dizablo's soup

Today quite a variety of entrepreneurs presented their business ideas at my Online Strategy Roundtables. Several times I brought up how precious our time is and we need to treat it as such. So many people become enamored with technology and the building of the product before they ever think to validate that this is a business service or product that a customer wants to pay for.

I've seen too many entrepreneurs wasting precious years of their lives, and I sincerely try to discourage anyone from wasting his or her time on an idea that does not have legs based on concrete customer feedback. One of the entrepreneurs said he thinks of me as the Simon Cowell for entrepreneurs after listening to some recordings of previous roundtables. I think my advice is only valuable if I'm being honest and direct. Plus, I don't want to waste my precious time either!

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Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. She has founded three companies and writes a business blog, Sramana Mitra on Strategy. She has a master's degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Her Entrepreneur Journeys book series, Entrepreneur Journeys, Bootstrapping: Weapon Of Mass Reconstruction, Positioning: How To Test, Validate, and Bring Your Idea To Market and her latest volume Innovation: Need Of The Hour, as well as Vision India 2020, are all available from Amazon. Mitra is also a columnist for Forbes and runs the 1M/1M initiative.

Dawson Fercho started off by introducing Temetic Research, an software services company that offers advanced tools based on digital sociology that can offer a deeper understanding of social media buzz (beyond just words) than social listening and monitoring products currently do. Launched in January, they already have half a dozen communications firms who deal in brand awareness and management on board as clients. They offer a base analysis report as a service, and they hope those who like the report will become clients of either the software products or of their ongoing service.

Dawson asked if he should position his business as being similar to social monitoring to help potential clients fit them into a category. He tells me there are several metrics that his technology is able to track because of the algorithmic sophistication that others cannot, so my advice is to lead with those metrics to differentiate. He needs to ask customers if they are interested in measuring X, Y, and Z to validate that these metrics are indeed of interest to them.

Dawson said all of their money is going into development, and my advice is to ramp up the base analysis service to help fund their development and continue to bootstrap. I also suggested he explore partnering with SaaS PR businesses like Vocus PR who I think will find this technology intriguing. I asked him to check out my case study on Vocus PR.

Next, Griffin Boyce presented PsycView, a software to help eliminate the distance between doctors and patients. Griffin discussed how this software can help doctors manage patients over great distances, and also how patients can use it to get treatment from rural and frontier areas. Griffin is trying to do too many things at once with his business and is going in too many directions. He spoke about having an iPhone application to serve people living in frontier areas, but the iPhone is not widely used in such places. He said he thinks addicts are a strong segment to target, but I don't think people in the depths of addiction will be checking their phones for solutions.

I think there could be something interesting in Griffin's pool of ideas, but he needs to do a lot more focused work to figure out what it is. I told him it's like an uncut diamond that still needs to be shaped and pared down to get to the gem. He needs to focus his software on doing one thing really well - zero in on one idea, a specific disease or whatever. Spraying and praying does not work. I suggest using the Clarify Your Story framework to focus.

Gustavo Hernando was up next to present daFoodie, a website that allows diners in Orlando to share photos of their plate of food at a restaurant to help others decide where to eat. He sees the sharing of such photos as a growing trend and does not plan to include ratings or reviews.

I'm very concerned that there is no reasonable way to make money doing this. I question how many people base their dining decision on photos alone rather than reviews. Perhaps he could partner with some other review sites, but what will keep them from doing this themselves? I hate to discourage any entrepreneur, but Gustavo may be better off using his considerable skills elsewhere. It is very expensive to go to market in this area; OpenTable has spent a ton of money. I hope Gustavo will find an opportunity that will monetize better for him.

Then we had Rudy Santamaria who has designed a line of kids clothing called Look Mommy! Clothing. These clothes convey positive images depicting what a child would like to be when he or she grows up. He has sold 750 of these shirts by hand in the past six months, validating that this is something parents are interested in buying for their child. If he would like this business to scale, the next step is to figure out how to sell these shirts without Rudy being physically involved in the process. Since baseball player and rock star shirts are his best selling, I suggest he start exploring what the best channels are for each category and remain very focused on each niche. Personally, I'm aware of a high level effort to interest young girls in science, so I suggested he do a Look Mommy, I'm A Scientist design for girls and target the organizations that are leading this movement.

Up last was Matt Walters for Sports Spray, a line of water resistant spray products to help amateur and professional athletes excel. His product line includes a stick spray (to enhance grip), slip spray (for under padding and blisters), no sweat spray (antiperspirant for hands or feet), more sweat spray (enhances workout and weight loss), and shoe spray (to keep from slipping). He is ready to go to market but is wondering if he should lead with a product whose competition retailers would already be familiar with or should he introduce the slip spray product, which is totally unique.

I suggest he start with the new, more differentiated product, the slip spray, and manufacture that first. He should focus all the branding around this new product and getting it reviewed by bloggers and social media influencers interested in sports. We discussed very targeted advertising to coaches since he believes it is a cost-effective and reasonably priced channel. I suggested he validates that the demand for this product exists by selling online before chasing retailers to get broader distribution.

I started doing my free Online Strategy Roundtables for entrepreneurs in the fall of 2008. These roundtables are the cornerstone programming of a global initiative that I have started called One Million by One Million (1M/1M). Its mission is to help a million entrepreneurs globally to reach $1 million in revenue and beyond, build $1 trillion in sustainable global GDP, and create 10 million jobs. In 1M/1M, I teach the EJ Methodology which is based on my Entrepreneur Journeys research, and emphasize bootstrapping, idea validation, and crisp positioning as some of the core principles of building strong fundamentals in early stage ventures.

