Category Archives: Entrepreneurship

Is The Very Idea of Designing Tech Products for Women Insulting?

Current Affairs, Entrepreneurship, Starting a Business, Technology, , , ,

(note: I posted this on the Huffington Post first, just about 10 minutes ago)

Maybe it’s because I’m father to four daughters, maybe because of simple fair play, but if you read my stuff I’ve been a chronic complainer about the relatively low numbers of women in high tech and tech in general. And I don’t believe it’s because the women like it that way, either. So why then does Don’t Be Afraid To Go Pink: Designing Great Tech Products For Women on TechCrunch today make me nervous?

My answer starts with a true story: in the late 1990s, at Palo Alto Software, we had a team brainstorming session to deal with the problem of under representation of women in among our Business Plan Pro users. The team at the time was half women, and for the record, our company is 49% women owned.pink tech

But that brainstorming session turned up nothing but bad ideas. Business planning is a great example of something that has no gender specificity. Most of the suggestions made were unintentionally insulting to women, as if being female means you plan your numbers less, or are more intuitive or less rigorous, which is a crock. Pink packaging? We did take it to heart with our packaging, putting the image of a happy female user all over the back of the box. But that was it. Business planning has no gender component.

The TechCrunch post has five suggestions, starting with don’t be afraid to go pink. Say what? Here’s how post authors Sarah Paiji and Sanby Lee explain that point:

We don’t mean that your product literally has to be pink. However, you shouldn’t be afraid to make a product that is only for women, and to signal this through your aesthetic and branding. For our mobile shopping app, we chose a name and color scheme that was decidedly feminine. We had men complain that they didn’t feel comfortable using the app, or posting in a community dominated by women. But that’s the point — we didn’t want men as our initial audience.

That bothers me. I think we have to make some logical distinctions here.

First, some products have gender specificity. Clothes, sporting goods, personal hygiene for example: of course they’re different for men or women.

Second, some content has gender specificity. Obviously some television programming, movies, magazines and other media have gender behaviors built into them.

So if you put these two assumptions together, then there’s absolutely nothing troublesome to me about gender-specific products where there are gender differences, and gender specific marketing that takes advantage of those differences, whether for gender-specific product or not, to focus market dollars more effectively. Sure, they advertise beer on football games and tampons on soap operas. So what?

But I really don’t like trying to build gender specifics into products that don’t have them. Very few tech products are inherently gender specific. Maybe the authors’ shopping app is, but if so, it’s one of a very few. And for the most part, trying to design tech for women ends up, well meaning or not, assuming women are dumber than men. Which is a dumb assumption.

Which I think we see in that post. After making that first point, the authors follow with 2.) resist feature overload, 3.) find the key influencers, and 4.) enable discovery. How are those factors gender specific? I’m a man, and I don’t want feature overload, I get influenced and I influence, and discover is good for me. How are those points women centric?

Then, finally, fifth of five: have women on your team. Doh! Of course! The work force is 50-50-ish, then so too should be every team on every company that isn’t doing gender-specific product. And I don’t mean by law, or forced by anybody; but rather, just common sense and a natural process over time.

(Image: istockphoto.com)

 

5 Hard Lessons Related to Firing Somebody

Business Mistakes, Management,

So you start your business, and you get it going, and growing. If you have employees, it’s likely you’re going to have to deal with firing somebody. Here are my some of my thoughts (based on actual experience; not theoretical) on that subject.

failure_bigstock_436908.jpg

  1. Having to fire somebody who’s been trying hard and failing is the worst job a business owner has. I’d rather do collection calls. But it happens sometimes. If you can’t stand the heat …
  2. Because of the recession in 2001 I had to let five people go on the same day. We had to cut costs and we had no choice. They weren’t let go for their own failure, but ours, and they knew it. For the record, that’s much easier than letting one person go because of work or performance reasons.
  3. Firing somebody should never be a surprise. It should be because expectations weren’t met, and performance wasn’t as expected, and that person should always know it. If it’s a surprise, management has failed. (Well, if it is a surprise to the person let go, that is; as for co-workers, that’s none of their business.)
  4. A good lawyer I worked with for years used to say that the time to let somebody go is the first time you ask yourself whether or not you should; the first moment you even think of it. He’s a smart guy, a good and honest lawyer, and basically compassionate. His underlying though was that it was best for both sides to do it as soon as you start wondering. And I’ve never known anybody to actually work that way. I didn’t. Still, the wisdom here is that it’s better sooner than later. Later does more damage.
  5. I’ve had some successes with repositioning a person, rewriting their job description, having them do something entirely different, rather than firing them. However, to be honest, those successes were the exception, not the rule.
  6. (Bonus) We live in a litigious world. Talk to your attorney before you do it. There are a lot of things you’d like to say but you shouldn’t. And some very unfair lawsuits happen.

