would but at the same time by just having those guidelines in place for yourself as opposed to putting together written policies that the company has to operate by, then you give yourself that flexibility to make a different call when the situation warrants it.
[23:18] Rob: You know, these last two tips may feel you might be listening to them and thinking, “Oh this is…this is obvious.Why were they even bringing this up?” But couple of things, one, they may not be obvious to everyone. I bet there are few people out there listening, thinking, “Yeah. You know, I’d never thought of that.” Number two, it’s a lot easier to hear this than it is to actually learn them. It’s a lot more work to actually treat people fairly and with empathy and to understand that people make mistakes. And you grow into that as a manager. So that’swhy we’re bringing them up, so you can actively be thinking about them as you are guiding people —
[23:50] Mike: Oh —
[23:50] Rob: …and actual example though not just talking about it.
[23:52] Mike: Somebody goes missing for a couple of days and they don’t e-mail back, you may very well say, “Well I’m going to can this person. You know, let him go as a contractor or whatever.” And then you find out a week later that their mother died or something like that.
[24:03] Rob: That’s one situation but someone might say well, they should’ve texted you or e-mailed you or something. But that’s a hard one. If you fired them and then found that out, yes,of course, you’d rehire…you’d rehire [Laughter] them if you are empathetic, you know. But also depends on the person, like ifthey were a really solid worker, I wouldn’t — and they went missing, I would not fire them like I would instantly think, oh,something happened. But if they —
[24:26] Mike: Right.
[24:27] Rob: …kind of been flaky and not really communicative the whole time, then it’s like, “Ah, they were kind of on the edge anyways.” There’s that balancing act.
[24:34] Mike: That’s why it’s a perfect example though because if you have like just a written blanket policies as well, if you go missing for two days or four days or whatever and you’re non-responsive through e-mails or and maybe they’re based overseas or something like that so you don’t have a direct line of communication with them, you can’t just call them up or go over to their house. If they don’t respond, if your policy just says,“Well, I’m going to let them go,” and then they come back a week later with that and you have to abide by that policy, yousay, “Well, I’m sorry that, you, you know, you had a death in thefamily but you didn’t call us so, too bad.” Whereas by using goals and guidelines for the company as your compass that gives you the flexibility to make a different judgment call based on situation.
[25:13] Rob: That makes sense.
[25:14] Mike: So the recap, tip number one is “To go online with everything.” Tip number two “Make sure your expectations are very clear with everybody upfront.” Tip number three is “To overshare information” and make sure you’ve given everybody enough information about the tasks that they’re doing to make effective decisions. Tip number four is “Learn to stretch delegate.” Tip five is “To acknowledge people’saccomplishments.” Tip six, “Understand that people make mistakes including yourself” and tip seven is “To treat everybody fairly and with empathy.”
[25:41] Music
[25:44] Rob: We actually had a voicemail from Terry at theBuild My Online Store Podcast. He had a couple of more tips surrounding episode 125 and are working from the outside the office hacks.
[25:58] Voicemail: “Hey, Rob and Mike. It’s Terry here frombuildmyonlinestore.com. I like the episode…episode 125 about Optimizing Your Productivity Outside the Office. I think two things that I found helpful, one, is the iPhone USB charger. So, what happens is if you’re outside in a coffee shop and you’re tethering your internet, it tends to drain the battery pretty fast. So, one thing that happened to me is that I forgot to bring my charger once and sometimes your phone just had half battery and you could probably end up hearing the whole thingwhile you’re outside and it could be a real jargon. So, the second thing is I actually bring menthol along with me. So, sometimes, you know, you’re outside, you’re hungry at the coffee shop. You don’t want to bring too much food or you don’t want to buy too much food. Menthol is actually a pretty good way to kind of control your hunger throughout the day and you just need a break to kind of refresh yourself. You take a mint, go for a walk and kind of take it easy. So, thanks for the episode. I found it really helpful and talk to you soon.”
[26:46] Rob: So, thanks for the call Terry. If you have a question or a comment and you like to leave us a voicemail and have us potentially play on an episode, you can call us at 888-801-9690. Our e-mail is questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us on iTunes by searching for startups or via RSS atstartupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll, see you next time.
Episode 128 | 9 Steps for Finding Startup Ideas
Show Notes
- FreedomPop – free 4G mifi (up to 500MB/month)
- HelpHonza – Startup marketing research study for a Bachelors Thesis
- Sweet Process – for documenting your processes
- The Launch Pad: Inside Y-Combinator – a new book that tells the story of Y-Combinator
- How to Get Startup Ideas by Paul Graham
Transcript
[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I are going to be talking about Nine Steps for Finding Startup Ideas. This is Startups for the Rest of Us: Episode 128.
[00:08] Music
[00:16] Rob: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
[00:25] Mike: And I’m Mike.
[00:26] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?
[00:31] Mike: A couple of weeks ago, we did an episode on working outside of the office and Steve wrote in and said, “Hey, I love the podcast. I was listening to the most recent episode on discussion of tethering. I just recently got a MiFi from freedompop.com which is a pay-as-you-go provider. You buy the MiFi for $99 then you get 500 megabytes a month for free. If you need more, the rates are pretty reasonable. It’s really nice to see that you can basically pay for just the hardware and then you get data allowance for free. It doesn’t seem like there is a monthly fee associated with that unless you go over that…that data amount.”
[01:02] Rob: Yeah, I really like what FreedomPop is doing. They actually buy excess bandwidth from Sprint I think it is. It’s 4G but it’s not LTE. It’s HSPA+ which is a little slower than LTE but it’s still faster than a lot of the cable modems you’ll have in your house. They have a great business model I think where it’s a freemium business model and you know, as long as they have the money to last, I think they can do it. I actually have one of this. I have the MiFi. The problem where I live is it there is no service here and I was a bit surprised by that because I had assumed that they would have service anywhere that Sprint has data service. But for some reason, the entire central area of California both all the way from Fresno over to the coast, I drove up in down the coast with that on just kind of sitting on my dash while I was driving in to the beach one day and I never got once got a signal.
[01:49] So – but you know, you can enter your zip code on the website before you order it and they will tell you if they have service there or not and it told me it didn’t have a service where I live but that wasn’t unexpected. But I’d hope that there’d be some other service within – I mean I literally drove 250 miles and never got service. But I imagine if you’re in the metro area, this is a no-brainer in my opinion to drop the 99 bucks and get that. It’s enough to check e-mail really easily. You know, 500 megs a month, this is a decent amount of data as long as you’re trying to stream anything.
[02:16] So, hey a student named Honza, he’s studying marketing in the Czech Republic and he’s writing a bachelor’s thesis about low cost campaigns, marketing campaigns for startups. So, he’s running this survey and he’s created a micro site to – to kind of tell you the full story, there’s a picture of himself. He put it up at HelpHonza.com. So, it’s honza.com. Guys from Airbnb, 500 Startups, Socialbakers, About.me, they’ve all filled it in. Frankly, I’m interested to see the data. He said the data are all going to be anonymized and published in his thesis. And so, it’s not like, you know, your secret marketing tactics are going to be given away. It’s cool. You know, he asked stuff about the gorilla marketing and other things like that. So, HelpHonza or Honza, honza.com if you are a startup or have launched an app and have anything to offer. He needs 300 respondents in order to have enough results to actually publish the paper. So, give him a hand if you can.
[03:10] Mike: Yeah, I filled that as…that out as well. It’s a pretty cool study and it’ll definitely be interesting to see what comes out of that and what sorts of I guess ideas and things that other people are doing come out of it.
[03:21] Rob: I agree. So, I also want to give a congratulations to Brian Casel. He’s just launched SweetProcess.com which is a tool for documenting processes. So, it’s designed to help business owners put together like SOPs or in my case, really nice for documenting processes to hand off to VAs. So, even if you’re not interested in doing those particular things, still head over to the site SweetProcess.com because the design is really nice and they’ve done an excellent job of communicating their value proposition. So, if you are going to be putting up a website or you want to figure – take – get some tips on how to improve your SaaS app value prop, give there’s a look because there’s something to be learn from how well their site is put together.
[04:05] Last thing, I’ve been reading a book called The Launch Pad: Inside Y Combinator and it’s basically written by journalist who have unfettered access to a single Y Combinator cohort. It’s an interesting book. I mean I think the big takeaway – I’m about halfway through. The big takeaway is just how optimize Paul Graham is for launching startups and how good he is at figuring out how to ship startups and come up with startup ideas and just nurture startups along. It’s really, really impressive to hear the interactions that he has with these aspiring founders. A lot of them are in their 20’s and are really, you know, just trying to figure out what’s going on and he is just an – sounds like an amazing mentor and just, you know, obviously very knowledgeable in the startup space.
