The main reason that I accepted the offer to share this experience and expose myself and the weakness’s of my first startup is the fact that I think sharing, claiming, and learning from failures is likely the single best way to promote trying. Doing a startup is tough and risky but what we need more of, EVERYWHERE, is trying. Eliminating the fear of doing a startup is important. We can do that by realizing that if things don’t go well your career won’t be over, you won’t be crucified, and you’ll likely be better off for it!

I would love to get your thoughts on the talk, please comment!

Below is the presentation that went along with the talk.

Links Mentioned:

Web414

SocialDreamium

What I’d like to see more of in Chicago

Eric Ries – StartupLessonsLearned

CrowdSpring post about studying competitors

In October of 2008 I launched a company called SocialDreamium LLC. I started out doing social web consulting work and used the revenues from that to fund the development of our first product. I recruited a co-founder and development team in December 2008 and we “broke ground” on our product just before the New Year.

Now in late-May 2009 we’ve decided to shut down SocialDreamium and move on. What did we get out of the business? A much better understanding of the social web landscape and significant entrepreneurial lessons learned. As much as I don’t like writing this post, it’s extremely valuable for all of you who are, or will be, in the same boat. The startup road is a narrow and rough one to travel along, my only hope is that you will be smart enough to learn from my mistakes. We weren’t just unlucky, we screwed somethings up; below are many (but not all) of the top lessons I learned from the 8 months we devoted to SocialDreamium.

Project Management Is Not Fluff

This is an area where I’ve probably learned the most. When I started out with SocialDreamium I thought that this project would be completely different from any large project that I’ve managed at work. I thought that the PM style I execute at work was much different than the style required on a startup. Dumb. Project management is project management, and it is important for startups because at the core it’s about getting things done. Execution and using resources appropriately is the name of the game.

Deadlines became a large issue for SocialDreamium and a good project plan helps to manage risk. It helps keep open and responsible communication between team members and have a clear understanding of who is accountable for what. With a good project plan you will keep costs lower (mostly time) and work more effectively because of the plans inherent ability to prioritize your work. I will now take more time to plan and document the goals of each step. Milestones and deliverables to hit those milestones are critically important.

How to Handle A Miss

When starting up you better love mistakes because you’re going to make many of them, the key is learning from them. I made the mistake of not handling misses appropriately during the early stages of SocialDreamium and it hurt us in the long run. Because our team had such a steep learning curve in the early days we missed a few of our expected development deadlines. When these misses happened I got caught up in the details… Who was supposed to do this design? Why wasn’t this bug fixed? What do I need to do to help fix the issue? These were all good questions but not the one I should have been asking.

The question to ask yourself when you have a ‘miss’, is why. And, you ask yourself that question 5 times to get to the root cause. Say it with me now… Why, why, why, why, why? By asking why 5 times you’ll get to the root cause and be able to eliminate the cause of the miss. As you eliminate causes of misses you become efficient, quick, and a powerful team. Next time I’ll ask why much more often.

Communication Strategies

At SocialDreamium, even right off the bat, we were a global company. I was based in Milwaukee and my co-founder @davidabrahams was in Australia, along with our development team. Startups are difficult enough without this kind of geographic challenge. However, it worked in our favor because I did all my work on SocialDreamium after 6pm which is 9am the next day in Sydney.

Communication became an issue in my lack of schedule and consistency. Because both Dave and I had full time jobs outside of SocialDreamium it sometimes had to take a back seat, and this introduced variability into our communication schedule. I’ve now learned that having a consistent and scheduled communication strategy is super important. Until you get to the point that you’re talking everyday (and obsessed to the point you don’t want to talk about anything else) you should keep a strict schedule. Usually, if you’re making good progress 2 email conversations a week should suffice. However, email alone is not enough. You need to have another channel for daily updates. We used Basecamp for our project planning and communication and I would highly recommend that product, but like anything you have to use it to find the value from it.

