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Category Archives: Startups

Why I used 99designs again

Last year I used 99designs to get a logo for my new startup Percollate. I was pretty pleased with it. Apart from fridge-drawings by my kids I’d never had anything designed for me before and it was exciting. Back then I had no idea of the kind of fallout this would create in my local community. I had genuinely never considered that this approach could be viewed negatively by people. After all, it’s got a kind of crowd-sourced feel to it so it has to be good. Right?

Wrong.

Turns out that most designers are dead against sites that take this approach. I say ‘most’ because these site exist and seem to be profitable. Most of these people I see regularly, respect the opinions of and certainly don’t want to upset. To get an understanding of their arguments check out http://antispec.com/.

A few weeks ago I enlisted 99designs for a second time to help me with a logo for Awedience. Clearly, I hadn’t forgotten what happened last time so why did I do it?

Alternatives

One of the suggested alternatives a year ago was to engage my local community. Actually, I like this idea. At the start of the year I embarked on a web-based side project and decided that I didn’t want to be involved with the design / UI side of things. To a packed audience I announced the project and explicitly asked for people to come join me and build it. I had dozens of conversations about how exciting the idea was but not a single offer of design interest. Not one. So, as time was of the essence, I got on with it myself.

Design is Subjective

Most people will agree that Wagner was a genius. Fewer people, however, will find his work to their taste. It’s subjective. Getting into a relationship with a designer really worries me because our tastes might simply be misaligned. Having to terminate a contract after weeks of work would be devastating. 99designs is a great way to quickly find someone that seems to share your particular, personal, subjective tastes.

99designs has Changed

99designs allows you to throw your net to the whole community at the start of a competition. However, within just a few days you have to pick a handful of finalists. I appreciate that this argument will not hold much water for many people reading this but it does mean that those unlikely to win find out quickly.

Awedience is Multi-sourced

The logo came from 99designs. The theme was bought from ThemeForest and tweaked by one of my advisers. For my part, I have be putting in 12 hour days for some considerable time building the application frontend and associated cloud services. The point I’m making is that I have considered the startup as a whole and thought carefully about how best a build each individual part.

We ALL do Spec Work

Nobody wants to work for free. However, unless you work 9-5 and are never called upon to speculate or take a risk, at some point, you’ve done spec work. I can only speak for my own industry and experience, but here are two concrete examples…

Tenders for Technical Contracts

At my previous company we built a business offering platforms to various financial and government bodies. At no point were we able to simply show our previous work and get handed a contract. Here’s how we would spend the man-months:

  • Understanding the client’s requirements
  • Infrastructure design
  • Integration understanding and design
  • Failure identification and problem solving
  • Cost analysis
  • Pre-Pitch documentation
  • Presentation creation
  • Presentation planning
  • Presentation practice
  • Travel to client offices
Guarantee of income: NONE. 

Technical Job Inteviews

Over the years I have been on both sides of the job interview table. Today there is more background information a potential employer can pre-read (e.g. StackOverflow), but the process was almost always the same:

  1. Spend time writing a CV
  2. Spend time searching for a position
  3. Attend first interview – do we like you and is your shit together (at least on paper)?
  4. Attend second interview where you’ll sit our tests and actually show us what you know. (Some companies I know also expect you to deliver a formal presentation of your work).
Guarantee of employment: NONE.

Cost / Benefit Analysis

The price is great ($200) and the results are good enough. Actually, I love our logo but then, as I said previously, it’s subjective. Up until today I had only had positive feedback for Awedience.com – including designers from my local community. Will today’s revelation change their opinions?

In Conclusion

I do not hold with the argument that designers are being treated differently to the rest of the world. Companies like 99designs have come into an established industry and disrupted it. Telling everyone not to use these new services will not work. Designers and design companies either need to find a better solution to the problems raised in this post or concede the ground.

Finally, I believe in open, constructive discussions. Apart from spam, I won’t delete any comments from this post.

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Posted by on July 16, 2012 in Startups

 

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The Apprentice – Keeping Europe Firmly in the Valley’s Shadow.

