The boring part of startups

As entrepreneurs, building businesses is our adrenaline rush. The same thrill you get racing cars and hunting, we get turning a vision into a reality. It’s hard to understand unless you’ve done it, been part of it, or even watched it first hand. But trust me when I tel you, we really love this shit. 

As entrepreneurs, we move fast, take incredible risks, and operate in environments with almost no certainty when we make decisions. Few days pass without a crisis or some form of chaos ensuing. Within seconds, an entrepreneur’s mood and entire outlook on his or her future can change for the better, or the worse. 

Entrepreneurship isn’t for everyone. It’s a very high risk, and oftentimes, very high reward situation. Those of us that do it understand this. And more often than not, we do it because of this, not despite it. We thrive on the energy, the speed, and the ambiguity. 

The characteristics and traits that we have as entrepreneurs allow us to endure in situations that would break others. But those same characteristics and traits we consider to be strengths can also be our weaknesses, as I experienced this past week. 

A business that I’m currently building had it’s first paying customer this past week. Hooray! Yes, it was a big, frame-worthy moment for those of us working on this business. This was one of those aforementioned, instant moments that changed the outlook for the future of this business in seconds.  

The customer came from a series of experiments we’ve been running for several months. Incorporating the basic tenants of Eric Ries’ popular book, The Lean Startup, we incorporated an MVP and launched a series of experiments. We incorporated the data from the experiments to run new experiments. Each experiment built on the prior experiments. Within several months we’d run dozens of them and, lo and behold, we got an actual paying customer. 

Up to this point, I thought I’d done everything right. I’d learned so much along the way that I iterated to success. All signs pointed to doubling and tripling down on the strategy. We are on our way to exponential growth. 

I could see it all so clearly in my head. 

The problem is, from the outside looking in, it’s not as easy to see. In fact, it’s pretty easy for people that aren’t involved in the rapid movement of the day-to-day in a startup to have the perception that I just spent several months and thousands of dollars to get a single customer to give me $125. Those of us with the broader vision know otherwise, but by a lot of (very fair) standards, that’s a failure. 

So, as entrepreneurs, our job is not only to turn our vision into a reality, but to ensure that important stakeholders - like investors - understand the vision. It is our responsibility to keep them engaged and informed along the way. This goes against what many of are wired to do, which is, to do. We like to do shit, not talk about it. We like productivity, not activity. We like story making, not story telling. 

And that is where our strengths are also our weaknesses. 

As entrepreneurs, it is important to remember that even if stakeholders understand our vision, they may not share the same degree of passion that we have for achieving it. If they did, they’d be doing what we are doing. Generally, they are investing a great deal of trust (and oftentimes, a lot of money) into us to execute. And in return, we owe it to them to provide honest and candid assessments on progress, and we owe it to them to do so in a way they’ll understand with absolute clarity. 

If progress reports and presentations to document what you’ve been doing sound like torture tactics, I’m with you. This is not what drives us. But it must be done. So, it’s incumbent upon us to make it as easy and efficient as possible. We have businesses to build after all. So, here are a few tips I’ve come up with to make this boring part of entrepreneurship a little bit easier and a hell of a lot faster: 

  1. Track your activity and automate it. I use Workflowy, which is essentially an incredibly dynamic to-do list that allows you to create multiple layers on multiple tasks and organize them. Here is a video of it in use and you can get it yourself here. The use of hashtags and ampersat symbols allow me to filter activity any way I want and I’ve found this to be the most effective way for me to organize my brain, which is no easy task.

    Workflowy also serves another important function: It tracks what I’ve done and sends me a daily email summarizing what I did the day before. These emails and reports serve as an activity diary on autopilot. I save the emails to a folder and when I need to recall details of experiments we ran several weeks ago, which can feel like years ago in a fast pace environment, it’s all there for me. This is helpful when you need to summarize what you’ve done over the past few weeks or months for other stakeholders.

  2. Document learning. The product development process I’m using relies heavily on experiments and iterative improvement. Since we are in the digital space, we can run experiments and measure them at rapid speed. It's not uncommon to run multiple experiments simultaneously. This is all well and good, but the data and learning can pile up quickly and when it’s time to demonstrate to stakeholders what I’ve done and what I’ve learned, it’s overwhelming. So, we have a simple form to use with every experiment that contains four sections: Date, Build, Measure, Learn. The basis of measurement is borrowed from the Lean Startup and I like it for its simplicity.

    For “Build,” I summarize what the experiment is. What are we testing? Who is our audience? What is our hypothesis? How are we testing it?

    For “Measure,” I write what we intend on measuring. When we execute on the experiment, I complete it with the actual data.

    For “Learn,” I write what we learned from each experiment, what surprised us, and how we think we’ll use the findings.

    This process creates a sense of order out of what looks like chaos and it makes it incredibly easy to put together summaries of what we’ve learned when metrics (like revenue and users) don’t tell the story yet.

