Something Small

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If you don’t do it excellently, don’t do it at all.
Because if it’s not excellent, it won’t be profitable or
fun, and if you’re not in business for fun or profit, what
the hell are you doing there? -Robert Townsend

There are two ways to start a business, by building a new game or by tweaking the rules to an old one.

The latter doesn’t get nearly enough credit.

Some of the best inventors, visionaries and creators started off building small products. Thomas Edison’s first invention was the automatic repeater, a simple improvement on the telegraph. Tim Berners-Lee, the inventor of the World Wide Web, got his start writing typesetting software. Stephanie Kwolek had many smaller patents before developing the five that would lead DuPont to create Kevlar.

Good inventors start with small products because big platforms are very, very difficult to manage. To do it successfully, it helps immensely to have some smaller victories to look back on for inspiration.

Also, let’s not forget that taking an idea from birth to fruition is a skill, a skill that needs to be trained and honed over time to become truly powerful. For every entrepreneur who managed to attain overnight success on the first try, there are hundreds who needed to earn their stripes.

How do you find out which side of the coin your idea falls on?

First, take a look at the idea that you have chosen to pursue and see whether you are trying to create something entirely new or whether you are building on something that already exists. One test is to look at your nearest competitor. Ask yourself whether your idea could exist in a world where that competitor didn’t.

If it can’t, in all likelihood you’re building product not a platform.

Let’s face it,

Most Ideas Are Products

And that’s OK.

People spend vastly too much effort wondering whether their idea is “big.” This is a monumental waste of time. If you manage to do some good, make some money, and find some happiness building your idea out then for the time being it’s big enough.

You also shouldn’t be worrying about something so abstract, because there are plenty of other things left to worry about that are much more pressing.

Here are a few more to keep you busy.

  • Do you have the technical talent to get your idea made?
  • Do you have the financial support to keep yourself in food, gas and shelter while you build your dream?
  • Do you have the patience to deal with broken teams and broken products?

Now that you’re pretty sure you know what you want to build, it’s time to look at yourself again.

Instead of asking whether your project is big enough for you, decide whether you are big enough for your project. If you answered “no” to any of these questions, it’s not the end of the world, but it is time to start looking at what needs to change in order for that answer to become “yes.”

A Short Intermission

I think it’s time to time a break.

Get a drink, watch some television and think about this last section because when you come back we’re going to move onto the most important subject thus far. I am going to show you the fastest way to sink your burgeoning masterpiece before you even leave dry dock.

The Next Big Thing

Good ideas are common - what’s uncommon are people who’ll work hard enough to bring them about –Ashleigh Brilliant

Step right up, step right up.

You, yes you!

You look like a trustworthy sort, let me tell you a story. In these modern times, it’s getting harder and harder to choose just how best to torpedo your idea. There is so much uncertainty out there folks, so much room for error.

Not today!

Today, I am going to show you - easy now, step over here - how to make all your wildest dreams come true!

That’s right, right here on this very spot I am going to let you in on a secret that will guarantee – yes, I said guarantee – that your project will be the failure you have always thought it could be!

All you have to do (pay attention now), is to think it’s going to be the “Next Big Thing.”

Alright, alright, enough of that.

Don’t get me wrong, wanting what’s best for your idea is great, it’s downright romantic. In a lot of ways, it’s a much better way of thinking than wallowing in mediocrity your entire career. One of your goals as an entrepreneur should be greatness, if it isn’t, there are plenty of lovely careers in less soul-sucking professions that you might wish to consider.

If you take this sentiment too far, however, you are going to miss out on the big opportunities that pursuing small successes can open up to you. If all you can see is your ten year plan, it closes you off to less glamorous but equally necessary tasks that you need to accomplish right now.

It’s a delicate balance and it’s one of the reasons why I always encourage people to see finishing their small ideas as being just as important as plugging away at their big ones. Every victory is a stepping stone.

So the next time you are lamenting over whether your product is going to become the “Next Big Thing,” remember this:

Not every product has to change the world.

As long as it changes something.

Not every product has to fix society’s woes.

As long as it fixes something.

Before we go any further, I want to give you a clearer idea of the difference between building a product and building a platform.

The Two Types of Ideas: Revisted

Are you building something completely original, or are you building a brilliant new take on something that already exists?

Often, the difference between a wildly successful idea and one that falls flat on its face is in understanding where you stand.

This difference can be summed up as whether you are trying to build a product or a platform.

A product is something that solves a problem.

A platform is something on which you build products.

Entrepreneurs build products and consumers determine whether they become platforms.

If you start building a platform before you have a product, well, you remember Chernobyl? It’s a bit like that.

This is is a classic bad habit of entrepreneurs, all they can see while they are plugging away at their product is the potential for it to transform into a world-shaking platform. They have no idea how this will happen or what it will take for it to happen but they are certain that building in that one killer feature is all it will take to see all of their dreams come true.

Never count on other people to share your dreams.

Instead, take a step back and realize that while it’s entirely possible that your Social Network for Cat lovers will turn the pet food industry on its heels, you have no way of predicting that in advance. Even if you could, you don’t know what part of your product your customers will want you to build on. The only way that you can have any chance of getting the information you’ll need to build your dream is to put the thoughts of a platform aside, build out your product and ask for it.

To this end, here are three tips for keeping your idea manageable and ensuring you don’t fall into the platform trap.

  • Have a clear idea of what you want to do.
  • Eliminate all those features that aren’t necessary to complete that goal.
  • Test incessantly, seeing which parts of your idea are right and which are wrong.

Now that we have that out of the way,

Shall We Begin?