So, the results are in and Ricky Martin is Lord Sugar‘s new ‘apprentice’. This is a bad decision. The UK’s Enterprise Champion, responsible for promoting entrepreneurship, should be a catalyst enthusing more people to ‘poke the box’. In short, he failed. Here are the 4 finalists, their business plans and my thoughts…

Nick Holzherr – Online Recipe Ordering

I think it’s fair to say that Lord Sugar didn’t understand the concept. Fair enough, investors rarely get involved with something they don’t ‘get’. However, recipes are big. Ever more sites, apps and shows are appearing that centre around cooking. There’s a lot of money to be made from product placement and commission from sales. Nick fell down by not referencing the existing market with examples of profitable counterparts. Also, if he’s written a working prototype ‘button’ hosted on existing sites then why not evidence the traction achieved?

Jade Nash – Lead Generation Call Centre

Jade did well during the process; clearly, by reaching the final. However, her business plan sucked. So, no surprise that she wasn’t ‘hired’. On the assumption that business plans were part of entrants’ submissions, though, I find it extremely disingenuous that Jade was allowed to enter the process. Why allow someone to go through an 11 week ordeal, with the associated opportunity costs, if she was never going to win?

Tom Gearing – Wine-based Hedge Fund

An innovative idea that combined two existing markets to create a new one. Nick Hewer commented to Lord Sugar that it could be an extremely exciting and profitable business. Lord Sugar’s criticism were based around not knowing the market and his discomfort about investing other peoples’ money.

Ricky Martin – Niche Recruitment Agency

Ricky is a very ‘backable’ individual; but his business plan should not have won. If this was The Apprentice 2009 then he would have triumphed easily. He will no doubt create and run a successful business. I agree with Lord Sugar here; it’s a safe bet.

Conclusion

I remember, vividly, a conversation I had with a Cambridge-based entrepreneur/investor about scale. He said “If you want to be huge, go to the valley. Europe and the UK doesn’t have the capital or stomach for ground-breaking, risky startups.” Ricky’s idea is not entrepreneurial. He knows the market well, but that’s because it already exists. Entrepreneurship should be about creating new markets, pushing boundaries and inventing new ways to solve old problems. The Apprentice should have excited and inspired us. It didn’t.

So, enjoy the continued coolness of the shade cast over us by our US cousins. If our Enterprise Champion cannot shine a little sunshine on us then who can?

 
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Posted by on June 3, 2012 in Startups

 

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Are funded startups anti-competitive?

Let’s start this post with a hypothetical…

Imagine a town with a supermarket and a bakers. The bakers has a sensible, sustainable business model, is profitable and provides a good living for its staff. They make ‘better’ bread than the supermarket and some customers decide that that’s important to them. The supermarket bread is not ‘bad’ either. One day the supermarket decides that it doesn’t want the competition. It has a substantial war chest and start giving bread away for free. This is not sustainable for the supermarket, but it doesn’t need to be. After a short period the bakers loses too many customers and closes. Now the supermarket can put prices back up to their normal prices – or beyond.

We’d all agree that this is not a good situation and, in fact, the state regulates against this activity.

Now consider 2 startups. A has a sensible, sustainable business model, customers and profit. B takes a huge injection of capital. B can then offer a similar (even slightly ‘worse’) product or service for free.

Is this situation any different from our hypothetical example? There is no legislation to curb this activity and, clearly, the investors in startup B must have envisaged an exit based on a sustainable business.

So, my question to you is “is this anti-competitive?”. I look forward to your comments.

 
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Posted by on April 18, 2012 in Startups

 

Stowaways on your startup escape path

This is a response to Daniel Tenner‘s post A startup escape path. The basic conclusion of the article is that, rather than simply jumping off the cliff, potential entrepreneurs should plan their exit from corporate life. Overlap what you’re doing with what you want to be doing until you have an idea that you can hit the road running with. This is sound advice but neglects to mention a major problem: your employment contract.

A standard employment contract will say, very explicitly, that everything you do, whether in office hours or not, remains the sole intellectual property of your employer.

