David Duey

The Trouble With Ideas

I recently read Ben Casnocha’s blog entry about entrepreneurial judgment where Ben quotes Marc Andreessen:

In my view, entrepreneurial judgment is the ability to tell the difference between a situation that's not working but persistence and iteration will ultimately prove it out, versus a situation that's not working and additional effort is a destructive waste of time and radical change is necessary.
I don't believe there are any good rules for being able to tell the difference between the two. Which is one of the main reasons starting a company is so hard.

I haven’t been able to get that quote out of my head.

Ideas as Time Wasters
I generally don’t have any problem coming up with business ideas.  Most of the ideas completely suck and I understand that.  And, I understand that the value of most ideas (mine or otherwise) is about negative zero; regardless there’s usually a germ of a potential business in many ideas.  Granted, the ideas would have to be refined and rethought, but most of my ideas usually aren’t good enough for me to spend my time refining and rethinking.

Recently, though, I’ve had a dearth of ideas.  I’ve tried to figure out why I used to fart ideas like I fart chili, but the farting has suddenly stopped.  I think it’s because I’ve finally come to realize how much effort and time all of those ideas have usurped from my task laden days.  I’ve finally begun to realize that my approach to finding a “good idea” just doesn’t work well. 

A lot of people would recommend taking action on a somewhat good idea and go forth and morph.  I like that approach, and the “take some action” approach has a lot of merit, but taking action and morphing can yield a big failure.  And, the problem isn’t failure in and of itself; the problem is the resources (time and money) that failure extracts. 

So what’s the problem?
One problem I have with simply choosing an idea to work on without doing any research or leg work and is that, at least for me, going forth does not equate to going off excitedly.  In other words I need to believe in the idea.  I need to believe there is, or will be a customer base for the idea.  I need to believe the idea will be profitable.  I have to believe in the idea in order to move forward with the idea.

Often I’ll have a bunch of ideas circulating in my head; I’m willing to kill some (or all) off, but I’m unwilling to latch onto any particular idea.  Why?  Because I’m unwilling to fall in love with an idea and waste my time and resources only to discover that it won’t pan-out in the end.  It’s a self-fulfilling prophecy that realizes itself before any real action is applied.   (Maybe it should be called “the bootstrapper’s dilemma.”)

And that’s the problem I’ve had with ideas lately.  I’m no longer confident that I can tell which, if any, are worth pursuit.  I don’t think it’s an issue of over-thinking or over-evaluation; I think it’s a simple issue of not really knowing or understanding how to properly evaluate a good idea. 

What’s the solution?
Well, I actually don’t know what the solution is, but I’m going to try something different for a change.  I think I’m going to do exactly what Eric Marcoullier did or what Paul Berbarian is doing (Paul Berbarian is fresh off of a failure and is looking for his next business idea); create a list of good ideas, get feedback, and then select one and go for it; really go for it – nothing half-assed.  Just do it.

I'm an Mnisiac

Mnisio is such a simple idea; it combines a slideshow (PowerPoint or Slideshare) with video so that you can view slides whilde a spearker talks.  Very nice.

One of my favorite presentations is David Heinemer Hansson of 37 Signals.  If you're into startups, it's well worth a watch.

Morphing

I've been busy morphing over the past several months - sort of.  Heather and I weren't quite sure what to do with Georneys.  We finally decided to morph; however, the path to morphing wasn't direct.  At one point we thought we'd move on and do something else, but nothing ever felt quite right.  Finally, one day it all came together and we decided to morph.  I realize now that we just needed some time and distance to gain perspective on what we were doing.

We should have the alpha of the newly morphed Georneys ready by the end of May.  We're excited again and we're ready to apply all of the things we've learned over the past year or so.

FiltrBox Gem

I just started using the FiltrBox beta a few days ago and came across this gem of a startup blog.  I don't know how missed Tony Wright's blog, but it's nice to see FiltrBox providing good info from the get-go.  Cool!

Illusions

I recently read “The Illusions of Entrepreneurship” by Scott A. Shane.  The book does a lot of “myth busting” with regard to many of the misconceptions people have about entrepreneurship.  It’s a relatively short and interesting read.

In the early nineties I did a short stint at a Small Business Development Center, so I’m aware of many of the inaccurate perceptions and misconceptions surrounding entrepreneurship.  However, a few things did surprise me:

• Entrepreneurship in the U.S.has been declining over the past couple of decades.  I never would’ve guessed.
• “Between 1982 and 2002, startups in the software industry were 608 times more likely than start-ups in the restaurant industry to become one of the 500 fastest growing private companies in the United States…”  The fact that software startups have a higher success rate than restaurants is not a surprise, but the magnitude of the difference is astonishing.
• “On average, businesses founded by people between the ages of 45 and 54 tend to perform better than those founded by people less than 35 years old.”  I could see where that would be true on average, but I doubt it holds true for web/software startups.

The one thing to note is that the book looks at small business in aggregate.  Thus, the statistics aggregate mom-and-pop businesses as well as more sophisticated startups.  The author does provide some suggestions for entrepreneurs, but because of the nature of the book, the suggestions are broad and generalized.

Scott Shane also wrote “Finding Fertile Ground” which is specific to tech startups.  I read Furtile Ground a couple of years ago and thought it provided a lot of good information, but the cost-benefit of some of the suggested market and strategic analyses may not be useful for web startups (i.e. it may be cheaper to build the product and test customer response than it would be to do a comprehensive market analysis).

There’s a Business Week interview with Scott Shane here.

