#StartupMistakes: Not practicing what you preach

To be fair, I think this might apply to bigger companies as well, not only to startups. However in my mind it will always be linked to the startup scene because that’s where I’ve seen how destructive this attitude can be.

Here are a few examples of things that were preached as “The way we do things around here” and at the same time disregarded by everybody:

  • Pareto rule of 80/20 -> there was no prioritization, we “focused” on everything
  • Agile/Sprints -> in reality management would change their mind about the features every two days #featureCreep
  • Lean approach -> people waited until to launch a project until the project got canceled.

And I could probably go on…

The issues I’ve noticed so far that come out of this behaviour are:

  • Employees will lose trust in your leadership and authority
  • Employees will get frustrated when you mess with their expectations
  • The team will be confused and morale will go down

My advice: be consistent. You can always change your principles BUT make sure that your team knows about these changes.

I’m telling you all this because I believe that changing your behavior starts by acknowledging the impact of your actions. I also think that changing your behavior can be as simple as changing your perspective. Thus I challenge you to go think about your actions.  Do you practice what you preach?

What do you think you about my idea? Did you ever see this happening in your company? How did that make you feel?

Photo by Mario Mencacci, used under CC

Here is how can you replicate Ford’s assembly line idea for your business

A little know fact is that Ford’s inspiration for the assembly line came from a slaughterhouse. Yes. You’ve read that right, a slaughterhouse!

Back in the day, taking cows apart was already a streamlined process. As the cow was moving around the slaughterhouse on a conveyor belt, specialized people were cutting certain parts, over and over and over again. This process was much faster than having one person slaughtering the entire cow.

Story goes that Ford had seen this and he thought: “If this system works so well for taking animals apart then it might work great for putting cars together.” So he reversed the system and voila: the world’s first assembly line.

I love this story because it shows that inspiration comes from strange places. Another reasons to love this story is that it hints to a recipe on how to look for inspiration in strange places.

Here’s how I see the steps to replicate Ford’s assembly line idea for your business:

  1. Define what area you want to improve: customer service, communication, mass production, sales, …
  2. Explore other businesses which have that area as core business model, or that perfected the skill over time
  3. Pick the top companies in that space
  4. Identify what technologies, models, partnerships make them so successful
  5. Take the essence of what you learned and see how you can apply it to your business model

Here is an example:

Let’s say my company sells shoes online and I want to increase traffic on the website. Where should I look for inspiration?

  1. Area of improvement: increase web traffic
  2. Businesses that have web traffic as their core business model: News industry, social networking sites, …
  3. Successful businesses in this area: Huffington Post, Buzzfeed, Reddit …
  4. Their tactics: social sharing, catchy titles, involve the community, UGC, …
  5. How can you use this for your own business?
    • Start a blog and have catchy titles
    • Invite people to generate content for you
    • Have social sharing buttons

That’s it. I hope this will help you. Is this applicable in your field?

Are you using any corporate slang in your external communication?

For the past 6 years I switched on a daily basis between English and Romanian. I worked for international companies where English was the lingua franca and at home I speak Romanian with my girlfriend.

Overtime, this changed my Romanian vocabulary dramatically. At the moment I speak some sort of Rongleză, as we say in Romanian, a mix of English words that are inserted randomly in my Romanian conversations.

Because I developed this vocabulary in The Netherlands, where most of my Romanian friends are in the same situation, I actually never realized how big this change was. Here nobody even flinches if they hear a word from a different language randomly inserted in a conversation. It’s normal. They do the same.

However, a few days ago, some Romanian friends of mine came to visit, and as I was telling them stories about one thing and another, I realized I have to stop from time to time because they had no idea what the hell I meant. I was using so many English words, in an unexpected context and probably with a Romanian accent, that it was impossible for them to follow me.

So where am I going with this story? Communication gaps.

I think that my story is a perfect metaphor for a phenomenon that often happens in companies, no matter the size. Behind closed doors, in small meeting rooms, after months of developing projects we end up creating our own language. This becomes natural.

The danger here is that we end up using these words in conversations with customers or even other internal teams. And much like my friends these other people will have no idea what are we talking about.

I believe that communication is one of the foundation blocks of a successful company. This is why I think it’s so important to realize this phenomenon and from time to time have a sanity check on our vocabulary.

So here’s some food for thought:

Can you think of some the words you defined within your team and which you use in your external communication, be it with customers or other departments?

Photo by Eddie Codel, under CC

How do you find users to recruit manually?

