No, you don’t need an app

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App Store iconsIt seems like everyone who’s starting a business nowadays wants an app. They want to go “mobile first” and launch an app – maybe just on one platform too. Because, you know, thats how you launch a ‘lean startup’ right?

“I want it to be like Uber crossed with AirBnB” or “the way instagram launched on only one platform…” If you’re thinking about your app in this way, you’re doing it all wrong.

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Startups need a problem, not a solution

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If you have an awesome idea for a new startup, stop. Write down your solution, put it away and start by identifying the problem that you’re trying to solve.

Contrary to popular wisdom to “Always focus on the solution not the problem” building a startup is not about knowing what you want to build up front. It’s about knowing what problem you want to solve and constantly evolving the solution to better fit that problem.

The surest way to fail at building a startup is to try and build a product. Chances are, no one is going to really want it and, like 1000’s of other really well designed & built products, it’ll be a dead end. Look no further than Google Wave, Minidisks (MD’s), Microsofts WebTV or  Facebook Home: They’re some of the most popular, highly funded failures that overlooked a need for the customer. They were great concepts and products, but they didn’t originate from a customer need.

What you need to focus on is the problem that you’re solving. 

The difference is that when you focus on the problem, it frees you up to constantly test and improve your solution to better fit your customers. They’ll help guide you to build a product that people actually want and in doing so massively improve your odds of success.

If you focus on the problem (getting from A to B) there may be many simpler ways to solve it. If it’s a big enough problem, even a basic solution will take off. *

By trying to approach the problem with a fixed solution in mind, you look for evidence that supports it. You have a hammer and everything looks like a nail. As such, you’ll find yourself going down a certain path without actually ever validating that it’s the best one, or continue to build out features as customers don’t want it *yet*. The worst thing you can do at this point is raise lots of money to build your solution as it’s only going to delay the fail and be infinitely more painful further down the line.

The best way to build a solution is to go to your customers with a problem and ask them how they’d like it solved. “What about if you had this”, or “would they prefer if they had that”. Look at how they’re currently solving it (and I hope they are if its a problem) and build out an offering from their feedback. Thats when you build an MVP – the absolute minimum that you can do that will solve your customers problem (at least in a small way).

By focussing on the problem it helps you:

  1. Continually evolve your solution to be a better fit. This should continue as you grow.
  2. Focus on your customer and getting feedback. “How can you solve it better?”
  3. Find much more innovative solutions by asking “what if…”
  4. Find cheaper ways to test your idea. Everyone wants to build an app/website/device to solve a problem. Most times, if it’s a big problem, you can test it by solving it manually and seeing if people want it.

So next time you think up an awesome gadget / service / device / thingy-ma-jig thats going to change the world, stop. Focus on the problem and rather build something really useful that customers are telling you they want. ‘Cause thats how you build awesome things.

 

*Image credit: http://fastmonkeys.files.wordpress.com/2014/06/howtobuildmvp.gif?w=500

The value disconnect

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Don't get caught by this!When you’re looking at starting a business, the one thing that you need to be very careful of is who has control of whether you succeed or fail. One of the most common (and most fatal) flaws in a startup business model is when they don’t control the value that they provide – and as such aren’t in control of their futures. This is surprisingly common!

TEST: Any business that cannot provide it’s primary value to only one customer runs this risk.

You’re guilty of this where you are dependent on someone else providing information, a service, a deal, opportunity or product. Any time that you cannot control the value that you are selling to your customer. This (seemingly obviously) poses a difficulty when trying to find a way to make money. Continue reading

So you’ve got a startup idea. Now what?

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I come across a number of people who have an idea and want to be entrepreneurs, but have no idea where to start. And most ideas remain just that, ideas. Knowing how to get to where you want to go is the part where the most ideas fall flat. Thats what this post is about: the steps you need to follow in turning your idea into a business. It’s not rocket science, but there is also no silver bullet. The steps below are just a guide where the details will depend on your idea, market and a whole bunch of other factors. This is just a place to start.  Continue reading

Be careful taking advice on your startup

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Founders generally fall in the category of knowing enough to see an opportunity, but not enough to see the obstacles. Which is normal, as otherwise they wouldn’t start in the first place, but this means that they need to rely on a community of people to get feedback, guidance and to learn from others experiences.

I’ve had a couple of instances of late where entrepreneurs with very viable businesses are told that their idea is not feasible, not scaleable or not worth their while. It normally comes from a VC (or incubator). The advice is not wrong – possibly misplaced – but the one thing you need to be very aware of is the motivations and perspectives of the person giving you advice.
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Work on Super yachts: Advice on everything you need to know

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Superyacht at night

I spent 4 years working on luxury superyachts (or megayachts or gigayachts) and every time someone I know is thinking about it I end up having the same conversation with them. I’ve decided to stop doing that and put everything that I’d normally say into this post. This is everything you need to know about working on superyachts, all in one place.

