Rule #1: Stop obsessing about the competition. (slide 19)
In the context of MailChimp, it was arguably the most important part of their success. MailChimp wasn’t the first player in the email marketing space, nor did their feature set put them leaps and bounds ahead. They simply did it better. They built a better product, experience and community that the others didn’t. They did it their way.
The competition was the last thing on their mind.
If you look around the web, you’ll see a lot of mimicking of competing sites. Exhibit A. Exhibit B. The list goes on, and I think it’s where a lot of startups go wrong.
When a product is created, it’s likely that inspiration is drawn from somewhere, and most pick their most prevalent competitor to draw inspiration. Which typically results in clones.
That’s where the comparable piece comes in. Instead of looking to competitors for inspiration, look to comparables. Find companies in a similar segment (ie. SaaS, Consumer) that you look up to and figure out what they’re doing so well, what makes you envy them so much and try to apply pieces of it. Fill in the gaps with your own ideas. Inspiration should only consist of subtleties, not holistic pieces like the interface.
Outside of the initial analysis, competition should be nothing more than a slight pulse that you monitor. Not an obsession. Instead, obsess over comparables.
When we built Stride, we took products that we loved (MailChimp, Zendesk, Mint, Stripe) and dug into what we enjoyed so much about them. Then, we tried to apply it to ours, in our own way. MailChimp’s inspiration dictated our color palate and the messaging that we used within the app. Stripe inspired our use of backbone.js to improve load times. If we looked to competitors for inspiration, we would’ve ended up with a slow product filled with a lot of grey and black.
We all can’t be as brilliantly innovative as MailChimp, as much as we’d like to be. Gathering inspiration from others is okay, even encouraged, just not from the competition. What’ll result is just that, another competitor.
Last week wrapped up the latest installment of MozCon, our annual user conference. Out of all of the amazing content, one thing has been lingering in my mind over the weekend and into today.
During Rand’s keynote, he touched on the idea of ‘Investing in Serendipity’, which was originally coined by fellow Seattle entrepreneur, Dan Shapiro. In an interview on GeekWire, Dan laid it out this way.
“In general, in startups in particular, and as a leader of a startup most specifically, your job is to create serendipity. It is to give it every opportunity for the right thing to happen, magically and by sheer dumb luck.”
Typically, serendipity isn’t something that’s thought to be alterable. The default place for it lies in the ‘dumb luck’ bucket. In my mind, as with most things, serendipity can be hacked. Actions that are taken can increase the likelihood of serendipitous encounters. Chance meetings like an unexpected upgrade to first class that put you next to the eventual acquirer of your company (in Dan’s case) are great examples of that.
So, how can we hack serendipity?
There’s a reason why the Valley is the place to be, it’s where serendipity and chance encounters run rapid. The sheer density of like-minded people produces opportunities that are nonexistent in other parts of the world, at least if you’re in the technology industry. The same holds true for finance folks working on Wall Street. In a digital world, geographical proximity is undervalued, but it’s just as relevant as it ever was. The same value exists in places like Seattle, Boston and New York, but to a much lesser extent.
We all know that network plays a huge role. The difficult question is how to build a powerful one. The former point obviously plays into network, but there’s ways to build from wherever you are – it’s just much harder. Between 2008 and 2011 I was based in Bellingham, a little town just north of Seattle, but my network was highly centralized in Seattle, San Francisco and New York. I attribute much of that to a habit I’ve worked myself into over the years, which is emailing one person that I’ve never met before each week. There’s no agenda attached to the note, the goal is simply to connect with great people on a regular basis. Those emails started long-term relationships that account for at least half of my network today.
When it comes to the way you lay out each day, optimism in the likelihood of serendipity plays a large role. Personally, I’ve fallen into the pattern of putting aside optimism and have instead been spending my evenings working, learning and growing. There’s nothing wrong with that, but it leaves an eventual drought on serendipity. Without optimism in the things that sound trivial like grabbing coffee with an old friend, attending a meetup or making a trip out of town for a conference, opportunities simply don’t present themselves.
