Inside My Brain

Thoughts about startups, tech, marketing, and life

CATEGORY: Business

Is the startup you’re building big or cool enough?

I think about this a lot.

Is WinOptix is a big enough idea? Is my target market big enough? Is the concept interesting or impactful enough?

A lot of this “big enough” doubt comes from reading a lot of tech and startup news.

“Startup X raises $50 million dollars and now is worth $2 billion.”

“Startup Y has $100 million in revenue with no marketing.”

“Startup Z goes public, the stock pops, and the company is now worth $5 billion.”

I need to stop reading all of crap.

The fact of the matter is that I don’t know if WinOptix is big enough yet.

Yeah, the government contracting market is really big, like trillions of dollars big. But at the moment, I’m only targeting IT service providers, which is much smaller.

Can the product be eventually sold to other types of government contractors, or additional markets outside of govcon, so that the market gets much larger? Maybe. But I don’t know. I’m not there yet.

Here’s a post from Rob Go of NextView Ventures that talks about the “market size fallacy” for seed stage startups. That post makes me feel better every time I read it. It basically says, “you don’t know until you find out.”

And the product is in such an early phase that I don’t know if it will be cool or impactful enough.

There’s been a good amount of interest from prospective customers and partners. Industry experts believe in the concept and like what they see in the product. But I won’t really know how impactful the product will be until I get more paying customers.

There’s a lot of things I don’t know. But that’s OK.

So if you’re not sure how big your market is or how impactful your product is, that’s OK too.

Maybe your company isn’t venture scale. Maybe it is. So what?

Maybe your product is in a boring industry. Or maybe it’s in a hot sector like AI or blockchain. So what?

It’s tough to stop having FOMO, but it’s necessary. It’s hard not to think about chasing the shiny object. I think about cooler technologies and products all the time. But it just takes my focus away from what’s important.

So is the startup you’re building big or cool enough? Don’t worry about it, it probably doesn’t matter.

Is it good to be your own customer?

Being your own customer comes with pros and cons.

Many startup founders and investors say that it’s a good thing to “scratch your own itch” or “be your own customer”.

By this they mean that if you identify problems that you face yourself, you’ll have a true understanding on how to solve that problem, and thus can build a great solution for it.

A quintessential example of this is Asana, a project management software tool created by Dustin Moskovitz and Justin Rosenstein. While working together at Facebook, they got frustrated with disorganized projects and lack of communication among team members. So they scratched their own itch by building an internal task management tool that they eventually spun out of Facebook into a separate company. The company is now worth close to a billion dollars.

Sure, it worked out swimmingly for Asana. But there are pros and cons to being your own customer.

Pros of being your own customer

There’s proof that a problem and pain point exists

Many startups build solutions and technology in search of a problem, and these are rarely successful. This issue is causing you some kind of pain – lost time, wasted money, or something else – so there’s proof that there’s a real problem there.

You have a deep understanding of the problem

Because you face this problem, you have keen insight into how to solve it. You’ll understand how to approach the solution and what issues to look out for.

Passion for the problem

Naturally (hopefully?), you’re going to be passionate about solving a problem that you face. The solution can have a material impact on alleviating the pain you face often, so it’s likely you’ll work harder to solve it.

Cons of being your own customer

All that sounds well and good. But there are issues that come with scratching your own itch.

You may have this problem, but not enough others do

There’s a certain hierarchy in startups that goes like this: feature < product < business.

You can build a small solution that solves your problem. But maybe it’s just a feature and not robust enough to be a full product.

You can build a full product that some people might use and pay for.

But in order to be a solvent business, you need many users and paying customers.

If you’re your own customer, this problem might be a scourge to you but may not be a big deal to enough other people to become a real business.

You may think you know everything

Because you face the problem, you may think you know everything there is to know about solving it. That is soooo soooo wrong.

This might cause you to build everything you want to build and ignore the input of your users. Or even worse, you might not ask your users for any feedback at all.

What you may end up with is a solution that is perfect for you, and no one else.

Passion might make you blind

It’s great to have passion for what you do. You’ll enjoy your work more, and it can help make you more gritty.

But having too much passion can also blind you.

If you’re so passionate about solving your problem, you might develop tunnel vision and not see when things aren’t working. You might not be able to identify that not enough people have your problem or that you’re solving it in the wrong way. And you may not be able to course-correct before things go down the shitter.

My situation with WinOptix

With WinOptix, I have a sort of hybrid scenario of being my own customer, and not.

