This section of my blog is all about being an entrepreneur - my own businesses, and my observations and thoughts about starting and running a business.
A Genius At Work...
I find it fascinating to get a glimpse behind the scenes at the workspace of great people - so enjoyed this blog post with pictures of Albert Einstein's desk from Life magazine in 1955.
It's too easy to fall into the 'revision timetable' problem of very tidy people, where more time is spent on preparing for the activity and clearing up after it than is spent on the activity itself.
Creation is a messy process, and we shouldn't be ashamed of that. So celebrate a messy desk, a sloppy intray - but only if you've doing something great in amongst it all. :)
Three Stories from Steve Jobs
Steve Jobs is held up as an icon of entrepreneurship, and in this video he talks about 3 key events that have shaped his life:
1. Dropping out of college.
He talks about his adoption, and his parents determination to send him to college. But he didn't find college to be worth the fees they were forced to pay - so he left after 6 months. He was very poor, but this gave him the freedom to explore what he wanted to learn and do - and he ended up learning the skills he would later need to create Apple.
2. Getting fired from Apple
He'd hired a manager to run the business with him, but their visions diverged - and the board of directors sided with the manager. So at the age of 30, Steve was fired from the company he founded.
This was when he founded Pixar, and a company called NXT (which eventually was bought by Apple, and its technology formed the basis for Apple's rennaiscance).
He says "Sometimes life is going to hit you in the head with a brick, but don't lose faith. I'm convinced the only thing that kept me going was that I loved what I did. You've got to love what you do. The only way to do great work is to love what you do - if you haven't found what you love keep looking and don't settle"
3. Facing Death
Remembering that you are going to die is the best way he knows of focusing on what is really important. Everything else falls away in the face of death. Steve talks about being diognosed with cancer and being told to get his affairs in order and being prepared to die. Against the odds he was cured of the cancer - but the feeling of having limited time, and being determined not to waste it, has stayed with him.
The speech was given to thousands of students on their commencement day at Stanford University, and it's a very inspiring talk from one of the world's most successful entrepreneurs.
Again a hat-tip to GigaOm for another great recommendation.
Solving the 3 problems of online business models
Online business models face new twists on the evergreen challenges that all business face - how to win customers, support customers in using the product or service, and how to keep the customers you've won.
Joshua Porter from Bokardo Social Web Design has prepared the fantastic presentation above, with some ideas on solving the three challenges he identifies:
1. The Signup Problem
Can you imagine if a real-world shop made you signup before letting you buy anything - making you fill out your name, address, email etc? Well online businesses have to put this extra stage in the way of potential customers - and it's one of the biggest drop-out points. How can this be improved?
2. The First Time Use Problem
People are trying out your product or service, but don't know what to do. How can you help them understand it, and get involved with it, before they give up and don't come back?
3. The Ongoing Engagement Problem
How do you keep users involved and active - and how do you build enough traction in a community based site (ie the chicken/egg problem of whoch comes first lots of users, or a valuable site?).
The presentation is mainly aimed at social web services, but applies to all online businesses. It really is well worth viewing the presentation at least twice to soak up all the information and ideas.
Monetising Start-Ups - Optimise your sales funnel
After an extremely busy end to 2009, I've managed to use the first few days of 2010 to catch up on reading - and one of the first articles I've read contained the slideshow above.
Tony Wright is the founder of RescueTime a software business that helps business people track and analyse their use of time for better productivity.
He's clearly learned a lot in his entrepreneurial career, because I think the presentation is absolutely spot on in identifying the important things for a startup to focus on - and explaining why they are important. The presentation is based around software or web businesses, but the principles apply to any business.
You can read his full blog post here, or here are his key points:
You should look at your business as a funnel (which, incidentally, is how every salesguy on the planet looks at their sales pipeline).
What’s at the top of this funnel varies on what type of business you have. Maybe it’s page views from organic SEO and SEM. Maybe it’s warm leads from a bank of cold-calling lead-gen folks. And maybe your conversion event is a software purchase (like ours is). Maybe it’s an ad-click. Maybe it’s an account signup. But trust me, you have a funnel.
