THE DREAM IN ACTION

I’ve been thinking about how my new startup adventure is going to be different than my role with GE and a few things have risen to the surface. So, I’ve decided to do a series of posts on those topics. You’ll be able to follow the series under the tag ‘corpvsstartup’ here.

When I joined GE at the very end of 2007 I had expectations of what opportunities the job would provide. I had just finished reading US News & World Report about how GE had the absolute best training opportunities in the country and it was the best place to start a business career. Since I had interest in technology, I joined the Information Management training program to follow the path of Jack Welch. There was an ‘unofficial’ promise that if I was the top of my class at the 1-year point I would be able to work abroad, there was the off program salary that was very appealing, there was the job titles, and the opportunity to work directly for a CIO. With wide eyes and butterflies in my stomach, I worked my ass of for these opportunities.

At the one year point, I was the top of my class; no chance to work abroad. At the 18 month point I hadn’t yet worked directly for a CIO. At the very end of the program, salaries had dropped “because of the economy”. In the corporate world there are systems, and people must operate within those systems. The people are only able to give you what the system will allow them to give you. It’s not their fault if something that was promised isn’t delivered.

While this sounds like I have serious distaste for my experience at GE, I really don’t. I loved it and learned more than I can tell in a hundred blog posts. My distaste isn’t at all with GE, it’s with the corporate system. It’s with the lack of accountability or even ability to deliver what you promise. The origins of my distaste grow from the inability to trust the system, and thus the people in it. I learned that…

In corporate there isn’t trust in the system, so you can’t trust the people.

Before joining UberCab, I read this post by @altgate and I’m so glad I did. He did a wonderful job of getting my head into the startup mind state. The transition from GE (uber corporate) to startup (UberCab) is a drastic one and having some idea of what to expect is helpful, but understanding that not knowing what to expect is the reality. One of his gems was:

Calibrate your expectations. – Unlike mature organizations with an HR department, formal recruiting programs and on-the-job training, your startup probably doesn’t have any of these.  The recruitment process will seem jerky, but that’s probably because the people you are interviewing with just pulled an all-nighter preparing an investor pitch, writing some code or otherwise doing something that, in their ideal world, you would have been helping them with.  Mature companies can afford to have people dedicated to recruiting but you won’t find that in most early stage startups so it’s best to reset your expectations now before you get disillusioned.

Also read about expecting the unexpected & getting to know the team.

Dharmesh Shah of HubSpot says about recruiting that you need to “make sure someone on the team will go to bat for the person when things are shaky.” In joining this team I felt that the people recruiting me would go to bat for me when/if/as things get tough. Because I trust that they will it gives me all the confidence in the world to deliver. And, there is not system stopping them from doing that.

I think there is a powerful result from trusting the people around you. I completely trust my family and something special happens when we’re together because of it. The level of comfort allows for you to forget about the cover my back mentality and focus on what’s really important. The mission (i.e. next release, mock-ups, code, release party). I’ve learned that…

In startups there is no system so you have to trust the people.

I’ve been thinking about how my new startup adventure is going to be different than my role with GE and a few things have risen to the surface. So, I’ve decided to do a series of posts on those topics. You’ll be able to follow the series under the tag ‘corpvsstartup’ here.

The first that I want to discuss here on the blog is the need to be bold. In a corporate environment things are usually pre-determined. Processes exist that you have to follow and the challenge can usually lie in just following those pre-defined processes. Aligning resources (PEOPLE) and following the appropriate timing is tough, but it’s still following a plan. In a startup there is no plan, no pre-defined processes. You have to define processes for the first time yourself, you have to write the plan, and you have to be bold to do that!

The story of how I got this opportunity is one that I’m definitely proud of. It’s so undefined, so nontraditional, and nothing that I could’ve ever planned for. But it definitely took some boldness, some balls, for it to happen. Here’s what went down.

Back in early January Travis Kalanick, an angel investor and startup advisor, tweeted this, “Looking 4 entrepreneurial product mrg/biz-dev killer 4 a location based service. pre-launch, BIG equity, big peeps involved–ANY TIPS??” I’d been following Travis for a while and knew that he was working with some awesome startups out in SF and I responded, “@KonaTbone here’s a tip. email me :) graves.ryan[at]gmail.com“. Kind of smart ass, but I figured a boring “I’m interested, please email me” response probably wouldn’t get his attention. It turns out that I was right. He email me that night, then we ended up getting on the phone and had a long conversation about my past experience, what he was looking for and some of the details about the opportunity.

