Focus or Fail

Mick Liubinskas from Pollenizer delivered a Focus Workshop in Melbourne last Tuesday night with the topic “Focus or Fail: How or Why Startups Get Focused”.

It was a great night that I got a lot out of despite recently reducing my entrepreneurial workload. I could definitely see areas I could have improved in previous projects and developed more than a few ideas on generating focus on my Next Big Thing™.

A couple of bite-sized takeaways I can pass on for those who didn’t get a chance to go:

1. Everytime you need to use the word “and” in your one line description of your product you’re losing focus.

For Orgnition we built a better way to manage your community organisation. What was this? It was an organisation management system which included a CRM and a CMS and email management and… we were not focused enough. Focus on one thing, do that right. For Pollenizer they were initially about helping people build better online and mobile businesses. That was too much and so now they are only focused online.

2. Customers move slowly. Very slowly.

Don’t expect your customers to jump on your product on day one, it’s rarely going to happen. They need to find out about you, hear about you from their friends and then go back and check out your site again and then maybe eventually sign up.

For Orgnition we realised back in January that another 6 months might get the business over the line but we weren’t prepared to make the commitment. Within the first month after we closed it down we started to get all sorts of enquiries, particularly from people we had spoken to 6 months previously, wanting to give us money. Unfortunately for all involved it was too late.

3. Target the customers or market with the most pain.

Ignore the rest of your customers, just make your product work for those people who really, really need it. These people will forget the cost of switching to you or the price you’re going to charge them for the product. Find these people and build your product around them, everyone else will come on board later as you build out your value proposition.

4. Define your market segments, be prepared to burn them.

This was a great point in the workshop. Create a detailed list of market segments that you can attack, make them as small as possible and then focus on getting them to use your product with all of your energy. However if your product doesn’t stick in that segment burn it, forget about that segment and move onto the next one.

By creating a lot of small segments (perhaps with only a dozen companies in each segment) you can move onto the next one and still have plenty of potential targets available to you. If you go through a lot of segments without gaining any traction it might be time to review your product and start the process again.

All in all it was a great session and I look forward to applying some of the concepts. If you’re in Sydney Mick runs these workshops every now and then and you should definitely get along. Hopefully he’ll be back in Melbourne for another in the not too distant future as well – I’ll certainly be going again. You can follow Mick on Twitter at @liubinskas.

Ned

Update: Here is a copy of the presentation slides from the night.

The startup in a weekend.

I just got back from checking out some of the startups coming out of the Agents of Change Startup Camp 2010.

There was an amazing vibe going on in the room as 6 times got their ideas together to report their progress to some outsiders like myself and Tom from Adioso. All of the teams have made great progress since they started around 16 hours earlier, working on very little sleep trying to get their concepts out and in the hands of real users.

I’ve been cynical of these “start a business in a weekend” programs in the past because it’s just not that easy. To produce something of real value takes a lot longer than 48 hours. A startup is more like a marathon than a sprint.

However what these kinds of programs do demonstrate to their participants is that it’s possible to release any idea in a short amount of time and that actually doing that is incredibly valuable for the individual. You learn how to create a successful venture through launching something, anything. It may not be successful immediately but taking that first step of getting something out there is instantly accelerates your knowledge of what a startup is and what it involves. It also makes you a part of a surprisingly small group of people who are doers, not talkers.

As an example I am studying entrepreneurship at RMIT. Everyone enrolled in the course wanted to be an entrepreneur; to create their own businesses, be their own boss and change the world. However in my three years doing entrepreneurship at RMIT I think I could count on one hand the number of students who have actually launched a business – and these are people who want to do this for a living.

This startup camp is also particularly important because it’s introducing a wide range of highly intelligent, talented and engaged students to the prospect of entrepreneurship as a valid career choice.

Anyway, enough ranting. Here are the 6 startups from the weekend, though not all of the websites are live at the moment. Check them out and let me know what you think.

• Ansr.it – a site for humourous questions and answers
• BloodThank.com – bringing blood donation to the social web, putting the Thanks into blood banking
• Classnotes.com.au – a marketplace for tertiary students to buy and sell study notes.
• Dreamsharediscover.com – a community networking site for users to share their dreams and live out their aspirations.
• Gwisher.com – a gift recommendation engine
• Nightmapr.com – find local hotspots and plan your night out.

For me the best early-stage pitch that I saw was for Class Notes. Firstly I was surprised that no one had really done this in Australia well, especially as the market is fairly competitive in the US and the UK. As Tom said to me later “it really doesn’t reflect well on the state of entrepreneurship in Australia’s students that this idea hasn’t been nailed yet.”