How do you find users to recruit manually? If you build something to solve your own problems, then you only have to find your peers, which is usually straightforward. Otherwise you’ll have to make a more deliberate effort to locate the most promising vein of users (see below how). The usual way to do that is to get some initial set of users by doing a comparatively untargeted launch, and then to observe which kind seem most enthusiastic, and seek out more like them. For example, Ben Silbermann noticed that a lot of the earliest Pinterest users were interested in design, so he went to a conference of design bloggers to recruit users, and that worked well.

via Paul Graham

I think that what Paul says makes a lot of sense. When you don’t know who’s your target audience you have to improvise. Forget about all targeting, send it to a big heterogeneous group, and then listen. Well, measure, don’t listen. In addition to what Paul said here is how you can locate the most promising vein of users:

  • Look in Google Analytics and see if you can spot any patterns. Think Geo, language, device type,
  • Look at the reviews. Identify who are the people that give you the 5 stars
  • Send out surveys or for physical products simply go and ask them
  • Use in app/on website notifications to ask them more about them
  • Make it easy for them to contact you. Early adopters have always want to influence the product.

If you need help with that, let me know.

PS: Not having a clear user profile is acceptable only in the prototype phase f your product. You must figure that out ASAP

Photo by michael dornbierer, used under CC

A story about buffalos, problems and solutions

At one point Hornaday realized that the buffalos that were roaming the great America plains were almost extinct, so he did what every respectable conservationist would have done: he went to Montana to kill several dozens of them.

William Temple Hornaday was one of the greatest pioneers in the early wildlife conservation movement in the United States. He was head taxidermist at the Smithsonian museum and he traveled the globe hunting exotic animals and stuffing those animals for the museum. It’s sounds weird, but for Hornaday killing all these animals was a kind of conservation. He believed that by stuffing them he was preserving endangered species for future generations that might not know them. Through taxidermy he could make the immortal…

After he hunted down and stuffed around 24 buffalos he arranged in the natural museum around a fake watering hole. As he looked at them he realized he was just a funeral director embalming the species that America was exterminating.

For me this is great example of how sometimes great people focus so much on the first solution they found that they don’t stop and question if it actually solves the problem.

This is the danger of focusing on solutions instead of focusing  on solving problems. Sometimes we fall in love with them and we keep pushing, protecting them even when they don’t make sense.

After his big awakening,  Hornaday became one of the biggest advocates for saving endangered species and he fought till the end of his life to save as many animals as possible.

My challenge for you is: STOP! Take a break from time to time and analyze your actions. See if you are embalming the buffalos or actually fighting for their survival.

You can hear the entire story on itunes or scoundcloud, starts at minute 15. I really recommend it.

Photo by Loren Kerns , used under CC

What Startup (podcast) can teach you about starting up?

Startup is a podcast that carefully documents the hidden story about starting your own company, the part you usually don’t hear about.

Alex Blumberg highlights all the moments good or bad, including fears, failures, successes, and various lessons learned.

The show itself was is a huge success, skyrocketing to one of the most listened podcasts in iTunes in just a few weeks from launch, which is extremely rare. Also, this podcast helped him get his funding in just a few months: $1.5M.

I absolutely love it and I think it’s a must listen for all of you who want to start their own company.

Below you will find summarized the key learning points that I took away from his podcast. You can read it all in just 3 pages, and considering this show spans over 4h30min, I would say it’s a bargain :D. Si here it goes… 

Storytelling is underused!

We live in a world in which nobody has time to listen anymore. We read status updates, fast forward, scan through articles, and cut to the chase. Unfortunately this is world also shapes our communications with our customers.

Because we are used to this communication style, our messages are shaped into these short, soulless status updates. Tailored to deliver the essence, but loosing the emotion and transparency.

This podcast is anything but that. The series packed with emotion and it’s addictive. I just became a big believer in story telling (as a communication strategy) and I think entrepreneurs should use it way more.

Think about all it advantages. A good story can bring people together, build a community, be viral, and make people take action. Oh and it’s free.

Transparency builds communities

Alex was not afraid to be transparent. He talked about how much equity he gave to his business partner, about having second thoughts on doing the whole thing, about the mistakes he made, how much money he was able to raise and how he hired his first employees. Sure, this made him a bit vulnerable, but at the same time he built trust among his listeners.

Transparency builds trust. And trust builds a community. And communities are important because they will support you in the long run, forgive you when you make mistakes and listen to what you have to say.