What do you think?

(Image: bigstock photo) 

Blaming Angels and VCs for Choosing is Like Blaming Up for Down

Angel investment, Bootstrapping, Venture Capital,

I was happily reading Sramana Mitra’s The Other 99% of Entrepreneurs on Read/Write Web, agreeing with every detail, when I ran into a snag. It’s in italics in this quote from Sramana’s post.

Sramana_RWW_Bootstrapping.jpg

Over 99% of entrepreneurs who seek funding get rejected. Yet, the entire world is focused on the 1% that is “fundable.”
The media, when pitched a startup story, is interested in who funded the venture. They seldom ask how much revenue the company has or if it is profitable. Incubators take pride in how exclusive they are and how many “deals” they “reject.” Angels and VCs, of course, discard most of their “deal flow.”And entrepreneurs? They seem to have confused the definition of entrepreneurship altogether. Entrepreneurship, they mistakenly believe, equals financing!

This is wrong.

I agree with her: It is wrong — except for that one extra detail. On the core of it, well, I posted something similar more than three years ago, in a respectful hats off to bootstrapping, on this same subject:

For years now, I’ve complained every so often about how we (in blogs, business plan contests, academia and entrepreneurship in general) tend to idealize the venture capital-financed startup, the SBA loan and the more formalized and carefully planned financial strategy. This is especially true in venture competitions.

This is the real world. Bootstrapping is often the only way to start, build and grow your business.

But don’t blame the investors. That’s like blaming up for down. Angel investors spent about $18 billion last year to fund more than 50,000 startups; of course they have to pick and choose. That’s the nature of investing in startups. And venture capitalists are investing other people’s money. They’re being paid to generate a return on investment. Their job is picking the best deals they can find. It’s for the rest of us to understand and respect bootstrapping.

Sramana Mitra is way too smart for that. I like her work and read her often, and included her in posts on this blog. I think she just got on a roll and added one detail too many. Because everything else in that post makes a lot of sense. And she’s one of the best writers/bloggers/thinkers you can find on startups and investment in general. I love her reengineering capitalism idea. So consider this a small correction for a really good post. On an important subject.

Are You a Trep?

Entrepreneurship,

Shall we start calling entrepreneurs treps instead.

Questions_iStock_000011860969_modified.jpg

In this post last October I joined Robert Jones and Rieva Lesonsky and a few others in a quest for a better word for “entrepreneur.” Robert started it with 5 reasons we need a new word for entrepreneurs and Rieva followed with what does it really mean to be an entrepreneur.

As far as I’m concerned we failed to come up with a better word.

A few days ago, however, somebody on Twitter called themselves a “trep.” I think that might just work. What if we started calling ourselves and other entrepreneurs treps?

Background: the word entrepreneur includes trep. And then there’s the word intrepid. Works for me. I’m a trep. How about you?

And if you’re that person who started with the word trep in Twitter, I’d like to know, so I can give you credit.

(image: istockphoto.com)

 

Do You Like Working Alone, in Teams, or Both?

Business Mistakes, , , ,

Did you perhaps catch The Rise of the New Groupthink on the NYtimes.com last week? Here’s author Susan Cain’s interesting lead …New York Times Page

SOLITUDE is out of fashion. Our companies, our schools and our culture are in thrall to an idea I call the New Groupthink, which holds that creativity and achievement come from an oddly gregarious place. Most of us now work in teams, in offices without walls, for managers who prize people skills above all. Lone geniuses are out. Collaboration is in.

But there’s a problem with this view. Research strongly suggests that people are more creative when they enjoy privacy and freedom from interruption. And the most spectacularly creative people in many fields are often introverted, according to studies by …

It’s not that teamwork is bad, but rather that alone work isn’t bad either. It feels like we need to respect both, and the need to approach different problems in different ways. When pendulums swing too far, we go back.

Confession: when I was in business school I avoided group projects as much as I could get away with. When assigned to a team, I sometimes negotiated breaking off a part of the project that I could do by myself.

Susan cites Apple and Steve Jobs and the early history of the company as a good example:

In the wake of Steve Jobs’s death, we’ve seen a profusion of myths about the company’s success. Most focus on Mr. Jobs’s supernatural magnetism and tend to ignore the other crucial figure in Apple’s creation: a kindly, introverted engineering wizard, Steve Wozniak, who toiled alone on a beloved invention, the personal computer.

