Unbelievable time at Startup Weekend

Went to the Women 2.0 Startup weekend. It was incredible. Over 150 people showed up to work on a startup idea in a compressed time frame: Friday 6pm to Sunday 6pm.

The skill sets were from programmer out to marketing and design. Ideas were pitched, teams formed, and prototypes designed and built.

The main thing I got out of it was a wonderful sense of the types of ideas that people are experimenting with. Truly talented people in product design, programming, and marketing showed me how to step up my game. I met some people that will I will continue to work and hang out with in the future.

The biggest personal change to my learning roadmap is that I am dedicating the next 2 days to learning JQuery. The projects that were using produced user interfaces made me feel like I am dating the ugly duckling by using Dojo. However, Dojo solves some problems that JQuery doesn't address in terms of plumbing, so I will continue to use it. Where the interface meets the user, JQuery crushes the alternatives that I have been using.

So, instead of whining or making excuses, it is time to add it to my toolset. It could also have a major impact in my work based on what I have learned in the last 6 months about using graphics tools and design. I was able to interact with the designers on the team, understand what they were driving at and have intelligent conversations about choices.

Before I would have resented the work being generated due to my lack of understanding of why it is necessary. I didn't need this skill set when doing personals, because the product was so strong that design was never a factor while I was there. This has changed now, so I have had to change.

Hit a major milestone - covered my first Java book

Got past the next milestone on my Open Source project. Finished my 800 page Java book and learned (90% at least) all the flashcards that I made from it. It reminded me of how difficult it is to program desktop applications, since much of the book covered this. I had tried to learned Windows programming 10 years ago, and had to set it aside due to working on my business.

Read a book on Google analytics, then another on Google A/B testing using their webanalytics product. Very interesting. If you have a web site, you should be using this to run tests non-stop for determining what works for your business plan. The book is: Always Be Testing: The Complete Guide to Google Website Optimizer. Really good stuff and totally free.

Also, read through my first C programming book today. Not very hard after Java, since Java was built based on C. Over 50% of open source data is built from C code. Not very interested in C for its own sake, but following the trail into Objective C for building iPhone apps.

I don't think that I am productive in the new technologies yet, but will start circling back to learn the tools needed over the next few weeks. Drupal will be the next goal. This will be a good project to apply the PHP that I have learned last week.

A new model is needed for tech startups and development shops

Spent some time with another entrepreneur recently helping them brainstorm. They have spent 2 years and over $100K on web developers. At the end of this, they have only realized a part of their original idea and have very little traffic to the main part of the site.

It was a story that I am becoming more familiar with. If you are going to get into an idea that involves technology, it is critical to have equity players that are comfortable with the different pieces required. Even if they don't do the work personally, they will be able to manage the development process with diligence.

The mismatch between the non-technical entrepreneur and normal technology development shop is huge. As a startup, you have a great idea, but must iterate and try as many variations as possible to find what will work. The development shop has a technical staff that has to be paid every 2 weeks regardless of how your idea is developing. They need to fill up hours and cover overhead.

And usually an entrepreneur wants to get several bids. So the development shop has to know exactly what you want to build. However, at this stage that is really impossible to know. So you create a huge technical spec and they crunch the numbers and get back with what seems like a really large number.

Why is the number so large? It is because typically to implement a web based idea, you have to go from the backend operating system, to databases, to web servers, to some server scripting language, to HTML, Javascript, CSS. And, oh yeah, we want it to look good and be well designed. Most developers are specialized so they can be the best at what they do. This translates into a large number of people who have to be involved, coordinated and communicated with.

What is really needed are boutique firms that have technical entrepreneurs. This uber-person would know the complete technical stack and be experienced at thinking like a startup person. They would work with the entrepreneur to define what are the key parts of the business plan that can be tested early to build confidence.

There are many techniques, such as paper prototyping, that require nothing in technical skills, but would allow many ideas to be tried quickly. Bad ideas could be discarded before wasting piles of cash on $50/hour programmers. Also, building stripped down versions, to find conversion rates for the core value propositions.

My guess is that for $20-$40K massive portions of most ideas could be vetted, lowering the overall project risk. At that point it would make total sense to take a project to a development shop, as you will have a much better idea of what needs to be built.

This may be an interesting area of the market to play in.

Staying motivated about improving my skills

I set off on a quest to learn the top open source languages to get access to what is happening in technology. I having being toying with this idea for a year now. Finally got the inspiration from the Julie and Julia movie last weekend.