It’s about who you know

In his show Alex tells us about the time when he pitches his startup idea to one of the most influential VC’s in Silicon Valley: Chris Sacca, an early investor in Twitter, Kickstarter, Instagram and other 40+ companies. Chris was in Alex’s contacts so he was able to contact him directly.

Who is in your network and what do you do to expand it?

Build it and they will come

When Alex started contacting people to invest in his idea, many turned him down. But, as this Startup podcast gained an audience, he witnessed a miracle. In just a few months investors were now looking for him to give him money.

Why? Alex built a prototype, something that people can understand. He made it easier for investors to see the potential.

I am big believer in having a presentable concept. When starting something up, make sure you build a mockup or a prototype. Have something that you can show others and sparkle their imagination.

Mistakes happen. It’s how you deal with them.

Making mistakes is inevitable. It’s part of the learning process and shows that you went outside your comfort zone. However when you make one… man, it will feel like the sky is tumbling down and you just want to hide in a corner.

That’s what happened to Alex in podcast no.9. He was so nervous. You could hear his voice trembling a bit, trying to calm everybody down, and saying it will be ok. I could feel it through my headphones.

However, you should focus on how you can fix it, much like he did. Be open about it. It was a slip not an evil master plan.

In these situations is important to listen to the people you’ve wronged, understand their issued before replying. Also, try several times to make it right. In the thrill of the fight, people might not want to talk to you, but if you come and talk to them after a few days they will be a bit more open and rational about the issue.

There will always be naysayers

Expect a long, rocky road to your final destination and be ready to receive a lot of negative feedback. The key is to choose carefully who do you listen to and who not.

How to decide who’s right and who’s wrong? There’s no trick really. You have to rely on your instincts…

You will feel awkward. It’s OK.

The first time Alex pitched his idea to Chris… it was sooo awkward to listen to him. He is such a good storyteller but somehow he lost his focus when it came to his dream.

Been there, done that. It’s ok to feel awkward. Again this means you are stepping out your comfort zone. The key is to remember that behind every success story are moments like these. Embrace them, learn from them and better yourself.

Finding a business partner is a lot like finding a life partner. Who knew?

The part where Alex finds his business partner is cute, silly, sweet, awkward, emotional and full of insights. Like a romantic comedy.

I had no idea it’s so complicated.

The big takeaway is that you need to be completely honest with your partner. After all you will have “a baby” together. If there is no trust, things won’t move in the right direction.

Naming is so complicated

This I kind of knew. I’ve been through several naming exercises in my life. Never for an actual company, but it was still pretty difficult to come up with a name that isn’t used by anyone else, makes sense, you like and fits the company.

On the other hand, I had no idea you need to do so many legal checks on trademarks when naming a company. Crazy! But, there are specialized companies that can do this for you.

Pitching to VC? Be ready for this question.

Are you asking a VC for money? Then make sure you can tell them your exit strategy.

These people will give you money to make money. Most of the times looking for 10X the investment.

It ain’t easy

After a few episodes, Alex has this moment when realizes all the sacrifices he needs to make for achieving his dream. Since he started he spent less time with his family, he has less money and his stress level skyrocketed. You can just feel his doubt in his voice. It’s so real.

Building your own company requires a serious commitment. You won’t be able to afford the vacations you want or spend as much time you loved ones. Just so you know. Be ready for the long haul.

I believe that all of these key learning points can help you build your own startup. If you read them and have no idea how all these could apply to you, leave me a comment and I will gladly help you out.

I will try to update the post with new learning points, as new podcasts will come out. If you want to find out about the updates you can either bookmark this post or visit it from time to time or you can subscribe below to my monthly podcast.

Photo byRaoul Pop, used under CC

Interview with Razvan Girmacea

The Challenge

Razvan is building the ultimate backlinks monitoring tool for SEO experts and online marketers. His clients come from all over the world and his services were recognized by world-renowned SEO and Marketing publications.

The most awesome part? He is building a global business from my hometown (Iasi) , and not from a world-famous tech hub. 😀

Intro

I met Razvan in 2007-ish at a Blogmeet in Iasi, our hometown. Back then he was a freelancer, one of the two freelancers I knew at the time. That fascinated me.

Having the will and knowledge to get clients and offer them valuable services… while most of us where still in figuring out what we want to do after university… it was truly inspiring.

Can you tell me a bit about yourself?

Hi everyone, my name is Razvan, I am 31 and I’m from Romania.

I love working in online and so far I have started over 30 online projects and initiatives. That was easy for me because I have a technical background and I can quickly build an MVP (minimal viable product) to test my theories.

