competition

Rules for Entrepreneurs: Compete and Collaborate

Photo by Roger Barker on Flickr.

Google and Apple are not only competitors… they are collaborators. Indeed, Apple and Google both offer top level smartphones – The iPhone from Apple and the assortment of Android devices by Google (Google not only has its own phones but is the main proprietor of the Android open source project).

In the same world, Samsung and Apple are rivals (and becoming even more rival-ous) with competing smartphones (Samsung runs Android) sparking ferocious lawsuits back and forth, but Samsung is also a major supplier of parts to Apple.

This segment of my continuing series on Rules of Entrepreneurship is all about knowing when and how to compete and when collaboration is a better option. They are not mutually exclusive. This is a natural segue from my last post where I suggest that entrepreneurs focus on doing one thing well.

Principle: Don’t Reinvent the Wheel

It frustrates me to watch startups (usually not very good ones) try to reinvent the wheel. A classic example of this was from back in 2007 when I was sitting in a Starbucks in Columbia, MD. We had a group of entrepreneurs who gathered there on a daily basis and cowork together.

One of the guys I was working with introduced me to a pair of African-American entrepreneurs and he wanted me to hear about what they were building. I sat down and listened to their pitch. They were building the “YouTube for the African-American community”.

Full stop.

What? Why? Why not use YouTube?

They were well into the process of building an entire video platform from the ground up, complete with their own video encoding technology, instead of leveraging what YouTube (and subsequently Google) already created.

The entrepreneurs real mission was creating a video-sharing community for African-Americans, not creating video technology for African-Americans to use. I told them that day that they should abandon attempts to build their own video service, and instead leverage YouTube (which is built and maintained by really smart people at Google) to build the community they really wanted to build.

Why re-invent the wheel? You distract yourself from your core goals.

Sidenote: I have never heard of or from those entrepreneurs since.

Collaborate

As an entrepreneur, part of the process is identifying your competition. We certainly have done that at WP Engine. Sometimes, it is to your benefit to team up with your competition to achieve a common goal. Remember, business is business and it’s not personal. Don’t let your desire to “win” get in the way of your ability to get ahead.

Also, remember the age-old saying, “A rising tide lifts all ships”. What is good for your competition is often good for the entire industry you’re in. Everyone wins.

Certainly that’s not always the case, but it certainly isn’t not always the case.

Compete

In my opinion, competition is a bottom-line issue and there are lots of ways to positively affect your bottom line. Usually, competition does not equate to a zero-sum game, an assumption that rookie entrepreneurs tend to make. (I did this a lot in 2006, 2007 while at b5media and trying to take pot shots at competing blog networks – years later, I find it all kind of silly).

When you do choose to take on direct competition, keep it narrow, precise and for a specific purpose. Don’t allow personal feelings to affect your business strategies and, in the process, keep the door open to cooperation with your competition in other areas.

Next week, I’ll continue this series and talk a bit about release cycles – which is always a fun debate. If you’re not already subscribed to this blog, do so now. Also, follow me on Twitter where I’ll be talking about entrepreneurship, WordPress and a healthy dose of sports on the weekend.

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building

Rules for Entrepreneurs: Do One Thing Well

Photo by bartb_pt on Flickr
I have been an entrepreneur for just shy of 5 years full-time. Before that, I was engaged in entrepreneurial “things” for the previous 6 years. 4 companies. I am not a perfect entrepreneur and some would argue I’m not even a successful entrepreneur since I haven’t had a successful exit yet.

However, the odds on favorite number that people in the startup community like to throw around is that 9 out of every 10 startups fails. So, as I see it, I still have 5 more failures and a win to look forward to (although I think my current startup, WP Engine, is a pretty damn good company that probably is a win).

I can say that in all of my years in this world, I’ve learned a number of things. Many of these things are through trial and error, success and failure, and good old A/B testing.

Today I’m beginning a series (revisiting an old theme from years ago when Steve Fisher wrote the “Venture Files” track on this blog – before I simplified to a single channel site that is updated far less often than it was then) providing some “rules”, as I see them.

As of now, I have six rules to share from my experiences. That may increase over time, but they are slotted and ready to go.

Focus Your Efforts

As an entrepreneur, the carrot on the stick is to provide the best damn {product} that {your target audience} has ever seen. I’ll focus on web tech startups since that’s what I know best, but the principle can cross easily into other industries as well.