It has been interesting. I have been plowing through several books this week. I read the book, make note cards and learn them while hiking or during down times. The first 2 areas, PHP and Python were fairly straightforward. They are very similar to other technologies that I am already familiar with.

Then I started on Java. Wow, it reminded me of why I never could get through my Windows programming books back in the 90's. I found myself walking up Windy Hill Friday evening, wheezing my brains out, and trying to remember FontRenderContext. It was the first time I couldn't get through a stack of cards before I got back to my car.

However, picked it back up this morning and pushed forward. I will only know toward the end of this year whether I see any new opportunities due to the effort I am putting in now.

The only thing that I have to relate it to, is during the startup phase of my dating site. We would often reach a point where there was a technological hurdle in the way. The choice was often, we could hire someone to solve it. This always seemed to cost upwards of $20K or I could read 2 $45 books and figure it out.

It was real easy decision back then. I didn't have the $20K so I read the books. Since then it has been more difficult to find the motivation. You often hear the advice to outsource everything.

Here is my take on this. If you have already found a successful business model, then outsourcing or hiring an employee to take care of details is totally appropriate. Heck, it is the only way to scale any business. However, if you are in the initial phase, and don't really know what twist and turn your idea will take, then I'm not so sure. It is often better to pick up the skill set within the sweat equity team. Preserve capital and keep iterating.

Iterate, iterate, iterate

Got back the initial results on a new product idea that I launched yesterday that is geared to finding out what teaching materials work best. Initial results were disappointing as it often is. So it time to roll up my sleeves and start iterating.

The amazing part is the it took only $8 to find the answer. I advertised on Google adwords and it took only 32 people to get the data I needed to see what the initial problems where. I collected the data on what people did after reaching the page. I got 4 questions answered and 2 other actions.

Google analytics showed that two people searched for a different course than we were offering. I then realized there are several AP History courses in addition to U.S. History that we are testing on. So I am going to start by putting up an explanation screen with choices for the course. That way I can weed out people who aren't interested in the course we have, as well as, determine if we need to offer one of the other courses as well. Also, we are going to work on explaining how our product works and what the next steps are.

The point is, that the best way to play the game is test with small amounts of traffic. You can purchase it easily and make it targeted to your offer. Turn off the traffic as soon as you get a good sample, can be anything over 32. Then sit down and look at the results and decide on what the next iteration should be. Then crank up the test again.

New goal, fluency in major open source project languages in 12 months

Saw a completely inspirational and funny movie this weekend, Julie and Julia. It told the parallel story of a blogger, Julie, and Julia Childs (the famous cookbook author). Besides being funny, it showed the power of setting big goals and moving forward.

The blogger, set the goal of cooking every recipe in Julia Child's cookbook in 365 days (over 500), while holding down a regular job. She then used the blog to document the journey. At the end, show transformed her life and began living her dream as a writer.

I began to think about what I could do that would apply this idea to my own life. I am not that interested in cooking, do doing all the recipe's in someone else 's book doesn't appeal to me.

However, I am playing in the technology startup space. I have been noticing that almost all the interesting projects are occurring in one of 10 or so languages. Several of which I currently know or have learned in the past.

My theory is that there is tremendous intellectual capital being created in all the open source projects that are peculating on the Internet. However, it is as if, you were a scientist in the 1700's and the research was being published in French, German, Russian, etc. And not all being translated into all available languages.

So if you don't understand the major research languages, your ability to use the different projects diminishes rapidly.

So my big, hairy goal is to gain fluency in: C, C++, Java, PHP, Python, C#, Perl, Ruby, SQL, and JavaScript and Objective C. I have a head start in that I currently know Ruby, SQL, and JavaScript.

So this weekend I pulled off the shelf the Learn PHP book by O'Reilly and made a set of flashcards. It is very similar to the ASP programming in the 90's before .NET. Took longer to make the study materials than learn them.

The next few days, I have been making Python flashcards from the 650 page book Learning Python. Should have them learned by tomorrow. Very similar to Ruby, seems like they are trying to solve the same problem set. Realized that in order to be productive on the web, I will have to also learn about Django, so I order the book today.

Tomorrow I start on Core Java by Sun, which is one of 2 volumes. I will let you know how this experiment proceeds. I am guessing that in 12 months I will be able to say that I gained very little from the effort or that vast new horizons opened up for me.

Either way I will be able to move on from this idea or get the benefit.

