Start out simple

Start simple, Planes that fly are build on ground

Planes that fly are build on ground

To build something complex you first have to build something simple. If you want to build something complex it will never work.

Why didn’t I realize this 4 years back. I was trying to build something so complex, that would atleast require few million rupees to just build and get it running.
And then I had to scrape out everything mid-way, thrice.

What it’s good that I follow the “never-give-up” spirit, that I am back on the plan, now starting with something “Simple”.

A lesson learnt once, an experience forever.

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How To Do Market Research For Entrepreneurs


In my experience, nothing beats talking directly with your clients and potential clients. There’s something about connecting with a real human being that reveals subtleties that technology based research doesn’t bring up. The tech touch research is more left brain (analytical and linear.) But the human touch research is more right brained (relational and holistic.)

Your goal with the human touch research is to understand, directly from your market, what they want.

Both human touch and technology based research are valuable when combined to help you create a winning business and product.

 

Ask the #1 Marketing Guru

 

The fastest way to riches in your chosen topic is to ask a top marketing guru what to do. He or she will reveal to you the secrets to access the pot of gold waiting for you. They will tell you how to market your product or service the most effective, successful way. All you need to do is ask the #1 Marketing Guru.

Who is it? It’s your target market!

THEY have all the answers for you. They will tell you what they want and how they want it. They will tell you what gets them worked up and ready to take action. They have the golden key that will unlock untold wealth for you. It’s all there for the asking.

Another common mistake I see entrepreneurs make is working too hard trying to figure out their business and marketing by themselves. You can spin in your head all you want, but the shortcut answers you’re striving for are literally a phone call away.

 

Two Ways to Do Human Touch Research

 

  1. Ask your market directly: The best way to find out what your market wants is to ask them directly (ideally in person.) When you hear their voice or see their expressions, you can gauge how passionate they are for your topic – how badly they want it. I recommend you set up a time either in person or over the phone to interview your market.
  2. Ask people who know your target market (centers of influence): Your target market will reveal a lot to you AND they may not want to really expose the full truth of what’s going on for them because they may not even know! Another approach to learn about your market is interviewing people who know your target market well. It may be a business colleague or associate – someone who will give you an objective, 3rd person point of view about your market. They know that market because they’ve worked with it for years or decades. They know first hand what’s going on in the minds and hearts of your people.

Marketing isn’t complicated when you listen to the obvious indicators from your target market. Resist the temptation to over analyze what they are saying. And watch out that your biases and preferences don’t get in the way. If you’re so in love with an idea and your market is telling you they’re not interested, take heed. Remember, your target market is your #1 marketing guru.

Copyright (c) 2009 James Roche – About the Author: Small business marketing coach, James Roche, shows you how to attract more clients, develop an internet marketing strategy and create your information products and programs. Discover his proven and practical marketing strategies with his free special report, “The Shift: Quit Struggling, Make a Difference and Join the New Rich”

 

 

 

 

 

It was yesterday, when things were not-so-difficult

This post is in regards to the startup companies and entrepreneurs with an idea, or a product.

Today getting done is not so difficult task.What’s more important is WHAT and HOW to get it done so that you don’t do it wrong.

In the earlier times, doing things was of more importance as there were very less, or almost nothing existing. So it was a necessity of making or building something quick, however it was, whatever features it had, they just knew one thing ‘Just Do It’. Making better things or with less errors, or with variety of great features, big and large, weren’t into pictures as things were developed for first times so it was important to first try if the basic works and only then to get your hands dirty completely into it making the product or company larger and feature-ful.

But today the scenario is completely different. Every product, every industry, there are thousands of competitors already sitting in the market before you, having more experience than you, and thus having more capital than you, making your chances very narrow to follow the same industry. So if you follow the old-times and try to just make something, than you should simply just forget it, unless what you have in mind does not exists in the world YET!. Don’t want to give up? Then you still got a chance. Create something that is far far far (note 3 times) more better and inventive than the older guys, because if you make something just 1X better, they still have that much capacity to overtake you or your product (they have got larger teams, money, market share, etc than you.) So better come up with something better, better planned, better strategies, better recovery strategies (in case your product doesn’t show up well with the consumers), and a better you.