About 3 months, and a few trips to NY & SF later, I’m diving in head first to work for a company that Travis is going to be working with very closely. The team of people behind our company is amazingly experienced and the market opportunity is ripe for disruption. My story is not to brag, although I am pumped how it turned out, but rather to show that this, one of the bolder moves I’ve ever made, really worked. Being bold creates opportunities and that’s the kind of mentality I believe is required to be successful in a startup. It may have even been careless but by really stepping out there and having enough chops to back it up, I was able to land a role running an awesome startup.

This is not even close to the end of boldness required to be successful. The startup path is one of trail blazing and getting your hands dirty in areas you never thought you’d be involved. But when I took the job with GE I had to submit that standard application and resume, and follow the traditional interview and hiring process, not in a startup. It’s nontraditional and requires boldness.

I’m pumped to continue to share other differences from GE’s corporate life to other startup lessons learned. Let me know in the comments if there is anything that you’d particularly like me to touch on.

With a lifetime of knowing that entrepreneurship is at my core and now 4 years of studying the web startup world, I’ve finally made the jump from ‘Office Space’ corporate America into the infinite abyss of the startup adventure.

I’ve had a great taste of the startup world, but this is something entirely different. In 2008, I attempted the nights & weekends project; with SocialDreamium we were creating a community analytics product focused towards startup community mgrs. I did all product design and customer development while my co-founder did all development. When Tweetdeck & Seesmic launched their FB & Twitter clients in April 2009, it took the wind from our sales and we closed shop in June 09. Many lessons learned.

More recently, I’ve had the amazing opportunity to work with Foursquare. Tristan Walker & Dennis Crowley are awesome, and in a short 3 months I learned a ton, and was continually inspired by the product they were building and the (what will be) powerful business around it. If I learned one thing from that experience it is that you absolutely must be excited about what you’re working on. If you’re at all bored with your work, you have no chance of success. The excitement that the Foursquare team brings to the office everyday is truly inspiring. I’ll miss working with these guys, thanks fellas.

I had an incredible experience over the last 2 years with GE Healthcare. I was exposed to so much through the management training program I was apart of and was able to work for some of the best managers in that business. I worked on everything from major ERP deployments to enterprise e-commerce, and was able to refine my project management skills in possibly the best environment in the world to do so. But recently a co-worker asked why I’m leaving GE and my answer was this…

My priorities with a job are two fold, first, I want to learn as much as possible, and second, I want to be excited about what I’m working on. I found an opportunity that will allow both of those priorities to be filled in a greater way that I believe GE could. When it came down to it, it was a pretty easy decision…

So, what’s next. It’s a combination of everything I was looking for. I’ll be working with some of the most bad ass entrepreneurs & investors in the industry, and I’ll have an opportunity to learn more in shorter periods of time than I believe I could in any corporate program. I’ll be at the ground floor of a startup that has the opportunity to change the world. I found the opportunity with a little bit of luck, a little bit of right time & right place, and a lot of hard work and preparing for an unidentified opportunity.

So, what is it?

Unfortunately, we’re not quite ready to bare it all. While I generally like to avoid the term “stealth mode”, we’re early and we’re running as fast as we can. I can tell you that I’ll be working between New York & San Francisco and I really look forward to making all the relationships I’ve created in those startup hubs over the last 3 years real life friendships. The world of no health insurance, jamming late nights, endless responsibility, and some of the most fun I’ve ever had are ahead of me and I’m so stoked.

Why raise $30 million to hire an enormous, nationwide sales force if you could use the power of existing sales teams for a fraction of the cost? Recently, I’ve been thinking about how startups can leverage other, larger, companies to build out their model. After all, a startups purpose for existence is to test their model. So why wouldn’t a startup leverage every existing system possible to keep costs low and test the model?

An increasing trend in startups, for good great reason, is to use Facebook Connect to leverage the existing social graph. Look at Foursquare, HotPotato, or OMGICU, all great examples of instantly connecting via FB connect to pull in all of your friends from likely your largest existing friend network. The time and wasted money that these startups would spend developing a brand new social graph is ridiculous.