Clearly this is all stuff that we already know, but context in the way we think about our day to day activities changes the decisions we make.
It’s a game that you’ve got to play to win or sit back and watch as others run circles around you. It’s the game of perception, and it drives careers, both for better and for worse.
I’d say it’s more prevalent in the startup world than the rest of professional life, but it’s not. I’m sure it’s only more public. Accepting the tone of sounding overly bitter, I guess I’m just kind of sick of it. I’m sick of playing the game, listening to people drop names like YC or Dave McClure to make it sound like they know what the fuck they’re talking about.
The truth of the matter is, no one really knows what they’re talking about. Most of us are only playing the game. Regurgitating what we read so we’re offered a speaking opportunity at a conference. Throwing incoherent experiences together to try to form something of value that prompts others to listen, so that one day, we may join in on the fruits of perceived status.
I’m just as guilty as the next person, but I don’t want to be. I have to be.
I’ve been watching the tech industry morph year after year into something of a popularity contest. Maybe I’m just finally losing my blindness to it. Or, maybe it’s becoming more pronounced. Who knows. Either way, it impacts everything. From job opportunities to valuation.
What’s the solution? Play the game, I guess.
Just realize, the perception game is alive and well, and it likely runs the world around you. The ones in power usually aren’t the most competent, they’re simply the ones that boast the biggest names and talk the loudest talk. I’ve been trying to fight it, but there’s no sense in pushing back. You either play, or get played.
Like most, I’ve been following today’s Digg saga. Initially, it was reported that the former web 2.0 hotness got snatched up for a mere $500K, but later grew to $16M. Either way, it’s a rough exit for such a big name.
There’s a few lessons we can take from this. First, when you have a community driven site, dropping a major site redesign without warning can do permanent damage. But perhaps most importantly, it’s the lesson of knowing when to fold ‘em. Digg has had its fair share of acquisition offers over the years, but never pulled the trigger.
Startups are fickle, especially on the consumer side of things. What’s hot one day can be ice cold the next. The web is littered with corpses of websites that missed their chance. When things are great, confidence can take precedence over reason. You get cocky.
On a much, much smaller scale I experienced something similar. A few friends and I went into Rails Rumble 2010 (a 48-hour developer competition) with no intention of building a business, but wound up stumbling on an app that had a stint as a Top 25 app on iTunes, caught great press and received an acquisition offer that would’ve put the product in capable hands.
We turned it down.
Then, as most side projects do, the popularity fizzled without us actively maturing the product. Today, it sits generating less than modest revenue and traffic.
In the moment, when the wind is behind your sails, it seems like you can float for years. Then, it stops. Waiting just the slightest bit too long can cool your options, drastically.
It’s a fascinating look into the early stages, and a great benchmark for the things that should be considered when evaluating an idea for a startup from a high level. The note touches on the following core pieces, distilled for consumption below.
Vision - Own the Internet Photo Editing Market
Problem - There is no ability to manipulate photos once they are online. People have to download them, bring them into a photo editor (which they must buy/maintain/upgrade), and somehow upload them again. That sucks.
Solution - A wholly-online photo editor, provided in (at least) two forms. Standalone, as an online application we provide direct to end-users. And integrated, as a seamless part of any site whose users benefit from being able to manipulate images.
Competition - Established companies with photo editing products. Established companies have to overcome two major hurdles to address this market (in addition to realizing it is a market!). First they must write an online photo editing application. There will be no quick ports of existing applications; most code will have to be from scratch. Second, they must implement their code to work as a seamlessly integrated service in a 3rd party site. Not only is this more work, but it is a new mindset for the established players.
