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By brantcooper, August 29, 2011 11:59 am

Here’s what I submitted to Eric Ries as an idea for the cover of his upcoming book:

For some reason, it didn’t get chosen.  : )  Actually, it’s a just slide from my You are (not) a Visionary deck I presented at last week’s Wisconsin’s Forward Technology Conference.

Comments (2)

By brantcooper, July 26, 2011 10:33 am

As technologists working on new products and new markets, we tend to forget where we are on the technology adoption lifecycle curve.  That’s a mistake.  Here’s why:

1. Nobody cares

See all that white space under the middle of the curve?  Those are people using products that aren’t yours. They are inundated with new offers every day. They exist in a world of information overload. It doesn’t matter how great your technology is, nobody knows about you, nobody cares about your product.  See that white space under the line marked by the blue dot?  Yeah, me neither.  If, for example, you are building a new web app that demands people spend time on your site, whether you’re the new deal site du jour or a “disruptive” new Q&A site, you’re competing against limited attention, ie., limited time carved out for spending time online.  Never mind your actual competition. You have to either increase the amount of time people spend online, or steal time from Facebook, Twitter, Google, Microsoft, CNN et. al.

2. You have a long way to go

Inside our early adopter bubble, we think a TechCrunch mention is the end all, be all.  What % of the US population has never heard of TC, 97%?  See where the curve starts accelerating up?  That’s about where the chasm lives, waiting to swallow you up.  Of course As Steve Blank likes to point out, you’re lucky if you even get to the chasm. We are easily distracted by minor (albeit clever) improvements to infrequent activity on technology platforms that from a global perspective, are obscure.  Say, like posting photos that look like Polaroids to Twitter. Not only are we enamored with such minutiae, but are ready to declare such features “the winner.” Of what, who knows?  You can try Leapfrogging early adopters, but that requires millions and millions of dollars (see iPhone/iPad).

3. Your entire ecosystem is early

Have you noticed the resurgence of email newsletters? It’s as if technologists finally got the DMA memo that email is (still) the online communication tool of choice among consumers.  In other words, if you want to reach customers, email is better than Twitter, Facebook, SMS, etc.  Not that these aren’t effective, too, for some segments, but like it or not, email is king.  The point is that the distribution of users on the platforms your product depends on, determines your market potential.

If your strategy depends on early majority platforms, you will need patient investors and money to burn. If you aim to leverage established platforms, remember that users generally like them the way they are (that’s why they were successful).  It’s hard to alter user behavior within a platform, too.

Of course, your objective might be to overthrow entrenched players, or perhaps to re-segment their market.  But remember that the momentum achieved by established companies successfully converting the “early majority” crushes your “better” product.

Use your fellow “early adopter” denizens to help vet your product, determine what works to solve pain, reward passion, instigate sharing, but don’t assume your success here and infatuation with your wiz bang technology represents a real market.

Comments (8)

By brantcooper, June 8, 2011 12:27 pm

I just did.

A couple of weeks ago, I tweeted:

f***ing hard telling clients maybe their “baby is ugly.” #lsmSF#leanstartupMI#EntrepreneurDownDays

The pause that followed was a deep void.  It was emotional.

During the next week of reflection, a non-early adopter, but loyal user of the product called the founder to  announce that he would not after all, pay for the product. Not at the proposed price, not at the price they had argued for, not at any price.

So he fired himself as Founder and CEO of his company.  And then he fired me.  (“I no longer need your services.  But in the future…”)

We talked briefly about his future, including possible pivots and leaps, but essentially, the gig was up.  I admire his self-awareness and the honesty with which he evaluated his situation.

Can you do that?

Yes, it’s difficult to know when to kill your idea.  Yes, you should be knocking down walls to work.  But the market is the final arbiter, not your hustle.

There’s a whole slice of our society based on non-transparency, on not being totally truthful. It’s necessary for polite society.  You don’t always need to hear your haircut sucks or you look fat in that outfit.  But this is a problem, too, when you really need to hear the straight dope.  As a startup founder, you need to surround yourself with people who are willing to speak the truth.

You need to talk to investors who won’t grinfuck you, e.g., those who makes intros to a bunch of other investors, instead of telling you why he thinks you’re not fundable. You need advisors like Dan Martell, who challenge whether you got the stuff, or Patrick Vlaskovits, who will kick your ass because you’re spending more time documenting your business canvas then actually outside the building testing your business model.  Truth-telling is why I admire Eric Ries, who is willing to challenge the most fundamental media myths surrounding startups and “visionaries.”