So many fail because they don’t get started - they don’t go. They don’t overcome inertia. They don’t begin. – W. Clement Stone

An 8 year old can run a lemonade stand and make a few bucks during the summer.

If he is really clever, he might be able to balance two or three such stands with a little help from his equally industrious friends. No matter how plucky the child is though, if you put him behind the wheel of the Farmers Collective that controls Lemon production in the United States, things will fall apart pretty quickly.

We’ve been beating around the bush for two chapters now, it’s time to answer the question — are you ready to start your business?

The question isn’t whether you are ready to start some business, it’s whether you can match up to the idea you have chosen to pursue. Do you feel comfortable that no matter how many of the problems and weaknesses we’ve identified so far that you run into, you will be able to make it out the other side with your product intact and ready to greet the world?

Don’t be afraid to admit that you have conflicting priorities.

Maybe the problem can be solved by something as simple as taking on another co-founder. Like I said earlier, often finding the “right person” means “finding the right person to make up for my shortcomings.” Admitting that you need help is the first step to getting it, you only start running onto dangerous shores when you ignore your shortcomings and stop being honest with yourself. If you aren’t willing to look yourself in the eye and see things as they are now, how can you hope to have the perspective you’ll need down the road when things start going badly?

Now that we are starting to transform your concept into a living, breathing product, here are a few questions that you should consider:

Can You Code it With Your Current Team?

Programmers are expensive, many programmers are fickle, and good programmers potentially have dozens of projects on their docket. If you have a great idea but don’t know how you’ll get it coded. You better have an answer to question two.

Where Are You Going to Get the Money?

The right answer is maxing out your credit card and asking rich relatives. A better answer than that is running lean and with the right team. We’ve already established that the point of building a product on the web is that you don’t need a huge amount of capital to start off. Keep in mind that money might be your biggest constraint, but it’s the type of constraint the might actually keep you from making poor decisions.

Do You Have a Viable Business Model?

Advertising is not a real business model. I would like to start out by saying that.

Small teams with products that are deeply niche and content heavy can survive on advertising revenue if they have the chops to court the right Agencies and convince them to spend on their sites. Most entrepreneurs have neither the expertise nor the content to allow them to go this route and instead rely on ad networks that rarely generate enough revenue to be sustainable.

Look at your product with a critical eye and ask yourself what about it is worth putting a price tag on. Do you have a service worth subscribing to, a product worth paying for or a niche community that you may be able to sell to through an affiliate? How scalable is your model and how much does it rely on luck and bad projections in order to be successful?

Here are some additional points that you should know about people on the Internet when contemplating your business model:

  • Unless they can’t find it for free, they won’t pay for anything. Provide some kind of value that can’t be copied.
  • Charge one-time or yearly fees, people are a lot more likely to buy in if they never have to think about it again.
  • If it is cute, clever or costs under $5 you have a chance of selling it. Club Penguin proved this point well.
  • Mainstream adopters buy; early adopters get it for free. Market your pay service towards people who just heard about The Twitters on Oprah.

Is Your Team Structure Financially Sound?

Hire as few people as possible and pay them as little as you can manage. Said differently, your ideal team should be made up of true believers with equity in the company and the same vision that you have.

My criteria for hiring has always been looking for people who would do the job anyway even if they didn’t get paid. When you’re a small company, your job is to search for partners not employees.

As a side note, if you rely on advertising for income, remember that you’re going to be running on razor thin margins especially when it comes to scaling your enterprise. Understand that if you’re smart, even when you have a significant audience (100k+), you’ll be running your business with a small number of people.

Unless, of course, you know the answer to this question:

How Much Venture Capital Do You Need?

The right answer is none, at first.

If you don’t go on a hiring binge, you should be able to keep yourself afloat using revenue from whatever business model you have devised before you ever consider courting VCs. Being able to show real revenue, a proven model and growth potential will put you way ahead of 90% of the startups that hope and pray the Internet will find a way to bail them out.

Especially now, relying on Venture Capital is a clear path to failure. You should pitch your product to anyone who might be willing to listen, but understand that the solution to your cash flow issues will more easily be found through creative business development rather than in the pockets of institutional investors.

The Short Version

In this chapter I tried to convince you that building a small, useful product can be better than raking the muck around your huge, unwieldy platform. Here are a few more thoughts on the matter:

  • Unless you have spent some serious lab time working on your idea, chances are very good you are developing a product, not a platform.
  • That’s OK.
  • The best way to cripple your idea is the build it as if it simply has to be the “Next Big Thing.” Sometimes all you need is for it to be a really good thing.
  • There are two types of ideas, products and platforms. You build products that may eventually become platforms.
  • Before diving in, make sure you have tools, people and business model you will need to make your project successful.

Homework

  • Make today you a 24 hour project day. Pick a project that’s more complicated than getting your
    mail and less complicated than taking over the world. Plan it out, put together a list of tasks and
    complete that entire list before you get to bed. Don’t let anything stop you from completing this
    project.
  • Make a list of every item in one room of your house. Next to each item, write whether it is a
    feature or a “new idea.” If it is a feature record what initial product it is based off of.
  • It’s time to decide on your “advertising business model.” Pull up a spreadsheet and write down
    everything you know about the people who you want to use your product. Your list should be heavy
    on the demographics you want to attract. When you’re done, fill in the blanks for every advertiser
    you plan on courting.

    I want to sell _______ (company) advertising because my demographic of _____ aligns well with
    _______’s brand. I plan on making ______ from this sale.

  • Put together your hiring wish list. Figure out what skill deficiencies you have and get them down
    on a piece of paper. On the flip side of this sheet, put together a list of people you know who have
    one or more of these skills.

Next: Case Study, Dan Kaplan, MyCityFaces | I really want to read this on the plane!

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