This is all-encompassing. The idea for a novel you had whilst on holiday, the new tennis technique you discovered one evening, the great iPad game that just ‘came to you’ in the shower. Whilst your employment contract is in force, these are all owned by your employer.

So, if you’re going to attempt this escape path you have two choices:

1. Tell your employer

Talk with your immediate boss and tell him/her what you’re doing. Assuming they don’t have a problem with your activities ask them to send you an official email or signed letter. This should say that they are aware you’re doing X, that it has no bearing on your ability to perform your duties and that the company lays no claims to it. This is your protection so make sure you are honest about what you’re doing.

The down-side to this is that you’ve now waved a flag with “I’m planning to leave” written on it. If you do, eventually, jump off the cliff then no harm has been done. However, if you decide to stay then you may have blotted your copybook.

2. Don’t tell your employer

You wouldn’t dream of asking our employer if it was OK to play in a band on the weekend so why should you tell them about any startup ideas? If you’re working on this in your spare time then it should be none of their business (literally!). The upside of this is if you decide that entrepreneurship isn’t for you; you can just carry on with your current job and no one is any the wiser. The big problems come if you take your escape path.

At any point in the future your employer can lay claim to the startup you’ve built. If they can show that you started your company / idea / product whilst they employed you then it’s pretty much game over. They may be entitled to, potentially, all the equity in your company plus payment of any profits generated by the company over the years. There are some shades of grey though. If you can evidence that your employer knew what you were doing then any judge would question why they waited until all the work had been done before filing a claim.

Conclusions

This is a very awkward situation and, unfortunately, current UK employee contracts stifle innovation. Your employer is in a strong position to disrupt your innovations in any number of ways if you, quite sensibly, test the wind before jumping off the cliff. If you’re an entrepreneur then I’d love to hear how you dealt with this situation. Please use the comments to tell me your experiences.

 
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Posted by on January 3, 2012 in Startups

 

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A Year in the Life of an Entrepreneur

Most entrepreneurial retrospectives are written at the point of success. Once you’ve made your millions it’s easy to be introspective and say where you went wrong. I haven’t got to that point yet, but I will. I’m one year into what I hope I’ll spend the rest of my life doing. If you’re about to jump off the same cliff then maybe you’ll find some of this useful?

Don’t Give Yourself A Year

My wife and I agreed to a one year runway in which to find a repeatable business model. This is far, far too long. In hindsight, we should have said three months or even just one. Given a whole year to do something, you’ll spend most of it doing the wrong things. The fear of failure is a very powerful driver. That’s why people study harder the nearer they get to an exam. Without that imminent risk of having to pack your bags and go home, you won’t push yourself enough.

Don’t Go It Alone

Ideally, this would be a co-founder – someone equally invested and equally in fear of the game ending. But there are plenty of other alternatives if one can’t be found. I have two sets of people that I rely on. Firstly, a number of superb, brutally honest advisers and, secondly, my wife. You need people, who you respect, who can beat you up on a regular basis and really challenge you about what you’ve done today / this week / this month. The reason you need these extra people is covered next …

Recognise Your Abilities

Your technical, sales, business or marketing abilities are as nothing compared to your ability to lie to yourself. Left to your own devices you will convince yourself that:

  • users need that feature
  • it’s not ready to ship yet
  • it’s OK to code all day
  • you need to build a platform for X

You cannot see the lies you tell yourself. Let someone you trust help you recognise that.

Assumptions Will Kill You

The reason Lean Startup is so essential is that it requires you to confirm your assumptions. Not with yourself or someone on your team, but with your customer – someone who might actually pay money for your product or service. Here’s one of my biggest assumptions:

Early on I had a prototype application that, essentially, worked. Trouble was, it was slow and wouldn’t scale to more than a few users. I assumed that nobody would pay for that version because it wasn’t quick enough. What an idiot. I never tested whether people would be happy for the product to email them when complete or even if it ran overnight. Bottom line: I could have had revenue from as early as February.