There are so many opportunities for rapid growth through this type of “existing system leveraging”. With Foursquare I’ve been working hard to get as many venues involved and offering specials in the application as possible, so why wouldn’t I take my own medicine here. I try to use, excuse me, partner with the people who already have relationships with these venues. It turns out there are marketing teams who have great relationships with large groups of bars and restaurants, working directly with these people may bring in 10-20 venues in one fell swoop rather than me pounding on each venues doors individually. Or, another example is liquor distributors? They have strong relationships with bars and can possibly influence the end price of the product to a customer who say, checks in on Foursquare…get it. There are sales teams that work with these people and have a system in place already like Coke, or Zoom media (those ads above urinals), etc. etc. etc., the list could go on.

Whether you’re building a social app, or a utility that sits on top of the ’social graph’ I’d encourage you to look at ways to use existing systems, social or otherwise, as your best distribution channels. The cost is likely lower, and the impact likely higher.

What existing system have you leveraged?

Recently, I’ve heard a lot of startup type people say, I’m a product guy. Without to much analysis I’ve always taken that to mean, the business guy, not the developer. I was mostly right with that snap judgment, but as I heard the term/title more and more I decided to jump into the details of the product manager role and the “product guy”. I found that there are those who dislike the product guy title, the self proclaimed “product guy bigots” and there are those who epitomize the role of “product guy“, and likely bask in it. It seems to be just generic enough of a title to get criticism from all angles, so what does it actually mean?

WTF does it mean?

Tony Wright wrote this about the product guy:

It feels like product entrepreneurs are oftentimes “cowboys”. Flying by the seat of their pants, they rally a small team to build a product that people want. It’s no surprise that this is really freakin’ hard and requires a mythical combination of brute force time and effort, insight, customer empathy, and a huge pile of luck.

Here’s my take on what the product guy should do:

• Scrub & rinse new ideas
• Write the product definitions (specs & reqs)
• Create the initial version (user experience)
• Connect: Customers <> Designers <> Developers
• Own the road map
• Define and measure success

Great slides on product management basics

Here’s a much more detailed slide about the details of product management.

It seems to me that whether you’re starting your own, or joining a small startup you need to work on these skills a bit. Whether you’re a community manage, a developer, or an operation guys you need to be aware of what the “product guy” is doing. You need to have some of the skills necessary to be a good product guy because in a startup your product is so infant that everyone has a drastic effect on its’ survival. Become a product focused <insert your role here> and your startup as a whole will be much better off.

We’re almost ready for the first, CHICAGO TECH MEETUP and I hope you’re joining us January 20th at 7pm at OfficePort for guest speaker Jason Fried (37 Signals) and presentations from local startups and entrepreneurs. Our first event was a great opportunity to socialize. This time you’ll want to bring a notepad in addition to your thirst.

A few details dates for all attending the meetup on the 20th:

An advance and sincere thank you to our sponsors: Thinklink, RackSpace, FourSquare, Sprout Box & OfficePort! (links below) We’re able to put on this great event (and many more) free of charge to our members, thanks to these folks!

We’ll be starting promptly at 7:00. To get a good seat (or, just a seat!) please arrive early. We’re at capacity. Following the keynote from Jason, we’ll take a quick break to grab food and drinks before the Startup session begins. We’re keeping the place open for plenty of socializing and drinks afterwards (where should we do the after party?), so don’t worry about fitting it all in between sessions!

I also want to thank our Panelists who have volunteered for the Startup segment. Our goal is to give the startups lots of actionable feedback, suggestions etc. (it’s not a contest by any stretch). On the panel we have Tim Courtney (SocialDevCamp), Alex Wilhelm (TheNextWeb), Mike Trotzke (Sprout Box) and Nik Rokop (Illinois Institute of Technology) – an awesome panel for anyone to be getting feedback from :) There’s also some great press in attendance (one of them rhymes with Chzech Bunch).

The four startups presenting will be WinkVid, Toy Studio, Sprout Social and Tgethr.com. I wish we could have fit everyone in, but we’ll make more room next time around.

I hope everyone is excited! I’m still blown away by the talent and enthusiasm of our members. Our membership represents a vast mix of local high-profile tech companies, startups, investors, thought leaders, bloggers, entrepreneurs and developers. Good things happen when this many talented people get together!