[04:46] It reminded me of how – just how much knowledge and advice I’ve gained from Paul Graham over the years. I started reading his essays way back. I think it was 2001 maybe when he started publishing but I’ve read his first book when it came out. I was a big fan of his and as I was listening to this book, I realized, you know, there’s a lot here that you and I could just chew on from episode after episode but I wanted to just pick one area and kind of look at how Paul Graham examines that and how he thinks about it.
[05:16] And so, I went online and he as this awesome essay called How to Get Startup Ideas and it’s at paulgraham.com/startupideas.html. We’ll link to it in the show notes. But it’s a pretty long essay and he goes through all the steps that he talks about for how to get startup ideas and how to think about getting startup ideas. And I pulled out nine steps and there are more steps in there. He doesn’t have it listed the steps. He just has prose, paragraphs of prose but we want to kind of put it in to, you know, nine bullet points that we could be able to push around on the podcast to kind of giving idea of how Paul Graham thinks about things, how he thinks about starting and thinking of startup ideas.
[05:53] So to begin, I’m going to read a little excerpt from him. He says – it’s from this essay. He says, “Why do so many founders build things no one wants? Because they begin by trying to think of startup ideas. That m.o. is doubly dangerous: it doesn’t merely yield few good ideas; it yields bad ideas that sound plausible enough to fool you into working on them.” And this is the part that I like the most. He says, “At YC we call these ‘sitcom’ startup ideas. Imagine one of the characters on a TV show was starting a startup. The writers would have to invent something for it to do. But coming up with good startup ideas is hard. So, unless they were amazingly lucky, the writers would come up with an idea that sounded plausible, but was actually bad.”
[06:30] That’s kind of the intro to this article that he writes. I’m not sure I agree with him a hundred percent. I’m not sure that thinking of startup ideas is something you should never do or that necessarily yields a lot of bad startup ideas. I guess it depends on how you think about it. If you start with a problem and try to think of ideas around how to solve that problem, I think that’s a good way to go. I think if you just sit around and try to randomly think of startup ideas, they’re going to obviously be, you know, a lot of danger that you’re going to build something no one wants.
[06:58] Mike: I tend to agree with you. I think that it’s also a difference between whether you’re trying to think of solutions to problems or you’re just trying to think of ideas. I mean I’ve seen some really cool technologies out there where I’ve looked at them and I said, “Oh, it’ll be really cool to build X,” and on the surface, it’s like, “Oh, that could be a great company that kind of build something around,” but at the same time if you’re not actually solving somebody’s problem, then who’s going to pay for? And I think that people tend to focus too much on, you know, the technology side of it or how cool something would be when it’s finished versus, you know, what problem it’s actually solving and who’s going to pay to solve that problem.
[07:32] So, you know, those are kind of all the issues and I tend to agree with him when he says that if you’re just trying to think up startup ideas, sure, you know, that’s going to happen but if you’re trying to think of problems to solve, then it’s a completely different scenario and I don’t think that that applies.
[07:46] Rob: Yeah, I would agree. The last few times I have tried to think of startup ideas I started with the question “What problems do X have?” And whether X was startup founders or entrepreneurs or whatever, you know, sort of group of people that I wanted to help. That was…that was the question and then I would write a bunch of answers and then figure out which of those can be translated in to an app.
[08:09] One other thing I’ll note is that Paul Graham since he does, you know, obviously runs Y Combinator and they’re going after venture funding, his ideas are — do tend to be bigger, right? They do tend to want larger ideas that are going to scale up and hit big markets and obviously, that’s not what we’re about here. There are going to be some differences of opinion for sure in a way that he approaches things. I know a bit later in the essay he actually does talk about just hacking around with new technologies is a way to kind of find startup ideas. And I’ve never found that to be true but perhaps if you’re looking to build a hundred million dollar startup, that’s the way you get there.
[08:43] Music
[08:46] Rob: Step one is “Don’t try to think of ideas, notice them.” And Paul Graham says, “At Y Combinator, we call ideas that grow naturally out of the founders’ own experiences organic startup ideas. The most successful startups almost always begin this way. Since what you need to do here is loosen up your own mind, it may be best not to make too much of a direct frontal attack on the problem, in other words, to sit down and try to think of ideas. The best plan maybe just to keep a background process running, looking for things that seem to be missing. Work on hard problems, driven mainly by curiosity but have a second self watching over your shoulder taking notes of gaps and anomalies.”
[09:23] Mike: I really agree with this idea of using your own experiences because throughout the course of your career, people tend to run in to different things where they’re trying to accomplish something and it just seems dramatically more difficult than it really should be. So, there’s all these problems that you probably run in to over the years that you look at and say, “Oh, well, why is this such a pain in the neck?” And you figure out a way around it but you don’t necessarily actually solve the problem or solve it in a way that would be useful to a lot of people.
[09:50] One thing that I can think of right off the top of my head that is exactly like this is Dropbox. I mean sharing files and synchronizing them between two different machines has been a nightmare. It’s been a nightmare for years and years and years. And then Dropbox came along and somebody said, “Hey, well, I want to make this particular problem easier.” And they did it and they did it in a spectacular fashion and Dropbox is taking the world by storm and its got a lot of clones out there as well and it’s not to say that clones are bad. I mean I think it certainly helps in the market to have some of that competition because it drives innovation in the market. It’s a classic example I’d say of, you know, somebody who recognized that there was a problem out there that they had ran in to and they wanted to be able to solve it and by coming up with a solution based on his own experience of having that problem, it came out spectacular.
[10:36] Rob: Yeah, it’s good that you mentioned Dropbox because they were a YC company and we’ll actually talk a little bit about them later in this episode. In terms of noticing ideas, I do think that that’s the best way to come up with them instead of the frontal attack, but I would also highly, highly recommend that you get some type of idea notebook or idea Google doc or just something to capture all the ideas you’re going to have because not only are you going to come up with, you know, if you really have it as a background process, you’re going to come up with an idea a week or three ideas a week or you just going to come up with too many for you to remember and tracking those is critical because you can flip back a year or two later and realized, wow, this idea is exceptional. But what it can also do is served as a brainstorming thing for you to go back to your ideas even if none of them are any good, they can help spark a new brainstorm ideas and help kind of guide you in to thinking about things in a new way coming back to your own notes.
[11:29] Music
[11:32] Rob: So, step two is to “Prepare your mind and expose it to many stimuli.” Paul Graham says, “If you look at the way successful founders have had their ideas, it’s generally the result of some external stimulus hitting a prepared mind. Bill Gates and Paul Allen hear about the Altair,” which is an early computer, “And they think ‘I bet we could write a Basic interpreter for it.’ Drew Houston,” he’s a founder of Dropbox, “…realizes he’s forgotten his USB stick and thinks ‘I really need to make my files live online.’ Lots of people heard about the Altair. Lots forgot USB sticks. The reason those stimuli caused those founders to start companies was that their experiences had prepared them to notice the opportunities they represented.”
[12:13] Mike: I think part of this is also the ability to understand technology. It kind of a fundamental level. I mean if you understand the types of things that can be done, it’s not just about recognizing the problem but it’s also about knowing what can be done to solve that problem. Part of this is also exposing your mind to a bunch of different stimulus and in these particular cases, they happened to run against this particular problem.
[12:36] Now, if Drew Houston had never ran in to a problem of forgetting his USB stick or Bill Gates and Paul Allen hadn’t heard of the Altair, would any of those other things have happened, chances are probably not because I doubt that they would have sat down and just come up with the ideas for either Dropbox or for a basic on their own. But it is the fact that those other things kind of factored in to their lives and they were exposed to them which really kind of drove them to build the things that they did.
[13:02] So, you definitely want to keep an eye out on, you know, where else is out there on the market? What are the things are going on? You really can’t just throw yourself in your basement and work on solving a problem for six months or two years or whatever. You really have to be paying attention to the other things that are really going on in the world.
[13:17] Rob: I really like this idea of preparing your mind and exposing it to many stimuli. I think the “preparing your mind” part is to be open and aware of things that are going on around you in terms of problems people are having, problems you’re having, just anything that could essentially make your life easier on a day-to-day basis and realizing if there’s a technology solution to that that it could potentially be a product idea.
