Pivoting for Profit

Just build a _____ profitable business!

David Heinemeier Hansson, This Week in Startups #46 (1:10:45)

My Lessons Learned - Make a Profit
My Lessons Learned - Make a Profit

Reflection

In the spirit of Agile, here’s my retrospective on when we realized the primary objective is to build a business & not to get funded.

Inflating Our Own Bubble

TechCrunch50 2009

Back in June 2009, I read about the TechCrunch50 2009 contest & while we barely had any running code, submitted an entry. My collaborators thought it was a bit of a stretch, but we all agreed it’s nice to set goals. So while trying to get a grip on what was required of us, I immersed myself in TechCrunch stuff. From what I understood, there was a common theme emerging – get funded & get out. And making it to the semi-finals only encouraged me.

I Think Our Bubble Has a Leak

Signed Copy of Guy Kawasaki's Reality Check
Signed Copy of Guy Kawasaki's Reality Check

We thought we had something that was so paradigm shifting, yet so simplistically obvious at the same time, that we’d have no trouble bringing on a CEO to help us reach Jason’s Promised Land. But it wasn’t happening like that. And as time passed, we realized that if we wanted to see our dream change the world then we couldn’t wait on someone else to make it happen.

Paradigm Shifting

That primed us for This Week in Startups #46 with David Heinemeier Hansson | ThisWeekIn.  Fast forward to 1:10:45 and there you have it.  It was paradigm shifting, yet so simplistically obvious. Just build a profitable business and the problem will be solved. Read his and Jason Fried’s Rework and you’ll get it too!

Trolling for Customer Development

The other day I was perusing Twitter when I saw Ben Yoskovitz’s

BeanSprout – a dating website for Business Development Partnerships: http://bit.ly/ivLRyf

A few tweets later, I was signed up and working with one of BeanSprout‘s founders – Artie Patel. I told him “Ideally, we’d like to hook up with someone like Localeze“. To which Artie responded; “They’re a customer of ours. Let’s see what we can do to help.”

Lessons To Learn

I’m actually planning on meeting Artie next week when they present at International Startup Festival – Montreal, Canada, July 13-15th 2011 where I’ll be volunteering for my Starving Startup ticket. Stay tuned for more details about how another startup delivered an awesome experience & whether it can help us learn to build a ______ profitable business.

(Thanks to Greg Meyer for tuning me into  experiences that @delivertheawsome.)

Related Links

Go out there and make some money!

Dan MartellTo Raise, Or Not To Raise | @MapleButter

My First Cold Call Demo Pitch and Are All Retail Sales Associates Like This?

Man I told you… my day is, I come to work, I get paid, I go home. You think I want to do this all my life?

– Retailer Sales Associate (Let’s call him Trevor)

a teenage girl with a bored look twisting her hair
Like I care?

Background

Over the past few posts, I’ve spent some time describing my Social Software in Schools project, which has been an absolute blast & has yeilded some surprising results. (But that’ll be another post.) However, I also spend my time on my true start-up – twetailer. Without going into much detail here, I’ll just put things in context by defining it as:

Twetailer: Brokering Consumer Demand with local Retailers’ available Supply – via tweets, for f(r)ee.

Prior to heading off to pitch a potential business partner, I decided to try out my routine on an unsuspecting Retail Sales Associate who I thought fit our personna – young, tech savy, looking for an easier way to get things done. My pitch demos how consumers Google for product reviews, make a decision, then search for a local retailer to make the sale. Part of the demo, demonstrates how local business directories / search engines were failing local retailers, thereby creating greater barriers for entry (sales) to their stores – partly due to their antiquated taxonomy/categories.

The story you are about to hear is true. Only the names have been changed to protect the innocent.

Dragnet trademark

My Story

I approached Trevor – an unoccupied Carl’s Cameras Sales Associate, as opposed to, the older gentleman behind the cash register making sales. I introduced myself as being part of an Internet start-up company offering a free search service that matches consumers ready to purchase products with local retailers ready to make sales – all via Tweets/text messages. While Trevor didn’t use Twitter (too young), he was willing to listen, so I opened my MacBook & started my Keynote presentation. I went through all the slides/videos & stopped at the demo part to elaborate. Trevor was engaged! He had questions & thought it was “really cool”. He thought searching Yellow Pages for “cameras” locally was useless but did accept there may not be many alternatives, even after I demoed Google Maps local search. He wasn’t surprised to see Carl’s Cameras not among the initial Yellow Pages search results & conceded that no one walks into the store asking for “digital image processing equipment” – Carl’s Cameras taxonomy & there’s no way anyone in the store could change that. He loved the idea of “social tagging” Demand & Supply in the language (terminology) of the consumers’ & retailers’ & thought it was very practical.