I’m really really pumped about our sponsors for this first event!

ThinkLinkr is the webs first, real time fully collaborative outliner!

SproutBox is a new approach to venture capital that helps entrepreneurs turn their ideas into viable businesses.

OfficePort is a creative community of entrepreneurs, freelancers and small-business owners.

Foursquare turns the city into you’re playground.

Rackspace, dedicated servers, managed hosting, and web hosting, with top notch service.

Most people know that Google’s precious search algorithm is a secret, sacred, thing that they’ve worked very hard to protect. In fact their behavior around that algorithm has been similar to Golum’s behavior towards his “precious” ring. You know, the one that will ‘rule them all’. This algorithm and others allow Google to provide very focused advertising based on your search terms.

In computing, an algorithm is an effective method for solving a problem using a finite sequence of instructions.

However, the way I see it, their dominance in providing web advertising using the “precious”, all machine, set of instruction won’t last forever. There are human powered systems that can adjust quickly for variables, change over time, and become increasingly “sharp” as they learn. Simply, they can learn better than just a computer. A great example of this type of human powered system is a NYC based startup Hunch. Effectively, they’ve created a system where they can collect an infinite number of decision trees, all generated by humans, and then predict future decisions based on passed decision sequences.

So, what am I getting at? Well, as you know I’ve been working closely in the local advertising space through my work with Foursquare and I can’t stop thinking about how large of an opportunity this is. If a bar or restaurant can advertise directly to the folks driving by as they’re deciding where to eat, that’s better than any billboard, radio spot, newspaper clip, full page magazine add, event sponsorship, Adsense ad in my Gmail or Google search, and I could go on… It’s simply the best possible advert you could get, as an advertiser or a consumer, unless I’m missing something. Here’s an example, when companies spend money on other ‘focused’ internet advertising they pay for say 100 impressions. This means that 100 people saw that ad, and the common click-through rate is about 1/100, even on the ‘focused’ ads. Now, what if you were able to directly reach potential customers who frequent your ‘type’ of establishment, fall within a very specific demographic, and only if they’re walking distance from your location!!! Right now you’re saying, “WTF are you serious…”, and I am.

With the blowing up of location based services like Foursquare, Loopt, Brightkite and a few others, this sort of data is readily available. People are using these services to share their location, their purchase preferences, their unfiltered thoughts about almost everything they do and businesses can learn A LOT from that. Now you see why all these nerds (me) get excited about data; because you can change the world with it. With this data you can turn industries upside down, and the ability to reach consumers in this intimate way is one of those opportunities.

It’s all a matter of who can reach the masses, who can create a product intuitive enough for “Joe the Plumber” to use. Google’s Adsense technology is fairly simple, but still local businesses don’t use it. The potential for human powered mobile, local, advertising is in the words of Austin Powers, “dead sexy”. My mouth is literally watering. I can’t wait to be a part of this movement.

Update: This post is going to be syndicated, and I made some additions/updates for that reason. 1/5/10

Quick thoughts on big valuations from pre rev startups:

There are a lot of folks that don’t understand why Twitter or other startups like them can be valued at such enormous valuations while showing minimal or zero revenues. I respect your skepticism. It’s tough to understand why these early stage start ups have millions of users but aren’t profitable. Please understand that most of them could create revenues if they wanted to, but just turning on the revenue spout isn’t most important. Turning on the revenue spout when all the pieces are connected properly is critical. I’d like to use this analogy to explain this further.

If your connecting a hose to the spout/spigot and you turn on the water prior to ensuring you have the hose connected properly, you’re going to have a mess on your hands, everyone’s getting wet and the process of watering your grass and using the hose is a failure. However, if you ensure a proper connection from spout, to hose, to sprinkler, you’re going to have a great experience, the grass get’s water and growth occurs.

These companies have already proven that they know how to acquire users, the water is running, now it’s a matter of connecting the pieces properly before they turn it on so that the combination of water (users), hose (business model), and sprinkler (team) are all connected properly to maximize their revenue opportunities.