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Why startups are hard: It’s all you.

One of the hardest things about a startup is that the buck stops with you.

With a very small team and a brand new product/service, there are no balls rolling and there are no pressing deadlines – until you create them. Clients not calling? Call them. No one coming to your website? Promote it more and get it out there.

It’s this responsibility that makes it so frikken hard to start a company. They call it the hustle. And all you do, all day, is hustle hustle hustle.

One of the most important things for a tech startup is to get your product in front of customers. (It’s that whole Product/Market fit thing that you’ve got to try and work out as quickly as possible.) If you don’t have a product yet, pitch the idea. See if you can get people to sign up or agree to terms then go and build it. Fast. Cold calling really sucks but it’s one of the best ways to start talking to people about their needs and what you can do to solve them.

This is one of the biggest hurdles to get over in the early days of a startup. It’s because you don’t have a benchmark and have nothing to compare what you should be doing to. It’s those awkward moments when you’re talking to a customer and have never had to pitch it in this way before. You’re making it up on the fly and everything you are saying is a test for the person’s reactions. Say one thing wrong, price it too high or mention the wrong features or benefits and this potential customer is about to become another failed lead.

One wrong step and you fail. Then you pick yourself up and try again. (Probably to fail again.) It’s this cycle that makes it hard. When it’s a slow moving corporate cycle, it’s even worse.

Keeping motivation through the first couple of months is a serious challenge. Don’t underestimate it. Just remember that it’s all up to you – and get on with it.
[Note: These are my thoughts. If you want the real deal, I recommend reading this post by Paul Graham on ‘What startups are really like.‘ or browse WWPGD.com]

Why idea’s (+NDA’s) are worth nothing

Knowledge is not power. If that were true, then universities and libraries would rule the world. It is only the application of knowledge that leads to power – that is why businesses rule the world.” – Napoleon Hill, Think and grow rich.

It is one of my favourite quotes, and one that I find myself repeating more often than not. Every time someone tells me about this fantastic idea they have all worked out, but haven’t even got a paying customer (or sometimes even a minimum violable product worked out) yet. Continue reading

What to (not) put on a CV for a tech startup

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It’s been a while since my last post but one of the things that’s been keeping me busy is hiring staff for the tech startup I work for.

I’ve been through almost 600 CVs for four different positions in the last few months and there are some definite trends on what to do – or not do. During the process I’ve been making notes of some of the more common ones, as I really think that it will be useful to people applying.

Disclaimer: I’m not an HR specialist. I work for a tech startup and all of my advice is tailored towards that. This is not true in all cases, but it is what I’ve found relevant in my case. Use at your own risk…

Ideal format:
There are many schools of thought on how long a CV should be.  I’d recommend a short 100 word paragraph in an intro email with a CV attached. (This depends on what they ask for, but is a pretty safe bet.) The CV should only be two pages. No more. And I don’t care what you’ve done, make it two at a max. Page 1 should be all your personal information, enough for me to gauge what type of person you are. Page 2 should be a summary of your work experience.  Pick the most important stuff.

Short and sweet.
I want to know two things:

  1. Will you fit into the culture (i.e. hard working, smart and fun?)
  2. Can you do the job (do you have enough of the right kind of experience?)

Give me just enough info to answer those and I’ll ask for more info in the interview – bring a long CV then if you want.

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Funding Secrets Series: VC funding

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The first thing the VC will do is look over your business plan and if they like it, invite you in for an interview. If you manage to get through that they will want to do a due diligence audit* on your business. They will generally only invest once you have proven customers and want to ramp up your market traction and grow to own a market. Remember that most VC companies are in communication with each other so make sure to address the issues of one before going to another. They will normally cross check with other VC’s before investing.
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Funding Secrets Series: Tips and Resources

This is the Tips and Resources section of my Funding Secrets Series.

Tips:

– Fund the business as much as you can by yourself for as long as you can. Try to give as little away to investors as possible, but don’t be too cheap on giving it to people working on the business through an equity pool.

– Remember that every round of equity funding that you get will decrease your piece of the pie. Every round that you issue new stock to the new investors, the amount of stock that you hold becomes a smaller percentage of a larger pie.

– Do your best to meet the next mile stone, before the funding runs out as bridge funding gets pricey…

– Be frugal with your spending!
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Funding Secrets Series: Appendix: VC Returns on Investment Example

Here is a hypothetical example of what a typical VC portfolio could look like and why they need to invest only when they can see a potential for a 10 – 20 times return on their investment. The numbers are overly simplified (see notes) to demonstrate the point of why the Big Profits have to be such a high multiple of the initial investment.
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Funding Secrets Series: Seed and Angel funding

In the beginning you should be bootstrapping the business off your own money or maybe from FFF (friends, family or fools) This should get you as far through the idea stage and finding a founder or two to help you get started. Normally once you get to the point where you need to build a prototype, or hopefully just afterwards, you’ll need a round of funding to give you a boost. This is where you go look for angel^ funding.

