Platforms and Networks – Best Resource of the Year

Did not blog in 2012, I am going to try and blog in 2013.

This has been widely posted in the twittersphere but it still deserves to be bookmarked.  Tom Eisenmann has a blog Platform and Networks and he has blogged a page with a resource of links about managing start ups and it’s absolutely awesome and the link is here

Thanks Tom

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JLM:The Management Team

A JLM post on AVC today which is just as awesome as his comments (which are blog posts really)

Here it is, a straight reblog:

Congratulations, you have built a prototype. Got it to work. Debugged it. Even sold a few copies. Have some real customers. Now you are ready to scale up and make some real money.

You have crossed that Rubicon from having an idea to having a product and customers. Now you have to build an organization, a real company, to manage the entire process. Or your fledging little company has to evolve from crawl to walk to run.

You may look yourself in the mirror and say — “Well, I know a lot about my product, even its market and competitors but what the heck do I really know about building a company?” Can I do this?

The simple and truthful answer is “Yes, you can!” If you don’t think so, here are some tips to take you from the garage to the executive suite.

Bad news — your generation did not invent sex. It does not have to invent the crafting of companies either. Someone else has also done this before.

Create a clever and insightful graphical representation of the business model which will become your company.

Identify who the customers are and why they will pay money for your product. This is the revenue side of the model.

Identify the elements which must be incorporated into your product to create it. This is the expense side of the model.

Identify all the management functions which are necessary to transform the ingredients into the product and to educate the customers and to make the sale and to manage the money.

Identify the competitive forces that are lurking in the darkness wanting to destroy you — the ones that are real and the imaginary ones.

Make a drawing of all of this on a single very large piece of paper and then marvel at what you have done. Do it about ten times until you have perfected it. It keeps getting better each time.

This is the company you will have to create. The one that can operate this business model. The one which can deliver your product to the marketplace and make a buck in the process.

Make an organization chart which shows each of the functions that are necessary to operate the business model.

Make it a functional chart and don’t worry that it turns out very close to what every company ever created looks like. That is good. Remember, you did not invent sex.

Identify the functions which are “essential” and those which are “nice to have”.

Now identify what you can afford and what you can stretch to afford and those which are simply out of reach for the time being.

You have now identified your immediate, short term and long term organizational imperatives.

Take the business model and the organization chart and color code it to identify your own personal strengths and weaknesses. If you have a co-founder, put his up there also. Now you have identified those elements of leadership and management that you can provide and those you will have to hire from the outside. Be tough on yourselves; don’t undertake a task you hate just for the ego enrichment of it all.

Be prepared to hire people who are fabulous in their fields. Hire a Chief Financial Officer you cannot possibly afford and tell him he is the “financial conscience of the company”. Meet with him weekly and never miss a meeting.

Now take the business model and the color coded organization chart and create a schedule of how you will build the organization. Which functions will be added first and why? The business model will tell you what and the color coded organization chart will tell you who and the schedule will tell you when.

That is really all there is to it but you will want to consider the following considerations:

It will not be perfect out of the chute. You will do some stuff that does not work. Just re-engage and do it over. It’s going to be OK. Really punish yourself — just kidding. Learn to laugh at yourself.

Understand that everything in life is iterative. You do something. Get better at it. Get better at it some more and one day you laugh to remember how naïve you were when you started. Ever learn to ski or snowboard?

Do the formulaic and fundamental stuff and get it done but only do what you really believe.

Vision, Mission & Values

Vision — big dreams and little dreams all cost the same, so go with the big ones so that if you only accomplish fifty percent, it will still make your Momma proud.

Mission — simple, direct and jettison every extra word. The mission of the Infantry — “Find ‘em. Fix ‘em. Kill ‘em.”

Values — sweat this one because you will have to live this one. If you are going to take risks and run with the bulls, this is where you let everyone know. Don’t be afraid to say that “frugal” is a value. I like frugal.

Every new employee hears the values part of the company from you and only you. Wear a suit and a crisp white shirt and a tie and tie shoes. Do it in the first five minutes of their employment. They will never forget that. Don’t discuss them, tell them. Difference between a tattoo and magic marker.

Job descriptions — don’t hold out for a Pulitzer but put some thought into it.

Copy the absolute best exemplars you can find out there. They are out there. Be a copy cat. Read Drucker.

Make all your decisions about equity upfront and don’t be afraid to say that you have to “earn” it. Understand that equity is an element of compensation and sometimes it is not even in the top three.