Is it Time for You to Earn or to Learn?

This post actually ran on bothsidesofthetable.  This article is copy of Mark’s experience being a VC and an entrepreneur which he shares on Both sides of the table.

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These are the words of Mark Suster:

I often have career discussions with entrepreneurs – both young and more mature – whether they should join company “X” or not.  I usually pull the old trick of answering a question with a question.  My reply is usually, “is it time for you to earn or to learn?”

Let’s face it.  If you’re thinking about joining as the director of marketing, product management manager, senior architect, international business development lead, etc. at a startup that has already raised $5 million the chances of you making your retirement money on that company is EXTREMELY small.  That’s Ok.  Not every job you have is supposed to be your big break.  It’s Ok for that to be your job to “learn.”

Yet I often hear people asking about these types of opportunities express their questions to me whether I think this company is going to be a big hit.  It’s clear to me that many people confuse learn with earn.  I will do a simple calculation for them that goes like this.  OK, you would own 0.25% of the stock.  They raised $5 million in their B round.  Let’s assume that the company raised it at a normal VC valuation, which means it gave up 33% of the company and thus $5 million / 33% = $15 million post-money valuation.  If you never raise another round of venture capital (a big if) and if your company is sold for the normal venture exit ($50 million on average for 200 or so annually that get sold) then what is your stake?  $125,000.  Yup.  Simple math would have solved that but people rarely do the calculations or think about it.

And let’s say that it took 4 years to exit – that’s $31,250 / year.  Now … these are stock options and not restricted stock so you’ll likely be taxed at a short-term capital gains rate (see comments section for why).  In California that averages around 42.5% so in my state after tax you’d make an extra $18,000 / year and that’s in a positive scenario!  BTW, this ignores liquidation preferences which actually mean you’ll earn less.

DollarsSo let’s go CRAZY!  You get 1%, you sell for $150 million and it’s in 3 years (e.g. you won the lottery).  That’s an after-tax gain of $287,500 / year for 2 years.  Not bad.  Doh!  Wait a second.  Stock vests for 4 years.  You didn’t get acceleration on a change of control?  Sorry bud.  We’ll have to either cut your earnings in half to $143,750 or you’ll have to complete 2-years at BigCo that bought you making the money spread out over 4 years so it’s $143,750 / year for 4 years.

Don’t get me wrong.  This isn’t shabby money.  But given that a home in Palo Alto or Santa Monica will set you back $2 million it’s hardly riding off into the sunset.

I’m not trying to depress you.  I’m just trying to be realistic.  If you want to “Earn” (and by earn I mean the chance to buy your house outright or greater) – you have to start a company or join as a senior executive.  Or you have to hit the lottery and be an early player middle management player at Google, Facebook, MySpace or Twitter.  Let’s be honest – how many of those are created per year in the entire country?  1?  2 max?  I spoke with an investor recently who told me that 1,500 deals get funded / year in the US, 80 (5.3%) eventually sell for $50 million and only 8 (0.5%) eventually sell for $150 million or more.

stanfordSo when the Stanford MBA, the ex senior technology developer or the former Chief Revenue Officer of a company is calling me and asking my advice on their next gig you can see why I start with “are you ready to earn or to learn?”

For most people it’s learn.  I only emphasize the question before I find it much more helpful to join a company with realistic expectations of what you want to get out of it.  My advice is often, “make sure that what you get out of working at this company is one or several of the following: a great network of talented excutives and VCs, more responsibility than your last job, specific industry or technical skills that will help you in what you do next, a chance to partner with companies that will increase your industry relationships, etc.”  Learn now to earn later.

When I was CEO of my first company (where I admittedly F’d up everything before I figured it all out) we initially calculated for people how much there options were going to be worth some day.  It was 1999.  Ventro was trading at $8 billion on sub $2 million of revenue.  It was easy to do these calcs.  Over time I realized that this created a rotten culture.

