THE DREAM IN ACTION

At BarCamp Milwaukee last weekend I hosted a session on Startups in the Financial Crisis. It was very well attended and turned out to be an incredibly valuable discussion for a lot of people. (Thanks for all the great feedback!)

I wanted to revisit some of the content of that discussion to emphasize what a startup needs to focus on within a very tight economic environment. When the DJI is down 40% from this time last year things change. Budgets have been cut, investment capital has been reduced, and now only the best will get funding. I’m going to pull one out of my fathers book: “I’m not going to tell you what to do, but here is what I would do if I were you…”

Get Lean

I don’t mean just start running and eating well (although that may help). I mean reduce the FAT of your startup! Stop paying somebody to do sales if your product isn’t ready to be sold. Look for small inefficiencies that can be improved. If your development teams finds that they are spending excess time on bug fix, think about changing your development strategy. Obie Fernandez’s team at Hashrocket, employs the “Pair Programming” strategy. You may think it would be a waste for two to do the work of one but the time and effort save on bug fix is huge. Focus on two words when looking to LEAN your startup, EFFICIENT & EFFECTIVE.

Focus

This one also implies that there are decisions to be made. The obvious is, what to focus on? Well don’t take this advice and go put yourself in a cave coding. It is super important that you focus on the product from a user feedback perspective. You need to be out there building your community and asking for feedback from them. If you don’t know what your community thinks of your alpha release, how do you even know what to code? It is very important that you are out there building relationships and building opportunities for future collaboration and growth with other entities. The startup ecosystem is alive and well, if you are not tapping that (ass) your really missing out.

Profits

You used to be able to sell your 100k views with no monetization strategy to VCs… that might not work these days. Today your going to have to prove that you have value the old fashion way…sell (which implies someone is paying real $$$). It’s important now to show investors that you can actually make money. Jason Fried (37 Signals) talks about not having to build a  Domino’s, but just build a profitable Mom & Pop pizza shop that makes money month after month. Profits will become more and more critical and you may have to make difficult decisions to get there. Even Google is cutting back, so your startup will likely have to also. The gist here is focus on the bottom line!