Where the best ideas come from

Your mileage may vary, but I’ve found that the best business ideas come disproportionately from two activities; reading (long form) and on your way into, and out of sleep.

I specify long-form reading because it gives your brain a chance to shake loose the relatively narrow focus of  your daily activities. Reading blogs, tweets, articles, etc. is great for education, but to really get the creative wheels turning, they don’t offer enough of a departure from whatever else is going on.

Even if the topic is only loosely related to my business goals, I find I almost walk away with a page or two of good (fresh) ideas after reading through a full book. I also find that the good ideas really start forming after a few chapters - I’ll often go back and re-read the first few once I’m in the right mindset.

I think this is mostly because you’ve spent enough time in the material to become separated from whatever else is going on - a reset of sorts - and real innovation comes from forgetting constraints.

The same goes for sleep. As you drift off or begin to wake up, your subconscious is still primarily in charge, and it doesn’t know about all of the boundaries that we typically operate within.

Have you found the same? Give it a try. Eventually I’ll add a comments section to this blog so you can tell me :)

Scrappy is good. Efficient is better!

Everyone knows you need the right tools to do the job well. You can demolish a wall with a spoon but unless you’re trying to kill time, get a sledge hammer. Or, if your time is worth more than $25/hr, hire someone else to do it and get it off your plate completely.

This can be applied to nearly all facets of your startup - some you are probably overlooking. Being scrappy is great. It’s an admirable trait in general and you can learn a lot along the way. But, as soon as you can afford it, you should favor efficiency.

Using just Google Analytics and an FTP client we can test different variations of landing pages. Using Website Optimizer we can do it more efficiently. Using a dedicated landing page CMS, while not cheap, allows us to do it more efficiently still.

For a long time I did mockups and wireframes using Snagit Beta for Mac (free). I found I could do them 10x more efficiently using Balsamiq which was designed for that task. Interestingly enough I now use Keynote (a slide presentation tool) which allows me to be another 3x as efficient - and more detailed so there’s less time lost on back and forth with my designer and developers.

I can get by with basic accounting, but it’s not what I’m great at and not what my business needs me to be doing. We don’t need someone doing that full time yet, so instead I hire out to people who are experts, have lots of other customers, and will charge me accordingly.

Sometimes we hang on to ‘Scrappy’ out of pride, because we think frugality is a sign of good execution, or we simply overlook opportunities to optimize. There are things in your business today that could be exponentially more efficient if you and your team had the right tools.

Sometimes they won’t make economic or logistical sense, but take a close look. When you compare the cost of the ideal tool with the opportunity cost of lost time or efficiency, you might be surprised. After all, these tools and services weren’t priced in a vacuum.

If your engineers spend 15% of their time doing QA, but you can you can spend 5% of your payroll to have someone do it full time, you’re ahead (and you can ship 15% more product). Spending is hard, especially in a startup, but sometimes it’s the right move.

I set a reminder each weekend to look for ways I can improve my efficiencies. I’d love to hear some ways you’ve done the same.

Re: Education

“If you send an idiot to a motivational seminar, you get a highly motivated idiot”

I don’t remember the source of the quote, but it’s stuck.

The same goes for technical schools, undergrad, biz school, etc.

Greatness is in the composition of the person and is only augmented by education. We have brilliant employees who didn’t finish college, and brilliant employees with Graduate degrees. I believe the latter would have been brilliant (at something) regardless.

We’ve also all met highly educated people who suck.

In some cases education changes the course of what people excel at. In others it helps round out their tool set. In many cases the greatness was a course set in action independent of outside influence.

Hire and pay well for brilliant people, don’t get hung up on how it was nurtured.

How to get truly useful customer feedback

Something that worked well for us, may work for you.

After our public launch (post private beta), I sent our first 500 users a personal email asking for their thoughts, was the software meeting expectations, things they liked, didn’t like, were confused by, etc.

These were personal emails from me, to them (only). They weren’t automated in any fashion.

The results were amazing. I received over 100 thoughtful responses, some of them pages long. People took the time to provide really useful feedback and it was tremendously more valuable to our business than anything a survey or feedback forum could have provided.

I attribute the responses to the fact that these were personal emails, and the open nature of the questions asked.

This clearly isn’t scalable - I spent hours a day for a few weeks responding, but the insights were so much more useful than anything we get from other channels. If you can fit it in, I highly recommend it.