I took my first steps in this direction during my University studies when I created several websites, search engine optimization portals and a few other projects. After a while, I decided to start a real business, so in 2009 I built an ecommerce website, which was selling educational toys for kids.  After growing the website and gaining valuable insights into managing a proper business, I sold it to a local competitor and started thinking about my next project.

Having over 6 years of experience in Search Engine Optimization and a good domain, I decided to start Monitor Backlinks: a service that helps people that buy, sell or exchange links online to track every single link to and from their website.

That sounds interesting… can you tell me a bit more about it?

Well, the product evolved quite a lot since v1.

Basically Monitor Backlinks allows any SEO consultant, SEO agency, business owner or marketer to track incoming links.

All they need to do is connect their domain, add the domains of their competitors and add the keywords they want to track. From that moment the process is fully automated.

The first thing we do is discover all the existent backlinks to their website and recheck all the links in order to see if they have any SEO value. Then all our clients receive a report with data about: social metrics, page ranks, if it belongs to an IP network, if it has a lot of external links and so on.

After the initial report, the system will crawl everyday the web, using Google Analytics and other sources, and it will index new links to the domain(s) of our clients. In case someone writes about them, they will be automatically notified via email.

Additionally every week we check backlinks to competitor websites. This is a very useful feature, as every search engine optimization company will start by researching you competition to find out where they can get some good links.

Speaking of clients… how is it going? Are you growing your customer base?

Yes, we are. At the beginning things stared quite slow but now is going ok. I am super happy with the conversion rate, I already have big clients, big agencies that really like the product.

In fact I have even stopped the advertising campaigns. Now I get a lot of traffic from organic search, which proves that my marketing strategy was quite good. I was able to get a good position on SERP for some really high volume keywords.  Just to give you an idea, I get up 50% of all traffic through search engines. The other half is from referrals, about 800 domains…or so 😉

 Where are your clients based? Romania or somewhere else?

Romania is one of the last countries if I look at paying customers. Most of my clients are from the US and the UK

 I bet you had a lot of ideas. As you said you had over 30 projects. How come this was the winner?

I read the Rework book from 37signals and I saw what they did with Basecamp: a handful of employees generated huge revenues. I wanted to build something similar.

That’s basically our business model. With a small team I can setup a good automatic service for which I can charge a small, but recurring fee every month. And yes I do have a lot of ideas and even after I stared this projects I had a lot more, but at the end of the day I just wanted to stop playing and do business.

And in my opinion it takes time to create a real business. You have to work hard to get clients and brand awareness.  For example at the beginning when I reached out to some SEO experts they just ignored me because I was too small…but the more I invested in creating brand awareness and the more I grew, I noticed that more and more people replied to my emails. And now, even top SEO blogs talk about my tool.

Besides, I knew this market very well so it made sense to start something in this area.

Razvan Girmacea 2

How did you fund the project?

The first year I bootstrapped and I didn’t pay for any development costs because I did everything myself. I only paid for design services and ads. During this period I also worked part time as a freelancer to make some money.

After the first year, I qualified at How to Web Startup Spotlight in Bucharest. At the end of the fifth day an investor told me he wants to talk to me about my ideas. After the event ended I waited for him for a while but I was too tired so I just left without talking to him. After two weeks I reached out to the organizer of How to Web, Bogdan Iordache, and he gave me the contact details of the VC.

I must say that at that stage I was not actively looking for funding and I had almost no idea about startup investments.  So I called Bill Liao and talked with him via Skype for 15 min. At the end of the call he told me: “we want to invest 50K EUR in your project, just tell us how you plan to spend the money”.

Well, that’ s a cool story!!

Yes. It is.

After that I start reading a lot, as I realized that from my “part time” project this has the potential to become much bigger business and that I would have to have more responsibility. At first I got a bit overwhelmed to be honest, but I got over it eventually and accepted his offer.

 Who developed it and why did you do it this way?  

As soon as I got the money I hired a developer to help me scale the business and I moved everything on Amazon servers. At that moment the product was still in the first phase: no automation, no keyword monitoring, no competitor analysis.

With the help of my new employee the product grew much, much faster. Even though it was a bit strange to lose control of everything that I have built, having someone to help me out was really good as I could focus on other things like marketing and business development.

 So how big is your team now?

We are 5 people now.

 Did you ever considered stopping?

No, once I decided to take the investment I never considered stopping.

It’s still very challenging though, but it’s normal because a complex product will lead to bigger and more complex challenges.

