July 24th, 2009
We had a great breakfast this morning in Mountain View and started with about 15 folks at 9 AM. After we had gone around the table with introductions and developed an issues list, another three or four folks drifted in between 9:15 and 9:30 as we were discussing the first few issues. I had a chance to talk to them afterward and they were all familiar with Meetups (one of the places that we advertise the breakfasts).
Contrary to how other Meetups may be run, we don’t start off with a sales pitch but go around the table for introductions and solicit issues and discussion items. If you come late you miss this context and it may be harder to fully participate in the discussion portion of the breakfast.
July 22nd, 2009
At yesterday’s breakfast one of the entrepreneurs who was doing his first venture and making good progress remarked that he hadn’t anticipated how much of an emotional roller coaster doing a startup was. It had “higher highs and lower lows” than his earlier jobs. In January 2007 Hugh MacLeod included a point about this in “Random Thoughts on Being an Entrepreneur:”
23. Running a startup is full of extreme ups and downs. Which is why so many successful and happy entrepreneurs I know lead such normal, stable, unglamorous, “boring”, family-centered lives. Somehow they need the latter in order to balance out the former. Extra-curricular drama looks great in the tabloids, but that’s all it’s ultimately good for.
The emotional roller coaster that is almost unavoidable when you are bootstrapping means you need to be connected to planet Earth, and that’s through friends and family who will keep you grounded. Larry Niven, in the short story Flash Crowd, observed that
“For each human being there is an optimum ratio between change and stasis. Too little change, he grows bored. Too little stability, he panics and loses his ability to adapt. One who marries six times in ten years won’t change jobs. One who moves often to serve his company will maintain a stable marriage. A woman chained to one home and family may redecorate frantically or take a lover or go to many costume parties.”
A startup injects enough chaos into your life on a regular, and irregular, basis that you need a strong support system to be able to survive it.
For another approach see “Maintaining Your Perspective On the Entrepreneurial Roller Coaster.” For two analyses at different times of the Hugh MacLeod “Random Thoughts” post see:
July 21st, 2009
Full house in Sunnyvale this morning at Coco’s with a good mix of newcomers and returning attendees.
One of the things that’s neat for me is that a number of bootstrappers are making measurable progress even in the midst of this downturn. Folks that a few months ago were talking about developing or finishing their product now have either initial test sites or actual paying customers. Several folks looking for additional co-founders to help scale up. And a number of entrepreneurs contemplating new businesses.
One test I will sometimes offer individuals or teams at a breakfast is “What are three questions that people around the table can ask potential customers of yours to know that you can provide them with significant value? It’s one of the ways to think about building a referral network. There are some constraints:
- Answers have to be yes, no or a number.
- The question can reasonably be answered different ways based on the prospect’s situation. For example the question “do they want to save money on their car insurance?” is worthless because everyone will answer yes and it doesn’t offer meaningful test.
- The questions can branch or depend upon prior questions, but above one or two dependencies it can get hard to communicate and for people to remember.
It’s something you might think about for your own bootstrapping efforts: what were the characteristics of customers that we have offered the most value to? Or what symptoms does a prospect have (a symptom is their perception of a problem or a need, vs. the “practitioner’s diagnosis” for the problem) that indicate your highest probability of providing some value. The difference between these two is that first may uncover a large population of prospect for whom you can provide little or not value but some that you can offer tremendous value (there may also be the need to refine your criteria in this case) and the second may offer the vast majority some value but not necessarily be compelling (again may want to refine your criteria so that you have a high chance of offering compelling value).
July 20th, 2009
Rich Collins of the
Lean Startup Circle send out an agenda for tomorrow night’s Meetup that contained the following exercise. I can’t make the meeting but this is an exercise you can also do with your team.
- What problem will your initial product solve and how will it solve it?
- Who has the problem?
- How will you find the people (early adopters) with the problem and present your solution to them?
- What evidence will convince you that your solution is promising?
- How will you collect the evidence?
July 11th, 2009
As a bootstrapper I focus on learning faster than my larger competitors–and applying it more rapidly–as a source of competitive differentiation. I wanted to pass along three principles for effective learning from a 2005 essay by Michael Nielsen titled “Extreme Thinking” in which he concludes that effective learning requires
- Purpose and meaning.