The Danger Of "Lean"

“Half of these opinions won’t apply to a majority of you.”

If every lecture, self help book and Lean startup talk began with the statement above, I wouldn’t be writing this post. But they don’t.

Like any sales or self-help book, lecture or op-ed piece - the Lean Startup mindset has a lot of valuable lessons; when assessed against your situation and applied where it makes sense. The thing that troubles me is the typical presentation of “this is the way to do things” and “what worked for me will work for you”.

If you’re like me, at some point you’ve worked for a manager who changed your entire process after reading some book on this or that. They get all excited and has an entire team spinning their wheels until, god forbid, they read another book.

Tim Ferriss’ The 4-Hour Work Week was a runaway success. How many of you who read it are working any less than you were before?

No way in hell you’re going to outsource dietary supplement manufacturing overseas, let a virtual assistant manage your business and go win a Jui-Jitsu competition while vacationing 6-months out of the year. But, there were a lot of valuable lessons.

My current beef isn’t with Tim’s book, it’s with some of the teachings of “Lean”. Or more directly, that they don’t all include a disclaimer.

One of the most shared practices of Lean is the idea of releasing a minimum viable product (MVP) and letting the users take over. That’s not how it’s presented, but that’s what it boils down to.

If you asked Facebook users what they wanted in the product early on, they would have said custom profiles and a music player. That’s what users knew. Myspace set the expectations. Luckily Mark Zuckerberg had a vision that he wouldn’t compromise on, knew when to ignore the masses and built a massively successful business.

If Mark Pincus of Zynga asked users what they wanted, do you think they would have said “we want to pay real money, to plant fake corn”?

In 2005, the most commonly requested features for cellular phones were MMS and longer battery life. The iPhone didn’t support MMS for years, and the battery life still sucks.

The most successful entrepreneurs have a gift for seeing what users need, before anyone else. The most successful businesses change our expectations.

If all we do is build what customers ask for, we’re all going to end up with the same damn products. VC’s would just hire focus groups and an army of engineers and build it themselves.

Own your roadmap. Solve problems that require vision we don’t possess - we’re relying on you to do exactly that.

Do right by your users, always. Without fail. But know that often we don’t know what to ask for. And if you build what we ask for, based on our current world-view, know that you’re going to end up building what we already have - and I’m not paying you for something I already have.

Erase “MVP” off your white board and don’t release something until it’s ready. You’re the only one who knows.

Absolutely test your hypothesis, make sure there’s a market fit, and get feedback along the way. But don’t be timid and second-guess yourself out of building something extraordinary or worse, let beta users talk you out of your roadmap.

Half of these opinions won’t apply to the majority of you.

If I were an investor...

(I’m not), here’s what I would look for in a startup:

Must Haves;

  • BOTH Technical and Business-minded founders/team. By technical I mean the person who’s building it. By business-minded I mean someone who can sell it, drum up strategic deals and has a phenomenal sense of product.
  • A prototype (at least). If you couldn’t find anyone to help you get the idea off the ground without money, I wouldn’t be convinced of a) the idea b) the leadership.
  • A business model that a) exists b) isn’t ad based.
  • A large, underserved market with money.
  • Lots and lots of innovation. A significantly better mouse-trap.

Ideally;

  • Cheap keywords
  • CEO owns the product roadmap
  • User Experience Fanatics
  • 5+ years experience doing whichever function they intend to do with the company. CTO = coding. CEO = selling, leading, managing products. CEO could fall under the coding side too I suppose.

I’m totally biased on all of these things, and as I said I’m not an investor - but based on my current world-view, this is what I would look for.

Segmented Social Graphs

Just read a great article/presentation related to the challenges of unsegmented social graphs (linked/embedded below)

The case used in the presentation to illustrate the problem was a swim teacher with young students who was also connected to gay friends and often commented on their pictures on Facebook - unknowingly exposing her students to photos from wild nights out from her friends.

The more common case is just that we normally behave differently with different groups of people (family vs. co-workers for example). Mark Zuckerberg would probably say that people with nothing to hide wouldn’t need any segmenting. That’s just not realistic. We interact with people differently.

The problem is, that as methods to segment social graphs emerge, it’s entirely too tedious to go *back* and put everyone into buckets. FB lists or groups (not sure what they’re called) are just too much work.