In addition, we are offering entrepreneurs access to investors and customers through our substantial channels. Our newly launched 1M/1M Incubation Radar series this week profiles La Grande Dame, and you can also read about several other 1M/1M entrepreneurs on my Forbes column, These Companies Are Built To Enjoy.

You can find the recording of this roundtable session here. Recordings of previous roundtables are all available here. You can register for the next roundtable here.

When Sigma Partners' Richard Dale posted a video of a random dancing guy to his Venture Cyclist blog I was skeptical. I'd seen the original video sans narration and dismissed it as a strange sociological phenomenon condensed into a quick three minute clip. Nevertheless, when the same video is narrated by MuckWork and CDBaby founder Derek Sivers, it provides some valuable leadership lessons for entrepreneurs.

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Having first presented the video at this year's TED Conference, Sivers make the case that instead of the first mover / leader being the catalyst of a movement, it is in fact the first follower that rallies others.

Says Sivers, "Being a first follower is an under-appreciated form of leadership. The first follower transforms a lone nut into a leader. If the leader is the flint, the first follower is the spark that makes the fire. "

For entrepreneurs, it means that the key to virality isn't just building a great product. It's about having the right early adopters to teach others how to use the product and become comfortable with the novelty of something new. Sivers explains that it's the early adopters that others follow and not the trailblazing / seemingly crazy leader. In other words, it's important to respect your earliest users and give them the mechanisms to make their support public.

Says Sivers, "We're told we all need to be leaders, but that would be really ineffective. The best way to make a movement, if you really care, is to courageously follow and show others how to follow. When you find a lone nut doing something great, have the guts to be the first person to stand up and join in."

We've seen our fair share of angel investors, early executives and engineers follow a lone nut and build successful businesses. As an entrepreneur, who do you credit as your first follower and what efforts have you made to ensure that the act of following is made public?

In the ancient times before the internet, a business plan was what you wrote to appease the Gods of private equity and venture capital. It was a thick document, full of scientific analysis, market data and of course, a J-curve shaped projection of sales. The problem was that few investors would make it through your epic masterpiece. Instead, they'd skip to the juicy parts. Former CEO of Elance and current founder of Roach Capital Partners, Eric Roach, shares what he's kept in the business plan to raise $55 million dollars in venture capital in two months.

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In a recent blog post, Roach writes, "I would not waste the time building a big bad business plan, at least as described all over the web.  I've come to believe this has become a consultant's dream, unfortunately, not one filled with gold at the end of the rainbow... When looking at the companies I have funded, I cannot think of a single time when I have read one.  Not one."

I saw the post moving up Hacker News earlier today and I sincerely hope that entrepreneurs continued reading the article beyond the initial "don't write a business plan" message.

While Roach dismisses the idea of an epic business plan document, he does encourage entrepreneurs to build a business case. The VC suggests omitting excel spreadsheets and keeping it simple. That being said, you need to know your projections, financials and product market as if those spreadsheets were sitting in front of you. In his experience, he's raised funding with an executive summary, a powerpoint deck of 10-15 slides, clear financials and an elevator pitch. While he suggests you spend less time on constructing an epic document and more on getting your second meeting, he recognizes that you will be required to justify all of your statements. The point is that it's not about the paper, it's about your rationale, product and power to persuade.

Photo Credit: Alex de Carvalho

Between Y Combinator's Startup School, the influx of seed fund incubators, the list of legendary mentors and investors and the dotcom bust's school of hard knocks, is there really any reason to go to grad school? At ReadWriteWeb we're supportive of lifelong learning and universities that coach entrepreneurs, but a recent post by Venture Hacks founder Naval Ravikant has us wondering, "What is the value in grad school?"

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Ravikant suggests that incubators and accelerators like YCombinator and Techstars are the new grad school.

He writes, "In some ways, it's better," and that unlike business schools, YCombinator pays entrepreneurs, which allows founders to be their own boss and encourages original work.

In addition to Ravikant's points, the fact that every incubator participant is connected to advisors through a financial agreement means the group may be motivated to maintain their network and share contacts. Nevertheless, before dismissing the idea of grad school altogether, it's good to remember many of the top entrepreneurs and investors in Silicon Valley are MIT, Harvard and CalTech grads (including some of the Venture Hacks team). Perhaps the argument here is not so much about incubators over traditional institutions, but in the value of good mentors that have a stake in your success and do not rest on the laurels of a tenured position.

As a startup entrepreneur, what is the best lesson you've ever been taught and who taught it to you?

Photo Credit: Duncan Hull

If I see another screencast using the iMovie default songs, I'm going to go nuts. Music sets the tone for how you want others to perceive your company and choosing a generic soundtrack is like branding yourself boring. In the past, videographers were forced to work with lawyers to gain appropriate licenses for samples. Thanks to the Free Music Archive and a number of other services, we're free to use original songs while still maintaining the rights to attribution. This morning's launch of the Free Music Archive's guest curation series further expands on this environment of collaboration.

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Rather than forcing users to blindly navigate through the seemingly endless supply of CC-licensed tracks, clueless music seekers like myself can look to musicians for inspiration and track discovery. Creative Commons invited developer and ccMixter contributorVictor Stone to curate the community's first guest playlist. Stone's mix is entitled, "Above Ground Collection" as opposed to the underground and experimental tracks we so often see in music file sharing communities. Stone describes this as a playlist of pop and R&B "by producers who have an ear for the popular without sacrificing artistry." For those of us looking for decent demo music, this may be a good place to start.

Users can stream and download the curated playlist from the Free Music Archive or they can visit the ccMixter Editor picks for new podcasts, downloads and popular tracks. If you're a startup company in need of a video demo, consider spending the extra hour on ccMixter and choose a song that gets people pumped to register.