- A long-term vision.
- A social environment that reinforces our learning.
He identifies three requirements for developing a strong sense of purpose and meaning:
- A common understanding with a large group of people with whom one is later able to feel a common sense of community.
- The development of abilities which are not common to your community, and which will eventually enable you to make a unique contribution to your community.
- Making a creative contribution to your community, to something larger than yourself.
My hope for the Bootstrappers Breakfasts, not only individual breakfasts but the community that is forming around them, is that they offer a social environment with helps everyone learn how to be a better entrepreneur.
July 5th, 2009
The following is a guest blog by Brendon Farrell, a volunteer who facilitates the Bootstrapper Breakfasts® in San Francisco.
Who has watched the movie “What Women Want“? I admit that I’ve seen parts of it, but don’t pretend to know that answer. I do have an idea or two around “What customers want”. It seems that if our community of entrepreneurs could generate more revenue, we would be able to solve most of our common business challenges. For example, issues around having employees or managing labor, trying to skimp on legal fee’s while risking liability, pushing out the needed product developments and scaling our companies could all be solved by one reality-getting more revenue.
Looking introspectively for answers and within my corporate role, I notice some trends that have been successful and some that have not. From the perspective of personally bringing in about 60 mil in revenue last year, it seems that customers usually fall into several categories.
- The prospective customers that want it.
- The prospective customers that think they might want it.
- The prospective customers who don’t think they want it at all.
Candidly, most of my prospective customers have been in category 3. I guess the question that begs to be asked is, how does an entrepreneur move the prospective customer market upstream from category 3 to category 1? Or, is this an invalid assumption all-together? What if, for example, it would be more time productive for the entrepreneur to simply sort out the prospective customers before prospecting them? I think that is a fundamental mistake that many of us make. I know that I certainly have.
Instead of trying to force the market upstream to the fantastical category 1, why not spend a bit of time and money identifying the prospective customers who are in categories 1 and 2? Eventually, as the prospective customers in category 3 hear the news of product success and value from contacts in category 1, the market will naturally move upstream.
This concept reminds me of kayaking or canoeing. An avid paddler, I often find myself in situations where I am paddling “upstream” or against the wind. It makes the experience so much easier and more enjoyable to paddle downstream with the current guiding me to the destination. It seems that working tediously for little gain is similar to paddling upstream and working in an enjoyable and results driven way is like paddling downstream.
So, how can we all paddle “downstream”? I think some of the answer involves finding where downstream is-identifying the currents of the market and positioning yourself where they start going downstream. To give a real life example of this, let’s say that I decided to start a kayaking business. Not such a far out notion, so let’s give it a go.
Imagine if I built a wonderful location, employed knowledgeable and friendly staff and had a “sticky” website. Sounds good right? Sure, unless the location was in the middle of the Mojave desert and my gorgeous website wasn’t registered with the search engines. I could have executed my business plan to almost perfection, but not realize very much revenue growth simply because I didn’t identify where the market is and where the category 1 prospective customers are.
Instead of this blunder, let’s say that I learned from my own blog-post and actually did do some research and did find where the category 1 customers are. I think my business outcome would be different and my revenues much higher.
I look forward to your thoughts and comments on this subject…
Brendon
July 2nd, 2009
The handout from Craig Shirley’s June 16 “Negotiating With Key Accounts” are available here
Slide is copyright Craig Shirley 2009
- ASP = Average Selling Price
- ACV = Annual Contract Value
July 1st, 2009
Often we ask attendees to tell us one thing they learned from this morning’s bootstrapper’s breakfast. Here’s a couple … and please add your own!
“Lots of great information about Names and naming. One thing I learned was that once a name is trademarked it is federal rather than State or City. Very useful, I have a lot to think about and more to learn.” Liz — May 2009
“I found the people who joined the breakfast were all very smart, experienced and valuable. I will definitely join next time to meet more people.” C. Cao — June 2009
Want to read more — check out One Thing I Learned 2008