I’m going to finish this with Susan’s choice of quote from Steve Wozniak’s autobiography:

Most inventors and engineers I’ve met are like me … they live in their heads. They’re almost like artists. In fact, the very best of them are artists. And artists work best alone …. I’m going to give you some advice that might be hard to take. That advice is: Work alone… Not on a committee. Not on a team.

Think about it. Alone.

Good Business Decisions Aren’t Made by Vote

Business Mistakes, Business Stories, , ,

Have you heard this? It’s not mine, I think it’s sort of common knowledge:

If the decisions were made by consensus, every wall would be painted beige.

fingers planning

As my business grew up from entrepreneurial to stable, we had to redo our decision process. Early on, we sat around, a few of us, discussed and decided. That was when there were 10 or 12 of us. I guess I made a lot of the final decisions, because it was my work, my product, and my company. But it often felt like consensus. And it seemed to work.

But it didn’t work forever. After a while — a few years, really, but it seemed like a blink of the eye — we were 30-40 people. And we had programmers and bookkeepers not just chiming in on decisions about, say, packaging and web designs … but feeling alienated if their opinions weren’t given enough weight. And here’s what I learned:

Good business decisions aren’t done by votes

Ultimately, we had to learn that we’d evolved into a structure based on functional expertise, and we wanted our financial people minding cash flow and taxes, our development people writing code, and our marketing people deciding on packaging, web strategies, and social media. And that hurt some feelings. But it improved the business.

Businesses that grow must also grow up.

(Image: Big Stock Photo)

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Q&A: The Perfect Letter to Potential Private Lenders

Angel investment, Business Mistakes, Q&A

This is another question received in my ask-me form on my timberry.com website:

I’m hoping you might be able to help direct me in finding the perfect letter that I need to send out to potential private (mainly friends) lenders for a start-up I’m involved.  I need this letter to spell out the details of the lending terms, conversion, etc.  I’m a numbers person (CPA) not a writer but I need this letter to be very appealing to convince them to lend us the start-up capital we are seeking.

My answer:

You’re focusing on the wrong thing. People don’t invest or not because of the perfect letter. Get the details right and the letter will follow. If you’re a CPA you’ve got an education and you can write the facts in correct English. Or, if you have money you don’t know what to do with, pay somebody to write a perfect three-paragraph letter.

The best a letter can do is communicate facts quickly and easily. The facts sell your deal, not the letter. what matters isn’t the letter but the startup, the team in charge, the product-market fit, the deal itself, and of course (as you suggest) the details of the lending terms, conversion, etc.

Start with a conversation, not a letter. Don’t ever think you can find startup investors by sending some letter out to a lot of people. You need to pinpoint the right people, and communicate well. A letter might be useful for following up, but think of it as a cover letter to a legal document. It should be no more than three paragraphs, hit the highlights legally, and that’s it. Then you have all the legal documentation your people will have to read and understand and, eventually, sign.

What you do need, by the way, is to check with an attorney about anything you say, or write. There are a lot of banking and fraud rules related to these deals. It’s pretty easy to break the law if you don’t know it. And the wrong terms on a letter to potential lenders can screw up your chance for angel investment or venture capital later. Now there’s an expertise you might really need for the letter, and, more important, the loan documents.

Q&A: How Do I Sell My Idea to A Big Company?

Business Ideas, Business Mistakes, Q&A, Starting a Business, ,

This is another email question I received via my ask-me-a-question form on my timberry.com site. I’ve edited it slightly:

I recently read your article protect your ideas and I have an idea that I want to protect and want to pitch to a company. I don’t know if I can turn my idea into a business without the business I created it for. I have an idea for a new revenue model for Facebook that uses their current model but gets more advertising and more potential … But my model would only work on Facebook; I don’t think I could start up a social networking site and get the same results. So my questions is do I try to patent the idea then go to them or what? How do I approach a successful company and tell them “hey you could be making way more money and revolutionize social networking!