Trend - Our timing is right. We’re at the intersection of demand (mass use of online photos) and capability (Flash 8 supports the first level of functionality we need). Flash 8.5/9 will take us to the next level. New sites and services that make use of photos are popping up all over the place. Photos are becoming an internet data type as common as text.
Aside from potential revenue models (which were touched on briefly), it’s a fairly comprehensive and quick checklist to use when you’re running through ideas of your own. If they compellingly pass this litmus test, then you can move to something more comprehensive like a canvas or even throwing up a landing page and putting those assumptions to test through customer development.
The important part is having a method for killing an idea before it becomes too much of a time suck. There’s nothing worse than spending months and months on an idea that there isn’t a need for.
The title of business development (BD) is becoming more and more common in startups. The irony, not many folks know what it is. It’s become the catch-all term, a ubiquitous phrase depending on who you talk to – which of course contributes to the confusion. Frankly, it’s a tough thing to articulate.
Typically, the function of BD can include a variety of activities like strategic partnerships, content licensing, product distributions, monetization and sometimes acquisitions. But, it varies greatly depending on the size and type of startup.
For example, BD at Seesmic was very focused on our platform and growing our userbase through 3rd party integrations. At Moz, it’s all about product distribution, strategic data partnerships and monetization through our API. The day to day is drastically different.
A few years back, Seth Godin wrote a great post on BD, complete with tactical recommendations and examples (outside of startups) of BD in the wild. Here’s a few:
The Princeton Review built a huge test prep business, but only by licensing their brand to a series of books which did the lion’s share of their marketing for them.
Starbucks licenses their name to a maker of ice cream and generates millions in royalties.
Best Buy offers extended warranties on appliances you buy. They don’t provide the warranty, of course, a business development person did a deal with an insurance/service company to do it and they share the profit.
Extracting from all of those examples, in it’s simplest form, BD can be described as connecting similar businesses to similar goals.
But that’s overly simplified. Digging in a bit deeper, I’ve found that BD at startups can be distilled down to 2 primary responsibilities.
1) Filtering The kryptonite for any startup is a lack of focus. Regardless of your size or scale, you’re likely to receive endless requests to “partner”. As cool as that sounds, 9 times out of 10, it’s likely not going to be beneficial. The majority of people don’t do their research or take the time to really understand the businesses that they’re looking to partner with. As a BD, one of your primary roles is knowing how to sniff out the requests that are going to derail you from your mission and spot the ones that can take your business to the next level. Likewise, the BD plays the role of the connector for the requests that make it through the filter – connecting the right people together and driving a deal through to completion.
2) Building BD at startups is based around company goals. Goals can be specific things like building a platform of 3rd party apps (in the case of Seesmic) or broader things like making check-ins derive real world value (in the case of Foursquare). In terms of execution, the thought process is the same. That goal is the finish line, and the role of BD is to fill the gap in the middle. The gap is filled by determining which companies can help your startup achieve your goal and most importantly, how can you help bring them closer to their goals. If the latter isn’t satisfied, then it’s a deal that shouldn’t be done. Once you determine the companies that fulfill both, the building begins. Looking into the Foursquare example a bit deeper, the goal of Foursquare was to derive real world value from their check-ins. The goal of Amex was to drive visibility to a large base and to increase the value for current cardholders. Both sides were satisfied, and a deal was born. The tactical work is the in-between.
Some companies lend themselves very well to BD, others don’t. In any setting, a good BD is a strategic thinker, someone that’s well-versed in technology, precise in their execution, driven by data and gifted in building and maintaining relationships.
Hopefully this helps to provide some context, and reduces the number of blank stares that I get when I tell people what the hell I do all day. :)
I’ve had a lot on my mind lately. You read things like this, and it stops you dead in your tracks.
Often, we get so wrapped up in everything we have to do that we tend to forget why we’re doing it. We end up 5 or 10 years down the road looking back on a path we never meant to travel. Both for better and for worse. It’s odd, the thing that matters the most, becomes an afterthought. At least for me it has. I’ve been working nonstop since I was 17 to become “successful,” but I never really sat down to understand what that was. Sure, I’ve placed some rough visual in my mind of what that would look like, but that was the extent of it.