[13:40] And the second part is exposing yourself to many stimuli. This is the part that I am a huge proponent of. Anytime that I’m trying to brainstorm things whether it is app ideas or whether it is a marketing plan, whether it’s ideas for the podcast or blog post, I am looking for external stimuli both inside my discipline and outside. And this is a reason that I listen to so many audio books, that I listen to so many podcasts and then I use to when I had more time read blogs and read books. I just find that that exposing yourself to all the stimuli creates creativity. You can of course overdo it and you can over stimulate yourself and you can never retain anything that can happen. But if you keep it at a reasonable level, even listening to things outside of your discipline, listening to creativity podcast or reading about architecture or having a hobby, just in some other area that’s not technology can absolutely shape your mind, just make you think a little differently than everyone else is and essentially, it prepares your mind then it goes those startup ideas going. And if you’re tracking them in a notebook, like I said, over a long period of time, you can really arrive at some gems.
[14:44] Step three is “Get to the leading edge of a field.” Paul says, “If you’re not at the leading edge of some rapidly changing field, you can get to one. For example, anyone reasonably smart can probably get to an edge of programming, for example, building mobile apps in a year. Since a successful startup will consume at least 3-5 years of your life, a year’s preparation would be a reasonable investment especially if you’re also looking for a cofounder. You don’t have to learn programming to be at the leading edge of a domain that’s changing fast. Other domains change fast. But while learning to hack is not necessary, it is for the foreseeable future sufficient. As Marc Andreessen put it, software is eating the world, and this trend has decades left to run.”
[15:24] Mike: I think this is probably one of the several paths that you could go down. I think that, you know, Paul Graham kind of illustrates a bunch of different ways for finding startup ideas and obviously, this fits in to one of them. Kind of brings to mind the story of Bill Bither from Atalasoft who spoke last year at MicroConf who came in and he started his company back in 2000, 2001 and what he did was he built the company on the back of a .NET imaging component. And you know, C-Sharp was relatively new at the time. They really weren’t any other .NET imaging components out there. There were some imaging components but not in .NET. So, he went ahead. He built one and he was kind of at the leading edge of that field and fast forward, ten years later and he sold the company for millions of dollars and cashed out.
[16:10] So, you know, you can definitely do that and I can think of other examples as well. I mean, you know, you look at Oracle. They’re on the edge of databases back where databases were first being built and I think he’s right. I mean I think if you look at any given field that year timeframe that he’s talking about is in some ways just talking about becoming an expert in that field such that you are on the bleeding edge. So, if you wanted to look at rails development, you could start looking at that stuff, make sure reading back to the source code. If you wanted to do the same thing with the Linux Kernel, you could do that. I mean there’s a lot of different ways that you could go about this and it’s a matter of picking a field that interests you and then building a business that’s essentially starting at the edge of that field and then over the next three or five years, you kind of maintain, you know, the company being at the edge of that field.
[16:54] Rob: Yeah, I don’t feel like I had a realistic view of what this really meant before I became a professional programmer because before that I looked at the startup space and I thought it was just all about finding ideas and generating the next novel thing because that’s kind of how the press in the mainstream media and just people talk about it, right? It’s like you needed an idea and you could raise some money and build this thing. And as soon as I started programming, I realized wow, it takes away – number one, it takes way more than that. Number two, that there are a lot of very skilled developers who can build things themselves who also have their own ideas.
[17:27] And so, the bottom line is until you really get emerge in to a field and you’re kind of pushing the boundaries of it, I think that you’re way behind the pack. It’s not to say that you can’t come in as an outsider and do something, it’s just the odds are much, much lower. And I think I would have offer a simpler version of this and it would just say, “Do something in public.” Like even if you can’t get to the leading edge of the field right now, start blogging about something related to what you want to do or start a podcast or start writing – learning code and start writing some code. As soon as you start doing things in public, opportunities open up, challenges rise in front of you and you, hopefully, rise to greet them. Just things start happening once you actually make yourself vulnerable enough that you put something out in to the world that other people can look out.
[18:13] Steve Jobs said great artists ship and in my opinion until you’ve shipped, you just have no chance of really understanding what it’s like to launch a product and you’re way far behind in the raise of actually launching a good one because there are people out there who’ve launched multiple successful and they’re your competition. And so you have to get there too. So, ship early, ship often. You know, as Paul Graham says get to the leading edge of a field.
[18:37] Music
[18:40] Rob: Step four of our Nine Steps for Finding Startup Ideas is to “Look for something missing.” And Paul says in the essay, “If you’re really at the leading edge of a rapidly changing field, there will be things that are obviously missing. What won’t be obvious is that they’re startup ideas. So if you want to find startup ideas, don’t merely turn on the filter of ‘What’s missing?’ Also turn off every other filter, particularly ‘Could this be a big company?’ There’s plenty of time to apply that test later. But if you’re thinking about that initially, it may not only filter out lots of good ideas, but also cause you to focus on bad ones.”
[19:15] Mike: I think this one is interesting but I think it also depends a little bit on being on a field where it is changing rapidly and it’s relatively new. I think that it would be difficult to look at a field that is fairly mature and come up with things that are obviously missing that just don’t exist. I guess I would think of things like, you know, anything related to C++ or C++ libraries or databases and database development. I think that a lot of those things, they tend to be mature areas and in fact, I mean those are not just mature areas but it takes tons and tons of time and effort in order to get anywhere.
[19:51] So, I think that those are kind of classic cases of where the, you know, the field is so mature that you’re not going to be able to make much head way versus if you start looking at either narrow aspects of that field so like database sharding for example or fault-tolerant database. Those sorts of things, they are in a large mature field but you’re looking at a very, very narrow slice where you could make some very, very rapid advances in that one specific area. And you know, I kind of like what he said about, you know, the fact that, you know, could this be a big company? Well, it could be. It could be that, you know, a highly available database could be, you know, a big business but you don’t want to necessarily say, “No, I’m not going to go after that,” because you’re not sure about it.
[20:33] Rob: You know, I think what you said echoed back to step three in terms of getting to the leading edge of a field because you brought up C++ and you’re right, it’s so mature. It’s a mature market, right? It’s just people have contributed so much to it that there isn’t a lot of innovation to be had I’ll say in terms of servicing that market whereas with – if you did C++ database sharding that is the perhaps the bleeding edge of that area.
[20:58] Step five is “Turn off your unsexy and your schlep filters.” He says, “Most programmers wish they could start a startup by just writing some brilliant code, pushing it to a server, and having users pay them lots of money. They’d prefer not to deal with tedious problems or get involved in messy ways with the real world which is a reasonable preference, because such things slow you down. But this preference is so widespread that the space of convenient startup ideas has been stripped pretty clean. If you let your mind wander a few blocks down the street to the messy, tedious ideas, you’ll find valuable ones just to sit there waiting to be implemented.”
[21:33] And when he says turn off your unsexy and your schlep filters, he means an idea can be unsexy. It can be not that interesting, a boring idea and that means fewer people are going to be going after it. And then the schlep filter he talks about is this is like trying to do a medical health record startup where you know that it’s not just about writing code, it’s about schlepping away with bureaucracy and trying to get all these things on board and there’s privacy implications or about like building Stripe and I’m pretty Stripe came through Y Combinator as well. They had to schlep through the bureaucracy of dealing with payment providers and there’s a lot of security issues and all that stuff.
[22:05] Mike: I definitely agree with this in a lot of different ways because if you start looking at problems that are boring but would probably make good money, I mean you can come up with some pretty surprising things, you know. Honestly, AuditShark and you know, going after auditing servers is not sexy in any way, shape or form but at the same time, I know that there’s money there. I’ve seen the dollar amounts that people pay for that kind of software and although it is boring, it will make money.
[22:31] So, there’s a difference between looking to be successful versus trying to look in to a certain way to appeal to exhibit that mass appeal. And you know, there’s obviously pros and cons to each one but if you’re going for mass appeal and sexy, that can be great assuming that you are doing some sort of a consumer product where people are actually going to pay for that. But if you’re looking at this is application or something like that, some of them are quite frankly pretty boring and just because they’re boring, that doesn’t mean that they won’t make a good deal of money.
[23:00] Rob: Right, we’ve always been a proponent of niche ideas and they tend to be unsexy and or need a lot of schlepping even acquiring apps and rewriting them and moving them to new servers, those are schlep ideas, right? It’s just – it’s not writing green field really interesting brand new code on cutting in – edge technology. It’s working your ass off and moving things for two or three months. It’s not that interesting but that is where at least early on I would say go after those markets like those are going to be the ideas that are going to get you going and then you can always go after the sexy and the easier idea so to speak later on once you’ve had some successes, built your confidence, have revenue, all that kind of stuff. I’m on a big proponent of going after the unsexy ideas.