So when trying to figure out what the hell to work on as an entrepreneur, go worship at the alter of the funnel. That means:
* Measure the hell out of everything. If you don’t know many many new visitors are coming to your site, what percentage of them do something, what percentage of THOSE people, click signup, what subset of THOSE people actually successfully signup, and what percentage of THOSE people are paying you a month later, the first thing you should do is work on metrics. Don’t go overboard, but know your funnel.
* Work your way UP the funnel, not down (if you have the financial luxury to do so). Most entrepreneurs ask “how do I get people to come to my site so it can grow?” The answer most often is down the funnel: the product isn’t providing enough value, communicating clearly enough, engendering enough passion, or causing people to want to tell their friends.
* Seek the low hanging fruit in the funnel. That means that you should seek out where people are escaping your funnel. If you get tons of visitors but no one clicks on anything (high bounce rate, low time on site), chances are your value prop is confusing or isn’t very compelling. You might need to improve the product, but chances are you just have to improve how you talk about it.
* Seek leverage. The lower you attack the funnel, the more it helps. If you do something to improve your retention that will help you forever. If you do something that gives you a boost in acquisition (like a SuperBowl ad), the value will be short-lived (unless you have a true viral loop).
The full blog is well worth a read, and I urge you to step through the slides above.
Hat tip to GigaOm for recommending the article.
Early = Wrong
There's been a string of Web 2.0 companies biting the dust in the recession, and as with all business failure it's well worth examining what went wrong to learn some valuable lessons.
In the case of Lookery, which has just announced it's closure, the founder himself has taken that step back to a analyse what happened, and has written up his thoughts in a very open and honest blog post: http://blog.lookery.com/2009/08/21/couldery-shouldery/
The whole thing is worth a read, but it's the last lesson he mentions that leapt out from the page for me:
Coulda-Shoulda #3. Once we sold the ad network, I fell into a bad old habit — persuading my team to build something before the market was ready for it.... This is the fourth blog post that I can find from a Lookery exec in which the primary theme is early = wrong.
It's such a common mistake of entrepreneurs (including me), that I wanted to say a bit more about it.
If you launch a new idea onto the market, it is very very hard work. You have to educate people about why your idea is a good one, how it works, and how it can help them. You have to establish your ideas value in the marketplace. You have to drive demand to something new.
If you launch a business that capitalises on an existing idea, all this work is done for you, and you can focus your resources on harnessing existing demand.
Many people think Google was the first search engine because it's the most successful. It wasn't. It was 7th to launch. Can you name the first? No. It doesn't exist anymore.
Was the Dyson the first vacuum cleaner? Did Richard Branson invent the aeroplane? Did Donald Trump invent buildings?
Even Bill Gates didn't invent the operating system, the word processor, the web browser, etc.
These highly successful billionaires didn't invent anything, and weren't first to market with their idea.
The 'First Mover Advantage' is a myth. It's the 'First Mover Curse' in reality.
If you really really want to launch something brand new - at least make sure your business is extremely well capitalised, because you'll burn through a hell of a lot of money before you make it succeed.
Better to stand on shoulders of giants, and build a successful business by improving what the market has already learned to want.
Simple and Fair Investor Term Sheets
FFI Plain Preferred Term Sheet -
Techcrunch today highlights the publication of the template term sheet (shown above) from The Funded Founder Institute.
The Funded campaigns and spreads information designed to make VC deals fairer for the founders, and there has been growing discussion that the series A term sheet should be standardised. Out of that discussion has actually come some consensus between entrepreneurs and VCs, and you'll find the result here: http://www.docstoc.com/docs/10303638/FFI-Plain-Preferred-Term-Sheet
It's US focused, but the VC deal-structure principles are similar worldwide, so it could be modified for other countries.
Using something like this could save both sides a fortune in professional fees - which'll be a big help in small early stage rounds.
Meanwhile Techcrunch has previously reported that the Y-Combinator incubator has released similar documents suitable for smaller Angel rounds.
The documents are listed here: http://www.ycombinator.com/seriesaa.html
YCombinator StartUp Challenge: The Future of Journalism
How can the media can best evolve for the web? What is going to replace newspapers online? How can content sites make money?
The answers to these questions are highly valued at the moment. Rupert Murdoch believes he can just put content behind a subscription pay wall and people will be happy to pay for it rather than get it free from other sites.
Some sites (like TechCrunch that the link below goes to) make money from advertising and events while giving the content away free.
But many sites make no money at all.