However, here’s how the conversation continued;

Me: “Would you use Twetailer to help you close sales?”

Trevor: No. It’s not like I’m going to work here the rest of my life. My day is, I come in, I go home, I get paid.”

Me: But you could just sit down in the back room, have a coffee & make sales? Do you text message?

Trevor: True dat. Yah of course I text.

Me: Do you have unlimited text messaging?

Trevor: Yah, for sure. But I’m not going to use my phone for work & Carl’s Cameras is not going to give me a phone to text.

Me: Carl’s Cameras doesn’t have to give you a phone to text. Especially, if you’ve already got unlimited texting. Tell me, if a friend texted you & said he knows someone looking for a nikon d5000, do you have any in the store, would you text back? Wouldn’t you text “Yes, tell them to come see me.”?

Trevor: True dat… of course I would.

Me: So what’s the difference with Twetailer?

Trevor: I guess nothing. But my day is, I come here, I work, I go home, I get paid. You know… you should really speak to Carl’s Cameras’ Regional Sales Manager. He’s a really nice guy & he’s gonna love this thing. He could probably get all the stores to use it. (He then went to get me the contact info.)

Me: Thanks so much for your help. I really appreciate it. Take care.

True Dat Story

I then glanced over to the cash, where the elder gentleman was eavesdropping from all the time, waited to see if he had anything to add & then left.

Following Up

In the days that followed, I tried on several occassions to contact the Regional Sales Manager. The phone number Trevor gave me was also listed on the web site. Yet everytime I called, the phone system went on & on about the office hours & no matter what options I chose, no matter what day, no matter what time, I always ended back at the beginning. For the record “Carl’s Cameras” is my alias for a national retailer!

Moving forward

A few days later, I demo’ed to Kevin Makice – author of Twitter API: Up and Running – O’Reilly Media. He had a funny/sad take on this story. His theory is that small/medium sized retailers – the Mom & Pop stores, are so busy treading water, that they can’t imagine stopping for 5 minutes to try something new, simply on the hope that it can change their world. This would be especially true, for a technology they don’t get – like Twitter/ text messaging.

Ironic, eh?

Unfortunately, the irony of the situation, is that text messaging/tweets empowers these retailers to get back in the digital age. There’s no need for static brochure-ware web sites – which they may have missed, or, are out-dated. There’s no need for online e-commerce shopping cart sites – which they probably can’t afford, or, could never see any return-on-investment. There’s no need for anything more that an old mobile phone that can text message & someone to push those little buttons.

All they need is someone like Trevor to give a damm. Someone who would probably love the excuse to text at work. Someone who would probably find it easier than answering the phone.

Lessons Learned

Next time, I’m going to demo someone on commission 🙂

Reflection

Have you had a similar experience? Is this a generational thing, or, simply a management issue?

Reblog this post [with Zemanta]

Homage to TechCrunch50 2009, its Organizers and Participants

As a TechCrunch50 2009 Semi-finalist who chose legal services over Demo-Pit costs, I empathized every moment with the presenters and salute all of you.

LBS is just gonna get, sorry Location Based Services, is just going to become more and more important.

Dick Costolo,  Panelist & Judge http://www.ustream.tv/recorded/2169088

TechCrunch50 2009 Conference

Background
June 2009

with only the bare bones of running code, I submitted our TechCrunch50 2009 application. My contributors (The Start-Up Chronicles: Chapter 2. Who, Part 2), while suggesting I was being too aggressive, agreed that it’s always nice to have Milestones, and agreed to try.

July 27, 2009

I received an email informing stating:

Congratulations, your company has been selected for a phone and screensharing interview. We were truly overwhelmed to have over 1,000 applications from over 40 countries submit to launch at our event this year, so please feel great about making it to the next round of consideration.

August 2, 2009

We received an email instructing us to book a demo time and make whatever live demo arrangements necessary &

The duration of your interview will be 15 minutes. Please plan to demo your product for 8 minutes (show the product, we have the background information in your application) and use the remaining 7 minutes for Q&A.

As a reminder, DO NOT comment about your interview status publicly (including social media such as Twitter, FriendFeed, Facebook, etc.) Unfortunately, we’ve had to eliminate 2 companies to date from consideration who posted about their status with the conference. We don’t want to take these steps, but other applicants are certainly looking out for people who do not follow the rules. Please don’t let this be you.

Sunday September 8, 2009 5:00 PM to 5:20 PM PST

Our twenty minutes of fame. Jason Calacanis logged into the demo a couple of minutes late. I reiterated our assumption that he’s seen our background video uploaded with our Application to which he informed us that he only saw our names & that of our start-ups’ as he found the demo log in information. Somewhat disappointed, I pushed back reminding him of the previous email. All Jason said was:

Just demo.