Be Realistic About Team Core Competencies

Our team of developers was pretty strong. They could diagnose an issue fairly well and act on a solution. Where our team lacked skill was design. We could make things work but making them look pretty was tough for us. To be competitive and drive user adoption, interface design is mission critical. I should have spent more time researching (free material) on UI and layout.

To solve this issue before you have it, recruit appropriately. You wouldn’t hire college grads to consult CEO’s (or maybe you would) so don’t expect that you can do the design if you don’t have design skills. Make sure that you understand the needs of the business and product before you build your team. Another way to put this is, build your team around your product, not your product around your team.

Know Your Product and What Goes Into It

I didn’t understand the technology that was going into SocialDreamium. I still don’t. We decided to build REACH our flagship (but never launched) product in Microsoft .NET. Everything I read about .NET lead me to believe that it was old and that finding talented “social web-ish” developers would be difficult. I was reassured that there is a large development community for .NET and because .NET web development was our teams core competency we were in a good spot. To be honest with you, I still don’t know what the right answer to this was.

What I did learn is that if I’m going to try and start a company where we build houses, I better understand the wood, the brick and the morter. I need to understand what it takes to build a damn house even if I’m not the contractor. It’s absolutely my responsibility to understand the resources that are going to go into my product and business. I don’t expect to be a developer, but I sure do need to understand our information architecture and how one language over the other will affect speed of development, scalability, and anything else that will affect our business processes.

Can you really compete?

Don’t just make a 10/20/30 pitch listing your competition and think that that is enough. It’s not even close. This mistake, I think, is the largest one that Dave and I made in the process of starting SocialDreamium. We knew who our competitors were at the point of launch but we failed to think about who else might be our future competitors. We also failed to analyze if it was actually possible to accomplish what our competitors could accomplish with the resources we had. Startups compete with giants like Microsoft and yes, even Google all the time but sometimes you have to realistically look at the likelihood for success when your “out-resourced”.

The 2 issues were future unexpected competitors and being out resourced.

1. Our future competitor that was unexpected was Seesmic. They developed the Seesmic Desktop and I was honestly blown away. It was so much better than Tweetdeck (another known competitor) and it literally took the wind from our sales. They were extremely well funded, already had tons of press, and the launch was enormous. Their feature set match ours so closely that it was scary and it was our own fault for not being able to get something out sooner in order to compete.
2. Being out-resourced will always be an issue for startups. But in order to overcome this issue you need to make up for it in some other way. A new revenue model, a feature set that is extremely innovative, or a marketing campaign that can change the game (GoDaddy).

Be Honest with Your Passion

This is a lesson I learned without making a mistake. You have to ask yourself, why am I getting into this industry? Having passion for the industry allows you to understand it, grow within it, and be innovative and competitive. I love studying why and how people communicate. I enjoy trying out all the newest tools to do so, and I love taking one form of communication (Twitter) and translating that into other forms (in person).

When we started SocialDreamium our goal was to create a tool that allowed startup community managers to grow groups of people around a cause or a brand better than anything they’d ever used. We loved talking about how people use Twitter and Facebook and blogs to reach people and engage them. We had a solid understanding of the space and where it needed to go. We created a product POC that was killer and that could’ve been a game changer. Our issue was not our passion for the space, our issues lie in the above lessons learned.

I hope that you’ve learned something from my mistakes. Learning from others experiences is so important in entrepreneurship. Here is another great example of a startup post mortem that you can learn from. Don’t stop learning, and don’t stop daring to make mistakes.

image via PieterMusterd

Today, I’m announcing my plans to close SocialDreamium, LLC.

This decision, which came about over the last month or so, was a challenging and complex one. Either way, I’ll tell you that this decision revolved primarily around money, competition, vision, and team: maybe the most critical factors of a successful startup.