And that is why, in my opinion, Google’s social site (Google Me?) could win. People loved the blank canvas that moving from MySpace to Facebook provided. “OK, this is my REAL network”.

As Facebook has increased in popularity, people have started making much looser connections. What was once family and friends is now friends, family, industry connections, coworkers, etc.

More than that, adding people to ‘buckets’ of contact types at the time of connection is 1000x easier than going back and trying to do it now (think about your Twitter following, would you actually go back and group them all? You’d get about 1/10th of the way through and give up).

That’s why on Sprout Social, we have people add contacts to lists/groups as they connect. The same approach could make Google Me a very likable web property for the overwhelmed, OCD like me, and just people who want some walls between groups of online connections.

Users have different social graphs on Facebook, LinkedIn and Twitter for that very reason. If Google Me offers a way to have that same distinction in one place, they will do amazingly well.

The Real Life Social Network v2

View more documents from Paul Adams.

Ways in which Apple wins...

When a company can claim the following, I will bet on their stock hitting $500

  • Hottest phone on the planet
  • Hottest laptops on the planet
  • Hottest tablet computer on the planet
  • Slickest consumer OS available
  • People lined up for blocks rather than waiting for the UPS truck
  • Stranglehold on digital music
  • The most visionary product team our industry has seen

Apple has become a juggernaut we’ve never seen the likes of before. Their dominance is different than MSFT dominance 10 years ago - because it was put at the top of the pedestal by users, not necessity.

The Reality of Social Media ROI

Here’s the truth people seem to be dancing around: Measuring Social Media ROI is f-ing hard.

Unless you transact all of your business online, or track every sale at the register, you’re not going to get accurate ROI numbers for social media. You can ask for magic software all you want, but unless you’re ready to devote serious time and resources, no brilliant programmers are giving to give you the report you want to show your boss/investors/marketing heads.

I’m not suggesting that ROI metrics don’t exist. Of course you can measure audience engagement, fan-base growth, conversions on your website, clicks, etc. My argument is that these are just the tip of the iceberg. The real, astounding impact is the low hum that is emanating around the new breed of socially aware businesses, just under the surface of metrics.

The real return on Social Media is so much simpler. You either do it and reap the benefits of community, or you don’t and you watch your competition steal your customers.

Here are a few personal examples of social media returns from my own experiences, and I am confident these aren’t unique to me; I have seen a tweet from Zappos and visited their site to buy a few pairs of shoes. I have gone to eat at places I saw my friends frequenting via Foursquare. I have attended functions that people talked about on Facebook. I have hired people through recommendations on LinkedIn.

There’s a 99% chance none of these businesses know that my money originated through social media channels. Does that make it any less real? Shit no.

Eventually their bottom line will expose the benefits, but there are too many outside factors (the economy, the season, our fickle society) to paint an accurate picture.

There are people who bought a house through a realtor because of a blog post they read, who don’t even recall that’s how they first heard of the agent.

People have had good experiences at restaurants and shared it with thousands of their Twitter followers. They’ve never written a Yelp review in their life.

There’s a customer right now who’s thinking about changing providers, but will get exceptional customer service through social media and become a life-long customer.

This is the reality of social media ROI. We’ll get better at measuring it over time, but until then, stop waiting for the ‘hard numbers’ to get involved. Your competition is basking in the love.

Fun Fact: In February of this year, I uncovered a tweet about a new Venture fund in Chicago (where I live) while using the software that my team built. That same Venture Fund invested in my business in April. That’s millions of dollars in ROI on both sides in less than 140 characters. That’s the world we live in now.

The last 10%

In software development, are you crushing the final 10%? It’s the difference between becoming ‘the’ brand by solving the hard problems and being lost in a sea of similar products…




“Laying out the design of a page or a flyer so it looks like a pro did it takes about ten times as much work as merely using the template Microsoft builds in for free, and the message is almost the same…




Except it’s not. Of course not. The message is not the same.




The last ten percent is the signal we look for, the way we communicate care and expertise and professionalism. If all you’re doing is the standard amount, all you’re going to get is the standard compensation. The hard part is the last ten percent, sure, or even the last one percent, but it’s the hard part because everyone is busy doing the easy part already.”

Seth’s Blog