Money and Microformats

By coincidence, I came across a couple of good posts from members of the of the Judy’s Book team.  (Sadly, Judy’s Book is winding-down.)

• Money.  Andy Sack, co-founder of Judy’s Book, has a brief post about raising money.  “Try as hard as you can not to raise money.”
• Microformats.  Dave Naffziger, Vice President of Engineering at Judy’s Book has a good analysis that explains why microformats have a number of challenges ahead.  It’s worth a ready if you’re into semantic web stuff.

Complementary Products

Free RSS Readers
Not long ago, NewsGator announced that all of its client RSS readers would be free.  Someone asked me why they’d do that.  My response was that NewsGator’s management probably decided that free RSS readers would help drive demand for their more profitable enterprise services.  But, Joel Spolsky, in his Strategy Letter V, explains the complementary product thing much better than I can:

Demand for a product increases when the prices of its complements decrease.

In fact, Greg Reinacker explicitly states NewsGator’s goal in one of his blog posts, ”What we’re working to do is to saturate the market with our clients.”

The Chicken or the Egg?
I think it’s kind of interesting that years ago a small software company actually used the proliferation of its complementary product as the vision for the company, “a computer on every desk and in every home.”  Regardless of what you think of Microsoft, in the early days of the company, I think they did a great job of communicating their “change the world” vision by emphasizing their complementary product.

I suspect that most new technologies face the same chicken and egg problem that micro software faced 30 years ago.  I’ve been working with semantic markup (microformats and RDFa) lately and I see the same sort of problem with the semantic web stuff.  In order for semantic markup to be useful, there has to be content made available as semantic markup.  In addition, users (or computers) need something that can “read” and possibly interpret semantic markup.  I’m seeing signs of life in both areas; Technorati and Yahoo seem to be leaders with semantic content and there are several Firefox add-ons for micoformats.  Also, according to rumors, IE8 will be able to recognize microformats.

Not Implicit Enough
Currently, most semantic markup is “read” by a browser plugin, and once the markup is identified, it’s up to the user to do something about it (i.e. add an hCard to your list of contacts).  But I don’t think content and reader are enough for the semantic stuff to work well.  And, I think that’s one of the problems with the current state of the semantic web, it’s not implicit enough; users have to take some action.  Semantic markup is certainly better than nothing, but there’s still a wide, gaping void between providing content that a computer can recognize and process (i.e. semantic markup) and improving the user experience by implicitly using and consuming semantic markup. 

I think the killer complementary product or service for semantic markup will be a tool (add-in, application, web service, whatever) that not only recognizes semantic markup, but also interprets and processes the information on the users’ behalf.  I don’t think that capability requires artificial intelligence; I think it can be something as simple as tracking attention and user preferences much like RSS readers do today.  Twine is probably a good start.

Dick Costolo on Business Models

Dick Costolo has a good post about business models for startups.

I generally believe that for many technology companies, you need not necessarily have any idea how you will make money when you get started, and if you show good progress on the product and customer adoption, you need not make any commitments to a business model for some time. You do need to intimately understand where you sit in the proverbial value chain and what your position there means for your company, but you don't need to know precisely how you will extract value. In fact, I'll go farther and say that focusing on business model too early can hurt a company's prospects.

By the way, Dick Costolo is one of the TechStars mentors this year. 

Eating My Own Dog Food

Over the past few weeks I’ve been advising a friend and colleague about a software product that he’d like to create.  He’s in the enviable position of having a potential customer at his door step that has a need for his product.  The problem is that my friend has good vision; he can see what the product can become and gets caught up in the “vision” rather than focusing on the specific needs of the customer.  Given his lack of resources, it’s important for him to remain focused and only provide the feature set required by the customer.  When we talk, I’ve repeatedly stated the following:

• Stay focused on the problem that’s causing the customer’s pain.
• Don’t write any code at first.  Instead, create a slide show that proposes the solution and listen to the customer in order to discover the customer’s specific needs (feature set).  At the same time, try to find out if they’re willing to buy rather than simply show interest in the product.
• Don’t over-analyze or over-build the product to suit a “generic” customer (a variation of the “stay focused” theme).  The product can be modified to suit other customers later.

I think the advice I've given my friend is pretty good, but unfortunately, I’ve come to realize that I don’t heed my own advice.  I haven’t been eating my own dog food.  It's like the old saying, “Don’t do as I do, do as I say.”

When I have a new idea, I’ll often dive right into the technical aspects of implementation without seeking input and feedback from mentors or potential customers.  I waste a lot of time on things people may never want or use.  I’ll have to change my ways and start listening to the advice I’ve been handing out. 

Failure

CNN posted an article from oprah.com titled "How to Fail Your Way to Success."  It's a good, motivational and brief read. 

"Success is as dangerous as failure," said Lao-tzu, and any life coach knows this is true. I can't count the number of times people have told me, "I hate the job I'm doing, but I'm good at it. To do what I want, I'd have to start at zero and I might fail."

Dwelling on failure can make us miserable, but dwelling on success can turn us into galley slaves, bound to our wretched benches solely by the thought, I hate this, but at least I'm good at it.

This is especially ironic because researchers report that satisfaction thrives on challenge. Think about it: A computer game you can always win is boring; one you can win sometimes, and with considerable effort, is fun.

With time-killing games, where the stakes are very low, pretty much everyone's willing to risk failure. But when it comes to things we think really matter, like creating a career or raising children, we hunker down, tighten up, and absolutely refuse to fail. Anyway, that's the theory. The reality is, we are going to fail. Then we make things worse by refusing to accept this.