I came up with the idea for WinOptix by trying to scratch my own itch.

While working at software development firm Thorn Technologies, we would use Maryland’s database of state and local government projects to look for potential work to bid on. But writing these proposals took a lot of time and effort, and many times we would write them not knowing anything about the customer and having no idea of our chances of winning the bid.

So I came up with the idea of a system that would be able to better predict the probability of winning these types of government contracts so businesses like ours wouldn’t waste time and resources going after projects we had a low probability of winning.

I didn’t have too much experience in government contracting, so I started doing customer development with people in the federal contracting space (a much bigger market than state and local). Their input completely changed the approach I would take to solving the problem and has been a massive influence on the product to this day.

While the initial idea spawned from scratching my own itch, I didn’t know enough about the subject matter to be confident enough to build a solution on my own. So I depend on the input of subject matter experts to inform the product development process.

I think it’s been a pretty good balance so far.

Conclusion

There are many pros to being your own customer, but it can come with some drawbacks as well.

Scratching your own itch is beneficial only if you can properly identify when it becomes a burden, and adapt accordingly.

Are you building something that scratches your own itch? What are the pros and cons that you’ve faced? I’d love to hear from you!

Grit, not talent, is the key to success

I recently listened to the audiobook version of Grit: The Power of Passion and Perseverance by Angela Duckworth. This is a great read for anyone who wants to improve at anything.

The theme of the book is that talent, while important, isn’t the key to success. Rather, hard work, perseverance, and stick-to-itiveness correlates much more highly to achieving goals and success in life.

I think this is so important.

Most of us aren’t blessed with natural, god-given talent in a particular skill, but you can still work hard and improve yourself everyday.

And grit is something that can be learned; it’s not just a characteristic that we’re born with.

grit-word

Case studies of grit

In the book, Duckworth highlights some powerful case studies of grit.

The book talks about how MVP and Super Bowl-winning quarterback Steve Young had a rough time when playing football at BYU. As a freshman, he was the 8th string (8th!) QB on the team and was essentially used as a tackle dummy for the defense. He wanted to quit, but his father told him that he couldn’t come home if he did. So Steve kept practicing his throws and improving his play everyday until he became the QB1. And he wound up setting all-time BYU records.

Then he gets drafted by the San Francisco 49ers and has to be the backup to Joe Montana for a few years. He could have asked for a trade, but instead continued to learn from one of the best in the business. He eventually became the starter for the 49ers and the rest is history.

Another powerful case study was of Francesca Martinez, a British woman with cerebral palsy who became a famous stand-up comedian.

Let that sink in a bit. A comedian with cerebral palsy. A comedian with cerebral palsy!

Dealing with cerebral palsy is extremely difficult. Cracking jokes in front of a drunk and raucous crowd is not an easy task. Imagine having to do both at the same time?

Martinez refused to accept her fate. She took speech lessons for years as a child (with her parents’ unwavering support) and has to perform speech exercises before each performance. She embraces her disability by calling herself “wobbly.” And she has sold out hundreds of shows and won many comedy awards. That’s pretty amazing.

The importance of grit for entrepreneurs and parents

Everyone can take away lessons from this book, but it’s a really important read if you’re an entrepreneur, parent, or both, like me. 

I used to think I was a pretty talented marketer and business person, and I certainly worked hard at every job that I’ve had. But I’ve been completely humbled as a startup founder.

There is so much I don’t know, and everyday I face situations where I have no idea what to do. I already have a couple of failed ventures under my belt and it would be really easy for me to just give up and find a corporate job. And I do think about quitting often. But I believe that if I keep pushing and learning, I’ll build a successful company in due time.

As a parent, I really want to teach my daughter Maya how to be gritty, just like how Steve Young’s and Francesca Martinez’s parents did.

She’s only 3 so it’s a bit early to ask too much of her. But there are times where she just says “I can’t” after failing to complete a task such as opening a container or climbing up on her chair.

So each time she says “I can’t”, my wife and I tell her not to ever say that, and assure her that she can do anything if she puts her mind to it. She has even started telling us not to say “I can’t” when we say it. It’s pretty funny.

Duckworth lays out a great system that she uses with her family to learn how to be more gritty.

First, everyone, including the parents, has to do a hard activity. This can be learning to play an instrument, picking up a new language, improving in a sport, yoga, or anything that requires everyday, deliberate practice.