Inevitably, being the best damn {product} that your {target audience} has ever seen, involves taking an already existing idea and improving on it. It’s always nice when you can do something new and innovative, but most companies aren’t and maybe shouldn’t be. It’s hard to do something completely new. One quick peruse through Angellist will show you scores of companies who are pitching their products as the {blank} for {blank}.

Examples:

  • Netflix for Digital Children’s Books
  • Twitter for images
  • Meetup for Professional Events
  • eBay for College Tutoring

While I go into manic twitching mode when I see pitches like this, I have to hand the entrepreneurs and startups credit in that they are able to clearly identify exactly what they are building and why it’s important. Sure, they have to leverage some other known entity to get their point across, but their idea is concise and communicable.

Don’t be Google

To leverage a known entity for the sake of this post, Google is a poster child for leveraging someone else idea in the entirely wrong way. Tell me what all of these products have in common:

  • Google+
  • Google Buzz
  • OpenSocial
  • Orkut

That’s right. Every single one of these products were attempts to be the entirety of something else – to take it to their biggest competition in the space. Google+ is a direct swipe at both Facebook and, to a lesser extent, Twitter. Google Buzz was a direct assault on Twitter. OpenSocial existed to provide a social networking framework and was a play to undermine Facebook. Orkut took a swipe at Friendster, both of which are essentially dead today.

In every one of these cases, Google decided to “go big or go home” and ended up going home. The most recent, Google+, is still trying to get some traction but everyone seems to be sitting back and saying, “I’ve got social network exhaustion” and don’t see the big value in Google+ over existing products that do the same thing.

The better approach, if you want to assault Facebook, is a limited, targeted, precision-strike on a single feature and knock it out of the park. Twitter already has the status update. Don’t go there. The concept of +1, is already being done by Facebook with the “Like”. In other ways, Tweetmeme has been doing the same thing by enabling users to share what they like (who’s really gonna share what they don’t like… even if they don’t literally “like” it because it may be controversial, it’s compelling enough for users to share… which is the essence of a “Like” or a “+1″?).

But perhaps Google could really target photo sharing and tagging. Picasa is already there. Make it challenge Facebook’s photo albums and tagging. No one has done social event planning very well. Even Twtvite and Eventbrite are just for event planning, but don’t do social very well.

You Have Finite Resources

As an entrepreneur, you have limited resources. The last thing you need to be doing is getting “squirrel eye” and being distracted by every cool feature you could make. Does it fit within your vision? Does it help extend the main reason for building the product? (A good example of this is Foursquare building an Explore Tab… it extends their business product vision).

Especially at the beginning, you don’t have a lot of resources. Don’t try to be everything to everyone. Stay targeted and laser-focused on doing one thing and one thing well. As your company grows, you can start exploring complementary features and products. You just can’t be everything all at once.

Next time, I’ll expound on this concept by talking about competition and collaboration. You’ll want to come back. If you’re not already subscribe to this blog, do so now. Also, follow me on Twitter where I’ll be talking about entrepreneurship, WordPress and a healthy dose of sports on the weekend.

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Everything I Needed to Know About Entrepreneurship, I learned from Star Wars

Star Wars. The original Star Wars. Perhaps those movies were defining films of our time. Though the first title (aptly numbered Star Wars IV) was filmed in the late 1970s, it continues to define movie nerddom today. Of course, Star Wars has seen somewhat of a renaissance due to the licensing of the intellectual property for the creation of video games like LEGO™ Star Wars and the continual memeage (is that a word?) of Yoda and Darth Vader quotes.

Nonetheless, it, like any good story, is successful in no small part due to the parallels in life that can be drawn. Much like how Office Space taught me about Public Relations, Star Wars taught me about entrepreneurship.

Don’t doubt me. The nuggets of wisdom are strewn throughout. In fact, I’ve developed my entire professional life around Star Wars. 1 You don’t believe me? Check this out.

Always Two There Are, a Master and an Apprentice

No matter how good you are in your professional life, there is always someone better. Yoda reminds me that, there should always be someone I look up to for learning. Sometimes this person (or people) is better than you at what you do. Other times, this person (or people) is someone who excels in a complementary way.

One of the founders of WP Engine, Jason Cohen, is one of these guys. Jason is amazingly technically (if I can keep him away from Javaisms while writing PHP code) and is the brainchild behind our infrastructure. More importantly, the dude is one of the savviest businessmen around in a completely unassuming way. He is not the guy who is going to walk into a meeting a toot his own horn like some investors or entrepreneurs do. He simply is and carries chutzpah. I have not known Jason very long but in the time I have, I’ve developed a real appreciation for him.