This ‘first’ round of funding is generally called your seed funding. The purpose of this funding is to setup the business (get office space, register, apply for patents, etc) and to get you to the next milestone or further. Try not to spend all this money at once as there are bound to be many unforeseen speed bumps and delays along the way and time is one of the most valuable things to a startup.
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Funding Secrets Series: Types of Funding

I spoke recently at a Nucleus Talks on Angel and VC investing to student entrepreneurs in Stellenbosch. One thing that I realised is how few people actually understand the different types of funding and when or how to go about getting it. Now there is no cut and dry method or simple answer but I’ll share the little that I know and hopefully you’ll find a couple of tips that you will find useful.* Firstly you need to identify between the different types of funding:
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The 3 main blog ontologies

To blog, or not to blog… thait is the question. I get asked it quite often and the answer is a general ‘yes’ – but more importantly you need to work out what type of blog to have first. This comes from the answer to the question: “Why?”

I have recently read a couple of articles about blogging (there are tons out there) but I perticularly like these 2. First is Mark Sunster’s comprehensive post with all the details on how, why and on what. Then there is also the balanced view from local entrepreneur Sheraan on the softer side of why he blogs and what you should think about before you start.

I think that on of the most important questions is “Why do you want a blog?” As far as I see it there are 3 different ontologies:
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The 5 roles you need in a startup

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There are a couple of key roles to fill in an IT startup. I’ve recently recalled a great blog on “5 People you commonly find in a startup” by John Sharp in a couple of conversations as I feel that knowing what your strengths are and what sort of team you need around you can be key to business success. The 5 types are:

 

Visionary – The person who come up with the idea. The type of person that identifies the problem that the team will solve and the high level look at how to do it.
Wizard – This is the operations side of the startup, the person who works the magic and makes the impossible actually happen.
Wiseman – They’re your investor or Advisor. They bring money and experience into the mix.
Willing Slave – One of the most crucial roles is the person who can actually build the product. Outsource this at your peril.
Deal Maker – This is the guy who can sell the idea. They get investors onboard, find customers and sells to clients.

Now that doesn’t mean that every startup has to be 5 people, only that these 5 roles need to be covered. The Wizard can be the Dealmaker, or the Willing Slave or Wiseman the Visionary. Most times there are multiple hats worn by the same person.

I was recently looking at an opportunity with a friend of mine. It is a great idea with huge scope and lots of potential. I turned it down. Right from the beginning there was an obvious overlap in our skill sets. We were both Wizards, which led to big overlap in operations and decision time – something a startup just can’t afford.

Knowing where your skills fit in your startup is an absolute must. In the same breath, finding the right mix of people so that your startup covers all the bases is just as important. Especially if you are looking for funding.

I’m very happy in the knowledge that I’m about 60% Wizard and 40% Closer. Don’t ask me to come up with a world-changing idea, but give me one and I’ll draw you a road map. Where do your skills lie?

Do you feel Lucky… Punk?

How lucky are you? I’m not a big fan of starsigns and superstitions, but some people just seem more lucky than others.  Isn’t strange how some people always seem to land on their feet in any situation and that everything always works out for them? With some other people, it’s the opposite. So, what is it that makes some poeple really lucky?

As I found out in The Luck Factor by Richard Wiseman, there’s actually a little more to it. Through over 10 years of experiments researching luck he reckons that it depends more on what type of person you are than what you star sign is. The old saying, “Unlucky at cards – lucky at love” seems to be slightly off the mark because generally people that are lucky are lucky in many aspects of their life. So what makes for a lucky person?

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The Power of Facebook Lists

It is always a concern for me about who can view the info on my Facebook Page. It led me to be pretty stingy with who I added as a friend as I refused to make my personal Facebook page completely sterile. I used to keep Facebook purely for friends and Linkedin purely for business but that line is often blurred. I have only recently started using the list feature on Facebook, and realise what I have I been missing out on! I have now managed via lists to have different people see different areas of my page. Each person is put on a list and sees only the area of my page that is relevant to the list they are on – and no more. i.e. business associates can see lots of contact information but no pictures and posts; Close friends can see everything and distant friends can only see limited pictures and posts with very little contact details. It takes a little while to set up, but is well worth it. Here is my easy step-by-step* guide…

*I have a brief 3 step summary for advanced users at the bottom…

Firstly you will need to create the lists. To do this, look on the top right and go to

Account -> Edit Friends

This will bring up your list of friends with a button Create list button at the top.
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