Next, you can quit your activity, but not until the season is up, your membership runs out, or you come across another natural stopping point.

You also get to pick your hard activity. After all, if you don’t like what you’re doing, you’re not going to stick with it.

And she mentions that when her kids get to high school, they have to commit to the hard activity for at least 2 years.

I can’t wait to implement this when Maya gets a little older.

Conclusion

Even if you don’t have natural talent, you can work hard and learn skills to be successful. I can’t explain enough how powerful that is.

It takes deliberate practice and a gritty mindset to do so. But I believe that it also takes a strong support system and helpful people along the way.

If you’re looking to improve at anything, I highly recommend this book.

Let me know your thoughts about grit and how it has impacted your life. When have you been gritty? How can you improve your stick-to-itiveness? I’d love to hear your thoughts!

Is your business model minimizing financial risk for your customers?

I’ve written in the past about business model innovation, and how companies can not only innovate with their product, but also with the way they charge their customers and garner revenue.

A business model innovation that I like and have been noticing recently is one that that minimizes the financial risk for its customers. While the free trial and freemium models do this to a certain extent, some companies go even further.

There are two models that I highlight in this post:

  1. When companies provide a service first, and get paid later when a certain event occurs
  2. When companies have you pay first but then refund money if you don’t use the product in a given time frame

Here are three companies that do a great job of minimizing financial risk for their customers.

Lambda School

Studies from Georgetown University and Pew Research Center have shown that college graduates make significantly more per year, and over a lifetime, than their counterparts with no four-year college degree. That’s a comforting statistic for college grads, current students, and those thinking about attending.

But there is a lot of risk in attending college.

First of all, the cost of attending college has become astronomical.

Tuition and fees at ranked private schools average over $41,000, with some of the top schools charging over $55,000 per year. Yucky to the bank account.

Growth of college tuition

Growth of college tuition – graph courtesy of US News

So unless you have rich parents who can pay for your education (lucky you), or you ace all of your high school classes and entrance exams and get a full scholarship (smart you), you’re likely going to have to take out student loans. And these loans will follow you around forever, even if you declare bankruptcy.

Second, even if you graduate college, you might not get a job upon graduation, or months or even years after. That’s pretty terrible.

Because of this increased risk of attending college, there’s been a growth in popularity of vocational programs and coding bootcamps like General Assembly, Flatiron School, and many others that have come and gone. These programs can either be in-person or online and teach you tech-related skills like web development and digital marketing. Classes typically last a few months, depending on whether you’re a full- or part-time student.

The problem is that these programs are still pretty expensive (full-time, in-person coding bootcamps can cost up to $20,000) and you’re still not guaranteed a job after you graduate. So are these programs really solving the problem?

Lambda School has a really innovative business model that aims to minimize their students’ risk of gaining a useful education.

Lambda School provides computer science and data science courses taught live and online by instructors who have worked for the largest tech companies like Google and Apple.

The big differentiator is that you don’t pay a cent for this education until you graduate and make more than $50,000 per year in salary. At that point, you pay 17% of your salary for two years. 

So let’s say you graduate from Lambda School and get a job as a Data Scientist making $75,000 per year. 17% of $75,000 is $12,750; assuming you don’t get a raise within your first two years, you would pay $25,500 to Lambda School.

That’s less than one semester’s worth of tuition and fees at some universities.

With no upfront monetary investment.

And you already have a high-paying job before you pay anything.

That’s pretty amazing.

I’m not sure how innovative their curriculum is; live online education has certainly been tried before. It’s the de-risking of the cost of the education that’s really innovative.

I learned about Lambda School from this episode of This Week in Startups.  The founder, Austin Allred, shares a ton of info about why college tuitions have soared and why he started Lambda School.

Education is one of the most important sectors of our economy and it’s clearly broken. I’m rooting hard for Austin and Lambda School to succeed so this huge problem can be fixed.

MaxSalePrice

Selling a home is a stressful task and a lot of work.

You need to make your home look nice, work with agents, price it correctly, give tours, and much more, in a short amount of time.

In the end, you want to maximize the sales price of your home. And one way to do this is to do home improvement projects before you put your house on the market. A remodeling of your kitchen, new hardwood floors, and a fresh coat of paint can significantly increase the value of your home.

These projects aren’t cheap, though. A kitchen remodel can cost over $40,000, a full paint job can cost $10,000, and installing hardwood floors can be many thousands as well.