What I really liked about this idea was that they can generate revenue relatively quickly – a good indicator that they can generate real value for people by solving an existing problem. They’ve also been able to launch a version of the site in less than a day. I’ll be really keen to see how these guys progress with the project – now that they’ve got most of the functionality the real work begins to make it a successful business.

You can follow the rest of the weekend via the hashtag #scm10 on twitter and find out more about the Agents of Change student entrepreneurship programs at their website.

Ned

Make misteaks.

Today we officially shut down Orgnition for good.

We could have kept going, knuckled down and thrown another 6 months at it. Hopefully we would have come out on the other side with a functional business which generated enough revenue to keep us going at it for another 6 months. In the end we just didn’t have it in us to keep going on a business which we no longer believeed in. There was also an enormous opportunity cost in sticking with the Orgnition business – a business we both acknowledged we would not have entered if we knew how hard it was to get off of the ground.

Already looking around at other projects I can see that some look awesome from a technical or business point of view but I am also being realistic about the time involved in putting them together and the hard work and pain that is all in front of me.

Cris Pearson recently sold out of Plasq to focus on Skitch. When the settlement cleared we had a celebratory lunch and he reflected on the business he had just left and the one he was now dedicating his life to. I realised then his success took around 5 years to come to fruition. And now he was just starting that process over again with Skitch – a product that’s been out for a while and which he will be dedicating the next 5 years to.

For Tom and Fenn they’ve been working on startups for 6 years before they started Adioso. 6 years of “mixed results” in various enterprises. Adioso as a business is still at an early stage but building on their previous record and with some solid backing they’re now positioned to make some serious changes in the travel industry.

I was reading a job posting on Hacker News the other day (more out of curiosity than anything) and one line in particular really stood out in the requirements: you must be prepared to make our startup the focus of your life. This one line, combined with the idea that it’s going to take at least 5 years to make something significant gives me new enthusiasm to not only try again but also to dedicate myself to the next project.

I’ve learnt a lot from this “failure” and I think learning anything means that it’s not a failure at all, just a milestone on the path to being successful.

“Failure is only the opportunity to begin again more intelligently.” – Henry Ford

Ned

The Illusions of Entrepreneurship

Malcolm Gladwell has an awesome article in the latest New Yorker magazine about entrepreneurs. It focuses on two case studies which show entrepreneurs less as risk-taking cowboys and more as well-informed, calculating predators.

The examples used are of Ted Turner and his success in shifting the family business from billboards to television and John Paulson’s highly calculated profiteering from the collapse of the housing bubble in the U.S. It’s really awesome stuff.

As per all of Malcolm Gladwell’s writings it is well researched and referenced though one section in particular stood out for me. It is his excerpt from Scott Shane’s book “The Illusion of Entrepreneurship”:

“Yes, he says, many entrepreneurs take plenty of risks – but those are generally the failed entrepreneurs, not the success stories. The failures violate all kinds of established principles of new-business formation. New-business success is clearly correlated with the size of initial capitalisation. But failed enterpreneus tend to be wildly undercapitalised. The data shows that organising as a corporation is best. But failed entrepreneurs tend to organise as sole proprietorships. Writing a business plan is a must; failed enterpreneurs rarely take that step. Taking over an existing business is always the best bet; failed entrepreneurs prefer to start from scratch. Ninety per cent of the fastest-growing companies in the country (USA) sell to other business; failed entrepreneurs usually try selling to consumers, and, rather than serviing customers that other businesses have missed, they chase the same people as their competitors do.

The list goes on: they underemphasize marketing; they don’t understand the importance of financial controls; they try to compete on price. Shane concedes that some of these risks are unavoidable: would-be entreprenuers take them because they have no choice. But a good many of these risks reflect a lack of preparation or forethought.”

The whole article is worth a read if you can get your hands on it, seems to be hidden behind a pay wall online.

Ned

New Horizons

It’s always hard to know when to move on. Whether it’s on a business deal, a side project or a relationship – to choose the right time to shift your focus onto new things is really hard.

I’ve spent a good couple of weeks over the Christmas break reviewing most things in my life and working out what I want to do in the coming years. I don’t like to plan too far out, but I’ll be finishing up with uni at the end of the year so I need to start figuring out what I want to do next.

Some things I’m still mulling over in my mind but I have made a few decisions that I think will set me up for some of my bigger life goals. One of these is to nail uni this year so I can graduate and keep my employment options open, another is to learn more about product management and finally to reduce my involvement in projects which remove focus from the startups I’m involved with.