I’m sure I’m not alone.
Randall Lucas, a good friend and mentor of mine recently gave me the following advice. He told me to think about life as a trend chart — as long as you’re trending upwards, you’re in good shape.
Your goal, passion, or point of success is that place that’s in top righthand corner. Your milestones (job, diploma, relationship, etc.) both past, current and future, live in between.
The idea is to get the line trending upwards towards your goal, to that point that you measure happiness off of, professional or otherwise. For visual folks like me, thinking this way helps to understand which moves we make are a regression, lateral or improvement.
Self-assessment is tough, but necessary. Don’t just do without understanding why. Take a step back and think about what makes you happy. Make that your goal. Everything you do in between should get you closer.
I own 2 iPads, a MacBook Air, a Mac Mini and an iPhone. I watch intently during every WWDC keynote. I view Apple products as art. I’m what you would call an Apple fanboy.
But I’m not sold on Siri – as it is today, and into the future.
It’s very clear that Siri hasn’t yet reached it’s full potential. Having attempted to use Siri over and over again, it’s obvious that it needs to improve to be a viable option. I get that. Even then, do we really want to speak to our devices?
Just like you, the idea of being able to speak fluently with computers (a la Iron Man) sounds freakin' awesome. But is it practical? I don’t know.
I do know that every time that I’ve used Siri, it has felt unnatural. Rarely am I in a position where it would be completely normal for me to speak to my phone without looking like a complete shed of tools. Like a guy with a bluetooth. If you think about how technology has progressed to this point, we’ve moved further and further away from voice communication. Texting, tweeting and email are our primary means of communication. Before, it was by phone.
The people I’ve talked to about this topic are similar to me, early adopters. We usually try to jump on the new technology train as soon as we can, but this one isn’t sticking.
For the sake of my quest to become as much like Iron Man as possible, I hope that the technology grows to the point that it has practical everyday applications. As it stands now, I’m not sure that I see it.
There’s a common misconception among first time entrepreneurs that the only way to win is to be the first. The first to attempt an idea, the first to enter a specific market. It’s something I’ve been meaning to touch on for some time, then this came across my feed.
You don’t have to do it first, you just have to do it right.
Elegantly said. Too many put an emphasis on being the first to think of an idea. So much so that they never actually create anything, they just keep trying to think of an idea that doesn’t yet exist. The most iconic companies in the world weren’t the first, they were simply the best. MySpace beat Facebook to the punch, HP hit the market before Apple, PicPlz existed before Instagram.
It didn’t matter. They succeeded because they did it right.
‘Doing it right’ can mean a lot of different things, but I think the most common theme these days is simplicity. Taking a poor user experience, over-zealous feature set or complex interface and dumbing it down is often a safe bet. We need simplicity. This is how Jack’s Square is blowing dated cash registers out of the water, and it’s how we’re attempting to shake up the CRM market with Stride. If we were concerned about being first, we sure wouldn’t have attempted to enter that space. We knew we could compete on user experience and simplicity, so we did.
Ideas are a dime a dozen, and you’ll likely never be the first person to think of them. Worry about executing, not being first.
Next time someone says, “doesn’t so and so already do that?” to your fledgling startup idea. Tell them, “yeah, so what? I’ll do it better.”
I’ve been waiting a long time for a platform like Svbtle. Over the years, I’ve jumped from Wordpress to Tumblr to Squarespace. I’ve been in and out of blog platforms like Lohan in and out of rehab. Like a Kardashian in and out of… well, never mind.
There’s something special about just being able to write. Putting blog customizations, plugins and other bullshit aside allows you to truly focus on the content – with no distractions. It’s a beautiful thing.
The quest for minimalism has brought me here, and damn is it pretty.