Tag Archives: startup

Pipecleaners – Experiments in Risk Management

Pipecleaners are a powerful metaphor and an interesting approach for managing all sorts of risks. I’ve heard it mentioned by my boss a couple of times, but with the boss filter on I hardly knew what he was referring to or where it could ever be applied. Having launched LinkPeelr (in a completely different category of software from what I launch in my day job), I’ve now come to see a more universal applicability of pipecleaners.

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Make your bootstrapped startup work

Note from the author (added 29/9/2010): It seems that some readers found this post a little too opinionated for someone who hasn’t yet launched. I’ve tried to address your legitimate feedback in the comments here and on Hacker News. I’ve also done some toning down on passages below.

Don’t waste your precious pre-launch time like we have has been so well-received that I decided to expand on the topic and bring you a few more tips from the hapless entrepreneurs behind yet-to-be-launched just❤liked.

Get something online fast

It doesn’t matter whether you call it the launch, the beta, the alpha or something else. It’s absolutely critical that you make your app (some version of it), available online as soon as possible, and this is something we didn’t too well. In retrospect it seems that ideally we would have put something up within 1 or 2 weeks after nailing down the principles and definitions between ourselves. I’d be as aggressive as possible about this milestone and hold yourself accountable for missing this first and, in my view, the most important of deadlines before your real launch. We too should have been harsher on ourselves slipping that deadline.

Why do I insist so vehemently on having something online as soon as possible? Well, having something online gives you an entirely new perspective on the app. This may seem totally counterintuitive because development environments often do good enough job of emulating what the online experience will be like.  And yet they are not the real thing, especially if your application is a multi-user one.

Many things (e.g. image pre-loading, web copy and messaging, and analytics) you will never plan for unless you’ve gone through the exercise before, and you would be well-served by giving the task of getting online fast the highest priority possible. The approach is also consistent with “iterate like mad” mantra. You can’t iterate without the first iteration. This actually reminded me of the way mathematical induction works. If you don’t have it proven for N, you can’t prove it for N+1.

Avoid Sophisticated User/Customer Acquisition Schemes

I know how tempting it is to make the alpha, the beta, the theta, etc. exclusive for a select set of users, priming your customer acquisition pipeline and virally spreading the news of your glorious app to the rest of the Internet. Yes, it sounds great, except you are a bootstrapped startup with very limited resources to spare on marketing and promotion. We too got a little carried away entertaining notions of viral growth while we should have focused on getting the app online.

If you are a starry-eye entrepreneur like myself and your user acquisition strategy is based on creating artificial scarcity, STOP!

This is domain of funded startups with connections. Chances are you are not going to be able to pull it off just on your own unless you are incredibly well connected (but then you are probably not bootstrapped). More importantly, if you get carried away with your scarcity generation, you’ll soon find out that you are creating scarcity around vaporware, which is a far worse situation to be in when you are trying to build trust around your name and product.

Keep in mind that scarcity doesn’t need to be generated: it’s inherent in every new product, and it’s the scarcity of user’s attention.  I recommend to just open it up to all. Surely, nobody will come, but solving this problem is much easier when you already whetted it against early adopters and have something to iterate from.

Limit Conceptual Discussions and Long Term Planning

It’s important to agree on the basic principles of the application and to define the important terms that you will be operating with for the duration of the project. This will ensure that all involved operate with the same vocabulary. We’ve been bitten by this couple of times while working on just❤liked. Trust me, redoing things just because you misunderstood your co-founder is not fun.

I don’t believe it’s a wise use of anyone’s time to make plans that stretch beyond  MVP. Sure, you may have a notion of how you want it all to turn out in the end, but it’s best to keep that notion to yourself until it morphs into something else or goes away. Because it most certainly will.

Your primary focus should be on building something crippled and putting it online. Make “crippled” a requirement if you must, just get it done. Anything that distracts you from this task or derails your efforts is counterproductive.  Don’t belabor the evolution of the product until you have the first version and your opinions and speculations about the target market and user acquisition strategy are a little more informed.