[23:42] Step six is to “Stay in your area of expertise.” Paul Graham says, “When searching for ideas, look in areas where you have some expertise. If you’re a database expert, don’t build a chat app for teenagers, unless you’re also a teenager. Maybe it’s a good idea, but you can’t trust your judgment about that, so ignore it. There have to be other ideas that involve databases, and whose quality you can judge. Do you find it hard to come up with good ideas involving databases? That’s because your expertise raises your standards. Your ideas about chat apps are just as bad, but you don’t know any better.”
[24:13] Mike: I think part of this is relying on the expertise that you have in a particular field to be able to recognize when something is a mediocre idea versus a bad idea. And you can use that in a couple of different ways but I think that the primary way that you can use it is to look at the competition that’s out there and see what they’re doing and whether the solutions that they’re coming up with are reasonable and if they’re not, then you probably don’t need to worry about them but, you know, if they’re actually making a living selling that product, then it means you stand a good chance of coming behind them with a better product and essentially cleaning their clock just because not only that you have better technology but you understand the problem better and you can probably phrase it to customers better. And therefore your expertise is going to help you get to a position where your marketing collateral is better and you’ll be able to go in the sales situations and intelligently talk about the value or the solution that you provide versus your competitors and you’ll be able to come out on top.
[25:10] Rob: I don’t necessarily agree with this one about staying in your expertise. I think that it’s ideal. I think it does improve your chance of success but I still think you can have — build a really good app and definitely make a lot of money and quit your job and do that whole thing without needing to be the target market for your app. And he tends to say, “Basically, try to build something for yourself that you’re going to use,” and I just – I don’t necessarily agree with that. I mean I think we’ve talked a lot about finding more niches, you know, if you’re not a lawyer, it doesn’t mean you can’t build software for lawyers. If you’re not a realtor, it doesn’t mean you can’t build software for realtors. But if your area of expertise is that you’ve built a lot of database-driven applications and you know how to code and potentially, you know how to design and build the SaaS front and end and potentially know how to market then I think that you can go outside that in one of those areas.
[25:57] Now, if you don’t know anything about building SaaS apps or marketing or realtors, then yeah, trying to build a SaaS app for realtors is going to be a real challenge but I think if you have one or more areas that are overlapping with your idea, I think that’s sufficient. I would agree with him that it’s ideal to stay within your area of expertise but I’d just wouldn’t make it, you know, a rule.
[26:17] Mike: Right, I mean I think all of these are general guidelines. They are not hard and fast rules. I mean you can’t look at any given one of these areas and say that you have to do this or you will not be successful. I mean I think if you’re able to find something that overlaps in all nine of them, you have a much better chance than if it applies to none of them. So, I think to stay in your area of expertise is good advice but you also have to keep in mind that Paul Graham tends to write from his point of view. In his point of view is going to be companies that he wants to invest in, he’s going to want you to have expertise in that particular area because if you bring expertise to the table for a particular products or company that you are bringing to market, you’re going to be much better off than somebody who has no idea anything about it and just trying to build something without really understanding a lot of the things that go in to it on the back end and they didn’t build a career out of it.
[27:08] They just opened up a book one day or a magazine and said, “Oh, well, Fast Company said that this is the next hot area. So, I’m going to build a product and a company around it.” And they don’t know anything about it whereas you may have three or four or ten years of experience in that particular area and that you’ll be able to just walk all over them because they’re still coming up to speed while you’ve got that background of expertise that they don’t. And it’s very hard to replicate that expertise.
[27:32] Music
[27:35] Rob: Step seven is to “Choose an obvious idea.” And Paul says, “When you find the right sort of problem, you should probably be able to describe it as obvious, at least to you. Which means, strangely enough, that coming up with startup ideas is a question of seeing the obvious. That suggests how weird this process is. You’re trying to see things that are obvious, and yet that you hadn’t seen.”
[27:55] Mike: I think this rolls a little bit in to the previous one where if you have enough expertise in an area then the solution is obvious to you but to a casual observer, it’s probably not.
[28:05] Rob: Yeah, I think I’d agree with him on this one. I do think the best startup ideas are did do tend to be obvious to someone who has expertise in that arena. Step eight is to “Give yourself time.” And he says, “You have a lot of control over the rate at which you turn yours into a prepared mind, but you have less control over the stimuli that spark ideas when they hit it. If Bill Gates and Paul Allen had constrained themselves to come up with a startup idea in one month, what if they’d chosen a month before the Altair appeared? They probably would have worked on a less promising idea. Drew Houston did work on a less promising idea before Dropbox: an SAT prep startup. But Dropbox was a much better idea, both in the absolute sense and also as a match for his skills.”
[28:46] Mike: I think this is just a lot about not restricting yourself to one idea. If you’re working on something and a better idea comes along, I think it’s just keeping your mind open to the fact that whatever you’re working on, may not be the best use of your time and if you give yourself a deadline to commit to a particular project and then you would hear to it, then you could very well be missing out on a much better idea and I think that Paul is just saying don’t sell yourself short. Don’t force yourself and do constraints that don’t necessarily make any sense because what good rationale is there for saying, “Okay, I have to have a good startup idea in a month.” And if a month goes by and you have to settle on something because you’ve given yourself some arbitrary deadline, then you’re going to pick something and it may not necessarily be the greatest idea and because you’ve committed to it, let’s say, two or three or four weeks later you come up with a better idea, well, should you switch?
[29:40] Well, according to the mental agreement you’ve made with yourself, you shouldn’t because you’ve already started on something, you picked it. And I think Paul is just saying, you know, make sure you don’t put yourself in a situation where you back yourself in to a corner and you’ve given yourself no other options. Keep your mind open.
[29:55] Rob: Yeah, I see aspiring founders and even founders who are coming back for a second or third time trying to think of ideas in a certain timeframe because they’re antsie and I felt that myself six or seven months ago trying to acquire something and I had spent two or three months just looking at all different types of apps to acquire. People are sending them to me but nothing was a good fit and I, a couple of times, I tried to force it and I’m glad that I didn’t. I eventually, you know, went back to the playbook and came up with the idea for Drip. But having an artificial timeline like you said, it can make you yourself feel better. It can reduce anxiety but it’s really not a very good idea trying to force it and not suitably vetting your idea is a dangerous game to play.
[30:38] So, step nine is to “Find a small group of people who desperately need your idea right now.” And he says, “When you have an idea for a startup, ask yourself: who wants this right now? Who wants this so much that they’ll use it even when it’s a crappy version one made by a two-person startup they’ve never heard of? If you can’t answer that, the idea is probably bad. The danger of an idea like a social network for pet owners is that when you run it by your friends with pets, they don’t say ‘I would never use this.’ They say ‘Yeah, maybe I could use something like that.’ Even when the startup launches, it will sound plausible to a lot of people. They don’t want to use it themselves, at least not right now, but they could imagine other people wanting it. Sum that reaction across the entire population, and you have zero users.”
[31:23] Mike: There’s part of this that I agree with and part of this that I disagree with. I think he’s got the right idea where you definitely need to find people who would say, “Yes, I definitely need this right now,” because those are the type of people who are willing to pay for and you want the people who are willing to pay for your product to essentially help guides you down the path of building more features and things in to the products and help shaping your marketing message such as you can acquire more customers and you can build the product out so that it is applicable to more people in your audience.
[31:53] And what he’s really getting in to the second part is that you don’t want to build something that a lot of people look at and say, “Oh, well, that’s a good idea. I think that’s interesting but, you know, I wouldn’t use it but I can see how other people will use it.” Because at that point you’re going down the path of mediocrity and going down that path essentially means that, you know, your startup idea is not going to go anywhere fast and it’s going to limp along. It’s not going to have a lot of users. It’s not going to grow very fast and you’re going to feel bad about trying to kill it because it does have some people who are using it but not a lot and it’s never really going to grow the way that you have ever envisioned it growing or the way that you want to. And eventually, you’re going to have to make a hard decision about whether you kill it or not or whether you try and sell it and get off from under it.