SocialDreamium was attempting to compete is one of the most crowded spaces on the web at the time. We were building a social media application that would aggregate Twitter, Facebook, and other popular networks. Sound familiar? There are many companies with significant funding and resources who are developing similar applications so it became very difficult for us to see a successful path through that market. Our team was strong but faced many challenges of communication and execution. In short, for us to really drive a lot of users to our product over some of the other startups in the space was like trying to put out a fire with a squirt gun.

Overall, I’ve come out of this experience with significant lessons learned that I definitely plan to share in detail over the coming weeks. Our team was able to complete the version one development of our product, REACH, but as we were coming to the finish we said to ourselves, “This won’t compete, do we really want to open this up to the world?” My plan is to blog about these lessons learned to help me institutionalize them so that I don’t make them again in the future. I hope that you’ll follow my RSS to get the details and benefit from my mistakes. A few of the mistakes I’ll share are:

• Not focusing on traditional project management
• Implementing corrective action, managing misses
• Communication strategies & plan
• Understanding team core competencies
• Know your products & the tech
• Be realistic with your competition
• Having passion

Personally, I’m not even close to done. My hunt for the dream has only just begun and my eyes are wide open for the right project or opportunity. As you may have read, I opened The Renliv Group to manage different ventures. Right now I’ll continue business consulting for companies looking to improve their social web presence and internet marketing effectiveness. I continually learn from the people I work with and I want to help others with those goals. You all followed the progress of LibraryForLaos.org and watched us raise over $1800 and fund 5 reading programs for children in rural Laos. This was one of the most rewarding projects I’ve ever worked on and I’m excited to be able to help with projects like this with the time I’ll now have. Giving something back and helping others definitely puts the dream in action.

I want to thank two people specifically for their support and advice along the way. Daniel Debow, the CEO of Rypple, has been a sudo adviser to me through this process. He not only was one of the people who inspired me to launch SocialDreamium in the first place, he also provided guidance along the way. His experience and friendship will surely continue to be an asset to me as I continue the search. Also, Ross Kimbarovsky, CEO of crowdSPRING, has continually supported my ideas and excitement. He forced me to hash out ideas for the product and find clarity in its goal. Ross provided challenging feedback for how to handle the “startup at night” lifestyle and why its important to look at the big picture. To both of you, thanks guys.

And last but not least, I have to say that David Abrahams my co-founder and head developer of REACH was awesome to work with. It’s disappointing that nothing ‘publicly’ tangible came of SocialDreamium but the experience for me was phenomenal, I learned a ton from Dave. He has got to be one of the easiest guys to work with and I’m certain that if I was based in Sydney or if he was here in the Midwest the outcome would have been different. Cheers buddy.

More to come…

No 10 mile run today. However, the weather was probably the best it’s been in the last 2 years of my life. I started the morning hopping on Yelp and finding an awesome little cafe called Caffe Capriccio in North Beach. Cafe Capriccio was the quintessential SF cafe with hipsters galore and breakfast egg wraps to die for. I did a little reading and scheduling the rest of the day.

Just after noon I headed south on the 101 towards San Jose to meet up with Ryan Kuder in Palo Alto. I had this perception of Palo Alto and all of Silicon Valley that every establishment has wifi, every coffee shop is filled with keyboard blazing software developers, and every restaurant is packed with VC’s either raising money or funding the next Facebook. I was excited to see how close my perception was to reality.

The drive south was gorgeous and as I pulled off on the famed Sand Hill Road I expected Teslas and Ferrari’s to swarm the streets; the reality was a little off from this expectation. I drove around Stanford’s beautiful campus for a while then headed into Palo Alto towards the also famed University Cafe.

Ryan Kuder has been serving as a sudo adviser to me in the process of building SD. He totally understands the space and as an ex-Yahoo is now diving into the startup world himself. We had some great conversations around both his startup Neighborsville.com and mine. We discussed the challenges of the social web space and the important aspects of a product launch. Ryan asked me an interesting question (as good advisers do) that I thought was a very good way to think about the process.