  3. Be proactive in communication. Investors, employees, and other stakeholders rely on me to give them critical information about the business and thus, peace of mind. If I wait until they are concerned and asking questions, I’ve waited too long. As a rule of thumb, I simply ask stakeholders how frequently they want to hear from me with updates and progress reports. Then I communicate slightly more frequently than that. As I do with other activities, I block time on my calendar to do it in advance of when I need to do it. I don’t wait for a “good time” because there never seems to be one to write progress reports. I put it on my calendar and stick to it.

These a few things I do to provide a bit of structure to our intentionally chaotic environment. My experience has been that the processes we have in place to help us provide clarity to stakeholders also help provide clarity within the team. That ensures our tactics are helping advance the strategy to turn our vision into a reality. So, we all win. 

Have you found tools or built processes that provide some clarity and efficiency in communicating with stakeholders? I’d love to hear them if you have.

The top 5 things I learned in business school this week

Note before reading: I have withdrawn from the program that offered the examples I provide below. Time is the most important asset and I couldn't waste any more of it in a program that provided more "WTF" content for my blog than it did my education. After a great deal of consideration I elected to enroll in a highly ranked Executive MBA program at a different school.  

Don’t judge me, but I’m working on getting my MBA. I have some reservations about the effort, some of which Gary Vaynerchuk bluntly expresses here:

Solid points. I'd add that nearly every business skillI I have, I've learned from experience, not a professor. 

Nevertheless, I’m enrolled and making progress on getting a piece of paper that qualifies me as a "master" of business. Why? Well, for starters, it's an employment benefit and I’m not paying for it. Plus, I’m a nerd and find learning pretty fun, so why the hell not?  

As someone enrolled in MBA classes thinking I can actually apply what I am learning to my businesses, these past couple weeks have been a massive fucking disappointment.

To enlighten you as to just what I mean, I’ve taken the liberty to list the top 5 things I’ve learned in the past week from my MBA classes. Before you read, please, I beg you, check the date of this post. It’s not a typo. And this is legitimately what my required reading is at the moment.  

Without further ado, here’s what I’m “learning” about consumer behavior in my MBA program:

5. Google is rapidly taking over as the internet’s top search engine, recently overtaking Yahoo as the leader. 

From the textbook:

"Yahoo lost the top spot by 2003, with the gap between Google and Yahoo becoming even greater with the following year."

Thanks for the breaking news, business school. Looks like I better stop sending MSN my search advertising budget. 

4. Longaberger is a great example of how to successfully execute direct selling.

From the textbook:

“Longaberger is the premier maker of American-made handcrafted baskets and other quality home and lifestyle products. Annual sales of 8 million baskets and a total of 30 million pottery, dinnerware, wrought-iron, and other home products are accomplished by nearly 70,000 independent home consultants nationwide who sell Longaberger products directly to customers. Led by CEO Tami Longaberger, the company was ranked the eighteenth largest woman-owned U.S. company by Working Woman in 2001.”

Who the hell is Longaberger? Yeah, I was wondering the same thing. As it turns out, so was their most recent President, Michael Somoroff when he was offered the job, which he took for 6 months before departing. Somoroff is just one of 7 presidents Longaberger has had in the past 10 years and since 2000, the company has seen revenues fall from $1 billion to about $100 million. If I’m going to learn anything from this company, it might be what not to do.

3. Catalog sales are growing dramatically. 

From the textbook:

“Catalog buying has experienced dramatic growth in recent years, averaging about 7 percent per year growth in sales (at least twice as high as location-based retailers).”

Well shit, here I’ve been working to integrate an effective inbound marketing strategy using valuable and relevant content for one of my businesses and I didn’t even stop to consider printing out expensive magazines and mass mailing them across the planet. I have to alert my sales team of this innovative approach. 

2. Newspaper and yellow page ads are really important. But the real growth opportunity is in television home shopping. A great example of this is when Kodak used QVC to introduce its new Cameo zoom lens.

From the textbook:

“About 20 percent of in-home purchases are stimulated each year by newspaper magazine, and yellow pages ads that call for a direct response such as the return of an order form. But big growth in this category is occurring in television home shopping both in the United States and abroad. The on-screen sell seems to work well with a variety of products, especially when there is a need for demonstration. When Kodak introduced its new Cameo zoom lens camera on the QVC shopping network, 9,700 were sold in just seventy minutes. Kodak also benefited from pitching its related products at the same time.”

Want a surefire way to train our future business leaders for success? Teach business students about newspaper ads, yellow page ads, selling shit on QVC, and Kodak’s cutting edge ways of doing business. Seriously, fucking Kodak?    

But I have saved the best, most informative, most important thing I’ve learned for last…

1. The internet is really best for sharing information, not for selling things.

From the textbook: 

"It's probably correct to conclude that the Internet is still best for providing information rather than selling."

You read that correctly. 

What I'm wondering here is, if I'm asked on a test whether the internet is a great tool to sell products, do I answer correctly, or do I answer with what is in the book? 

This must be a business history class, right? Sadly, no. This is what they are teaching about consumer behavior at one of the top 50 business schools in the country.

I’m not even paying for my MBA and it’s enough to make me reconsider whether it's worth the investment I'm making, which is largely in time.