Excuse errors, first post from my iPhone. (Update: added photo)

Update: Twitter is reported to be profitable after making search agreements

I was very motivated after reading Fred Wilson’s post on tenacity this morning. The long hour, late night, double time, alarm clock, graveyard, bloodshot eye, 3 coffee, 0 inbox, crush it, hustle, grind it out, and rock, bullshit…is totally worth it, and I love it. Not to mention it’s exactly what will, eventually, get me there. You know, there.

I’ve been pondering, in great detail, the challenges of getting “old school” brick and mortar business to better understand, then implement the enormous value that certain web based tools could provide for them. My first observation is that it must happen in that order, understand, then implement. My second observation is that it must be in their terms and must align with their ‘current’ business goals (I’ll elaborate on that).

A friend who works at a major consulting firm asked me for tips on how to use Twitter for his firm. My advice was, “You’ve got to understand your business goals before you have a hope of using Twitter (all social media) correctly”, and the same goes for bars, restaurants, and retailers. Here is what I would be doing if I ran one of these types of businesses…

I’m going to play the role of bar owner for the example here, the same principles apply to all.

1. Identify the value for the “key players”

There are two key players in this game. First and foremost are my customers, without them I’m dead so there interests should come first. My goal is to drive them to my venue. Second, are the investors or owners of the establishment. If an action pleases one and pisses off the other it won’t fly. Mutual benefit is critical.

Customers

It turns out that my customers are becoming passionate about things I don’t even really understand. It’s not productive to bitch out it, it’s my job to learn and get on their level. People are playing web based games that can literally determine where they go next. Customers are following their friends, broadcasting their locations, following friends recommendations, tips, and reviews to make consumer decisions and I have to be paying attention.

Venues

Turns out this crazy new game allows me watch! I’m invited to this party…for once. And because it’s location based I can track their interaction with my bar. Details like who’s coming to me, how often, who they’re with, and what they’re saying about me are mine for the taking. Not only does it let me sit on the outside and observe, they let me engage and play the game, even better, they let me make up the rules! Parker Smith wrote on this blog, ‘r+d’:

Foursquare provides a dead simple and engaging platform through which any small businesses can establish a loyalty program.

Venues can offer specials and determine the incentive for game players (who by the way are our most passionate customers) to come back, and spread the word.

2. Measure the value

Now that my eyes have been opened to the world of technologies that can literally change the way I interact, monitor, and reward my awesome customers, why not make that physical interaction a bit easier? Introducing Square: Twitter inventor Jack Dorsey just launched a biz that is a new way of accepting payments that, oh by the way, allow you to track customer spending. Here’s how Foursquare and Square play well together… (diagram from Hutch Carpenter)

The social incentives remain on the Foursquare side, it’s fun, and people are rapidly spreading the word. Now, from a transactional standpoint, I want to see what kind of $cash$  this is bringing in and revolutionize my conversion and merchant process and significantly increase my visibility to all of it.

Now by using this tiny device that plugs into an iPhone (or another smart phone soon) and can accept credit card payments, I know who’s coming (from Foursquare & Square), I know who is with them (from Foursquare), and I know how much is being spent (from Square), and I know how often they come (from Foursquare & Square). The ultimate customer monitoring, visibility, and analysis has arrived. It’s just up to me to keep my eyes open, continue to learn and use the tools available to me.

Conclusion

I better understand my business goals of attracting and converting customers and I’m using the tool that they are having fun with to monitor and act on their behavior. That’s mutually beneficial. I’m not selling them anything they don’t want, I’m connecting on their level and learning more about them. I’ve taken the time first to understand why these tools will help my customer and me and I can easily implement it. Very simple, very engaging, very affective.

It’s almost as if Foursquare was meant “for Square”.

image via flickr

For a while now I’ve been writing about Foursquare customer development, sales, and business development. I’ve written about my experience as a foursquare sales rep and the challenges of selling to local venues. Now, I’d like to share some of the details of my newest project and what we’re going to accomplish.

I’m extremely excited for this project because of foursquare’s opportunity and potential to change the way business is done.  The challenge of reaching local venues is incredibly difficult and the only successful method to date has been to deploy a very large sales force. Yelp and others have used this method but in my mind traditional methods are not very exciting. What if there was a new way to sell at the local level? What if you could reach venues through their customers and create a win win experience that benefits every party? The possibility of that win win is very exciting, innovative, and exactly what we’re going to build with the Foursquare Street Team.