Starting to find resources for effective social media use

I have immersed myself learning about the tools that have developed for communicating with other people on the Internet in the last 10 years or so: blogging, Twitter, social networks, etc. This blog is my first concrete step in this direction. Of course the question is, "How to use these tools to get to my current goals?"

For me this is finding another startup project or creating interest in my current startup project. I want to create a product with a net revenue of $1 million+ a year. Hey, you have to think big, because all projects take tremendous effort.

Ran across a really good blog by Aaron Uhrmacher called Disruptology. He has a really good analysis of Dell's various social media strategies. Dell has reached $3 million in sales via Twitter. Hey that is 3x my current goal, so very interesting. They are doing it by promoting time sensitive offers, so not really relevant to my current venture.

However, if you have a business or client that could offer this type of "special deal" content, it could be a relevant strategy. There was a company in Dallas that would buy a small quantity (50-200) of specialty items and offer one product for sale per day and people would rush to be one of the few that got to buy the item. It created a fanatical following and was very successful.

It leverages the influence technique of scarcity. If you know of any other great use cases please post them in the comments. I would love to get more input in this area.

One of my greatest friends - The Scientific Method

Read a post on the Scientific Method by Seth Godin. Using the Scientific Method has been one of the greatest tools in my arsenal. It is one of the greatest advances human kind has made.

In brief, when you approach a situation that you need to understand better, ask yourself, "What is my theory on how this works?" Many times this can be hard, because we have unconscious ideas and assumptions. So take some time to brainstorm about all the beliefs you have about the problem.

The next step is to figure out a way to prove one or more of your assumptions wrong. The key question is, "How can I test this?" And in business a better question would be, "What is the cheapest way I can find out if I am wrong?" You can save yourself huge sums of capital by working out the answer to this question.

For startups testing the basic appeal of the core idea is enough. I remember reading about IdeaLab putting up a web site offering cars for sale, even though they didn't have any. When the first person placed an order, they went to the dealership bought one and then resold it to the person. It was brilliant because it tested the idea that anyone would buy a car through the Internet when this was a novel idea.

If you are not testing your ideas, then you are participating in superstition. Human brains are hardwired to make connections, real or not.

There was an experiment with birds in a cage. Randomly pellets of food would be dropped into the cage. Over time each of the birds formed an opinion about what made the food appear. They would begin to do elaborate dances, bobbing their heads and jumping up and down, never realizing that this had nothing to do with the food appearing. Sounds a lot like some people I know.

ROI on Social Media

I read an interesting post at entrepreneur.com by Carol Tice on ROI on social media. It made the point that she has not found any or many business owners that have found a useful way of turning social media into business they can take to the bank.

It is the same sort of thing I remember people saying about the web in general in 1995 when I started my dating site, which is now making TCMS over $400 million a year in revenue. I guess what I hear, is "I don't know how to do this, so it must not be worth while."

The good part of the article is the basic question, "Is what I'm doing working?" You should always ask yourself this about any given activity. Then if the answer is no, the next question is "Is it working for anyone else?" If the answer is yes, then you should ask, "What technique are they using that is making them successful?"

I will admit at this point, I have no idea how to make the social media thing work. If anyone has read a great book or two, let me know in the comments.

I am using the strategy that has worked in the past for me. I am ordering any book written on the subject and saturating myself on the topic. Today I read through The Secret Power of Blogging and learned about 15 things that will help me learn how to get the word out about this blog.

I have decided it doesn't do any good to write good articles if no one knows about it. I haven't even gotten started on Twitter, Facebook, etc. I feel that it all probably works together when you are doing it right.

When I see phenomenally successful people like Tim O'Reilly and Seth Goodin using these tools, I realize that I'm just not getting it yet, but it will be worth working on.

Spotting and dealing with trouble clients

Just read another post about problem clients from Allison Nazarian. She points out some great warning signs:

• Deadlines that show a lack of understanding of the process.
• Need total attention - confusing an employee with a service company
• Unwillingness to pay equal to the amount of work.

After thinking about how several startups I know hit this same issue, I think it is a matter of training yourself to respond properly.

First off, if someone has a budget there are two equally valid ways to handle this. The person providing the service has to work for less than they want. Secondly, and this is the one to focus on, they can reduce their expectations and do the portion of the project they can afford. Maybe the do the rest over time, kind of like the rest of us on a budget.

Present the second solution to the potential client. If they refuse to see the light, then they have communicated to you what they actually value the work at. If this is less than you value your time then you should not expect this to change in the future.