And you have to find trustworthy contractors and pay them upfront to do this work.

MaxSalePriceMaxSalePrice logo is flipping this model on its head.

The company will work with you and your real estate agent to figure out what improvements are needed to maximize your sale price. Then their contractors will execute these projects, and you don’t pay until you close the sale of your home, regardless of how long it takes to sell it.

Everyone wins here. You maximize your revenue from your home, your agent gets her cut of a bigger pie, and MaxSalePrice gets paid for its work.

I know the company’s CEO, Rick Rudman, pretty well. He started and sold his PR software company Vocus for nearly $500 million and was the CEO of social media software Tracx. The more he told me about MaxSalePrice, the more interesting it sounded. I think it’s a really great business model and I’m sure MaxSalePrice will be really successful with Rick at the helm.

Slack

Workplace communication provider Slack does many things really well, and their business model is one of them.

Slack has a pretty amazing free plan. You get unlimited public and private channels, 10,000 searchable messages, up to 10 apps, and much more. It’s very compelling for small teams.

Slack logoOnce you grow out of that plan, Slack can cost up to $15 per user per month.

The innovative aspect of their business model is what they call “Fair Billing Policy”, where your company will only get billed for the people who use it each month. So if an employee you’ve already paid for becomes inactive, Slack will add a prorated credit to your account for the unused time.

There are very few enterprise apps that get used by every employee every single day. Even though Slack is likely to be one of these apps, they still minimize financial risk for their customers by providing refunds for inactive users.

That’s a characteristic of a truly customer-centric company. It’s no wonder why they’re valued at more than $5 billion.

Conclusion

I really love it when companies innovate with their business models, and these three companies are doing a great job of taking care of their customers’ wallets.

It has really made me think of how to structure pricing for my startup, WinOptix, and how I can de-risk this process for my customers.

Have you seen other companies whose business models help minimize financial risk for their customers? Are you doing so for your customers?

I’d love to hear your thoughts in the comments.

Marketing is the easiest and hardest job at the same time

Marketing word cloud

Marketing is really easy. And it’s hard. Both at the same time. I learn that everyday.

NYU Stern is one of the best universities in the world for finance. And I got my MBA there in marketing (though Stern is pretty good at Marketing, too).

At Stern, the finance majors would constantly poke fun at all of the marketing folks for taking the easy route. While these finance people were using spreadsheets to calculating Betas and IRRs, we marketers were learning about fluffy stuff like “brand” and “engagement.”

And I’ll admit that when I was was an engineer and consultant way back in the day, I thought that marketing was easy and fluffy as well.

On one hand, it’s true. On the other hand, it’s not.

Marketing is easy, anyone can do it

Post something on Twitter? That’s social media marketing.

Write a blog post? That’s content marketing.

Pay another company to slap your logo on their materials? That’s partnership marketing.

Talk to someone about a product? Is that really marketing? Yeah, that’s word-of-mouth marketing.

It’s true, anyone can do marketing.

Executing marketing tactics is easy. In fact, any conversation that you have with anyone about anything is marketing for that thing.

Yeah, marketing is really, really easy.

Anyone can do marketing, but can they do it well?

Yes, anyone can do marketing. The question is whether they can do it well and achieve the goals set by their boss and company.

You can execute any of the tactics that I mentioned above. But how are they working? Are they producing leads, users, customers, and revenue?

Here’s why marketing is so hard.

So many channels

I mentioned four 4 types of marketing channels in the section above. That’s only a fraction of all the marketing channels that are available at our disposal. Here are a few more that I can think of off the top of my head:

  1. Pay-per-click advertising
  2. Online forum marketing
  3. TV advertising
  4. Radio advertising
  5. Affiliate marketing
  6. Mobile marketing
  7. Guerilla marketing
  8. Email marketing
  9. Public relations
  10. Event marketing

Here’s a Google sheet with many, many more.

The difficulty in marketing is experimenting with all of these channels, prioritizing which ones to focus on, and determining which are most effective.

True measurement is difficult

Awesome segue – how do you determine which channels are most effective? You need to be able to attribute leads, customers, and revenue to each channel. That’s proven to be pretty difficult as well.

John Wanamaker famously said that “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

So true.

Yes, online marketing has made that easier. If you run a Google Adwords ad and a user clicks and buys your product, you should be able to attribute that sale pretty easily, right?