What are some of the decision you’re going to have to make?

Decisions, after thinking about this further, are what make a the founder of a startup special (and powerful). The decision to start, the decision to get funding (0r not), the decision of what business model to choose, the decision to hire employees, the decision to make a decision, or wait. The process of building a business is all decisions and defining the decisions you make is what will determine your success. Great question Ryan.

After a cup of tea at the Uni Cafe I was headed back to the city. I was disappointed at this point of my lack of Tesla sightings until…

The day was complete. A great, in person meeting of someone I originally met on Twitter. A Tesla sighting. A beautiful drive down to PA from the city. Overall, my weekend in San Fran/Bay Area has been awesome. The preconceived notions I had of SF are officially eliminated and now I have an accurate perception of the city. I love it. It’s got all the benefits of being in California, the diversity of the people and their vibe is awesome, the cities neighborhoods are classic with tons of character, and  there is tons to offer someone who enjoys being very active! In summary, I could definitely live here.

REACH is (update:ALMOST) ready! Well kind of. SocialDreamium is ready to “lift up our skirts” and show you for the first time what we’ve been working on!

REACH is an application that will aggregate your social web inputs to make the act of community management easier. We’re looking for people who work at startups, organization community managers, product managers looking to get feedback from users, or people managing large personal brands to help us test the tool. We understand that it’s not yet perfect. In fact we’ve only integrated Twitter so far, so you won’t get to see much of the integration plans YET. However, we thinking the the tools and functions that you’ll be able to use are pretty cool. The layout is simple, intuitive and user friendly.

If you’d like to get an invite for the private beta release of REACH please just leave your email or Twitter ID in the comments below. Also, you can go to REACHHUB.com for more information and a signup link!

Thanks so much for the support and help and we’ll be sending out links shortly! Cheers.

Be flexible.

If you have some perfect situation in your head about how your company will be formed, how it will grow, and how you’ll fair, don’t. All of your expectations will likely not be met and your “perfect scenario” will not come true. However, you do need to have vision. It seems like a catch 22, I know. You need to focus on what you want to accomplish, not how you want to accomplish it.

Know where you want to go.

Your destination should definitely be in mind. What type of product would you like to build, what industry do you want to serve, and what values will your company operate on? These are things you do have control over and can use to help guide your business. These things will no doubt help in determining your success (or failure) but this is about as detailed as you will be able to get with much accuracy in terms of what your company will accomplish.

Don’t know how you want to get there.

The less you have pre-determined the better off you’ll be. Trying to force a triangle through a circular hole will not work. So, focus on building the pieces and figuring out what type of team you have to work with then go out with your triangular team and find the market that needs triangles. You’ll be much better of this way that forcing something that just isn’t going to happen.

Shut up and listen.

If you’re focusing on the right things that your focusing on your team. The who is so much more important than the what with your business. Once you have the team in place than trust them, shut up and listen to them, figure out where you collectively will go and no you the “leader”. If you did your job well in creating a team then you got some very intelligent people, no follow in their footsteps and be intelligent by listening to your new team.

Learn.

It doesn’t matter that you’re not a developer. If you’re building software (like we are) then you need to learn. Sit with your developers, learn what they go through, and learn what they love. If nothing else you will learn what to look for in your next hire. Community managers need to sit and learn from developers, developers need to learn how to market their product, finance guys need to figure out how to get a product to market and how price affects that process. But, most of all, you the leader need to have a hand in all of it. You need to realize how your organization is structured, what everyone is working on and WHY. Start learning these things now and never stop.

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Alverno College is an all women’s liberal arts college in Milwaukee and my talk will be on using the web to network.

If interested in more information please contact:

Megan Olson – Alverno SIFE President

meg.a.olson@gmail.com

We are gearing up and preparing to release our first product, whose name will be released soon, (while already developing our second) and were running into a few issues that we’re going to look to you to help us solve!