Likewise, Geoff Livingston has become a close friend but he’s also an incredibly focused entrepreneur. I’ve known Geoff since his early days where he was running a social media PR firm out of Alexandria, VA. Geoff and I became close but it wasn’t until I lived with him for six months in 2008-09 that I realized the drive this kid had. He frequently asked for my advice on things that were happening professionally, all of which will remain off the record in the circle of trust.

However, he has demonstrated since that he knows how to make tough decisions and go after what he believes in. Earlier this year, Geoff co-founded Zoetica to assist non-profits and socially conscious companies in their communications efforts. His drive has led him to lead in the CitizenGulf effort to raise money for oil spill cleanup in the Gulf, and to raise awareness and change in the policy world.

His dedication to his cause is something I’m watching and learning from.

Yahoooooo! You’re all clear, kid. Now let’s blow this thing and go home

Remember when the Death Star invasion was happening in Star Wars IV? The X wings were being pursued down the trough by TIE fighters. Darth Vaders fighter was on the hunt to blow Luke away. Han Solo brings his Millenium Falcon into play at the last minute and with some perfectly timed shot, knocks Vaders fighter into oblivion allowing Luke to handle his business and blow the Death Star away.

In business, the ultimate goal is always to have an exit. If it’s not, you’re holding it wrong. You don’t want to stay in a job forever. You may want to delay because you have more you want to do with the startup before selling it, but at the end of the day, if you’re putting blood, sweat and tears into a startup… you want the big pay day at the end.

This is what drives many entrepreneurs to settle for less money in exchange for more equity in the startup. Get less cash now for way more cash down the road.

Like the Death Star invasion, startup mode will have you fighting a guerrilla war at times… fighting for your survival… skirmishing to get a leg up. Once you’re clear and have done everything you can to get the company to a specific place, cash in! Blow this thing and go home. Live to fight again another day.

Aren’t you a little short for a stormtrooper?

One of the more hilariously ridiculous quotes from Star Wars IV came from Leah when Luke rescued her from being executed by the Empire.

The takeaway from this quote is pretty simple… never let anyone denigrate what you do as an entrepreneur. There will always be second guessing and there will always be other entrepreneurs who feel like thy know better and can offer advice. You know your company better than anyone else. You know your decision-making fiefdom better than anyone else. Own your offense and maintain confidence in what you do, and what you are building.

Luke, there is another Sky….walker…

The dying words of the Jedi Master Yoda. These words were the clue to Luke that he had a twin. That there could be another Jedi candidate. That there could be another Skywalker to defeat the evil Empire.

In the Lean Startup mode of starting businesses, the idea is to fail and fail fast if you’re going to fail at all. That way, if you fail and fail quickly, you can learn quickly without having put a lot of time and effort into something that will never work. Taking lessons learned, you can move on to the next startup and try again. Keep in mind that, statistically, 9 out of 10 companies fail. There is nothing wrong with failure as long as you realize there is another around the corner.

There is another Skywalker. There is another idea. There is another startup. And there may be another failure.

Arrrrrrrrrrrrrrrgh!

We don’t know specifically what Chewbacca was talking about when the Millenium Falcon’s hyper drive system failed. If there are any Wookie translators in the audience, please step to the front of the room. However, we can deduce that, based on what we know of Chewie, that he was doing tactical consulting.

In other words, it’s my opinion, that Chewie was making sure Han knew that there was a lot of problems with the Millenium Falcon and it wasn’t like they had the money to fix the bucket of bolts. Chewie was suggesting solutions for Han to fix problems quickly without spending a lot of money. I mean, can you imagine if Han had to take a VC round to fix the Falcon? What would the valuation on that sucker be anyway? I’m sure it would be a diluted round.

Instead, Chewie was helping Han realize what he needed to do to fix the problem on a budget. Maybe even in bandaid fashion. As entrepreneurs, use your creative juices to find ways to self-fund and not take stupid money just so you can extend runway. Find ways to be revenue positive now instead of later. Find ways to cheaply outsource problems so core team members can focus on the core solutions.

See?

See. Everything you need to know about entrepreneurship can be learned from Star Wars. It’s a geek favorite for a reason. I’m sure there are lessons you have learned as well. Feel free to share those.

In the meantime, may the Force be with you.

Photo by xtyler

Notes:

  1. Not really. No, really.. not really.

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