The renowned incubator for startups, YCombinator, has set a challenge to entrepreneurs - come up with the solutions to some of these media challenges and they'll help you get started in business to solve them.
Details of the challenge are reported on TechCrunch here: http://www.techcrunch.com/2009/08/16/y-combinator-starts-seeding-ideas-t....
YCombinator says:
Newspapers and magazines are in trouble. We think they will mostly die, because we think we know what will replace them, and it is too far from their current model for them to reach it in time.
And yet people still need at least some of what they do. You can't have aggregators without content. So what will the content site of the future look like? And how will you make money from it? These questions turn out to be very closely related. Just as they were for print media, initially. The reason newspapers and magazines are dying is that what they do is no longer related to how they make money from it. In fact, most journalists probably don't even realize that the definition of journalism they take for granted was not something that sprang fully-formed from the head of Zeus, but is rather a direct though somewhat atrophied consequence of a very successful 20th century business model.
What would a content site look like if you started from how to make money—as print media once did—instead of taking a particular form of journalism as a given and treating how to make money from it as an afterthought?
(The good news is, we think the writing will actually end up being better.)
Groups applying to work on this idea should include at least one person who can write well and rapidly about any topic, one or more programmers who are good at statistics, data mining, and making sites scale, and someone who's reasonably competent at graphic design. These functions can of course be combined, and in fact it's even better if they are. Ex-Googlers would be particularly well suited to this project.
Find out more details and apply for the challenge here: http://ycombinator.com/rfs1.html
The Social Media Revolution
Here's some food for thought about the power and growth of social media. How can your company use this to its advantage - and avoid the downsides?
Do you know how your company is being talked about on social media sites? What are your competitors doing with social media - and does it give you a competitive advantage.
It's worth watching and then thinking about some of these questions.
Liveblog: Entrepreneur Country Conference
I liveblogged the Entrepreneur Country event yesterday.
The original, as-it-happened liveblog can be found here: http://www.steveparks.co.uk/liveblogging_entrepreneur_country_event
Here's the roundup of the day...
09:11
About to start
We're soon to get underway. The event is the brainchild of Julie Meyer, the woman who made her name running First Tuesday in the late 90's, who now runs Ariadne Capital (and has just become the newest of the BBC's 'Dragons'). The opening remarks are from Jonathan Simnett. He's a senior adviser to Ariadne Capital, but has also been communications director at Spinvox - doing a good job of getting them in the public eye, and getting them talked about.
09:14
The Golden Age of the Entrepreneur
That's the title of this event apparantly. Jonathan says if we said that to the man on the street they'd laugh, but so many great companies get founded in downturns. We're going to look at the central role entrepreneurship is going to play in upturn.
09:18
Julie Meyer, CEO Ariadne Capital
She says she was bringing portfolio companies together on a regular basis, and it felt like a different place - the speed, the ideas etc. So she created entrepreneur country. She starts with premise: 'the entrepreneur is the hero'. They are willing to live frankly abnormal lives to build their business. The money is nothing more than money. Capital follows ideas. Stay focussed and the money will find you. A small group of people can make a disproportionate difference.
09:26
Andrew Main-Wilson, COO, Institute of Directors
He says he was once marketing director of Thomas Cook, wanted to leave and start his own business. needed
Liveblog: CBI Entrepreneurs' Summit
Yesterday I liveblogged the CBI Entrepreneurs' Summit, held in London. The event featured Stelios of Easyjet fame, Mark Dixon of Regus, and Brent Hoberman of Lastminute.com.
The original, as-it-happened liveblog page can be found at http://www.steveparks.co.uk/cbi_entrepreneurs_summit.
Here's the complete blog of the day's events...
10:04
Welcome from CBI
The vice-president of the CBI, Helen Alexander, is welcoming delegates. She mentions what the CBI claims it's doing to help entrepreneurs with the recession - claiming credit for the Regional Venture Funds, simplified legislation and business support etc!
10:07
Reasons for Hope
Ms Alexander continues with some reasons for hope... opportunities for startups (Mike Bloomberg famously launched his company after redundancy), new technologies etc. Recent upturn in stock market may mean people are ready to invest again. But the next year will be tough. Access to credit is still difficult. CBI will do what it can, she promises!
10:10
Chris Rea, MD of AESSEAL - Turni
Has
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