Jason Calacanis, Founder & CEO of Mahalo (also known for Silicon Alley Reporter & Weblogs), wrote a must-read for all tech entrepreneurs entitled, “What to Do if Your Startup Is Failing.” In it, he proclaims that there are 2 types of entrepreneurs in this world: real ones and the folks who play entrepreneurs for some portion of their lives.
Great read 
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“All men dream: but not equally. Those who dream by night in the dusty recesses of their minds wake in the day to find that it was vanity: but the dreamers of the day are dangerous men, for they may act their dream with open eyes, to make it possible.” -Thomas Edward Lawrence
An important question that frequently arises for any product company is, “How long will it take to build?” Internally you will debate this (our lead developer can insert his silent chuckle here). Externally you’ll hear it constantly from your customers, partners, investors, family, and really just about everyone you meet. If you’re honest with yourself, the realistic answer is usually simple: we don’t know, but we’ll estimate anyways.
This rule applies to every build: your alpha, your beta, & every iteration within. This is the nature of building a new product.
Product timelines are tough to pinpoint because of the large number of unknowns on Day 1. These unknowns result in consistently evolving product requirements. For example:
….and I could go on and on.
Don’t be discouraged, these obstacles are normal. What’s now comforting for me is that over time we’ve continually become more accurate with our estimates. Better accuracy occurs because we’ve become more educated about our customers and their requirements, we begin to more keenly anticipate market moves, our system has taken on a more precise form, and the economic market forces focus, etc.
So as a parting note, here are three lessons I’ve learned to stay sane during the grueling process of building a product from the ground-up:
The guys over at one of my favorite blogs, Venture Hacks, just officially released their first digital book: Pitching Hacks.
In their own words:
“We’re excited to share our first book with you: Pitching Hacks. It’s all about pitching startups to investors. 83 pages of beautiful PDF. $19.
We’ve raised $100 million for startups like Epinions, invested another $20 million in companies like Twitter, and advised many others. Pitching Hacks shows you how to apply the simple lessons we’ve learned along the way.”
Here’s a few samples of the book you may want to check out:
If the stellar free advice they’ve been pumping out on their blog is any indication then this is probably well worth the $19 license fee.
“The fight is won or lost far away from the witnesses, behind the lines, in the gym, and out there on the road; long before I dance under those lights.” -Muhammad Ali
There are many reasons why I love software startups: innovative thinking, blank canvases for building new products, smart people, etc. The single greatest reason, however, is that each day that you don’t die as a company becomes another opportunity to edge slightly closer to a product/market fit. With proper focus you’ll always end up building a little bit more, generating a few more customers, gathering additional customer/market feedback, and refining your product.
Why must you keep building? Because as Marc Andreessen writes, a product/market fit is the only thing that matters and as Paul Buchheit points out, it usually takes a long time to get there. If you’re working on a new deal I recommend you read both posts. Here’s an excerpt from Buchheit’s:
“We started working on Gmail in August (or September?) 2001. For a long time, almost everyone disliked it. Some people used it anyway because of the search, but they had endless complaints. Quite a few people thought that we should kill the project, or perhaps “reboot” it as an enterprise product with native client software, not this crazy Javascript stuff. Even when we got to the point of launching it on April 1, 2004 (two and a half years after starting work on it), many people inside of Google were predicting doom. The product was too weird, and nobody wants to change email services. I was told that we would never get a million users.
Once we launched, the response was surprisingly positive, except from the people who hated it for a variety of reasons. Nevertheless, it was frequently described as ‘niche’, and ‘not used by real people outside of silicon valley’.
Now, almost 7 and a half years after we started working on Gmail, I see things like this: Yahoo and Microsoft have more than 250m users each worldwide for their webmail, according to the comScore research firm, compared to close to 100m for Gmail. But Google’s younger service, launched in 2004, has been gaining ground in the US over the past year, with users growing by more than 40 per cent, compared to 2 per cent for Yahoo and a 7 per cent fall in users of Microsoft’s webmail.”
The grueling process of achieving a product/market fit is one of the primary reasons, among several other important reasons, that we built the core piece of our technology in-house. Because of such, we can listen to our market and respond with the confidence and versatility to switch focuses on a dime.
If there’s anything I am certain of, it’s that tomorrow we will be better than we are today.
Update: As I skimmed my feeds tonight I ran across another post on one of my favorite blogs, Venture Hacks, that touches perfectly on the topic of ‘learning your way to a product/market fit’. If there’s one funny result of tough markets like we are currently in, it’s that it gets a lot of people thinking along similar lines of how do you build something of actual value. Give it a read.
“If a man is called a streetsweeper, he should sweep streets even as Michelangelo painted, or Beethoven composed music, or Shakespeare wrote poetry. He should sweep streets so well that all the hosts of heaven and Earth will pause to say, Here lived a great streetsweeper who did his job well.” ~Martin Luther King, Jr.
As young kids my brothers and I were passionate about baseball. At our own request, my Dad would drive us to the local high school to run hills. We’d ask him how many he thought we should do. He’d advise, “Run until you can’t do anymore…then do 1 more.” That advice is how I approach a startup.
I’m consistently asked how we (at LockerDome) can stand working so much. I hate this question. As a passionate entrepreneur, the question doesn’t make any sense. If you’re working on a deal yourself, or have done one before, I’m sure you can relate.
