Tuesday, September 28, 2010

8 reasons why Investors won't invest in my startup

I have been doing some soul searching lately about the future of my startup. Things like where I am in the lifecycle of my startup, if and when I should spend time and energy to raise funding, or how viable it is for my startup to follow 37signal's way to growth and profitability.

To keep things real, I have compiled a list of reasons why an investor would not want to invest in my startup. Here it goes,

1. I am building "yet another" project management tool. See Dharmesh's post on "Onstartup" about this.

2. My startup is in the B2B space (which takes longer and costs more), when all the craze is in the consumer space. 

3. I'm a 41-year-old, first time entrepreneur, and not charismatic. These days, most entrepreneurs are in their early twenties. Stats are stacked against my generation.

4. I don't have a great elevator pitch, nor do I have a great deck.

5. I don't have a great UX expert, nor do I have a great Customer development / Inbound marketing expert on my team.

6. I don't have a popular personal or product blog. In fact, last time I checked, our product blog had a blogger grade of 26 (by the way, I love the graders tools by Hubspot.)

7. I don't live in the Mecca of startup- Silicon Valley, for that matter, not even in Silicon Alley, or Boston.

8. I'm a first generation immigrant without any "social proof." Stats are again stacked against me.

Oh, well! I won't let this list get to me. I keep this list to remind me of things I need to do everyday to neutralize these forces. I also have a list of reasons why investors should invest in my startup. That's for another day.

Friday, September 10, 2010

Twitter - "The Remote Control of Our Social Networks"

Imagine for a second, you get a job alert on your twitter account from your Linkedin network. You tweet back to your Linkedin account to your resume to the person who posted the job like this:

   /send myresume @ #LI

Although it is a trivial example of how Twitter can fit in our ever growing online social presence, but you get the idea. We already understand the power of Twitter as a non-stop source of streaming content. We have seen how Twitter has become the primary realtime news, interactive customer service, or marketing outlet,. However, I believe we are completely missing another aspect of a potential use of Twitter. This is the use of Twitter as a "virtual remote control" of our social networks like Facebook, Linkedin, Foursquare, Social Games (e.g., Zynga games) etc. This will put Twitter in the middle of our virtual social life. Let me explain what I mean.

To IRC users, the use of commands to control and manage the network is not new. For computer geeks, it is also known as "control data" used to regulate main data in many protocols like HTTP, FTP, TCP etc. For example, if you type just regular text on IRC, it is treated as a message to be published for everyone to see. However, if you start with / it is intended for the server to take some action in the context on behalf of the sender. For example, if you type 

       /invite Syed #ScrumPad

It is interpreted by the IRC server to send an invite to the user "Syed" to join "ScrumPad" channel. This is really powerful, yet very simple tool to use. The use of slash with some keywords is getting popular lately in the Twitter community as "Slashtag." This was introduced by Chris Messina, the guy who also introduced us to the world of "Hastags."

We already use some commands to control and provide additional context to our Twitter messages. Some of these are directly supported by the Twitter server (e.g., RT as retweet, D as direct message) and some are just interpreted by the recipients and no actions are taken by the server (e.g., mention, or reply by using the @ in the message). Here is a good guide on how to use them correctly. Most of these evolved organically by the Twitter community. Here is a TED talk by Twitter founder Evan Williams on the evolution Twitter syntax.

We all know how Facebook has become intertwined in our lives. If there is one thing that can be attributed to the growth and success of FB as the largest social network, that would be its brilliant idea of "InApp" - applications running inside Facebook application. It transformed Facebook from just a social network to "a platform for social network-aware applications." In the same way, if Twitter directly supports and facilitates the flow of control data among different applications, it can become "the hub of our virtual world." It can allow us to have our own "Virtual Remote Control." Let's just call it "TweetMote." Here is what the world would look like with our TweetMote (just checked tweetmote.com domain is not available. Is there any domain available these days?),

Tuesday, September 07, 2010

Synchronized dance between customer and product development

This May, I had to make one of the most difficult decisions of my life. I had to close our offshore development center in Bangladesh. We built this development center from ground up over last 4 years. This team became an extended family. The team was young and full of energy. They believed in the vision of building a world class software development center. They gave 120% day in and day out to earn the praise of our clients.  For most of them this was their first job. To see the dream come to an end was heart-breaking for them. But the reality was that this had to be done. This is why.

A little bit on the background. We started our business to provide software development services to small business using Agile /Scrum delivery model. Along the way, we ended up building ScrumPad, a Web-based project management tool, to help us manage our service delivery. Encouraged by initial feedback from some of our early adopters, last year we decided to make a transition from the service to product. So, we gradually started to move the whole team over to work on just ScrumPad. Around the same time, I met Eric Ries, Sean Ellis, and Dave McClure on the "Geeks on a Plane" trip to Europe (if you haven't been on this trip, I highly recommend it. You need to apply for it). I am glad that I did. I came to know about "Lean Startup." And I decided to start applying the principles.

It is easier said than done. Transitioning a running engine takes more effort than starting from scratch. It took us a good 3 months just to figure out where we were and where to start (or so we thought). We gradually slowed down new feature development, and started to focus on validating the existing features. However, we started to realize that it takes longer to validate a feature (even qualitative feedback) than to build a feature. So, we still continued to produce more (hence waste) than we were able to validate.

We finally realized that the only way we could tackle this issue is to put a hard break on the development. This meant the closing of the offshore development. It took us another 3 months to actually announce the decision and 2 months to implement. Here is what we learned:

    Match product development cycle with customer feedback cycle. 

For most companies, customer feedback cycle is the slower (a lot, at least in our case) of the two. An out-sized product team will always end up producing crap and hence slow down overall progress. This is especially true for companies making a transition to "Lean Startup" model. We had a large team (for an early stage startup) with mostly product development experience with no customer development experience. As a result, no matter how slow we went, we were still producing more than we were able to validate. In fact, we found out it is better to have product development run a bit behind than necessary. We don't want to produce everything that we think what our customer development (I'm using customer and product team more as two different roles that we get to play than as physically two different teams) is telling us to do. This is because test results and customer feedback are imprecise and open for interpretations. Having a less than required development bandwidth is a good way to force us to prioritize our work.

In an essence, a successful transition to "Lean Startup" model requires establishing a rhythm between customer development and product development first.