A good comp plan includes:

Salary;
Benefits;
Short term incentives (measurable performance based bonus);
Long term incentives (equity); and,
Something special (work from Colorado two weeks per year).

Develop a philosophy of management. Write it down. Try it out on some folks whose wisdom you admire. Put it to work. Live it.

Get a mentor, a rabbi, a gray haired eminence who is willing to work with you. Golfers get swing coaches but great swing coaches work on the golfer’s head as much as his back swing. Get a professional coach.

Do not be surprised that everyone in the company does not share your passion. That is the curse of being an entrepreneur — you see and care about things other people don’t even know exist. I would rather be a Captain of a rowboat than the second in command on the QE II.

Do not make changes, conduct experiments. Nobody can resist an experiment. Experiments that work well have a thousand fathers and mothers. It becomes their idea.

Brainstorm at least once a month. Honest to God, uninterrupted brainstorming. There are no bad ideas.

Learn to critique yourself. Learn to talk yourself down off the ledge. Be thoughtful. Take the lowest echelon of the company to lunch once a month. And then talk to them. Listen to them. Make one change they came up with and you will become a legend.

In any organization, you rarely receive power. You take power. You wield power. The most powerful people will things to be done they don’t order them to be done. That is real power.

Ooops, I see the hook. So I must go. Good luck. Remember — you can do it.

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Christmas Day 2011, the day I had to grow up

The chairman of our family, my dad, Norman Forster, officially retired on Christmas Day 2011 at 2.00pm, aged 87.


That was the moment I had to finally grow up. My mother and wife were downstairs cooking Christmas lunch and I went upstairs to check on my father, we knew the time was approaching but were hoping he would get through Christmas Day, unfortunately he had passed away. So I now had to go downstairs and somehow tell my mother, I walked into the kitchen, they both had their backs to me, chatting away about something or other, I walked back out and debated with myself about telling them after lunch but I knew I couldn’t do that really.

So I had to go back in and tell them. It was the very worst thing I have ever had to do, although my mother had cared for my father for the past 8 months and was fully aware that his time was coming I knew it would break her heart. At that moment we entered the most surreal world and despite having time to get used to the idea of him dying nothing had really prepared us for it. But the show had to go on, it was Christmas Day and I have a 4 year old son.

For all of my life my father was always there for me, always around to pick up the pieces. Always in my corner, the person I could go to and ask about anything and receive sensible unbiased advice. Sometimes it wasn’t the answer that I wanted to hear but it was pretty much always the right answer. He was my CFO (which was his career) and Chairman, always providing a guiding hand.

There were times I didn’t take that advice and when it proved I should have, which was invariably the case, my father never once said I told you so. He mostly allowed me to make my own mistakes and if necessary helped to dig me out.

I owe both my parents everything and yet they in return have asked for nothing. When I look at the complex relationships that some of my friends have with their families I realise how fortunate I am to have had a ‘normal’ relationship with my parents.

So I’ve had to do some growing up in the past week or so, which seems an odd thing to say at my age. It’s my turn to stand in my mother’s corner and I am happy to be able to do it.

Love you Dad.

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Steve Jobs RIP

Steve Jobs narrating “the crazy ones” ad

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Ideas are just a multiplier of execution

Derek Sivers, founder of CD Baby and Muckwork.

Image via Wikipedia

You often see the clichéd expression “ideas are worth nothing it’s the execution that counts.”

I fully agree but came across a great chapter in “Anything You Want“, written by CD Baby founder Derek Sivers.

The chapter is entitled “Ideas are just a multiplier of execution”  I’m going to copy and paste this from the book:

AWFUL IDEA = -1

WEAK IDEA = 1

SO-SO IDEA = 5

GOOD IDEA = 10

GREAT IDEA = 15

BRILLIANT IDEA = 20

 

NO EXECUTION = $1

WEAK EXECUTION = $1000

SO-SO EXECUTION = $10,000

GOOD EXECUTION = $100,000

GREAT EXECUTION = $1,000,000

BRILLIANT EXECUTION = $10,000,000

Multiply execution by idea and that puts a fun value on the idea! Am I suggesting you take the figures seriously, no, I just think it’s a fun way to show that without execution the idea is worthless.

“Anything You Want” is a great short read, I’d recommend that you buy it.   It’s written in the same sort of style as “ReWork” another  of my favourites.

P.S.