Sure we can respond to such nonsense (and I sometimes do) with the normal cliches like, “It’s not work if you you like what you’re doing,” but that response is merely a brush-off to the question. If you want to know the truth, we work so hard because we simply don’t know any better. It’s what we do.
You see, startup junkies are extremists. Once we can taste a market all we want to do is start building. Moderation means nothing.
Just about now I can already hear someone responding with ‘work smarter, not harder’. When applied properly, there’s some truth here, but I’ll tell you why I don’t put much weight into this phrase:
Putting in a few hours to build something, hitting the market on the head, and then making millions is an anomaly (see Plenty of Fish). Stop reading main stream media clippings. If you’re an entrepreneur-or thinking of becoming one-I’d suggest you look at the steps that Google took instead. While the odds of duplicating Google’s success are surely slim, Google’s path is nevertheless relevant. Notably, what few talk about is that the development on Google’s technology began in January of 1996. Google did not receive it’s first financing until August 1998, over 2 and a half years later.
At the end of the day it’s pretty simple: tech startups take a lot of work to get right (read Paul Buchheit’s blog post entitled “Overnight success takes a long time”); heck, they take a lot of your time even if you don’t get it right.
If working at 3am to iron out a random bug, getting out of bed at 5am to respond to a customer email, or skipping another night’s sleep to make requested updates on your financing docs for the millionth time doesn’t sound like your type of gig then a tech startup is probably not in your future. If that’s the case, it’s unlikely you’ll ever fully understand why it is that we can work so much.
Come to think of it, I guess I work so hard because a 9-5 sounds like torture.
I’ll admit it, I’m not a coffee guy. The taste has just never grown on me. So when I mention ‘let’s grab coffee’ it’s simply a descriptor for the act of getting together and chatting rather than a statement of beverage/consumption preference.
There’s a great clip in the movie Good Will Hunting (my favorite movie) where Skylar mentions to Will that maybe they can go out for coffee sometime. Will says, “Sure. Or maybe we could just get together and eat a bunch of caramels….when you think about it, it’s as arbitrary as drinking coffee.” Couldn’t have said it better myself, which is why I’m randomly a hot chocolate guy.
Skip ahead to about the 4:50 mark in the embedded clip below to watch the scene.
In the startup world though coffee is that special drink that makes everyone at the table feel comfortable. It’s the social beer for entrepreneurs. So when I tell you that while you are sipping on those beans, I’m actually enjoying a tasty little hot chocolate you’ll probably start to squirm a bit. Same cup, yes…fooled you. But hey I fooled you for a reason, because it makes YOU feel more comfortable .
I’d be willing to bet that there are plenty of other investors, entrepreneurs, and general businessmen that would secretly rather have a cup of something other than coffee. Heck, maybe they’d even rather get together and ‘eat a bunch of caramels’. I’d also be willing to bet that very few will actually admit it. Oh well.
So what do you say, maybe we can grab a hot cholocate sometime? ‘Because when you think about it, it’s as arbitrary as drinking coffee.’
“Stress is the fertilizer of creativity.”
When we first began concepting LockerDome we constructed an ad-based model which was fully dependent on large chunks of financing, as well as significant scale. And after some moonlighting, off we went. We:
Yes, things were moving along quite nicely, then somewhat slower, and then…boom, the market changed too much to ignore it. In fact, it was a phone conversation not too long ago with a fellow entrepreneur that got me thinking really hard about our next steps. He said, “Raising money right now is obviously tough and the problem you are trying to solve will take some time. Find a way to create some staying power.” He was right. It is time to get back to the drawing board to define an adapted model that is better suited to take on this economic storm.
We began re-concepting, but the only problem is that nothing seemed to fit. We discussed everything from premium accounts, to selling sporting goods, to creating to donation pages, to well you get the point-a bunch of ideas that don’t help us today. The common flaw in 90% of our suggestions: they need significant scale to succeed. We were thinking too much like a tech bubble startup and not enough like practical entrepreneurs.
So we wiped the board and started over. We actually listed requirements this time (probably should have done it the first time!). Requirements are:
Again, nothing. So we walked away from the problem and cleared our heads. While shooting some hoops, it hit. Yes, one of those extreme moments of clarity. When we brought this new concept to the board the possibilities now felt limitless (and actually met our requirements above). Even better, we decided this approach was both technically possible and a fun technical challenge! Lastly, we bounced the idea off close advisors, investors, potential customers, and others. The response was tremendous.
Now this is one of those moments that I love being a young startup (especially one with an agile development methodology) because 1 week later we’ve successfully and seamlessly been able to apply a complete 180 to our business and development efforts. No red tape. Beautiful.
You’re wondering what this new direction is; sorry, I’m saving the details for another day. That’s not because I value ‘stealth mode’ because I don’t (in fact I hate that term), but it’s simply because I’m tired and I need to knock out a few emails before getting some food and grabbing a nightly nap.
So now we enter a new phase for LockerDome. We have much to learn from these new potential customers. In fact, we undoubtedly have much refining to apply to our offering (price points, product, & perhaps even target), but we’ll get there. It’s fun when you can taste the market. Ok, it’s also fun when you can taste money in the market 
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And most importantly, we’ll continue to adapt. That’s how we survive.