There is always the promise of future work, however, I don't think their valuation of your time will increase. If anything once someone has results, they tend to devalue the other person's contribution to the results.

The same on the timescale issue. Again it is a valuation of the work. Someone with unrealistic expectation on how long it takes to create your product, won't value the output. Since in their mind it should take little time / effort to produce.

The key is training yourself to recognize the warning signs and respond properly. Kind of like saying, "Hello, this is Will Bunker", when I pick up the phone at work. Make it a habit and you will save yourself a world of pain.

Give yourself plenty of rope - in case you trip

Interesting situation came up yesterday. My bank wants to refinance my home, which would save me money and be a good thing. However the appraisal came in lower that the original purchase price (not very surprising right now).

So then the question to me was, will you put in extra money to get the loan to value ratio down to 70%. The amount was pretty high, but would save me monthly cash.

So I called my father, who managed to stay in farming during some of the toughest years. I could take the cash out of one business or the stock market. Both would leave me short cash if anything else came up wrong.

My father's analysis, which matched how I have seen him run his own business, was keep the cash available. He said, "if your rope is too short and you trip, you'll hang yourself."

Funny thing happened when I called back the mortgage agent and told him that I would have to pass (and eat the $400 appraisal fee). He said they would apply for an exception, it might cost me an extra $10K on the mortgage but I would make that back up in 10 months of savings. So I get the best of both worlds, safer mortgage and maintaining as much personal cushion as possible.

Have a game plan for staying in the game

Had a conversation today where we discussed someone's game plan for staying in the game of being an entrepreneur. It is very easy to either get discouraged and quit, or be so optimistic that you run into real financial trouble.

The key is to get serious about knowing what your monthly nut is to keep your lights on. This can be on a personal level and as a business. If you are a one person startup it is close to the same thing.

There are payments that you can't get out of short range, like rent / mortgage, food on the table, lights, etc. You should know this number like the back of your hand. Then make sure that you realize that everything else is a choice.

So many times the extra choices are put on auto pilot which uses up precious runway. If you reach the end of the runway before liftoff, it is not a pretty sight. The decisions you make here determine how long you have to try.

The other side of the decision is your personal limits. How far do you go into debt before failure becomes catastrophic. One of the lessons I picked up from Richard Branson (Virgin Airlines) is that he structures every new venture in a way that failure doesn't impact his other businesses.

Keeping the cost of failure tolerable is a huge factor. Otherwise you will severely limit the number of times you get to try.

At the end of the conversation, we discussed how it comes down to personal sacrifice of the extras and having an intelligent warning system (budget) that let's you know when it is time to fold your hand and try again a different day.

Problem customers / clients

There are 2 schools of thought on customers:

1. Customer is always right.
2. Fire problem customers.

I think both are probably right to some degree. Don't follow a rule of thumb religiously, but apply common sense based on where you are in the startup cycle.

I tend to look at where I am headed with an idea. If the customer's complaint fits into this roadmap or makes sense I will accelerate development in that area.

The hard part is separating out people who are legitimately frustrated with a poor implementation from people that are frustrated with their existence on this planet.

It really hit home to me when running a previous company. I would walk to work early (4 AM ) so I could get some programming done. One morning, I see someone else's shadow in the window talking on the phone. I think it might be someone calling their girlfriend in Russia, so I quietly slipped into the office to see what they are up to. Instead, it is an employee calling up the customer service departments of random companies and complaining about products he has never purchased.

That is when it hit me, not all customers are right even some of the time. So again it is using common sense. When I encounter a user that is of this kind, I flee the scene as quickly as possible. Give them their money back and hope they latch on to my competitor and waste as much of their time as possible.

Not always easy to tell the two types apart, but that is why you have to use your brain in this startup game.

Don't build other people's boat docks (unless that's your business)

A great lesson I learned from my father, who has been an entrepreneur his whole life (as a farmer, among other things), relates to staying focused on your core business.

We had put in a RV park one summer, as he was starting to find a way to transition out of farming. One of the tasks was to put in a fishing pier in the lake so that the campers could enjoy a day of fishing. He had the extra farm labor so he saved the $20K by doing himself.

He put in an extremely well built and beautiful pier, but the work was hot and messy (southern summers). Toward the end, someone else who had a house on the lake came up and starting asking my father about his work. At the end of the conversation he began badgering him about building a pier for his home and how much would my dad charge.

