Startups

Strategy and tactics for startups, especially in software or other enterprise technology.

May 16, 2015

Your first customers

A couple of the raw startups I advise have recently asked me about a hugely important subject — dealing with their very first customers. The big deal here is that initial customers can offer three different kinds of valuable resources:

*Confusingly, both credibility and product feedback are sometimes called “validation”.

Questions of money are of course heavily influenced by how complete your product or service is. In particular:

Equity investment by your early customers and partners is problematic. In particular: Read more

April 24, 2015

Should you start a tech company?

I occasionally get very hands-on in accelerating a raw start-up. Typically this is when an engineer comes to me with an unquestionably clever idea and asks me — sometimes in very broken English :) — whether and how he can get rich from it. So let’s collect some thoughts on the subject.

This post can be construed as fitting into my “not-very-organized series” about the keys to success. In particular, it draws on my July, 2014 post about judging opportunities.

The product plan

A start-up product idea needs to satisfy multiple criteria. Awkwardly, they’re rather contradictory to each other.

That usually means that the idea:

Criticisms I’ve made repeatedly of specific ideas include:  Read more

March 1, 2015

Marketing advice for young companies

Much of what I get paid for is advising early-stage companies, especially on messaging and marketing. So let’s try to pull some thoughts together.

For early-stage companies, I’d say:

Of course, these subjects are much discussed in this blog. The top three overview posts for young companies are probably:  Read more

July 9, 2014

Judging opportunities

This is the first of a not-very-organized series of posts on two related subjects:

Most of my posts can be said to touch on those areas, especially the latter one. But in this series I’ll try to be more direct about it.

Useful background may be found in:

For a new company in a new enterprise IT product category, the path to success may be oversimplified as:

Read more

March 3, 2014

Marketing in stealth mode

I consult to ever more stealth-mode companies, so perhaps it’s time to pull together some common themes in my advice to them. Here by “stealth mode” I mean the period when new companies — rightly or wrongly — are unwilling to disclose any technological specifics, for fear that their ideas will be preempted by rival vendors’ engineering teams (unlikely) or just by their marketing departments (a more realistic concern).

To some extent, “stealth-mode marketing” is an oxymoron.* Still, there are two genuine stealth-mode marketing tasks:

Further, I’d divide the second task into two parts — messaging and outreach. Let’s talk a bit about both.

*I am reminded of my late friend Richard “Rick” Neustadt, Jr., whose dream job — notwithstanding his father’s famous book on presidential power — was to be a US Senator. So he needed to punch his military duty ticket, and got a billet doing PR for the Coast Guard. (One of his training classmates was Dan Quayle.) His posting was to a classified base, and so his PR duties consisted essentially of media-mention prevention. But I digress …

Stealth-mode messaging

As I wrote in a collection of marcom tips, the pitch style

“We’re an awesomely well-suited company to do X.”

is advantageous

  • In stealth mode, when you don’t have anything else to say …
  • … but not at first product launch, when you finally do.

For small start-up companies, this message is most easily communicated through highlights of the founders’ awesome resumes, for example:

Our CTO personally stuffed and dyed the yellow elephant for which the Hadoop project is named.

But that still begs a central question – how do you describe what your stealth-mode company is planning to do? I.e. — in the quote above, what is the “X”?

Read more

January 22, 2013

When I am a VC overlord

When I am a VC overlord:

  1. I will not fund any entrepreneur who uses the word “disruptive”, unless she has actually read at least one book by Clayton Christensen.
  2. I will not fund any entrepreneur who mentions “market projections” in other than ironic terms. Nobody who talks of market projections with a straight face should be trusted.
  3. I will not fund any software entrepreneur who is unfamiliar with “The Mythical Man-Month”.
  4. I will not fund any software whose primary feature is that it is implemented in the “cloud” or via “SaaS”. A me-too product on a different platform is still a me-too product.
  5. I will not fund any pitch that emphasizes the word “elastic”. Elastic is an important feature of underwear and pajamas, but even in those domains it does not provide differentiation.
  6. I will hire a 16 year old intern of moderately above-average intelligence. I will not sign or propose any contract that intern finds difficult to understand.
  7. I will hire a second intern of moderately below-average intelligence. I will not fund any product whose documentation that intern finds difficult to understand. Exceptions may be made for products sold to orienteering athletes, crossword puzzle solvers, or engineers.
  8. When a board on which I sit approves revenue targets for the year, I will further stipulate that the year-ending sales pipeline must comprise more than a Chinese hair salon, an Italian pushcart vendor, the CEO’s brother-in-law and a bankrupt bait shop in Nome.
  9. I will only hire a CEO who can explain the technology at his previous company. A CEO who doesn’t know what his products do can’t sell or market them either.
  10. I will only hire a CEO who can also walk me through a sales cycle at her previous company. A CEO who doesn’t know how a customer buys may well have trouble producing revenue.
  11. I will support any plan that I agree is good for a company I have invested in, nor matter how modest or how bold. I will participate in any funding round that I think is profitable for my limited partners.
  12. I will remember that a board of directors has a fiduciary responsibility to all shareholders, and not just to the preferred ones.