Over time I took to telling people the following, “join BuildOnline because you think you’ll get great experience.  Join because you like the mission of what we’re doing.  Join because if you do a good job we’ll help you punch above your weighclass and work in a more senior role.  And if you ever feel that in the year ahead of you you don’t think that you’ll increase the value of your resume and you’re not having fun then go.  Join because we pay well but not amazing.  Stock options are the icing on the cake.  They’ll never make you rich.  Don’t join for the options.”

Obviously you should only take jobs that you enjoy and that let you be passionate about coming to work every day.  That’s a given.  Don’t blindly join a company without knowing why you’d join or asking the right questions.

So a friend recently called to ask for advice on becoming the CTO of a startup.  He’d be employee number 3.  The company was being spun out of a larger company.  I asked him how much of the company would be owned by the parent company and how much would be owned by management.  He hadn’t thought to ask.  When we next spoke he had found out that the CEO had about 5% and there was no management option pool in place.  My advice was … run!  I said, “all the hard work is ahead. Why start the game with a company with a structure that’s likely to fail.”

Another talented young man I recently met called to talk shop.  He had an offer in NY, an offer with a well known startup in the Bay Area and an offer with a startup in LA.  He also has his own company that he started 6 months ago.  He’s not even 21.  He wanted to know what to do.  I told him that he needed to decide whether to learn or to earn.  He’s young enough to do either but know why you’re doing it.  I advised against the SF role because it was a bigger company and his role would be pushing paper from one side of his desk to the other.  If you’re going to learn then at least go work somewhere exciting where you can really do something.  If it works you can stay and grow for the next 5 years.  If it doesn’t you’ll have done 3 startups by 26.  And you’ll be ready to earn.

On the other hand, at sub 21 you have the ability to swing for the fences and try and earn if you’re so inclined and if you think you have the skill sets and the idea.  When you’re 40, have 3 kids and a mortgage this is much harder.

Now, for the “Earn” part.  Another friend of mine is a very talented executive.  He went to Harvard undergrad, Harvard Business School and has worked at 3 prominent startups and 2 well known big companies. He’s worked in the US and internationally.  He’s in his early 40′s.  Whenever he calls me he must think I’m a broken record.  I always say, “Dude (I live in SoCal now!) – it’s time to EARN.  Stop dicking around with another number 2 job (he always gets offere the number 2 job). It’s time for you to be in the driver’s seat.  Either start a company or go somewhere where they need a CEO.”

If you really want to earn you need to be in the top 3-4 in the company.  Best to be a founder.  Very few people can do this.  It’s a rare skill.  Be realistic about your skills, background and ideas.

Anyway, I hope this post hasn’t been too harsh.  I’m not all about the money.  I think working in a startup can be an enormously rewarding experience.  I wouldn’t recommend it any other way.  But you need to match your talents, age, skills, ambition and economic situation with your current reality.  At a minimum be realistic about the outcomes.  And make sure you ask yourself the question, “am I here to earn or to learn?”


5-point analysis test for your newly found business idea

Here’s my first post after my new beginning. So soon huh? Yes. Now I’m pretty serious with this beginning.

A NEW IDEA

Straight to the point:

Thought of a nice idea which you want to start with as your business?

Here’s an easy 5-point pre-start analysis to tell you if you really should start it. OR NOT.

1.Why are you making this project – Analyse for whom, and why you making this product ?

2.What is the problem that you’re solving? There’s no problem you’re solving? (If you wanted to do a business with the idea, Shut down now) – See if there is atleast some problem around you/people that it is solving

3.Is there anything else existing that solves this problem? – Similar idea already present? Competence?

4.If no, Good. If yes, why my product again? what the f*ck am offering (10x) better that the existing product isn’t? WHY ME and WHY MY PRODUCT and not the other product that’s existing since years?

5.Read them all again, you get the answer.