Starting Up by Rahul Pathak

Seth has a great post on his blog about the Wired article about the making of the iPhone. He highlights an amazing point:

The takeaway for me is that there were nearly insurmountable hurdles in terms of investment, partnership, technology and even security, and that at any time, the easiest thing would have been to just say  ‘forget it.’ Everyone would breathe a sigh of relief and move on. Important stuff is usually like that.  

I think Seth is spot on. You always have to work for the good stuff. Whether it’s waking up every day trying to get traction with a startup or pushing through mile 18 of a marathon when every muscle in your legs is screaming at you to stop, it’s always more satisfying when you keep your chin up and continue putting one foot in front of the other. It’s feels easier to quit but if you keep pushing, succeed or fail, you’re going to feel better about yourself in the morning.

In general, in startups, spending money carefully is a good thing. Cash is the lifeblood of any company and spending it wisely is critical. Having said that, there are areas where you should be prepared to spend because your business depends on it. It doesn’t pay to be too cheap when it comes to your attorney, your hosting & infrastructure and most of all, your people. Identify the critical elements of your business and spend appropriately in those areas. Be as cheap as possible everywhere else.Don’t get me wrong, you have to spend money slowly, but if saving a little today costs you a lot tomorrow, you’re making a bad decision.  

Dave has a great post up about transitions and he talks about folks at Judy’s Book going above and beyond the call of duty to make sure that work gets done and things get fixed, even as they were moving on to other things. I’m in violent agreement with Dave on this one. People have been fantastic and I have nothing but great things to say about the team.

Dick Costolo has another great post up on his blog called Too Many Chiefs or Too Many Indians. The post is about hiring at early stage startups and whether to hire experience or youthful enthusiasm first. Dick favors experience initially and has some good arguments backing it up.

First of all, in the first year to eighteen months of the business, everybody is generally heads down and go, go, go. By bringing in experienced people who understand the industry, their roles, and what needs to get done, you as entrepreneur are less likely to have to play grown-up and deal with the management issues that can frequently pop-up among a largely junior staff. It’s critical in the first 12-18 months to run as fast as possible, and by bringing in experienced players that can hit the ground running, you give yourself an opportunity to get a lot accomplished quickly. Secondly, as the organization grows from 4 to 20, if your first few people are senior, you can be confident that the future leaders of your organization are do-ers, people who rolled up their sleeves in the early life of the business and know how things operate ‘under the hood’.

Ask the Wizard should be in your subscriptions list if it isn’t already.

There’s a great interview of Jeff Bezos in the October 2007 issue of HBR. I think Amazon is making some great moves lately with their web services initiatives, their foray into movies and music and after reading this article I came away even more impressed than I was before.

It helps to base your strategy on things that won’t change. When I’m talking with people outside the company, there’s a question that comes up very commonly: “What’s going to change in the next five to ten years?” But I very rarely get asked “What’s not going to change in the next five to ten years?” At Amazon we’re always trying to figure that out, because you can really spin up flywheels around those things. All the energy you invest in them today will still be paying you dividends ten years from now…

…For our business, most of them turn out to be customer insights. Look at what’s important to the customers in our consumer-facing business. They want selection, low prices, and fast delivery. This can be different from business to business: There are companies serving other customers who wouldn’t put price, for example, in that set. But having found out what those things are for our customers, I can’t imagine that ten years from now they are going to say, “I love Amazon, but if only they could deliver my products a little more slowly.” And they’re not going to, ten years from now, say, “I really love Amazon, but I wish their prices were a little higher.”

It’s a great piece and while it’s long, it’s well worth it.

We released some significant new functionality on couponlooker today. (We also put out some new features on Judy’s Book which I’m really excited about but more on that tomorrow.) Kurt and Dave (Ops and Test) deserve a special thank you for great work in helping us iron out the kinks in this release and making sure the site is up and running.

The biggest user-facing improvements on couponlooker are the inclusion of ‘% off’ filters and related merchant filters to help users navigate search results.

The reason I’m excited about the filters is that they add significantly to user value. If you do a search for ‘digital camera’ on couponlooker, you are presented with a set of results for digital camera coupons (naturally enough) and at the bottom of the page, we present a set of links that allow you to refine your search:

If you click on say the 50% link, you are shown digital camera coupons for 40-50% off.

This is a simple change, but goes a long way to helping users navigate the search results. The merchant filters serve a similar purpose. They also help normalize data across coupon sites so “Dell Home” and “Dell Home, Inc.” aren’t treated as separate sites.