However this is a bit different from I imagined the things when I started it. Back then I told myself: “Ok, so I will launch the product, promote it, get some clients and make money”… simple right? In theory yes, but as the company grew I had to consider a lot more things like: resource management, financial planning, business strategy, business development, and so on.

My biggest problem right now is that I am the sole founder. As a founder I must do everything. If you are in a team you can split the tasks and things would go much easier.

Do you think luck played a part in achieving your goal?

Yes, well … in a way I guess. The thing is that if you create many opportunities and eventually you will get lucky.

For example last year I got accepted into the Lisbon Challenge Accelerator. But that didn’t just happen; in order to get accepted I had to apply and have a good idea.

Also, before being accepted here I applied for 10 other accelerators. I applied to so many startup accelerators not only because I wanted to get in, but also to get feedback. It was immensely helpful to see how other people (more experienced) perceived my ideas; an extremely valuable experience.

In the Lisbon challenge I ranked number 4 and won 10K EUR.

But coming back to luck, it is about creating a lot of opportunities. Whenever I read an interesting blog post about my industry I reach out to the author and connect with him.  And I am lucky if the guy needs my product or wants to help me. But yeah, without hard work you don’t just get there.

Why did you build a web platform. Why not an iPad app for example?

Simple. It was easier for me to start here. I know PHP, MySQL, front end and back end. I didn’t have to ask for help. I could simply do it. I saved resources, which is very important when you bootstrap and you don’t have a lot of money.

 What are the things you’ve learned or skills that you developed during this project?

I didn’t know much about accelerators and investment opportunities. Before starting MonitorBacklinks.com, for me building a business = making money. I didn’t know you could raise capital with just an idea or a basic prototype.

Also, I didn’t know that when you get an investment round you could pay yourself a salary. All I wanted to do is invest all the money in the business. But makes sense if you think about it, everyone needs a salary because everyone has expenses. This way I could stop freelancing and focus 100% on the business, which in turn grows the business faster.

Another thing that I learned is how valuable an Accelerator is. They basically give you the opportunity to validate your ideas really fast without investing any of your money. This is an amazing opportunity to grow your business without waiting years and tons of money.

 Do you think your location (city/country) influenced the project in any way?  

Romanian startups, and Eastern European startups in general, get less funding compared to startups from Western Europe or the US.

In America you can raise a lot more money with just an idea and the second round of investment is a lot higher, the evaluation is higher, and investors take bigger bets.

In Europe, the valuation tends to be smaller. Investors are more careful with their money; they invest smaller amounts and get more equity.

So being from Romania has it’s down sides but that should not stop you from going for your dreams.

 How did you promote your project so far and what was the most successful thing?

Since the very beginning I focused on organic search and I knew this would be a long-term strategy.

However, at the beginning I started with Adwords to understand better what people were searching for and what keywords had the best conversion.

 Do you have a motto or an inspiring quote?

No not really. People (their actions) inspire me not quotes.

 Where do you get your news and what type of news do you read?

I mostly use Facebook and Twitter. I follow a few people that have similar interests and they usually share only the most important part of an article, so they do the hard part for me. They act like a filter.

On top of that, I follow the RomanianStartups group on Facebook. It’s a really great source of news for things like startups, investments and entrepreneurs.

 What was the TED talk, book, blog post, life lesson or anything really that inspired you the most in making this project?

My inspiration comes from other entrepreneurs. For example, I follow quite closely Joel from Buffeapp. He is very open about his achievements and talks often about how he grows his business. I like the authenticity of a story that comes from someone that has built a company.

 Do you have a lot of competition? And how do you feel about competition?

 Yes, I do. I have both bad and good competition…

For example, there are some guys from The Netherlands that copied everything I do. From website structure, to features, to pricing they just look at what I do and they add that to their website.  It’s a bit annoying but I choose to ignore them.

It’s bad when somebody with a lot of resources start copying you because they can execute very fast and if they have a huge advertising budget they can win the game. But if there are two guys, who are working on the side, I am not worried. They will never be able to execute as good as I can.

I also have good competition. In the last two years I saw many competitors coming online; much larger teams, with lots of resources. It make my life more difficult but it’s not all bad news. If you start doing something and you don’t have any competition you probably don’t have a market, and then you will have to work like hell to educate everyone on why they should buy your products.

For me competition is good because I have many clients that came over from my competitors. They were not satisfied with their services and looked for an alternative.

 What would be the most practical advice you could give to someone that would like to do something similar? Something that he or she could apply from tomorrow.

Razvan Girmacea

 

Go to an accelerator. I cannot stress enough how much it helped me. I tell this to everybody.