And demo we did. Not taking any chances, we had a prerecorded simulated demo of how the system will work end-to-end, followed by a live demo of its current development state. Jason made a few observations. Fortunately for us, we had collaborated for weeks on an entire internal wiki pages titled -“Pitch FAQ”, which just happened to provide fuel for my answers. And that was it. twenty minutes does not last long. Jason thanked us for taking time out of our Sunday evening, told us we should hear something in about a week and immediately signed off.

The three of us stayed on the conference call for another hour going over and over those twenty minutes and wondering if we could have done any more and whether Jason got it, or, not. And the truth of the matter is, if we could have done it all over again with hindsight being 20/20, we wouldn’t have changed a thing. So we were just going to sit tight and wait for an answer.

August 18, 2009

Via email:

Unfortunately, we regret that we are unable to place your company as a TechCrunch50 finalist. This is certainly not a commentary of your business, technology or team. Many applicant companies have gone on to great success without launching on stage. For our 50 limited slots, we purposely showcase a diversity of technology innovation from different countries, mixing both funded and unfunded businesses. In many cases, our need to curate this content matrix eliminates many outstanding companies from a lead position on stage. We received more than 1,000 total applications— making for many tough decisions.

As one of our semi-finalist companies, we would like to offer you the opportunity to participate in our DemoPit. Over the last two years, the TC50 DemoPit has become one of the main assets of the TechCrunch50 Conference. It enables another 100 companies (50/day) the chance to showcase their technology to conference attendees. And the favorite “Audience Choice” from our DemoPit wins the last presentation slot on stage, along with the right to win the $50,000 best in show award provided by the TC50 organizers. The DemoPit wildcard is our way of acknowledging that our judging is subjective and that there are many more outstanding companies in our West Hall than we can fit on stage.

This year, we will be selecting two DemoPit companies to present on stage, one from each Monday and Tuesday. So your odds have doubled for a shot to still get on stage.

For a while I considered dipping further into my line of credit and “invest” in the DemoPit and associated travel expenses. But after conferring with my Contributors, it seemed the responsible thing to do was move the project to the next level by investing further in legal services. And that’s what I did.

I replied to Peter of TechCrunch my thanks for the opportunity but simply couldn’t afford it. But at the same time, in the interest of outside-in software development, I asked if we could possibly get any feedback to help us.

August 20, 2009

Email to Peter at TechCrunch

Hi Peter,

Here’s a thought…

TechCrunch should publish an index of the semi-finalists with their 140 character description & video (link to youtube if you prefer) in exchange for them not going public until after the site is published at TechCrunch50.

Ideally, you would let your community rate & comment on their favorites. That would be a win-win for everyone:
You’re still the mecca for launching start-ups
You’re still The Sensitive One when it comes to non-funded (some call it ultra-light) start-ups – you’re almost angelic 🙂
We get exposure & hopefully feedback that can be used in subsequent outside-in development
My one-liner is: [Still a secret] & you could use the 5-minute video that’s uploaded from my Application, or, I can repost it somewhere for you.

Just a thought 🙂

Regards,
Steven

Peter’s reply:

Steven, I’ll pass this along as something to consider for future years. Thank you.

My reply:

Peter, in the meantime, is there any feedback you can possibly share with us to add even more tremendous value to our TechCrunch50 experience?

Peter’s reply:

Steven, I spoke with your reviewer, Jason, who told me “I thought they were off to a really great start and that [still a secret] is a real challenge and opportunity. However, their product was not as far along as the top 50 we are selecting this year. I have no doubt they will get to the promised land with a little more time and effort.”

My reply:

Peter, you just made me very 🙂

September 14-15, 2009. TechCrunch50 Conference 2009

I haven’t watched all of the presentations yet, but enough to honestly say that my heart and nerves went out to everyone presenting. While all of the panelists I saw offered practical and useful feedback, I did feel that some of them were hell bent on not giving any kudos. Yet despite the pressure, I thought the demos were great and the presenters ability and preparedness to answer the panel’s questions were even greater.

Big Thank You

I can only imagine the organizational nightmare it must been to pull off this event with such class – not to mention the temperaments required in dealing with start-up to guru egos. I thank you Peter and Jason for all your efforts, patience and inspiration. I look forward to one day meeting you in the Promised Land.

Building communities

Once the legal work is complete we’ll start expanding our start-up Community to prepare for a limited private release. In the meantime, I’m going to try to bring in some income by seeding the social software seeds at my Sara’s elementary school.

Reblog this post [with Zemanta]