5 Steps to Escaping (Entrepreneurial) Mediocrity

This comment originally appeared in response to Ask HN: Does reading HN ever make you feel like shit? I got a few points for it, and I thought that it was worth reposting here. Here it is, extended and edited for style.

I know you are out there. You watch the improbable rise of a startup based on the same idea you’ve had for years. You ponder the immense paydays for founders which seem no more capable than you are. You obsessively follow them on Twitter (all the while putting up with their smug comments) somehow hoping to find something in what they say that would justify your own relative obscurity. You read the press coverage on TechCrunch detailing their startup’s next (naturally unprecedented) round of funding. And you wonder: “WHY THEM? WHY NOT ME?”

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This could only mean one of 347 things

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‘Why’ is a frequently answered question

Attribution is about figuring out the cause of events and answering the question why something happened. When it comes to our social lives, all humans are natural-born attribution-making machines.

Why did I lose my job? → It’s the economic downturn, and the company is laying off people.

Why is my boyfriend breaking up with me? → He is going off to college, AND he found someone else.

Why am not spending enough time with my family? → My boss is keeping me busy at work.

Of course, we tend not to answer the question for those events that have a widely accepted explanation, e.g. the sunrise, and those that don’t affect us personally, e.g. the death of a neighbor’s cat. Everything else is fair game for our innate attribution processes.

The basic function of these judgments is to help us make sense of the world, and we make a staggering number of them every day, often without realizing it. However, what’s really important is that most of the reasoning we dish out is subject to what psychologists call attribution bias. It’s not that we are stymied by less than perfect inputs in making the right judgements–it’s that we are predisposed to making certain kinds of errors even when the inputs are perfect.

What does all of this have to do with startups?

Eric Ries defines a startup as “a human institution designed to deliver a new product or service under conditions of extreme uncertainty”. When I think of this definition I think of uncertainty as something that’s coming at me from the future. Attribution biases mean that the past is chock full of uncertainties as well because our interpretation of the past is laden with erroneous judgments.

Wikipedia’s attribution bias article currently links to 13 types of different attribution biases. Most of them have implications for startups. For starters, consider these 4.

  1. Self-serving bias and its close relative group-serving bias. I only have two words: pervasive and pervasive. Essential this bias means that people attribute their successes to internal or personal factors and their failures — to situational factors beyond their control.
  2. Egocentric bias, aka “I did it all” bias. We tend to diminish the contribution made by others while exaggerating our own. Need I say more?
  3. False consensus effect. Yep, that’s thinking that everybody else thinks just the way you do.
  4. Fundamental attribution error. This bias makes you prefer personality-based explanations to situation-based explanations.

Imagine now the havoc these biases can wreak in an environment of “extreme uncertainty”: the great temptation to attribute the bump in site’s traffic to the inherent value of your offering over the press coverage that gave you a temporary boost, or the temptation to think that if you like an idea, or you solve your own problem when you build something, then others too will find want your solution.

Lean startups and attribution biases

Build, measure, learn virtuous cycle of a lean startup is straightforward enough until you realize that the learn part of the loop (what you learn for the next build phase) is fertile ground for all sorts of attribution biases. Iterations hinge on the fact that you first measure things that matter (see the great post on vanity metrics, also by Eric) and then extract knowledge that feeds into your next cycle through the loop. Subvert the learn phase, and you derail the whole iteration.

All businesses are prone to attribution bias, but only startups rely on continuous learning and small iterations to extract the business knowledge they need to succeed. Recognizing learning as a startup’s primary driving force is one thing, reining in individual biases and allowing learning to take place is another.

Startup – the anxious business of business building

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There are many possible motivators for starting your own business. Whatever they may be it’s still a viable business that you are after. It’s not a hobby or a diversion or a side project, it’s building a business that is the ultimate goal behind starting a startup. The other goal, one that is no less important, is to learn as much as you can about business building itself.

It should come as no surprise that when you set up on your startup journey, you set off with a set of proposed assumptions and inherent biases that you then work to prove.  I claim that proving existing assumptions wrong and finding new patterns that have no prior assumptions attached to them have different emotional implications for the founders. Even though “customer development” and “validate everything early and often” are all the rage, we still tend to hold our assumptions and biases as something deeply personal.