[32:35] I think a piece that I don’t necessarily agree with is that you have to find, you know, those people who desperately need it right now because I think that that’s a process. I think that you need to get at least something out there or at least, you know, talking to people and trying to figure out what it is that they want. And even if you’re not building exactly what they’re looking for, I mean, you know, people tend to have a very narrow view of what their problem is. And if you talk to me, I might have a specific problem and you talk to Rob and he might have a slightly different problem but if you build that solution for just me, it may not solve Rob’s problem.
[33:09] And what you need to do is you need to talk to a bunch of different people and then kind of aggregate all of their problems in to a single solution such that is solves and addresses all of those problems as oppose to solving just one person’s problem. And I think that involves talking to people. I mean you can’t just assume that everybody is going to have the same problem. They’re going to have similar problems but not exactly the same and that’s the part of that I’d say I disagree with. The idea itself is – has got to be sound and you have to build something that, you know, people are looking for. You don’t want to just kind of arbitrarily say, “Oh, well, everybody is going to have an identical problem,” because that’s probably not going to happen. They’ll be similar, just not exactly the same.
[33:44] Rob: This is why whenever I e-mail or I ask people what they think of an idea that I’ve come up with I never ask them what they did. I just ask them, “Will you use this and would you pay a very specific amount of money for this idea?” And I will lay that amount because [0:34:00] I don’t really care what their opinion is. I care about whether it solves their problem or whether they desperately needed it right now. I want them to say, “Shut up and take my money, build this right now.” And so, that is actually become my e-mails response because I get several e-mails a week of people saying, “Here’s my product, what do you think?” And I can certainly give them feedback on positioning and website design and you know, the copywriting and all that stuff but if they ask me what I think of the idea, almost always I will tell them, “I would use it,” or “I would not use it.” That’s the only answer that matters for me because my opinion about whether it will work is irrelevant.
[34:35] And then I will follow it up and say, “Go find X people.” Typically, I’ll use ten. “Go find ten people who are willing to pay you for this,” and that will answer your question way better than asking some guy’s opinion, some random person’s opinion about what they think of the idea flying because we can all sit there and think, “Yeah, I guess some people would probably want to use this,” but finding those people who really desperately need it right now, I think is a big early win for you before you start writing that first line of code.
[35:02] Music
[35:05] Rob: So, to recap the “Nine Steps for Finding Startup Ideas”, it’s from Paul Graham’s essay How to Get Startup Ideas are step one, “Don’t try to think of ideas, notice them.” Step two, “Prepare your mind and expose it to many stimuli.” Step three, “Get to the leading edge of a field.” Step four, “Look for something missing.” Step five, “Turn off your unsexy and your schlep filters.” Step six, “Stay in your area of expertise.” Step seven, “Choose an obvious idea.” Step eight, “Give yourself time” and step nine, “Find a small group of people who desperately need your idea right now.”
[35:35] Mike: If you have a question for us, you can call our voicemail number at 1-888-801-9690 or e-mail it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 127 | 7 Tips for Finishing Your Product
Show Notes
Transcript
[00:00] Mike: This is Startups for the Rest of Us: Episode 127.
[00:02] Music
[00:10] Mike: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
[00:17] Rob: And I’m Rob.
[00:18] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s up this week, Rob?
[00:22] Rob: Well, what’s up because I heard you’re working from a brand new piece of hardware. You ditched the MacBook Air —
[00:27] Mike: For a MacBook Pro right now —
[00:29] Rob: Oh, geez —
[00:29] Mike: I saw that guy on Twitter who had mentioned that I was probably going to have to now that you’ve got your new MacBook Air and probably, you know, I just followed his advice. It really what it was. [Laughter]
[00:36] Rob: You heard that I had 8 gigs of RAM and have to — about hard drive and got jealous?
[00:40] Mike: Yup, I did. So now, I’ve get 16 gigs of RAM. So —
[00:43] Rob: That’s so unbelievable, man. Yeah, that’s a great piece of machinery.
[00:46] Mike: If I had the model that you have right now, I probably wouldn’t have bothered to upgrade but disk I/O on the new machine that I just got has three times of what it was on my old MacBook Air which the model that you have is newer. So, you know, it has better disk I/O more RAM and all these other things. So, if I had that one, I probably wouldn’t have upgrade it but this is a little over two years old at this point and there were some things that I needed to be able to do that I just couldn’t do. I’d be on the road and couldn’t run things that I needed to run.
[01:11] Rob: Sure. Well, hey, I’m starting an experiment this week. I am outsourcing the creation of my MicroConf presentation. Not the content itself but just the creation of the slide deck and I’m doing it for a couple of reasons. I sat down just to kind of do a rough outline, get in to a text file and you open up UltraEdit and I started typing what I wanted to see on each slide and I got to the end and I have, I don’t know, 40 slides took me a couple of hours to think through it all. I added as many numbers as I could. It’s a 250-line text file and I looked at it and I thought to myself, you know what? Like going from here in to slides is actually kind of a trivial task like it’s super time-consuming. I bet it’ll take eight to ten hours at least to get all that in to a format that’s nice and I’ve realized like there are people that Keynote way better than I do. For a starters I’ve never used Keynote but secondarily, someone’s going to just – they’re going to be more of an expert at just presentations and doing things visually.
[02:05] So, I hopped on oDesk and I found sure enough there are people who are like Keynote and PowerPoint and just presentation gurus. And so, I have an open job right now. I’m down about three candidates and I’m going to send them over my outline and have them each do the first five slides and see what they come up with. So, I’m kind of…kind of stoked about it. I’m interested to see if this pans out. Obviously, it’s an experiment, right?
[02:25] Mike: Yeah, I definitely did that at least one of the past two years. I don’t – I think it was the first year where I was looking for a lot of different images and I had somebody else go through and that’d be – I kind of told them what I wanted and then just went through and picked out all the images and stuff and put it together for me but it does worked out. But that’s a good idea to go to oDesk. I hadn’t thought about that. So, I do want to give a special thanks to Dan and Ian from the Lifestyle Business Podcast for helping us out with our April Fool’s Day episode. I saw some tweets and feedback messages here and there which definitely caught a couple of people unaware and definitely pranked them.
[02:53] Rob: For the record, that was your idea just out of the blue, right? Like the week before April 1, you’re like, “Hey, we should do this,” and I’m like, “Man, I don’t know if we have enough time to pull that together.” You e-mailed Dan and Ian and we got it together quick. That was good. I think it turned out well. It looks like some folks were tricked for a little while and others knew right away that, you know, it was April Fool’s Day right on the guard.
[03:13] Mike: Yup, yup.
[03:13] Music
[03:16] Mike: Today we’re going to talk about Seven Tips for Finishing Your Product. There’s probably millions of abandoned software products out there that are sitting in source code repositories or on hard disks from developers who’ve started something and then just never finished it. And today, what we’re going to do is we’re going to walk through seven tips for ensuring that you finish the product that you start.
[03:34] Rob: You asked me how many products do you think that you started that never finished and so that’s the – to be clear, I did launched several products that failed and I’m not including any of those but I bet I have at least ten and maybe fifteen half completed codebases that I got at least eight to twenty hours in to and just abandon. And some of them I got 80 to a hundred hours into – and really started…started getting in to it and then just kind of left it by the wayside when I lost motivation. From all the interactions we have with founders constantly we know that people, you know, are abandoning apps, not finishing their products and so, you know, hopefully, these…these tips we pulled from our experiences are helpful.
[04:13] Mike: So, first tip that we have is “Don’t chase everything that moves.” You really need to be selective about the types of things that you start and some of this goes back to doing your due diligence and pre-marketing efforts to make sure that whatever products it is that you’re going to be launching or attempting to build is something that people actually want because if you get to a point where you’re 80, 100, 200 hours in to it and then you start talking to people or then you start seeing competition that you didn’t see before because you weren’t really doing that due diligence, you probably going to lose motivation and you know, it can be very distracting to have all these different ideas in your head.
[04:48] It’s always exciting to start a new product and when you start it, you have a lot of motivation upfront but unless you have the commitment to follow through with it, then you’re obviously not going to finish it. So, if you start chasing everything that’s going to become a huge problem and you’re not going to finished most of the things that you do start. So, definitely be selective about the things that you start and understand whether or not there’s going to be a market for those things.
[05:12] Rob: This is such a tough balance. One time, it was about five years ago when I was working with – this is back when I was in New Haven, Connecticut working with a couple of Yale MBAs and they were trying to get angel funding for this idea we had. And at a certain point, we cranked through several different ideas and we went and tried to do customer development. This was before it was called that but we are trying to talk to end users and figure out what their needs were and it was a long process and we did that for one idea and then we scrapped it. And then we did it for a second idea and we scrapped it. And this – months go by during this time and you start to get ante and you start to feel like you’re wasting time.
