Admit it, we live in an incredible period of time where the most successful people in the world freely publish their lessons learned online and we can virtually “attend” some of their classes. This week we’re doing exactly that with Reid Hoffman teaching his Stanford class on scaling a rapidly growing company. Watch his video titled Blitzscaling Session 1: Household Stage and learn from the person that started and scaled LinkedIn (NYSE:LNKD). Enjoy!
Recently I was talking to an entrepreneur that has spent $350,000 so far building stuff for his startup but nothing related to customer acquisition. This includes a visual brand identity, website, web app, and native mobile apps for Android and iOS. Now, during our conversation, I wanted to learn about his metrics. After mentioning that they haven’t signed any customers yet because they’re polishing the product, and therefore didn’t have any metrics yet, I asked about his go/no-go metrics to continue on with the idea. Meaning, what are his near-term goals, with specific metrics, to know if they’re making enough progress to keep moving forward. His answer: I don’t know.
Here are a few thoughts on go/no-go metrics for startups in the earliest of stages:
Too often, entrepreneurs don’t have metrics in mind when they’re starting out and get caught up in the grind without a target in sight. Also, remember the 3:1 customer acquisition to engineering spend ratio when budgeting in the early days as too many entrepreneurs spend all their money on the product and forget that they need even more money to acquire customers.
What else? What are some more thoughts on go/no-go metrics for continuing on with a startup?
Jeff mentioned not too long ago that tech startups aren’t really focused on innovating on a daily basis. Rather, they’re focused on not dying. For many entrepreneurs, especially those in the idea stage, they are closer to being a science project than an actual company. As Steve Blank famously says, “Startups are temporary organizations designed to find a repeatable business model.” I like to think of startups in this do-not-die stage as the hardiest of insects: cockroaches.
Here are a few thoughts on cockroach mode for startups:
Building a successful startup is incredibly difficult. Cockroach mode for startups happens more often than people realize and entrepreneurs that make it through it are even stronger due to the experience.
What else? What are some more thoughts on cockroach mode for startups?
Yesterday, I was talking with an entrepreneur at lunch. Right at the beginning of the conversation he said, “What’s the most interesting project you’re working on now?” Then, this morning, a different entrepreneur asked, “What’s the most interesting new startup in the Atlanta Tech Village?” Thinking back on these interactions, it’s clear that adding “most interesting” is a great variation to the common question “what’s going on.”
There are a number of common questions where adding “most interesting” makes it better:
The next time you use one of your go-to questions, add “most interesting” to it and see what happens.
What else? What are some more thoughts on the “most interesting” variation to common questions?
Atlassian, makers of popular software engineering and management tools, just released their S-1 IPO filing. Almost 10 years ago I used their JIRA issue tracker software and have been a fan ever since. Atlassian is known within the tech entrepreneur community for hitting $100 million in sales with no sales people — pretty amazing. In addition, they raised a $60 million Series A in 2010, which is large by today’s standards, and was incredibly large back then.
Here are a few notes from the Atlassian S-1 IPO filing:
As far as I can tell, Atlassian will be the first publicly traded software company with no sales team and no product price negotiations. Because the company is controlled by Co-CEOs with their special voting stock (and huge ownership positions!), they’ll be able to operate with a long-term view and focus on steady, profitable growth indefinitely. This is not your typical software company.
What else? What are some more thoughts on the Atlassian S-1 IPO filing?
In the entrepreneurial circles, there’s a well known book called The E-Myth Revisited, by Michael Gerber, where he popularized the concept of working on the business as opposed to in the business. Generally, the idea is entrepreneurs often get caught up on the day-to-day running of the business and don’t spend enough time dreaming, planning big goals, and thinking about the future.
Only, it doesn’t make sense to worry about working on the business if there isn’t much of a business to begin with. At the beginning, almost all time should be spent working in the business. Due to limited resources, domain expertise, and many other factors, the entrepreneur is usually the best person to be working in the business. Over time, this changes, and as the business grows and achieves some stability, the entrepreneur does need to consciously allocate more time to working on the business. Here are a few thoughts on working in the business vs on the business:
Entrepreneurs would do well to think about the concept of working on the business vs working in the business. Early on, most of the time is spent working in the business. Then, as the business grows, the entrepreneur needs to allocate more time to working on the business instead of in it.
What else? What are some more thoughts on working in the business vs working on the business?
Recently I started reading The 10X Rule by Grant Cardone based on a friend’s recommendation. Basically, the 10X rule is an idea that every project you do will take 10 times more time, energy, money, and effort than assumed, so set the much more difficult expectation, and if it happens to take less, then great. Too often, people set out to accomplish challenging goals (e.g. I want to build a successful business, I want to lose 20 pounds, etc.) and don’t set even remotely realistic expectations. However hard you think it is, set expectations for it to be 10 times harder and then you’ll be in the ballpark. Put another way, most people don’t reach their goals because they didn’t work hard enough at it.
Here’s a list of things successful people do, according to the author:
After re-reading that list, I can’t but think that it does a great job summarizing successful entrepreneurs as well. If you’re looking for some good ideas with the feel of a motivational speaker, check out The 10X Rule by Grant Cardone.
Khan Academy is one of those great “accidental” entrepreneur stories: smart guys makes educational videos to help his cousins, other people see the videos and clamor for more content, richest guy in the world likes it and invests, and millions of people benefit from awesome, free educational content. Hear this great story, right from the founder Salman Khan in this video of the week. Enjoy!
Continuing with yesterday’s post on The Great Game of Business for Startups, the author has an excellent Huddle Checklist on his site. While a few of the items are dependent on the type of culture and work environment (e.g. a focus on leaving fired-up isn’t common), most are broadly applicable.
Here’s the Huddle Checklist:
Every entrepreneur would do well to ensure that most of these checklist items take place during internal meetings.
What else? What are some more thoughts on the Huddle Checklist?
Earlier today an entrepreneur reminded me of an excellent business book that doesn’t get mentioned often enough: The Great Game of Business – Unlocking the Power and Profitability of Open-Book Management by Jack Stack. The author shares his stories of growing a successful business and emphasizes how educating team members on all aspects of the business (not just their area of focus), combined with transparency and open book management, results in a more aligned and committed team. Of course this makes sense, yet too many CEOs think it’s beneath them to spend so much time on these “softer” aspects of the business.
At Pardot, we worked hard to educate our team and provide an open book environment. Here are some of the things we did:
While open book management makes many leaders uncomfortable, we found tremendous success empowering our employees with as much information and communication as possible. For entrepreneurs interested in learning more, check out the The Great Game of Business.
What else? What are some more thoughts on extensive transparency and employee education in a startup?
David Cummings on Startups 