In the movie ‘The Patriot’, Mel Gibson builds and leads a militia to attack the British in a way that they had never seen, on the ground and by surprise. The normal sales approach has been the equivalent of the “line up and shoot at each other approach” of the pre-American Revolution British Army and what we’re going to build is a quick moving and innovative militia. This “street team” is made of up passionate foursquare users and passionate customers who want their venues to benefit from the value of being connected to customers like never before.

Our next step is forming this street team and empowering them to show venues the value of foursquare. If your an excited foursquare user, see the value of the platform for venues and users, I’d love to speak with you. We’re going to kick this effort of initially in Chicago and expand from there, so please get in touch. [ryan@renliv.com]

Here’s where we are now.

Existing Chicago Foursquare Promos

@ Chaise Lounge: Show that you’ve checked in on Foursquare and get 10% off on food.  Show your waiter to redeem!

@ Dragonfly Mandarin: Show that you’ve checked in on Foursquare and get 20% off every 6th visit!  Show your server to redeem

@ Piece: Show that you’ve checked in on Foursquare and you’re mayor and get your second pint on us! You can also follow Piece on Twitter

@ The Drawing Room at Le Passage: Show that you’ve checked in on Foursquare to the Drawing Room and get a free dessert with the purchase of an entree, small plate or drink. Show your waiter to redeem! Follow the Drawing Room on Twitter

@ David Burke’s Primehouse: Show your server that you’ve checked into David Burke’s Primehouse on foursquare and we’ll send out a complimentary chef’s choice appetizer to add to your breakfast, lunch or dinner. You can also follow David Burke’s Primehouse on Twitter

@ J Bar: Show your cocktail server or bartender that you’ve checked into J Bar on Foursquare, and receive 2 cocktails for the price of 1 before midnight.

@ Metropolis Rotisseria & Annettes: Show that you’re mayor of Metropolis and get a free brownie!

@ Meze Tapas: Show that you’ve checked-in on Foursquare and get 20% off meal with purchase of a pitcher of house sangria.

@ The Food Feastivals: Show that you’ve checked in on Foursquare and get one free admission per paid $10 admission!

@ The Hunt Club: Get a free shot with a foursquare check in, show to staff to redeem!

@ The James Hotel Lobby Bar: Show your cocktail server or bartender that you’ve checked into The James Hotel Lobby Bar on foursquare and receive 2 cocktails for the price of 1.

@ Wow Bao: Show that you’re mayor of Wow Bao on Foursquare and get a free 6-pack of bao!

You can follow Wow Boa on Twitter

@ Wow Bao – Chicago Loop: Show that you’re mayor of Wow Bao on Foursquare and get a free 6-pack of bao!

@ Wow Bao – Water Tower: Show that you’re mayor of Wow Bao on Foursquare and get a free 6-pack of bao!

Hey have you checked out Foursquare?

Is that the Twitter thing?

You can use Twitter to tell people where you are, via Foursquare. So not really a Twitter thing…

Go on…

I recently had this conversation with a non techy friend of mine and it made me think about how quickly things are moving on the web, and how God awfully confusing it must be for someone who doesn’t follow it like we do. That’s why when I heard the quote, “In 2009 if you’re not confused you’re not paying attention” from Bob Johansen of Institute for the Future, it made me stop and think. He really is onto something. When @msuster retweeted that today I could help but follow suit because of how well it explains what is going on.

It’s important for us tech folks to take a step back and put ourselves in the shoes of the non web savvy folks out there and figure out how to relate our fast paced industry to the rest of the world. Let me break it down in one statement: These aren’t just fads, toys, or goofy social networks, these are the tools that will make our lives easier in the future. Over time the good ones will rise and the less useful ones will die, but paying attention to how they develop will give us the understanding we need to utilize them and succeed.

For the critics, you’re absolutely right that you don’t need to pay attention to all of the noise out there, it’s impossible to. But what you do need to do is learn to pick up on the ones that stick and don’t be late to the party. If you’re just now joining Facebook you’re late. It’s going to be critical to at least try to comprehend these trends so that you can stay competitive no matter what business you’re in. Pay attention to the future no matter how confusing it may be.

image via flickr

I’ve been thinking a lot about customer development over the past few months. It’s a new way of thinking as a company, it’s a new way of approaching marketing, product building, and customer service. It’s changing, or maybe already has changed, the way companies think about the relationships with their customers, and it’s never been easier to employ this strategy than in early stage technology companies. And that’s exciting.