We also released an early version of a sponsored listing system that allows sites to promote specific coupons. These are clearly marked as sponsored listings and clearly distinguishable from the main search results.

As before, we continue to de-dupe coupons found on different sites in order to help users find the unique offers out there that are available to them.

Alex has a good post that goes into some detail about how we implemented the above features and it’s well worth a read if you’re interested.

With couponlooker, our goal is to drive traffic to the best coupon sites on the web. We’re also continually adding sites to our index. If you have a favorite coupon site, let me know and we’ll get it into the system.

These aren’t radical changes, but we’ve got to keep getting better at the basics in order to deliver value. There just aren’t any shortcuts.

As part of the product planning process at Judy’s Book, the primary document is a high level functional spec. In addition to this, at Andy’s insistence (thanks for the nudge, Andy) I created a one page summary which matched features in the spec to our core priorities, listed out the proposed phasing of work and the all important “what we’re not doing” section.

The spec (even though it isn’t always read in detail) is a great resource for working with our engineering team; the 1-pager was a good way to work with the management team. In a prior startup, I was told that communicating isn’t about what you think you said, it’s about what the other person thinks you said. I realize this is bloody obvious, but it’s easy to overlook.

In this case, I thought I was done when the spec was produced, but without the additional documentation and the one on one meetings where the same message was being delivered (albeit in different packaging) I wasn’t communicating effectively. If you’re not communicating, the right things aren’t getting done and that’s not ideal.

The other huge benefit of this is that all the communication really helps you understand what the hell you’re talking about.

On my drive (mercifully short) back from work, I heard a great interview with Bob Iger (CEO of Disney) on NPR. In it, he talked about the power shift from content producers and distributors to consumers of content. He said that at Disney, they were focused on the user experience and on using digital technology to drive incremental consumption. The user experience focus was great to hear about. (Dave’s written about companies that don’t get this and I highly recommend his post.) I’m sure spending time working with and dealing with Steve Jobs has contributed to this focus on UE.

In those instances, they were very much the result of the strategic vision that was outlined, which in those cases was to use technolo gy to reach more people, more often, in more convenient ways, to really think of the consumer and the power and the authority the consumer has in today’s digital world and serve the consumer better.

Apparently, a successful TV series consists of 22-25 episodes of which avid consumers watch 1/3. Making shows available for $1.99 via iTunes is a way to capture incremental revenues.

Really interesting interview and it did seem like Disney was embracing, rather than fighting digital content.

Here’s a link to the interview (audio/transcript) on NPR’s site. Enjoy.

Andy has a great post on his blog about negotiating term sheets. In it he also alludes to what I think is one of the most important things you can do in business - forming a network of people who want you to succeed.

…life is long and you don’t know whether this company is going to make it (in fact odds are against you)….so if you want to do another company, you want the group of people who want to support you to be as big as possible. Those people who support you when you’ve got nothing –who took a risk on the company not because of the company but because of you…those are the people you want to keep happy and close to you.

It’s all too easy to trade off the short term for the long term and it seems that people have a tendency to do that.

Great post on Startupping in which entrepreneurs are asked about their best and worst decisions. Some that stayed with me:

Ross Mayfield - Biggest Mistake — Not taking bigger risks earlier.
Maybe because in hindsight all risks are clear, but I always find myself regretting not taking bigger risks earlier. For example, open sourcing the Socialtext code was something we waited on until the company had strong footing. Partially because we thought there would be cannibalization, partially because we were understaffed to really engage with the community. But I believe if we bought this bullet earlier in the history of the company we would be reaping better rewards. As a planning exercise, now I always try to ask two questions: “How could we take more risk?” and “What risk can we take that creates the greatest amount of options?” I find there is always a way to do a little more, in particular by getting past instinct to control prevalent in so many entrepreneurs.

John Battelle - Pick one constituency and stick to it. Very early on, we decided that FM would be “author driven”. We could have made the company “advertiser driven” but it struck me the core business had to do with the folks who produce the sites we work with. At Wired, it was all about the ideas. At the Standard, it was all about the journalism. One clear core driving force helps clarify decisions during the tough early years.

Dick Costolo - I’ve made loads of mistakes so I’ll try to think of one with a good lesson for startups - one of the biggest mistakes I made in a previous company was accepting a high dollar contract once for something that wasn’t core to the vision of the business we were running at the time. While the revenue initially feels great, there’s nothing worse than pursuing a piece of business that isn’t core to the startup’s vision.

I highly recommend this post since although experience is a valuable teacher, it’s far better to learn from the experiences of others where you can.