[05:44] And what I realized is that that it really – there were two types of people – of the three of us, there were two types of personalities. One guy finally said, “You know, we just need to pick an idea and go with it.” In my head, that sounds good but then you’re not vetting anything, right? You don’t have a lot of confidence that that idea is going to go and you are just randomly choosing how you’re going to spend the next year or two of your life. And so, obviously, he was the personality of he just wanted to get moving with the app and I bet all of us have a little bit of that in us. I, on the other hand, really wanted to know that what we were going to build was going to be worthwhile that people needed it, right? That there is actually a market need and that we’re building something that people wanted.
[06:23] I think those are kind of the two sides of this coin and all of us have some of those two. It’s, you know, it’s not a dichotomy. You’re not either or but you have some of each and knowing yourself and knowing whether you are more of a person who is just going to jump on the first thing or who’s going to just sit and analysis paralysis for months and months, knowing that about yourself is very important to actually get something off the ground that has a reasonable chance of success.
[06:45] Music
[06:48] Mike: So, tip number two is to “Budget your time, energy and other resources.” And if you butt it off too much for a particular project all at one, you are a lot less likely to stick with it. So, you need to budget how you’re going to reach any of the major milestones by setting up a schedule for the different resources you have available and whether those resources are time, they’re money, they’re could be contractors that you have that are working for you or maybe you set aside a couple of thousand dollars and you need them to meet certain milestones by certain time periods or certain amounts of money that you’ve set aside for them to accomplished those tasks, those things you really need to keep a tight watch on so that you are meeting those milestones. Because if you start falling behind, it’s going to be very difficult to catch up later because you can’t catch up when it comes to code, if you got ten different things that you need to implement and you’re behind and you’ve only implemented three of them, it’s very difficult to catch up on the rest of them and still maintain some level of quality standards.
[07:45] Rob: I think the rule of thumb we’ve thrown around on this podcast in the past is whether you are building it yourself in your spare time or you’ve hired someone to build it, you want to get to launch in four months, ideally four months or less and no more than six months. That’s when people really start losing motivation. That’s where we see people drifting off and not finishing their app. And I’ve noticed, you know, working on Drip now since late November, early December, you know, one of the big things that has kept us going is knowing that our version 1.0 is just around the corner like it always feels a few weeks away and that’s good thing, right? We know we have a short development timeframe. We know that we kept the 1.0 to a minimum feature set and it does – it’s not like we designed the schedule “All right, at the end of 2013 we’re going to be done,” because that is – it’s that’s demotivation. It’s just too far out. You’re putting too many eggs in one basket and you’re adding a lot of risks to the project, risks that you never going to finish it and risks that once you get there that you’ve wasted a year of your spare time.
[08:44] So, I actually have a question for you. When you first started AuditShark, you worked…worked on it for several years now. Did you have a timeframe in mind like did you think that you were going to finish it in six months or did you even think about a timeframe or did you know we’re you like, “Ah, this is probably a 2-year development project since I’m doing it on the side”?
[09:03] Mike: I intentionally avoided putting together a timeline because I knew that it was such a large undertaking. If you look at my project file forward, it’s not called AuditShark. It’s called Redwood and part of the reason it’s called Redwood it was because I knew that it was just a massive, massive project and the idea is obviously a Redwood is a giant tree. Putting that in there as the project, it made me think about that on occasion that this is a long-term goal. This is a massive project that it’s not going to be finished overnight.
[09:31] Rob: So, in a way, you’ve kind of broken this rule, right? You didn’t necessarily budget – but you didn’t look at a schedule, right? You didn’t really have a horizon in mind. How did you think you’ve overcome that because it seems like that would be demotivating for me to continue saying like, “God, you know, it’s another few months, another few months,” and then see that for a year or two?
[09:46] Mike: But the thing is it’s different because I would say that – in a way I did budget my energy because if I put together this schedule it was two or three years long, it would have been demotivation and by intentionally avoiding it and basically doing the opposite by not putting together that schedule, I did budget my energy because I can break off little bits and pieces of it and implement those things and it doesn’t impact my morale. It doesn’t impact my ability to get some of those things done.
[10:13] Rob: Got it and knowing what you know now, do you think that if you started it over again from scratch that you could get it done in six months, that you could get something launched that people could use in this timeframe that we talked about the 4 to 6-month timeframe?
[10:28] Mike: It’s hard to say because there’s a lot of a code that for certain components that I didn’t build and I spent a lot of time managing building of those and while I was managing it, I wasn’t necessarily working on it myself. So, if I were to do everything, all of those things in parallel, I probably could have but at the same time, I would have spent a huge amount of time upfront in doing probably a pretty massive spec for it that I would have had to hand off to somebody or hand off to multiple people. I think that it could have been done but I really would have to had that spec upfront because there are certain things that I did where they ended up being more like prototypes in the way that they were put together and some things became production code, some things I ended up having to go back to the drawing board because it just didn’t worked out.
[11:11] Rob: Right and early on your expectation of the market or the market that AuditShark would serve turned out to be different than you had expected. So, I’m sure that added months to it as well.
[11:21] Mike: Right. So, let’s move on to number three. The third one is “If it works, ship it.” It doesn’t need to be perfect and in fact, it will take years for the product to be perfect but with each iteration, it’s going to be better than last iteration. What you need to do is you need to iterate more and don’t waste time on one massive first pass in order to get everything right because perfection is not the goal. You want to get the product out there so that people are using it and paying you for it and that’s really what your goal is. Your goal is to get people who are going to give you money for it. If you wait until it’s perfect, it’s never going to be finished.
[11:52] You need to be able to overlook a lot of the small things because there’s things that you’re going to do or have in the interface that are like, “Oh, I don’t know if that’s worthy or quite right.” At the end of the day, it doesn’t matter when you’re first launching and it made two, three or five years down the road but your goal is to get that first piece out there and then iterate over time to make it better because it’s a lot easier to iterate on something that already exists versus building something massive from scratch.
[12:17] Rob: If you are personally relatively unknown and you don’t have a massive launch list and you are really building something up from scratch or you don’t have a lot of traffic upfront, then I absolutely think that you should get something out there as quickly as possible just like Mike said get a couple of people using it. Don’t launch to everybody on day one. You know, as soon as you have something working launched everybody, that’s a terrible way to do it. You do the small limited beta maybe with one user or it might be with three. You get some feedback then you get the next few in, the new few then you slowly open it wider as you’re gaining more confidence in your ability of the app to provide what it needs, you know, to your customers as you add features, as you fix bugs, as you’re able to support it all these things.
[12:57] On the other side, if you already have let’s say an audience or you already have a large mailing list or you already have a large personal brand or you just already have a lot of people watching what you’re doing, I think you need to be a little more careful with this because obviously if you put something out that is very V.1, people are going to be more looking to rack on it, right and to rag on you and to say, “Oh, look at so and so put up this app. It sucks.” So, you have to be – I mean I’m saying this obviously being aware that I’m launching Drip in six or eight weeks and we are putting polish on it that I wouldn’t have put on an app that I launched six or seven years ago. But I have this list of thirteen, they’re the early access list and then I have a mailing list of, you know, over a thousand at this point.
[13:37] I’m not just going to e-mail all these people and say, “Hey, come on and use the app.” First, we’re going to be customer number zero. I’m going to install it on HitTail and we’re going to iterate for about a week, maybe two with the on boarding, with, you know, tweaking things and to me, that’s – we haven’t shipped yet technically, but we are iterating on it. We’re not going to be adding new features at that point, right, assuming it can do everything we need. Then we’re going to get customer number one from that early access list and we’re going to go to the same cycle. Probably spend a week, maybe two and then we’ll probably get two or three more.
[14:04] So, I see it as going and taking it in phases and whether you do have a large launch list or not, taking it in steps is the way to go. And in my opinion, as soon as one customer is using it and paying you for it, you have “shipped it”. If you are making progress a little bit of a time and you’re iterating and people are getting value out of it and paying you for it, even if you haven’t launch it to the world, I still think I would say that that counts and that is a better way to go, a gradual approach rather than, you know, unleashing it to thousands on day one.
[14:34] Mike: Tip number four is “To do what you enjoy and outsource the rest.” For the core tasks that you need to accomplish with launching a product, you need to understand why it is that you don’t enjoy those things. Is it because you are just not interested in them? Is it because you’re not familiar with them? Is it because you feel like you’re not any good at them? And understanding that is kind of key to getting your product out the door.