One of the smartest pieces of startup advice I’ve heard in a while was Andy Rachleff of Benchmark Capital saying, “The most important thing to look for in a founder: Authenticity”. (thanks to @TristanWalker for pointing me to this quote) The same goes for evaluating a startup as a whole, is the corporate philosophy of the company true to it’s actions? Is the company authentic about what they tell customers and partners? Take Comcast for example: They say they are listening to customers, they have a large team scanning twitter to make sure that customers voices are heard, but they sure as hell don’t seem to be listening to customer feedback about their phone support, or cable and internet packages. In short, it’s terrible. They’re not using customer development to drive their product offerings. True customer development focused startups make this a priority, and that helps them brand themselves as authentic.

Companies that that make learning a priority are exciting and they’re the type of companies I want to work with.

Today I was in a mtg about how GE will work to reach out to potential job candidates. Surprisingly, the recruitment practices are on the cutting edge of listening and reaching out to candidates and meeting them on the platforms that they use. They’ve abandon the “they’ll come to us” mentality that will fail every time. I don’t care if it’s a 2 person startup or a Fortune 2 behemoth, you have to listen and engage in customer feedback at the customers level or you will no be able to accurately road map your product.

Similarly, with the work I’ve been doing with Foursquare the team is very interested in the user feedback. To the point that they are intimately aware that the game must develop with user feedback in mind for it to remain compelling. With the recently inclusion of deals ‘in-game’ it’s only become more valuable for users. In the past it was just fun, now Foursquare is benefiting users financially, and that has staying power.

LEARNING companies solve problems quickly while remaining true to their strategy. LEARNING companies keep users and customers happy even when they don’t give them everything they want. LEARNING companies focus on long term value and they don’t let their products get stale. LEARNING companies measure the metric of user/customer engagement and realized that there is valuable data to be measured there. LEARNING companies listen.

If there is one thing that will be consistent with my career, I want to work for LEARNING companies.

image via flickr

In a recent project, I’ve been doing customer development here in Chicago to help out Foursquare. If you’re not familiar with customer development it’s gathering feedback from potential customer on what they’d like to see from your product in order for it to be of value to them. It’s been a fun experiment in biz dev and a wake up call to the difficulties of door to door sales pitches, but I’ve received a lot of great feedback. Below I’d like to share more of the findings of the experiment. Here’s post 1 and post 2.

Restaurants are scared of new

The overwhelming theme in speaking with restaurateurs is that ‘new‘ is scary. The reason why new is scary is because new costs them time. Time seemed to be their most valuable asset and learning takes time, changing takes time, adopting new takes time. In the tech world it may even be our business to know what the next trend will be, that doesn’t matter in restaurants.

Problem: I’ve found that only savvy business owners get the benefit of online. Forget iPhone apps and mobile social computing, they may not even have a web enable device in their restaurant at all. A few solutions to these problems rose to the surface in my discussions that I think will ease the adoption issue of a new technology.

Solution: Remove the need for opt-in participation. This at first might sound scary but hold on. This isn’t a “we’re going to force you to participate” play, it’s a “we’re going to help you whether you like it or not play”. If foursquare found existing deals that bars and restaurants were running to pull into the system they wouldn’t need to convince bars/restaurants to opt-in. If you know Thursday is $1 beer night at the local watering hole because of the drink specials app, post that deal within foursquare. Then when the user goes, they’ll say to the bar tender, “I found this deal on foursquare, this is awesome”. The user becomes the sales rep, and the bar becomes intimately aware of the value foursquare provides.

Cost of current coupon system

As a part of this round of feedback, I spoke with a marketing professional who sells to restaurants often. I wanted to know what his challenges were and how he overcame them. As always, if you’re doing something tough you might as well get smart experienced folks to give you advice. Why bang your head against the same door they did?

In this conversation I learned some techniques to make my pitch ’sexy’ to bar and restaurant owners.