It’s this last point that is the most important and one of the main reasons I’ve decided to resign from the Hive. I’ve had an amazing time running the Hive with James, Ross, Sandra and Anna over the last couple of years, it’s been really rewarding for me both personally and professionally. To see the entrepreneurial community grow in Melbourne to having 250 people at our last event, to be there at the start of the Hive in Brisbane and Sydney.

The Hive still has a lot of great potential and I look forward to seeing where everyone involved takes it. For me I’ve achieved what I set out to do and I’ve decided it’s time to move on to the next challenge.

I plan to stay a part of the community though I might take a couple of months worth of events off in the short term. I also hope to be a part of a couple of more tech-focused events throughout the year. Watch this space.

I’m moving on, looking towards new horizons.

Ned

Awesome Melbourne Tech Startups

There are a lot of really great things happening in the Australian startup scene and particularly in Melbourne. I thought I’d create a list of some of the more interesting, young and web-based startups. Some are bigger than others but it’s sometimes hard to know where to draw the line.

99Designs – Crowd-sourced design.

Aconex – Project management software for the construction industry

Adioso – Airfare search engine

AgileBench – Agile project management

Assess’d – Competency based recruitment testing

Corkboard – Email based file sharing

Creately – Online diagramming and design

BaseEstate – Real estate search engine

BinaryPlex – Twitter analytics and data mining. See Tribalytic

Docoloco – Local business reviews.

DPhoto – Simple online photo sharing and backup.

Edublogs – Blogging platform for students and teachers.

Event Arc – Automated ticketing and online registration for events

Intelimail – Email marketing

I Vote For Art – Online art community and marketplace

JebHunt - Job application manager

Jodoro – Collaborative modelling tool.

Merspi – Social learning tool for VCE students

MyTVR – Online television recording/viewing

Nodecity – Non-profit wireless networks

Orgnition – Non-profit organisation management.

QMCODES – Mobile marketing

Red Bubble - Online art community and marketplace

Rentoid – Rental industry aggregator

Retail Me Not – Discount store aggregator

Service Central – Australias #1 online services marketplace.

SimpleSponsorship – Sponsorship management

Skitch – Screenshot and collaboration tool

Smart Energy Groups – Energy awareness communities.

Stateless Systems – makers of RetailMeNot, BugMeNot etc

StoreCrowd – Discount store aggregator

Suburb View – Real Estate search tool

Tribalytic – Twitter analytics to filter the noise and focus on the topics.

XHTMLised – PSD to XHTML service

Yabble – Local business reviews

These are just some of the awesome startups coming out of Melbourne. I’m sure there are plenty more on their way and some that I’ve missed.

Who else should I add?

Ned

UPDATE: 8/04/2010 Added DPhoto, Smart Energy Groups and EventArc

Post-Launch

Josh and I launched the first version of Orgnition almost a month ago now and we’ve learnt a lot in that time.

When we pressed the go-live button and emailed out to a bunch of our contacts, activated the Adwords, started up the Twitter accounts and let the wider world know what we were doing we had some entrepreneurial optimism that the world would beat down our door.

Suffice to say it hasn’t been that easy.

Some things that I’ve learnt in the process:

1. Large organisations will always take a long time to move.

For us this means we’re going to have a longer sales-cycle than we were originally anticipating so we’re adjusting our plans accordingly. It seems fairly self-evident looking back but I think this is where our entrepreneurial optimism kicked in, which I think we also would have needed to finish the project.

2. Launching is hard.

It’s not easy to get a whole heap of people really interested in your product, especially when it’s a minimum viable product and therefore still in development and you have a fairly narrow market base. I have a new found respect for people who launch big.

3. Singular focus is important but customers are more important.

We can’t rely on service organisations alone to purchase our product so we’re expanding our reach out to other clubs and associations (some of whom have already shown an interest). We’re also spinning out some of the features of Orgnition into a separate Orgnition product aimed at the wider non-profit market.

4. It really is just the beginning

Launching kind of closed the “introduction” chapter of Orgnition. The chapter included everything that Tom Howard had worked on over the last 6 years with Rotary District 9810 through to Josh and I agreeing to take on and work on the project and right up to pressing the launch button. Now the real work kicks in with continuing product and customer development, documentation, tutorial videos, copy-editing and website optimisation, marketing and public relations. But now that we’ve got the product out there we can move a lot faster and have some credibility when we’re in meetings with potential clients and partners.

So now the real work begins.

Ned