[14:55] Rob: Let’s talk about a few tasks that the people might enjoy or not enjoy. E-mail support, I don’t know many people who enjoy that ongoing. I think early on as the founder, you do want to do some e-mail support especially as a bootstrap founder where you don’t have a team. It gives you a lot of insight in to what your customers are doing, thinking, saying, the problems they’re having and all that. But as the months tick on, as you get more customers, you get more support and you start seeing the same things over and over, that’s where you’re going to stop enjoying it and most founders I see who continue to do that up to that point, start to get a little burned out. And so, that I mean it’s obviously since it is a recurring task, it can be fairly systematize pretty easily. I would say that that’s when you should outsource early.
[15:34] Mike: All that information is great for after you have launched your product but let’s back up a little bit. What about before you’ve launched a product? What sorts of things can you outsource or what sorts of things to people not like about launching products or not good at them?
[15:48] Rob: Yeah, boy, that’s a long list. I mean I know some folks like myself I don’t enjoy design at all, right, because I’m not good at it. And so, that’s something that I’ve outsourced heavily since day one and if you are not good at it or you don’t enjoy designing, I think that is a no-brainer to outsource because there are a lot of good designers out there. Some folks I know don’t know how or don’t enjoy the coding side of it, for sure, that’s something we’ve espoused on the podcast. I think there’s also research tasks online, research either of competition or a potential customer, potential beta testers, all that stuff. Hitting up Google is not a hard task to do and if you outline some good criteria, it’s pretty easy to find someone who can do research for you.
[16:26] I also think, you know, even stuff like once you get a design back from a designer, you need to slice it in to the HTML CSS. You need to then turn it in to dynamic files at the Ruby, PHP or .NET, whatever…whatever your poison is. All of that is quite easily outsource to folks. It’s whether you have the time or the money and whether you want to do it or not but I definitely think that constructing the website is certainly something if you’re a developer that you can do but I would actually encourage you to spend more time on this other stuff like getting you’re marketing message down and getting your value proposition, your positioning, figuring out which of those are key elements and you know, really doubling down on those. That allows you to then to write your website content, allows you to put together a marketing plan.
[17:11] I haven’t heard of anyone outsourcing a marketing plan unless they have a lot of money like that you need to hire an agency if you want someone to really head that up. The small bootstrap founders I know, that’s the one thing you don’t outsource. You can outsource pieces of your marketing but you don’t outsource the vision of it and the deep, deep level understanding. That’s where entrepreneurs who are bootstrapping who are successful tend to excel. And then, you know, I think the other thing you mention was customer development, talking to customers realizing how most people aren’t going to enjoy that. I mean I don’t think anyone I know actually enjoys going out without a product and trying to get people’s pain points and talking to someone cold calling them, cold e-mailing them.
[17:49] Once you talk to them, it’s a lot of fun because you realized that they aren’t actually mad at you, right? The people are wanting to talk to you because you could potentially help them down the line especially if you’re not selling to them right now [0:18:00]. They are really open to talking to your about your ideas and about giving you feedback. But I think there is this kind of this fear or this myth that the customer development is really hard and I think each of us feel that that fear when we do go to cold call or cold meet-up with a potential customer. No, I haven’t heard of anyone outsourcing it. I know, you know, you mentioned outsourcing some things but certainly a customer development I think is something that the founders have to do themselves.
[18:24] Mike: Part of my point was to make sure that if there are core tasks that have to accomplish like customer development that you understand why it is that you don’t enjoy them. Is it because you’re afraid of doing them? Is it because you don’t think you’re very good at them? And you know, customer development especially when you don’t have a product as you said, it’s very difficult for somebody to just start reaching out to people and saying, “Hey, would you be interested in this,” or “Is something like this going to solve problems that you’re encountering,” because you don’t actually have anything that you can show them. All you can do is talk to them about it and that can be a little scary, a little disconcerting but at the same time, I mean I’ve had some really good conversations over the past couple of weeks with some extremely large companies who have a particular problem that AuditShark does not currently solve but it could down the road and it fits very, very well in to kind of a more enterprisy offering for them.
[19:12] So, those kind of conversations for me at least have kind of driven, I’ll say the future of the product and is not that I’m going to go implementing them today. I don’t think it’s going to be for probably six or eight months before I start getting there but it starts to help shape your vision of what the product is going to become down the road.
[19:30] Rob: Why do you think it’s so important that the founder needs to learn why they don’t like the core tasks?
[19:34] Mike: I think if you don’t understand why you don’t like it, then you simply avoid doing it and if you are avoiding doing it, then obviously you’re not going to get any value out of it but at the same time like for example, customer development, if you just don’t do customer development, then you get in to a situation where you’re probably 12 or 18 months in to the process because you haven’t talk to anybody and you’ve tried to launch it two or three times and it just hasn’t gone anywhere because you didn’t talk to anybody about it and nobody wants it. Nobody cares because you’re not actually solving someone’s problem and it’s – and it all comes back to the reason being that you did not talk to people.
[20:11] So, if you understand that you don’t like doing that then it’s something that you can consciously make decisions about and consciously address whereas if you’re not acknowledging it then you probably just going to avoid it. So, tip number five is “To track your progress.” And there are a lot of different ways that you can track progress, you know, maybe it’s based on your features or different customer development tasks, marketing tasks. You can use all kinds of different things. You can use spreadsheets. You can use bug tracking. You can use burn down charts, pretty much anything goes at this point. I mean you can even use Trello to basically line up all of your different to-do tasks and then move them around as needed but the idea here is that you really want to understand where you are in the process and be able to track that stuff and figure out roughly when you’re going to be done and if you are able to zero in on a specific date or a deadline for completing all of those tasks, that can help in in your motivational factors.
[21:07] Rob: I think most people avoid doing estimates at the beginning of a project because I think that they don’t want to be wrong because that makes them feel bad and I think perhaps they don’t want to face the music of well, if I really build this like I think I’m going to it, it is going to take eight or nine months — since I can only work 15 hours a week. I can’t underscore how critical being able to see your progress on an ongoing basis, how critical it is to your motivation to seeing an estimated completion date either stands still as you work or move itself backwards if you get ahead. I mean actually become an earlier date and knowing that you are burning the stuff down.
[21:44] You know, I think over the years I’ve used FogBugz for this. I’ve used Excel spreadsheets. Joel Spolsky had – what is it called? It was like a project estimate sheet. If you Google that, you’ll find it. And I also have – I have it in a Google doc now and that’s what we’re using for Drip and there’s this awesome function called work day where you can just say you give it a date which is now and then you add up all the remaining hours and – in those holidays, it has default holidays. You can add in holidays and it will give you a date that this project is going to be completed and it excludes weekends. It excludes major holidays. It’s pretty crazy how accurate this thing can be and even like it’s what we talked about last episode even if it’s off by a few days or by a week, it is still so much more clear than if you have nothing and are just basically driving in the dark.
[22:30] Mike: Yeah, the one thing about that that I found is that in order for that to work, you really have to be diligent about going in to every single line item and making sure that you assigned a time estimate too because if you don’t, then you’re just not going to get good results out of it. But I really like the way FogBugz does it because they give you a probability that you’re going to complete it on any given date and then there’s this, you know, range of probabilities across, you know, some multiple dates that says, you know, there’s a 90% chance you’ll be done with it by, you know, April 30th but there’s only a 50% chance you’ll be done with it by April 15th.
[23:07] Rob: Yeah, I think that’s a great way to go. Those estimates though if you don’t have any history in their system of estimating and then completing things, it has no idea how good of an estimator you are and overtime —
[23:16] Mike: Yeah.
[23:16] Rob:…as you build history, it will become more and more exact, you know, in terms of the estimates because it knows you’re personally a better estimator and if someone else is a worse estimator, it’ll take that in to accounts. And so, when you first thought it out, it’s actually not very accurate but you have to follow this and track your time and you do have to do line items just like if it was an Excel spreadsheet. You do have to say, “It took me this long,” so that FogBugz knows, you know, knows how long it took you and knows how to adjust your estimates up and down.