Showing them their costs. By figuring out what they were already spending on coupons, deals, and existing promotions it was very easy to show them the value of foursquare. Many restaurants spend $500/month or more on ‘Money Mailer’ and other coupon systems, and they have metrics on the amount of people that actually take advantage of the deals. Well guess what, with foursquare the cost of distribution (virality) is significantly lower, thus inserting foursquare as your promotion system returns a much higher ROI. It’s simple, bar shares a deal with foursquare, foursquare share the deals with users, users come to your bar. 1, 2, 3. Cash money.

Limiting the downside of excess coupons

One thing I found when talking to bar/restaurant owners is a fear of the downside. I think maybe they’re pessimists by nature, not sure. Either way, a common concern they had with the foursquare model is, “what if too many people come in for the deal, how can I control it?” They were worried that the Mayor would change everyday and they’d be stuck giving out tons of freebies. A feature that was requested more than once is the ability to record the # of times a person takes advantage of the deal giving them the ability limit abuse. Whether by limiting point incentives or other “in-game” techniques, I don’t see this as being a long term problem.

I’m sure I’ll have more in a couple weeks…

image via flickr

The ActionsTalk Story

When Blake and I started ActionsTalk back in early 2008 we were filled with the excitement that comes with a new venture. We hoped that ActionsTalk would become a valuable service for the “non hub” startup communities. We worked to bring deserved attention to startups who weren’t necessarily getting into the limelight because of their location. We worked at that for a long time. We succeeded at that for a while. We got onto the cover of the business section of the Milwaukee newspaper on the same day Barack was elected president and got huge publicity because of it. Our inboxes were flooded and things were looking up. We locked down some advertisers and AT was making money.

But in time the excitement dwindled and the direction changed. In time those changes lead to stresses on Blake and my relationship. And those stresses, since we were friends before business partners, lead to less excitement of making the business grow. I questioned, why I would want to grow something that seemed like it was harming a great friendship? So, the rate at which we worked and posted crawled and AT as a business died. ActionsTalk remains a great video blog with over 40 amazing entrepreneurial interviews, filled with content that I honestly believe any entrepreneur can learn and benefit from. In that sense it was a success, but no business that doesn’t get sold or continue to grow is a true success.

The changes in our business did introduce serious challenges on our relationship and in the end I think we both backed off because the challenges of a video blog business (a challenging and grinding business to be in) weren’t worth harming the friendship. Startups are tough and they WILL affect the dynamic of the founders relationship. Here are 5 ideas to keep in mind and things to focus on in order to understand and prepare for how a startup will affect a founding teams relationship.

1) Talk about the road map

In the case of ActionsTalk we set a goal of doing ActionsTalk interviews for a year. We reached that goal but it was never clear where, if anywhere, we would go after that. Needless to say, right about the year point, we slowed down. Build a road map, work though it from a product perspective, and from a personal life time-line perspective, and you’ll have a lot better chance of long term success.

2) Practice extremely open communication

Albert Wegner recently wrote a post about calling people out when quite during board meetings. He implied that even some startup founders wouldn’t express their real opinion during these meetings, and potentially he would find that founders completely disagree on direction! This is a big problem and any directional decision should be discussed with founders.

3) Keep emotion out of your business but in your friendship (possibly impossible)

This one is probably the toughest. At some point you’ll have to make a decision, what will come first the friendship or the business? There are so many stresses that come into running startup business that it’s going to be extremely tough. I do believe that you can run a business with a friend or family member but it takes a very special relationship and priorities do have to be discussed.

4) Focus on the larger goal

I worked on a project a few months back with my friend Allen. We decided to plan for about 2 weeks and raise money for one week and donate all of that money to building Libraries in Laos. He was traveling there at the time and I did all of the “social media” and out reach work state side. In 5 days we raised a few thousand dollars. Although a little stressful because of the fact that we didn’t actually hit our goal of $5000, our relationship was fine throughout. This may have been because of the shorter time period of the project, but I really do think that both his and my focus on the goal is what kept it so fun for both of us. As we checked our donations daily hourly it became more and more motivating. In the end it was a very successful project because of our ability to focus on the goal.

5) Don’t do it

Lastly, if you think that a friendship will not withstand the pressures of a startup, don’t do it. People are usually your friends because they are similar to you. Those are often the worst business partnerships anyway. The Ying and Yang relationships work better on the whole because you need those complimenting skills and challenging view points. Like I said before, a priority usually has to be chosen and if the friendship is the priority the project can often end poorly.

photo via flickr