My dad kept insisting that he didn't do this for a living, but the guy insisted. So eventually my father said that he would be glad to build him a pier for $50K. The guy exclaimed, "Everyone else charges $20K."

My father's reply, "Look I told you I'm not in the business of building piers, but for you I'll do it for $50K." That was the last he had to hear about it.

His point, if you are going to go off task, make it totally worth your while, unless you want to be building another person's business while neglecting your own.

Do you know what skills you need to succeed in your startup?

One of my habits to make a skills grid for any business that I am getting into. This tends to evolve as I progress further into the project. I use it as a guiding system for what skills I need to acquire, partner with, or have the money to purchase.

So for my current project YoYoBrain.com, my list looks something like this:

• Linux server administration - every website has to live somewhere
• Database administration - MySQL for this project
• Ruby on Rails for server side coding (could be PHP, Python, etc.)
• Javascript / Dojo - for making that Web 2.0 coolness
• Design - what should each screen look like
• Usability - what to include and how to communicate features
• Graphics / Photoshop / Fireworks - every site needs some graphics
• Marketing - how do people know about us

These are just the broad strokes, but you get the picture. Then at every stage of the project I look at how to find these resources. The funny thing is that my decisions change over the lifetime of the project. Maybe at some point I have more time than money and do it myself. Or I have the perfect partner that knows some of the skills and I don't have to worry about it.

However, most first time entrepreneurs don't have the money to hire all of the skills needed. I see people fall into several different traps.

1. Denial that the skill is needed at all. So they program an awful looking site and complain about why people don't get it (I have done this personally.)
2. Spend all their time trying to raise money. Sometimes this is successful but you should spend as much time coming up with other ways to fill the in the gaps.
3. Give up, saying that I just can't program/design/market...

I have actually caught myself doing all of the above. However I have a profound belief that I can acquire any necessary skill if I put in the time. On this particular project I have cut back the amount of money that I am putting into the business due to the economic downturn. This has meant that I have had to acquire more of the skills on the list. Things that I never imagined that I could do, I have gotten better at.

Am I ever going to be a world class UI designer? Probably not, but at least I don't suck at it anymore. Also I am able to have an intelligent discussion with any designer that I hire in the future and get twice my money's worth out of them.

There are tremendous books currently available by some of the top professionals in each of these areas. I read an unbelievably good book on design by Bill Scott called Designing Web Interfaces. He is head of Netflix's design. I couldn't possible hire this guy in real life, but he wrote down hours worth of advice.

So between books, blogs and videos, the information on how to get better at any piece of the puzzle is available. It is a matter of breaking it down into chunks and putting a plan in place that moves you toward getting better at doing this thing we call a "startup."

Why you should be an entrepreneur (or anything for that matter)

I am often asked how to know if starting your own business is right or when do you know it is time? My response is, "Even if f I knew that I would never succeed again with any startup, I would still be happy with the process of trying." I have given this much thought. 9 out of 10 of the ideas that I have attempted in my life end in one form of failure or another. At the age of 40 I am acutely aware that success can be extremely elusive. I have recently become aware that I might be over half way through this journey (no medical problems, just watching my parents get older.)

That is the reason that I moved half way across the country to Silicon Valley 2 years ago. I decided that if I wanted to accomplish anything or be involved with a group of people, now was the time to begin acting vigorously in the direction that I wanted to see my life taking.

But I always remind others that the trick is to avoid catastrophic failure. If you go bankrupt trying, it severely limits the number of times you will get to try. I started my first business (a dating site that is now Match.com), while both my partner and I had full time jobs. The first year was literally nights and weekends. Neither of us quit until we had revenue. I have always been a big believer of putting food on the table and keeping a roof over my head.

Yet there is an incredible amount of free time available if you are disciplined about finding and using it. I used to carry around a huge stack of note cards that had all the new technical information that I needed to learn to get better at starting technical ventures. It doesn't have to be technical, it could be anything that would make you better at whatever is important for the next step in your journey. When I had a free moment, I would drill through whatever I had time for.

The important part is to become clear about what you want out of the journey, then do the work necessary to get there. Listen to the feedback life gives you and get better at the parts that are today's stumbling blocks.

One of the reasons that I am starting this blog, is that I have become aware of a hole in my abilities, which is the usage of all the new marketing media that have become prevalent since selling my last Internet business in 2000. I am on a crash course to learn how to connect and contribute in a way that matters and people find useful.