Please offer your suggestions below. An associate will get back to you with our decision.

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July 3, 2012

Marketing communication essentials

I’m often asked how early-stage IT vendors should prioritize their marketing communications, and specifically their investment in collateral. They don’t have nearly the budget or management bandwidth to do everything; so what should they do first?

Most commonly, my answer is a variant on:

Beyond that, I’d say:

Where, by way of contrast, do I favor being frugal? Read more

September 18, 2011

Strategy for IT vendors: a worksheet

Much of what I do for a living* boils down to critiquing IT vendors’ strategy — for sub-10-person startups, for the largest companies in the IT industry, and for companies at all stages in-between. In the hope of making strategy analysis simpler, I’ve compiled a list of questions that every enterprise IT vendor has to answer, if it is to understand its own business. They’re posted below. If you can’t answer these questions, you don’t really have a strategy.

*E.g., consulting via the Monash Advantage and predecessor services. Every question on the list below has arisen recently in the course of my work, most of them many times over.

If you run an IT vendor, help run one, or aspire to do so, then I encourage you to give these questions a whirl. If you don’t think the answers are all knowable — either now or for the foreseeable future — it’s still advisable to make working guesses. Flexibility is a virtue — but even so, having a tentative strategy is far better than having no strategy at all. Strategy is to execution as design is to coding. The best time to fix software bugs is before you start coding; the best time to fix a bad strategy is before you’ve committed yourself to executing it. Yes, both the design and the strategy will need to be changed over time; but a smart, internally-consistent strategy is a lot better than a contradictory one, than an obviously hopeless one, or than no strategy at all.

This is a really long post, so I’ll summarize it up here. Explanations of each point follow below. Read more

March 22, 2011

Public and analyst relations: An example of epic fail

I post from time to time about stupid PR tricks, but last night I had an experience that was a whole different level of appalling, for reasons of ethics and general incompetence alike. Within hours, the vendor’s CEO had emailed me that the offending PR person would be terminated this morning.*

*By the way, that means an intriguing New England startup needs a new PR firm. By tomorrow it should be obvious who I mean.

It started as an ordinary kind of bad pitch. The PR rep emailed offering a briefing with a mystery company. I immediately deduced that the company was one I was in fact set up to talk with today, and had indeed been writing about since 2009. Besides being annoyed that I’d had to scramble to set up my own last-moment briefing with a company I’d led the way in writing about, I also bristled at the fact that the pitch included quotes from a couple of my competitors, whom I shall unimaginatively refer to as Dave and Merv.* So far, no big deal.

*Both personally and professionally, they’re two of my favorites. Even so, I dislike being told that I should use them as authority figures to be copied in my own view formation.

But then it occurred to me that those quotes probably weren’t approved, but instead were just lifted in an unauthorized manner from conversations, and indeed probably didn’t reflect the analysts’ precise views. So I messaged Dave and Merv. Shortly thereafter, the PR rep emailed me:

Neither David or Merv have authorized the quote for publication.  It was sent in error to you, as I had believed you had agreed to the sharing of confidential information.

The bulk of my response to that — and the essence of this post — was:  Read more

July 30, 2009

Note to technology startups

The following was originally part of my post today regarding Groovy Corp, but I decided to post it separately instead.

Getting a favorable mention in a couple of prominent blogs should not be the be-all, end-all of your launch strategy.  Rather, you should be laying the groundwork for getting enterprises to place significant bets on your unproven technology.  Eliciting the “I’m interested in that if it works” reaction is only a very small part of your overall marketing challenge.

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