But what if that user heard about your product from her friend prior to Googling it? Or what if they saw a tweet from your company last week that made them think about you? Or what if they saw a recommendation of your product on Amazon before hearing about your product from a friend or seeing your tweet that made them think about you?

Is it correct to attribute that sale to that Adwords ad entirely? No, it’s not.

Even though we now have access to so much data, gleaning real insight from all of this data has become increasingly difficult.

So how do you truly understand which channels are working, and which aren’t?

Attention is scarce

There’s so much to do nowadays. No one has time for ads.

Everyone fast forwards through commercials during the shows they DVR. Shit, they don’t even DVR anymore – they’re watching Netflix and Amazon Prime.

Consumers spend tons of time on social media. And while the potential to reach these billions of social media users is huge, these audiences are super fragmented and distracted that it’s so much more difficult to engage and interact with them.

It’s really hard to get attention nowadays, no matter how easy it is to write a tweet or blast out an email.

I’m sure that you’ve concentrated 100% of your attention on reading this amazing blog post, but your phone probably buzzed and pinged you with notifications from text messages, Twitter, Snapchat, email, whatever. Thanks for paying attention, though, I appreciate it!

Trust is being breached

Look at all of the data privacy issues Facebook is dealing with now.

Consumers are sick of ads following them around all over the internet (this is called “retargeting”). Even though retargeting works, it’s super creepy.

Tech companies have access to troves of user data that they leverage to serve us personalized (aka creepy) ads all the time.

And consumers hate this.

You need a unique combination of skills

To be a good marketer, you need a broad set of skills.

You need to be creative to come up with engaging copy, a unique market position, and eye-catching designs. But you can’t just be creative.

You need to be analytical to experiment with different marketing channels and measure how well all of these channels are performing. But you can’t just be analytical.

You need to be strategic to see how all of the different channels and moving parts fit together. But you just can’t be strategic, you need to be able to execute, too.

You need to understand psychology, technology, data, strategy, tactics and operations. You need to understand how sales people, designers, programmers, and customers work and what makes them tick.

It’s difficult to learn all of these skills.

Conclusion

There are so many marketing channels, attention is hard to come by, trust has gone out the window, and competition is continuously increasing.

With marketing, you can’t just circle an answer or highlight a cell in your spreadsheet. There’s no formula that you can follow. You have to experiment, measure, make assumptions, measure again, and experiment some more. It’s a never ending process.

So yes, while executing marketing tactics is easy, doing marketing well and proving that you’re doing it well can be really difficult.

Do you think marketing is easy or hard? I’d love to hear your thoughts in the comments.

It’s amazing how one person can change the dynamic of your team

Starting a few months ago, the lead developer for WinOptix, Dave, had less and less time to work on the project, so I was tasked to find another developer to help out.

On my search I went. I emailed developers in my network, posted on discussion boards, and reached out to LinkedIn contacts.

I found a remote developer (let’s call him Steve, not his real name) who looked pretty solid. He had a good resume; he interned at a high-flying Silicon Valley startup and was the CTO at other lesser-known ones. He contributed to open source projects and maintained a coding blog. He was pretty enthusiastic and friendly.

So we brought Steve on board on a part-time basis to work on some front-end styling and back-end bugs.

Steve took a little while to ramp up. We thought this was OK, since getting up to speed can take some time.

But after a while, we realized that Steve wasn’t the right guy for the job. While his code was acceptable, it was not a smooth experience working with Steve.

Everything took too long. Tasks that should have taken 5 hours took 12.

Steve did not push his code (which means sharing his code changes with us to review and merge with the existing code base) often enough. We asked him many times to push his code changes more often and while he said he would, he didn’t comply. Steve would tell us that he was going to push his code, and wouldn’t do so until 2 days later. And when he did, many times less progress than expected was made.

And there were times where we would go days without hearing from Steve.

The launch of WinOptix was already delayed, and our revised deadline for launch was impending. I was down in the dumps because progress was so slow and there wasn’t much I could do about it. While we knew a change needed to be made, we didn’t have much choice but to continue working with Steve, and we planned to do so only until we launched our v1.

In the mean time, I continued to look for additional developers to ramp up our resources after we launched, since we knew we would likely end our relationship with Steve. That’s when I found another developer, Jon, through a mutual friend. Jon agreed to help out immediately.

And Jon has been nothing short of awesome.

He has cranked out so many tasks and has achieved so much more in two weeks than Steve did in over three months. The difference has been night and day. We’re getting really close to finishing v1 and are gearing up to get WinOptix into the hands of about 15 trial customers.