Gravity’s Zipper

You will be exposed.  If your idea isn’t what you’ve built it up to be in your mind, it will eventually fail.  Believe in  yourself, be skeptical of your idea.  Surround yourself with truth tellers.

Comments (4)

By brantcooper, May 9, 2011 5:46 pm

Whether there’s a tech bubble or not is an interesting discussion going on in the blogosphere. (Reading guide is below.)

I fall into the “boom before bubble” pack. Having lived through the 90s’ bubble, there’s no way we’re there yet.  That doesn’t mean there won’t be one, but my feeling is we’re skating a razor’s edge off one side of which looms another wave of  housing foreclosures and a doom & gloom Sequoia presentation. Investors herding like sheep around darling Silicon Valley startup memes is not in itself bubblicious, it’s SOP.  Sheep investing affects supply and demand conditions that result in higher valuations.  Good or bad, that doesn’t in itself represent a bubble.

The Internet bubble was about more that overvalued startups. Horowitz and Graham argue other dynamics way better than I can (see links below), but I think it’s important to point out that bubbles dramatically affect the entire economic climate. The bubble was “our” version of 70s inflation.  The bubble caused a huge migration of people to the SF Bay Area. Salaries went through the roof (not just for engineering talent.) So did cost of living.  In the 90s, the housing bubble was inseparable from the Internet bubble. The buying of lots of different goods became irrational.

And there’s the final point.  Frankly, as long as the voices saying we are in a bubble remain as strong as those who say we aren’t, it’s hard to say we are.  There’s was very little dissent in the 90s or perhaps more accurately, that dissent was easily drown out by the ignorance of the mainstream media. But that isn’t the case today, either.

The Best Way To Avoid a Bubble

Think globally, act locally.  Successful startup ecosystems in Boston, New York, Boulder and a few other cities eases pressure on Silicon Valley prices for EVERYTHING, including startup valuations.  Yes there are advantages to investing in startups in large ecosystem like Silicon Valley, including access to partnerships, vast amount of resources and M&A opportunities, but there are pitfalls, too.  Strong entrepreneurship exists outside Silicon Valley, as many of the past “big wins” show.  Local non-SV ecosystems frequently have strong, yet  underemployed resources, lower engineering costs, employees less likely to jump ship, and local environments arguably more attractive that Silicon Valley.

But where’s the money? San Diego’s Avalon Ventures is the only VC with an active fund. Tech Coast Angels, who laughingly claim “lean startup” as a tag, is infamous among entrepreneurs for their six month plan for not investing, rather for any risk-taking activity.  Local support organizations like CONNECT server clean tech and life sciences well, but their vanity metrics fail to reveal their inability to attract and help Internet and software entrepreneurs.  There are about a dozen San Diego angels on Angel List, most of whom have no San Diego investments.

I have heard similar stories from other startup cities, even the bigger cities that seem to be thriving.  There are several problems:

• Many local investors are “old school,” believing they sit in the catbird’s seat and can wait for for entrepreneurs to knock on their doors.  (Not going to happen.)
• Many local investors follow the lead of Silicon Valley investors, rather than striking out on their own.  (Angel List helps solve this, plus lower $ amounts should increase risk tolerance.)
• Investors don’t know how to connect to local entrepreneurs. (Entrepreneur groups are thriving and investors need not fear being swarmed.)
• Many entrepreneurs don’t know how to connect to local investors. (Entrepreneur groups help with this, too.)
• Some entrepreneurs either ask for money based on ideas or are not building “real” startups. (Why do you think I evangelize the Lean Startup framework?)

The crazy result is local startups going up to Silicon Valley to find funding and then experiencing a tremendous amount of trouble to move there AND local investors investing in Silicon Valley companies.  This circumstance not only represents a failure to support San Diego’s economy, but also serves to increase the pressure on the Silicon Valley bubble, er boom.

Please let me know your thoughts on the bubble and local investments in comments.

_____________________________

Here’s a short guide on bubble opinions:

Yes, there’s a bubble

Steve Blank (post)

Paul Kedrosky (post)

Mike Maples (TechCrunch)

No, there’s no bubble.  (Yet.)

Henry Blodget (slides)

Paul Graham (article)

Ben Horowitz (post)

Howard Lindzon (post)