Well, last week brought a sobering of sorts. The assumptions that my co-founder and I have considered provable have come under harsh scrutiny of an outside expert, someone I trust and someone who has a solid track record of success and beyond-doubt credibility in this space. You may call it a watershed event, a cold shower – as my cofounder called it, but it was certainly, in its immediate aftermath, a source of great anxiety, concern and new doubts.

We heard the feedback, but we decided to keep going because we still believe we are working on something worthwhile. Expert opinions are expert opinions, but they lead to no revelations. Learning leads to insights, and if it takes another couple months for our users to second the expert opinion it would carry that much more weight in our minds. I think the users should be the ultimate judges of our undertaking. Also, it is my sincere hope that engaging with users will lead to more insights than a simple thumbs up or thumbs down from an expert.

Are we as surefooted as we were a couple of weeks ago? No, of course not. We always had very little surefootedness to speak of. Are we ready to throw in the towel and turn the project that we thought was a business into a hobby? No, that’s not what we intend to do either. We still feel that justliked was worth starting both for the sake of the learning experience it affords and as a business we believe in.

Like quickly – timing is everything

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In my previous write-up I spoke of the long tail of taste, how it affects our public persona and how we use it to quickly gauge who is worthy of our social graces. I sited the long tail as one of the premises for conjuring up Just Liked. Today I would like to turn to premise number two, which I believe is no less important.

Couple of weeks ago my wife and I happened to vacation in Prague. When we arrived at the hotel, we were cordially ushered in, pampered and treated in the most courteous manner possible. The service was impeccable. What was my first urge? Well, to recommend the hotel, of course.

I just started using Google Nexus One as my phone the week prior, and I already loaded it with all the location-based services goodness. I popped open FourSquare but ICON Hotel and Lounge was not in the database. Every imaginable venue in and around the building was, but not the hotel where we stayed.

I then did the same for Google Maps just to verify that I was not going insane. The hotel was there, but there didn’t seem an easy way to recommend it. At least neither app offered an immediate way to channel the superb experience I was having into a recommendation that my friends could use. It seems now that I should have been a little more patient and used Google Maps to search for the hotel and attack the problem from that angle, but that’s not the point.

Now, the point:

If you can’t attend to the urge to share or record a fleeting emotion in a 10-30 second interval, then it’s gone forever.

It's ticking...

It’s like pre-history. If you can’t write it down, it’s lost for the future generations. And these good feelings come and go very quickly. The memory of the positive experience stays with you, but the urge to share it with others fades. The memory alone does not provide enough motivation to return to the task, and you move on to something else.

I know what you are thinking:

How the hell are all the reviews on Yelp and similar sites generated?

Or if you are a bit more subtle in your delivery:

Pardon me, how the hell are all the reviews on Yelp and similar sites generated?

I don’t know. I guess the people who write reviews are somehow special. I think there is the “recommender” type, one who incessantly pores over every aspect of their existence to review and recommend every relevant bit. I am also sometimes struck by the length of these reviews. Some of these are treatises, not reviews. I suspect that few Yelpers recommend a lot of things, and a lot of Yelpers recommend a couple of things, but there is a huge gap in between.  There are few prolific reviewers and many who rely on the few for advice.

One possible reason for the gap is that there is no instant, like anything, anywhere type of service. People feel good about a service or a product or whatever else a lot more than what is already captured by the existing review sites. Why not capture more?

That’s what we are trying to do.

On private joys of ownership

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One of the biggest surprises of the startup experience so far has been the pleasure of owning. I am not talking about owning a multi-million dollar company or any company for that matter. I am talking simply about making something when there was nothing there before and putting your name on it. It’s not a matter of perceived or objective or any other type of value that can be put on the the thing you are making, it’s just a private joy of building, identifying with and taking pride in what you’ve build.

I am not a stellar programmer, and I have not written that much code in my lifetime.  But even when I did write something it was never my own.  And now, for the first time, what I write is mine, and that is somehow a very different experience.