When you’re a small team, every team member’s value, or their subtraction of value, is amplified.

One bad seed can bring everything to a halt. A strong team member can accelerate things quickly.

This is especially true with developers at a pre-launch tech startup. As a non-technical founder, you are so dependent on developers to help you ship your product.

In a large organization, one bad sailor isn’t going to sink the ship. There are others that may be able to pick up the slack and cover for him.

But in a very early-stage startup, where a team may have 3 or 4 members, each person has an outsized impact, for better or worse.

Right now everyone is working part-time on WinOptix, so we don’t have to go through the full commitment of bringing on a full-time employee. There’s no training we have to do, no insurance or salary paperwork to fill out, nothing like that.

But even in our experience of working with part-time employees, we can feel the impact that a bad and really good team member can have.

I now have a lot more confidence in our ability to execute. We’re cranking and can’t wait to get our v1 out into the wild.

On that note, I’ll be taking a break from blogging weekly (a little preview was when I missed publishing last week). With the launch of WinOptix, things are going to get pretty crazy soon. And I have some travel planned over the next few months as well.

I’ll certainly still blog, but it likely won’t be on a weekly basis.

On that note, see you when I see you!

What if things went right?

Prospect Theory graph

Most people believe losses hurt more than gains help.

When presented with a difficult or speculative decision, many people’s first thoughts would be about what could go wrong.

But what if things went right?

I’ve invested some money into Bitcoin, Ethereum, and other cryptocurrencies and frequently have conversations with others about this. Some of the negative things I hear are:

  • Have fun losing your money!
  • I’d never invest in anything not backed by a real asset
  • Crypto has no intrinsic value – I’ll pass

I’m not saying that you should invest in things you don’t understand. I totally get if crypto is too speculative for many, and I’m prepared to lose the amount I invested; it’s not enough to break my bank if things go to shit.

But what if some cryptocurrencies actually panned out? What if the underlying technology is the future of the internet (which I believe it is), adoption rose over the years, and thus the value of these cryptocurrencies increased in lockstep? A lot of money can be made.

There were so many things that could have stopped Uber or AirBNB from becoming a reality. Local regulations did not allow for ride- or home-sharing. Riders or travelers would certainly think sitting in someone else’s car or sleeping in another person’s home would be sketchy. And who the hell would want someone else in their car or home?

If the founding teams of Uber or AirBNB actually allowed these hurdles to stop them from creating these products, the world would be a very different place right now. We’d still be waving down cabs on the street and staying in overpriced hotel rooms.

But Travis Kalanick, Brian Chesky, and the companies’ investors thought about what could go right, instead of wrong. And these companies have changed the world.

Humans are naturally loss and risk averse, and according to prospect theory, losses have more emotional impact compared to an equivalent amount of winnings.

It’s difficult to go against human nature. It’s natural to think about what could go wrong, especially if you have a lot to lose and people depend on you.

But what if things went right?

What’s your thesis of the best path to success?

There’s a great Twitter thread that I took part in that was started by Josh Felser, investor at Freestyle Capital. Here is Josh’s initial tweet:

Of course, with Twitter being Twitter, there was some vitriol spewed at Josh.

I jumped in, asking about my situation in particular:

 

Everyone is going to have a different opinion on how to best get things done.

Some founders – those with families, lots of debt, and other factors – will have more constraints than others and can’t fully take the leap to work on their venture. Others may choose to be more risk-averse and work on their startups on the side until the time is right to make that jump. And some may go balls-to-the-wall, leave their gigs, and just run as fast as they can to get their startup off the ground. 

There’s no one-size-fits-all approach. We all have our theses. 

Josh has his thesis about those founders who won’t quit their job until they get funding. If you don’t agree, that’s fine. Just find another investor who is more aligned with your approach. I’m sure they’re out there. 

Josh may miss out on some successful investments. And he’ll have to be OK with that.

My wife has been extremely supportive of my startup endeavors, is the breadwinner of the family, and carries the brunt of paying for our expenses. I couldn’t do this without her. 

As much as I would love to work full-time on my startup, I have to contribute to my family’s well-being by bringing in income. The time to go full-time on my startup will come, but now’s not the right time. Josh won’t fund me, and that’s OK.  

There are different paths to success, and everyone will have a different opinion about what that path is. Do what’s best for you. 

The plight of the non-technical startup founder

Tech startups are hard.