Thanks to Seth Godin for recommending “Anything You Want”

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Bored Of Directors – Another JLM comment nugget

I’ve adopted JLM as my online mentor.  His advice is priceless and he disseminates it through his comments on AVC.  Here’s another cracker on Board Meetings, it’s a comment he left on Fred Wilson’s blog here :

Every Board has to have a leader, appropriate committees, charters Board, ethics, nominations, audit, etc and it has to have an “operating agreement”.

The Board Chairman has to be the guy who can develop, nurture and burnish the relationship w/ the CEO and it takes work to do that.  He should have a bit of gray hair and more than a few rodeo ticket stubs.

If you think just getting folks to turn off their phones and shut down their laptops/iPads is an “operating agreement” then you are in first grade metaphorically speaking.

The CEO or Board Chairman has to develop a standard meeting agenda which includes the normal stuff but also time for topics like — education, what can kill us?, brainstorming.

It has to be time weighted — budget the time and have a time keeper who keeps everyone on track.   Nicely, gentlemanly but firmly.

Brainstorming — focused on strategic issues — is particularly important but cannot be done justice if it is visited as everybody is thinking about dinner, rush hour traffic and is fatigued by the prior meeting.

The Board materials have to be in the hands of the Board 4 days before the meeting and they have to be comprehensive and include info that is NOT going to be discussed at the Board meeting.    If the Board reads and understands the material in the book, then discussion becomes much more limited.

You have to keep a parking lot — the place you stick discussions that are not completed and which merit future discussion.  Then you have to re-visit it.

Board members have to meet for part of the time out of the presence of management and have a quick checklist — how’s our CEO doing, we doing our jobs as Board members?

If you develop these disciplines before times of crisis, then when the crisis comes, you will have the personal and emotional capital to deal with things.

More importantly if you have an orderly process, an operating agreement and a good leader — you will have more time than you can ever imagine to spend on the important things.

Always eat together as it is a natural decompression mechanism.

via A VC: Bored Of Directors continued.

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GigaOM – “The Meme of the moment”

“One of the secrets of entrepreneurship is to have that unconventional, fundamental insight that the rest of the world hasn’t and be in the position to act on that insight.  And by the time the rest of the world figures it out, you are king.”

–  Mike Maples Jr., managing partner of Floodgate Capital

via GigaOM – good article on why Mike Maples won’t be funding any Groupon clones

That statement should have been tweetable

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When Free becomes ‘bait and switch’

I opened up my Spotify app yesterday to discover that as a “free” user I was now only entitled to play a track 5 times and to avoid this I should upgrade to a premium account.  I would consider doing this if Spotify gave me access to every single band and track that I like but they don’t,  their catalogue is missing quite alot.  Anyway I prefer to “own” a physical copy of the music, old skool I know.

What really interested me was the negative reaction that this produced with many Spotify users which was akin to the reaction that LastFM had when they cut off free access to their users outside of the UK, US and Germany.

The question that springs to my mind is, is it a good strategy to launch your service as entirely free to your users only to put the pay wall up at a later date after you have gained traction?  I understand it might be an easy way to gain traffic initially but by erecting a barrier at a later date you risk pissing off large numbers of your user base.

To me it seems a better strategy to adopt the freemium route, offering a limited version from the very beginning.  I’d suggest a very limited version just so that people can get a small taste of what you are offering and that way nobody is disappointed from the beginning.

On a similar note Marco Arment the creator of Instapaper has a great post here about taking his free version of Instapaper for the iPad out of the App Store.

 

 

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Don’t bet the farm on someone else’s platform

Image representing Twitter as depicted in Crun...

Image via CrunchBase

Twitter’s @rsarver released an announcement giving new guidance to developers on the best opportunities to build on Twitter.  Basically it says don’t build a Twitter client that consumes the Twitter stream.  Existing clients will be fine as long as they adhere to the Twitter TOS.

So Twitter have figured out that their value is in their stream and frankly they want to own the eyeballs but they are happy for apps to feed the stream i.e. provide more content.

That’s all fine for Twitter, it’s their ball, they can take it away if they want to and therein lies the danger.  For as long as I can remember they’ve been happy for other people to develop clients and distribute Twitter across the world, now they feel they have critical mass they are starting to tighten up the rules.  Who knows what changes they will make next and how that will effect developers who have built apps over the Twitter platform.

Don’t bet the farm on someone else’s platform unless your Zynga and they are trying to diversify out of Facebook as fast as possible.

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From Zero to a Million Users – Dropbox and Xobni lessons learned

Just watched the slideshow below by @drewhouston and @asmith

Very good overview of start up experiences and some great tips on how to grow your user base.

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