The Wrong Location Can Be Hard

We don’t all live in The Valley or within walking distance of Silicon Roundabout. In today’s global economy it’s always been possible to work remotely and run a successful business. The problem with start-ups is that you need a network around you. Companies are formed, founders introduced, investors intrigued and future users ignited by face-to-face meetings. I live just outside Cambridge which holds an admirable number of events. However, London is where it’s at and it costs me £50 every time I ‘pop’ in. This is not impossible, but it soon ads up. So, if you can, consider making your geography easier.

Know Who Your Customers Are

I have spent a lot of time talking with the wrong people over the past year. This is in no way disrespectful to them, it’s just that they weren’t my customer. For far too long I concentrated on the technology of my product and spoke with those who understood it. This was wrong. Figure out who your customers are as early as possible and spend a disproportionate amount of time engaging them.

Work Hard

I hope this goes without saying? However, it took me a long time to re-jig my working hours for maximum effect. For months I struggled to work evenings before I made a change. We have two young boys and, after stories and bedtime talks, I was falling asleep myself. Now I start work at 5am every day. It means my evenings are shorter and I watch significantly less TV but, hey, make the choice. You can, genuinely, work 14+ hours a day for prolonged periods.

Give Something Back

I was surprised how early it’s possible to give something back to the startup community. Part of being an entrepreneur is learning to learn fast. Within weeks I had some knowledge that some of my peers didn’t. Because we’re all trying to do something unique we all have experiences we can share – almost immediately. I mentored at Startup Weekend Cambridge in March, less than three months into my free-fall, and it was a hugely rewarding weekend. BTW: you’ll find that you can critique someone else’s ideas much more honestly than you can your own!

Attend Lean Startup Machine

Seriously. Go. Now.

I went to the London boot camp in September and the results were astonishing. Being forced to step far outside your comfort zone for 2 days was the best money I’ve spent all year. After the event I came away with a defined, validated customer segment and problem. The next London event is on February 3rd 2012 – you won’t spend better money.

Finally, I look forward to meeting more of you in 2012. I love being part of this pay it forward community and I believe that what we’re all attempting to do can have profound effects on, well, everything.

 
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Posted by on December 21, 2011 in Startups

 

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How to Ask for Feedback

Yesterday, the summation of 48 hours of very hard work was a pitch competition at Lean Startup Machine, London. I talked about what my team members and I had learnt about TweetPivot and Lean Startup methodology. Unfortunately, we didn’t win; but we did learn an incredible amount. To continue learning I asked for some feedback from the judges. Here’re my recommendations for how to do this:

1. Don’t ask what they thought

If you ask someone this question you put them in a difficult position. The feedback they give depends on how well they know you, your mood, their mood and whether they think you’re just looking for a boost. 9 times out of 10 they’ll say what they think you want to hear.

2. Don’t ask if they have any negative feedback

This is better than #1 but you still present the person with the same dilemma. They are very likely to answer ‘No, it was wonderful’. You’ve learnt nothing.

3. Ask them, specifically, for negative feedback

Perfect. You’ve explicitly given them permission to give you negative feedback. You can’t control how damning they’re going to present this, however, but you’ve removed the risk from them. If they say ‘nothing’, challenge them.

Positive feedback’s great, but you’ll learn much more from honest, negative feedback.

 
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Posted by on September 19, 2011 in Lean Startups

 

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Windows Azure Usage Gotcha for BizSpark Members

If you have an MSDN subscription then you’ll also get some Azure benefits. These have even been increased recently. PhotoPivot is a BizSpark member so we get access to MSDN Ultimate which entitles us to 1500 hours of Small compute instances per month.

Be warned: THESE BENEFITS ARE NOT INTERCHANGEABLE!

What I mean is, if you’re on Ultimate you can use 1 Small compute for 1500 hours or 2 Small computes for 750 hours each etc. What you cannot do is use an Extra Small compute for 1500 hours or 1 Medium compute for 750 hours. The benefit is SPECIFIC to the exact type of compute size.

We got slightly stung this month, but we’ve learnt our lesson. Learn from our mistake, not your own!

 
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Posted by on June 13, 2011 in Startups

 

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