You need all kinds of people to make a startup successful.

Depending on the type of product you’re building. who your customer is (consumer vs. enterprise), what stage you’re in, and other factors, you’ll need product leaders, software developers, sales reps, marketers, designers, operators, recruiters, administrators, and many other roles.

But in the very early days of your startup, if you’re a non-technical founder, by far the most important member of your team is the software developer. If you can find one.

No matter how much you know about the industry, the user, the product features, and everything else, the software developer will be the one who can actually ship a product.

You can do all the research in the world. You can talk to scores of potential customers to learn their pain points. You can create mockups and wireframes.

But all of that doesn’t mean much if you can’t ship a product.

That’s why software developers are the rock stars in the tech startup world. They can bring ideas to fruition.

As a non-technical founder, I know that I’m at a disadvantage. My coding skills, while improving little by little, are not even close to the point where I can build an app.

I need to be able to recruit software developers to help me build my product, and I’m competing against every other non-technical founder to do so. Not easy.

Once I successfully recruit them, I need to be able to communicate my vision of the app so they can build it. And a lot can get lost in translation.

Such is the plight of the non-technical founder.

Startups are hard. And if you’re a non-technical founder, they can be damn near impossible.

Rant over.

What I Learned from Indra Nooyi on Freakonomics Radio

Indra Nooyi

Image courtesy of Wikimedia Commons

I recently listened to an episode of Freakonomics Radio with Indra Nooyi, the CEO of PepsiCo. It was an amazing listen, I highly recommend it.

While Indra talked about so many interesting things she has experienced during her tenure at PepsiCo and her life in general, I took away three main points from the interview:

  1. How getting close to the customer is all that matters
  2. The importance of a STEM education, even for someone in the food business
  3. Developing “adaptation strategies”

Let’s dig deeper.

How getting close to the customer is all that matters

Around 13:50 of the interview, Indra talks about how men and women eat snacks differently. Men will loudly crunch on their chips, lick their fingers, and tip the bag to pour the remaining crumbs into their mouths. Women won’t crunch out loud, won’t lick their fingers, won’t pour crumbs into their mouths, and like to store snacks in their purses.

Indra has institutionalized the importance of deeply understanding customers into PepsiCo and uses that knowledge to design all aspects of their products – from packaging, shelving, storage, all the way to consumption. She frequently scans supermarket shelves to see how products are displayed, and sometimes visits customers’ homes to see how they’re storing and consuming the product.

All of this research and knowledge goes into a bag of Doritos. Seriously.

No matter what industry you work in – food, construction, technology, or any other – if you truly understand everything about your customer, you’ll be successful. You need to figure out how they select products or services, how they consume them in different scenarios, what their pain points are, and much more to add as much value as possible.

Importance of a STEM education

Around 16:40, Indra stresses the importance of having a science, technology, engineering and math (STEM) education.

How does the CEO of a global food and beverage company benefit from having a background in science?

Her education helps her better understand the science behind the research, development, and marketing of new, healthier snacks and foods.

Because nutritious foods are more highly scrutinized, PepsiCo has to back up these products with scientific facts. And the CEO needs to fully understand and communicate these facts to customers.

Additionally, knowledge of science helps her better grasp and communicate to her staff and Board of Directors why she is funding these scientific R&D initiatives and how they will get the company to a better place.

Indra mentioned that science is much harder to learn when you’re older, and if you have that foundation in STEM, you can easily learn anything else along your career journey. So true.

Development of adaptation strategies

Finally, around 31:30, Indra talks about developing “adaptation strategies” to deal with the things that life throws at you.

Indra talked about how her mother told her to “leave the crown in the garage”, meaning that even though she’s the CEO in her career, she shouldn’t act that way when she gets home. If she did, she wouldn’t be a good mother, wife, or daughter.

I think development of these adaptation strategies is really powerful. If you don’t adapt to your surroundings, you’re going hate life. If you act the same way in every situation, you’re going to alienate a lot of people, or be alienated by a lot of people. If you don’t adjust to the environment around you, you might have difficulty moving forward.

I’m not saying you shouldn’t be yourself. But there’s a lot of value in recognizing the situation you’re in and adapting to the environment.

Conclusion

Being the CEO of a massive international organization is a tough job. And Indra Nooyi basically laid out a blueprint on how to excel at it.

Regardless of what industry or function you’re in, I would highly recommend giving the episode a listen. Let me know what you think of it.