SocialDreamium is looking for a web designer/s, who love designing simple yet powerful user interfaces and clean images. Dave and I are very open to both ideas of bringing on another co-founder or managing member position into the SocialDreamium LLC and we’re also open to the idea of contracting the work out. We basically just want whats best for the dream…ium. With lots of passion and a limited budget, which we call a lean budget, we want to find a huge value in whoever we bring in. That doesn’t mean that we are going to rip you off. It means that we’d like to find someone who is motivated if not passionate about the end goal of this product, helping businesses and individuals grow communities better.

In the spirit of community I encourage you to repost, retweet, reblog, this call to the depths of the social web. If there are any questions about what we’re looking for please comment here or email me directly ryan[at]socialdreamium.com. The growth of this dream has thus far been phenomenal and I thank you for your support. We have a powerful product being built…please come help us make it look pretty!

• You need constraints to build great software. If there’s one thing we’ve got plenty of in this economy, it’s constraints. Make good use of them.

• Constraints enforce discipline. You’ll need to, among other things, manage your expenditure, focus on making products that people actually want to buy, learn the difference between cash flow and profitability and figure out how to market on a shoe-string. Now is an excellent time to forge those skills. You will need them the next time things go bad.

• In difficult times, skill and hard work, which you can control, become more important than luck, which you can’t. I like this soccer analogy. If you want to compare my soccer skills with David Beckham’s then don’t put us both six feet away from an open goal and ask us to kick a ball into the net. I might get lucky, and he might show off and miss. Instead, start us off from the other end of pitch against a couple of defenders and a goalkeeper. Then you’ll get a true picture.

Starting a business is risky, but not as risky as you think. The oft-stated fact that 90% of startups fail within their first year is an urban myth. In reality, the four year survival rate for IT startups is over 50%, and there’s no evidence that this is significantly lower for companies founded in a downturn. And most start-ups that fail don’t crash and burn, owing people money and bankrupting their founders. They are quietly wound down, or sold on, and the founders set something else up or return to employment, with the added skills that even attempting, and failing, to build a business bring.

Dharmesh is an obvious thought leader and subject matter expert when it comes to software startups which is the direction that SocialDreamium seems to be taking. With the combination of his expertise and his optimism, I’ll be listening closely.

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Tonight I was reading the Harvard Business Publishing site and there was an article that caught my eye. It was called, What Surfing Can Teach Us About Managing the Unexpected, and was all about responding to such tough economic times. The point was made, very well, that it’s not so important how we react to economic changes but more about how we prepare and position ourselves in a timely manor to take advantage of such turbulence. This point is hitting me strong as I think about timing and positioning, first I’ll share an excerpt from the article…

Instead of paddling around in circles as though we were in some calm lake, we need to learn to act like surfers — to place ourselves in the rising and falling swells, paddling forward while glancing occasionally backwards, so that we will be ready when the big wave comes. If we do that, we will stand up at the right moment, establish our balance, take a deep breath, and ride the exhilarating force of history all the way to shore.

Growing up surfing this analogy really make sense to me. When teaching surfing (I used to give lessons) I’ve always told people that “riding waves is pretty easy, but catching them is almost impossible”. This makes so much sense from a business standpoint too because the right business idea could be ridden out by many folks…these are called employees…sure it still takes work, but not nearly as difficult. What is practically impossible is catching that wave, starting and executing on the right business in the right market, with the right product, and the right people. Timing and positioning.

I’m encouraged that SocialDreamium is actual timed well and positioned accordingly. On Read Write Web today there was a post about how Tech firms are hiring Developers and Community Managers. This is a strong affirmation that the market SocialDreamium is going after is an important, emerging market with a need. If we can develop software that meets the needs and solves the problems that community managers are having we will be successful. But, we must also build the right team and focus on the right targets.

So far, so good.

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