[23:41] That’s a thing, when I’m using Excel spreadsheet, I mean there’s no…no better way that I have found to be honest. You have to figure out for yourself what you’re going to actually update. You can’t have a thousand line items at half an hour each, right? That’s not going to work. I mean you have to narrow it down to 50 or a hundred or some small enough number that when you’re done working and you log out for the night, that you go in there and it should take 30 seconds to just scan through, boom, I work four hours on this and you’re done, you know, and if there are over dues, then you put them in there and the spreadsheet will show. It will pull something out. I mean it’s not a hundred percent accurate but even if it’s only 90 or 95, it’s a shocking how much this will do towards keeping you motivated to finishing the project.
[24:25] Mike: And some of what you just said leads in to tip number six which is “To set goals and celebrate your milestones.” One of the things that I’ve done with AuditShark is that inside of FogBugz which is where I do the vast majority of the tracking for it, I’ve set up different milestones based on a specific date. So, instead of looking at this giant list of a thousand or just 2000 line items, what I’ll do is I will assign them to individual dates. So, I might have I call them sprints inside the…inside of FogBugz but I’ll basically set up all these different milestones and say sprint 17, 18, et cetera. And I’ll just assign them to be completed on a specific date and then I’ll take a bunch of cases and assign them to a particular sprint and I’ll say, “Okay, I’ll want these things to be done on this particular date and they’ll be part of this sprint.”
[25:07] And if it starts to get too many things in there, I’ll start looking through those and seeing what I can push out in to the future. In that way, when I’m looking at these different milestones, it’s easy for me to see whether or not I’m trying to squeeze too much work effort in to a too short of a time period, it also allows me to see whether or not I’m essentially keeping up with all of the tasks that I put on my plate or the tasks that I put on other people’s plates.
[25:33] So, the last tip that we have is “To know when to give up and move on.” Don’t be pigheaded and simply keep going on your products because you committed to the idea. If Google releases something that renders your product, your relevant, you need to move on and you need to be able to recognize that there are certain factors that are just way beyond your control that there’s literally nothing you can do about them and when those things come up, you need to just give up and go find something else.
[25:58] Rob: Let’s bat around a few factors that could be reasons to move on and maybe some factors of things that you shouldn’t move on but may, you know, maybe you think you should but you shouldn’t actually do it.
[26:08] Mike: So, the – I guess the first one that comes to mind for me is literally if Google or Microsoft or somebody like that comes out with an idea that is almost exactly what you’re working on. Now, if you’re doing something that is a very niche product and Microsoft has something that does that in a general way but you have something that is targeted for a particular niche that could use it, I think you’re probably okay. However, what was it? Was it Kiko that had a calendar, a web-based calendar system —
[26:38] Rob: Yeah.
[26:39] Mike: …and then they ended up shutting it down after Google came out with the Google Calendar.
[26:43] Rob: Right and I wonder if, you know, could they have pivoted that in to a niche? Or do they even want to or do they have too much money raised that going in to a niche play would have just rendered the business model useless and made it a non-success because if you are a bootstrapper and you’ve built Kiko, I actually think you could have still even with the free Google Calendar, you could have built a business out of it if you convince people in a niche that you could provide them more value and of course, you did provide them more value and then charge money because it’s a differentiator. There are still calendars that people pay for out there.
[27:15] Mike: Yeah, I think that the issue there was that they because they were angel funded, you know, what sort of investment are you going to be able to get back? Who’s going to end up buying that? And maybe they built it with the intention of possibly Google acquiring it down the road or maybe that was kind of their initial thought when they were coming out with ideas of who would buy it. I think that what you just said rings true as where if it was a bootstrapper who did it, you could definitely pivot it. But when you’re talking about that particular product with an angel or VC funded backing, I think that it becomes a lot more difficult to say, “Oh, well we were going to go big with this but we’re going to go smaller now.” I think there’s justifications become much more difficult in those conversations or much more difficult. It’s easier to just shut the thing down and say, “Look, Google is coming out with this. They’re offering it for free. There’s not very many places that this can go anymore.”
[28:02] Rob: I have a scenario. What if you’re in a middle of building your app? You’re maybe three months in. It’s going to take six months and there are really isn’t a major competitor in that space and then suddenly two other startups launched in that space whether they’re funded or not, they launched and they have decent products and you can tell they know what they’re doing. Do you think that’s a reason to shut it down?
[28:19] Mike: I’m not sure. I mean I’m not in that situation but I think that I would probably keep an eye on them but if you’re a three months in and your total development time was six months, it seems to me like having those two competitors, you know, if there were no competitors before now there’s two, in some ways that’s a validation of the market and it means that there is, you know, money there and people are willing to pay for. So, I don’t know as I would back off at that point. If you are doing something, you know, say several years ago and like the mobile management space and you know, obviously nobody was there at the time and then everybody started going there or everyone started building all these mobile management applications and now if you look at the landscape, there’s like 50 or 60 different companies who are doing something in this area and it’s a little bit late to be jumping in, I think that’s a completely different scenario though because, you know, obviously the time cycle is longer and then you’ve also got that fact that if you’re early in versus a late comer, those are a lot of different factors that go in to it.
[29:14] Rob: Yeah, I think I had to agree with you on that if – that if you’re in process and you’re – at least have the launch date in sight and new competitors cropped up then it wouldn’t be a big deal not if – if one of those new competitors was as you said Google and Microsoft, that would make me pause and reevaluate and if it wasn’t two competitors but it was nine competitors by some bizarre coincidence, everyone moved in to that space. So, that would also make me at least pause and reevaluate and consider shutting down the doors. It’s obviously whereas case by case basis. I mean it’s – it’s very specific. There’s a lot of factors that play in to this. I think the thing is you want to try to keep a rational head as much as you can because it’s easy to get discouraged and to let emotion get in to it, right? To let your emotion drive you down to become kind of disillusion with the idea. You get bored with it, “Oh, I would – you know, it’s not going to be successful anyways because these two new competitors have cropped in,” that is really easy to do if you are a one-person team and not getting any positive feedback or not getting any of the goals and celebrations of your milestones.
[30:12] Mike: Right but there’s always for any given piece of software where there’s a gorilla – I mean there’s always room for much smaller competitors and it really depends a lot on the niche that you’re going in to but as you said I mean if it’s a difference between two people cropping up, two new competitors versus nine or ten in this space of a couple of months, I would agree with you that if it were nine or ten that popped up, I might just give up at that point and go find something else that’s just probably going to be less competitive. If it’s only two, I don’t know as I would worry about it as much especially if one of those two was funded in any way because you never know, you may get down the road and they may become the gorilla but people are looking for an alternative to it.
[30:49] Rob: So, to recap our Seven Tips for Finishing Your Product. Number one is “Don’t chase everything that moves.” Number two is “Budget your time, energy and other resources.” Number three is “If it works, ship it.” Number four, “Do what you enjoy and outsource the rest.” Number five, “Track your progress.” Number six, “Set goals and celebrate your milestones” and number seven is “Know when to give up and move on.”
[31:09] Music
[31:12] Rob: If you have a question for us, call our voicemail number at 888-801-9690 or e-mail us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 125 | Optimizing Your Productivity By Working Outside of the Office
Show Notes
- Microsoft contest (win a free trip to MicroConf) – microappcontest.com
- Fresno coworking space, The Hashtag
- Logitech Lapdesk
- USB Monitors: 16” for $99, Toshiba 14” for $150
Trancript
[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I are going to be talking about optimizing your productivity by working outside of the office. This is Startups for the Rest of Us: Episode 125.
[Read more…] about Episode 125 | Optimizing Your Productivity By Working Outside of the Office
Episode 126 | Introducing Our New hosts, Dan and Ian
Show Notes
- Dan & Ian of the Lifestyle Business Podcast (LBP)
- Getting Things Done by David Allen
- Mastering the Rockafeller Habits by Verne Harnish
- Work the System by Sam Carpenter
What works:
- Results based reporting on a weekly basis.
- Uninterrupted times of work. (creative work vs. grunt work)
- Buddy system
- Frequent touching base sessions in-person to ensure wires aren’t getting crossed.
What you need:
- Flexibility in your working hours as a manager
- sliding time wigit
- Google calendar sync’d with everyone + google invitations
- Skype + gotomeeting
SOD – Strategic Operating Document
- Strategic Objective
- Operating Principles
- Operating Procedures
Examples
- Team Communication SOP
- Phone call rhythm, plan, and results.
- Weekly reports.
- TWBI, NWBI
- KPI
- Projects / Notes
- Boomerrang to reach inbox at same time.
- Example of what they look like.
- Open Projects with GTD Cues, ie:
- @ Friday Call.
- @ Waiting
- @ Elisa
- @ Dan
Trancript
Coming soon.