And my answer:

  1. Find out about patents and whether or not your idea has a good chance of being patentable. I seriously doubt that your idea is patentable, but I don’t know what it is. Patents are for inventions, not ideas. There have been some business model patents issued, but to build a business around it you’d have to be able to not just have a patent but defend it. And you should worry that the patent system is no longer working, caught in a deluge of technology.
  2. If there’s a reasonable chance of a good strong patent that would be defensible against Facebook, explore that option. Plan to spend tens of thousands of dollars, so be honest with yourself. Start by spending a thousand or so dollars with a patent attorney really good, and really honest, who can tell you what the odds are, and be prepared to end the project there.
  3. If — my guess — the patent option isn’t realistic, then forget it. You’re wasting your time. Give it up. The following points are just so you understand why.
  4. Jump into the shoes of Facebook for a few seconds. They live and breathe their business model. How likely is it that they’re going to invite you to tell them what they haven’t thought of? How likely is it that you’ve got something related to some direction they’re already studying? And how much to they want to deal with some stranger saying what they’re doing is an idea they copied.
  5. To help you think of it this way, I’ll share that during the years I built Palo Alto Software I learned not to even respond to people who wanted to sell me an idea for my business. I learned it the hard way: every single time I listened, it was something we’d thought about, often something we tried, but didn’t work. In a couple of rare occasions it was something we were already working on, which led to “oh dear, now this guy’s going to think we did it because he suggested.”
  6. And then, to make matters worse, there’s the problem of ownership: even if you did think up that great idea, originally, you don’t own it. You can’t legally own an idea. Patents protect inventions, not ideas (see points 1 and 2 above); copyright protects creative works; and trademark protects commercial communications. You can’t sell something you don’t own. Tell it to Facebook and they can run with it for free. They pay you only if they want to, out of the well-known goodness of their huge corporate heart.
  7. Just to explain an apparent contradiction between points 4 and 6: legally the big company can take anybody’s idea and run with it, because nobody owns an idea; but big companies don’t want to deal with the accusation or even the bad karma of actually doing that. Who wants the negative press? It’s way better to just not ever respond to you.

So there you have it. Not what you wanted to hear, I’m sure, but if I save you a lot of wasted effort, then I’ve done you a favor.

Reflection: 10 Lessons Learned in 22 Years of Successful Bootstrapping

Back to Fundamentals, Bootstrapping, Family Business, Reflections, , , ,

(I posted this about two years ago on Small Business Trends. I’m reposting it here today because this is a good time of year for this kind of reflection. And maybe also for not writing a new post. Tim )

Last week a group of students interviewed me, as part of a class project, looking for secrets and keys to success. They were asking me because after 22 years of bootstrapping, my wife Vange and I own a business that has 45 employees now, multimillion dollar sales, market leadership in its segment, no outside investors, and no debt. And a second generation is running it now.

Frankly, during that interview I felt bad for not having better answers. Like the classic cobbler’s children example, I analyze lots of other businesses, but not so much my own. As I stumbled through my answers, most of what I was saying sounded trite and self serving, like “giving value to customers” and “treating employees fairly,” things that everybody always says.

I wasn’t happy with platitudes and generalizations, so I went home that day and talked to Vange about it. Together, we came up with these 10 lessons.

And it’s important to us that we’re not saying our way is the right way to do anything in business; all businesses are unique, and what we did might not apply to anybody else. But it worked for us.

1. We made lots of mistakes.

Not that we liked it. At one point, about midway through this journey, Vange looked at me and said: “I’m sick of learning by experience. Let’s just do things right.” And we tried, but we still made lots of mistakes. We’d fuss about them, analyze them, label them and categorize them and save them somewhere to be referred to as necessary. You put them away where you can find them in your mind when you need them again.

2. We built it around ourselves.

Our business was and is a reflection of us, what we like to do, what we do well. It didn’t come off of a list of hot businesses.

3. We offered something other people wanted …

… and in many cases needed, even more than wanted. You don’t just follow your passion unless your passion produces something other people will pay for. In our case it was business planning software.

4. We planned.

We kept a business plan alive and at our fingertips, never finishing it, often changing it, never forgetting it.

5. We spent our own money. We never spent money we didn’t have.

We hate debt. We never got into debt on purpose, and we didn’t go looking for other people’s money until we didn’t need it (in 2000 we took in a minority investment from Silicon Valley venture capitalists; we bought them out again in 2002). We never purposely spent money we didn’t have to make money. (And in this one I have to admit: that was the theory, at least, but not always the practice. We did have three mortgages at one point, and $65,000 in credit card debt at another. Do as we say, not as we did.)

6. We used service revenues to invest in products.

In the formative years, we lived on about half of what I collected as fees for business plan consulting, and invested the other half on the product business.

7. We minded cash flow first, before growth.

This was critical, and we always understood it, and we were always on the same page. See lesson number 5, above. We rejected ways we might have spurred growth by spending first to generate sales later.

8. We put growth ahead of profits.

Profitability wasn’t really the goal. We traded profits for growth, investing in product quality and branding and marketing, when possible, although always as long as the cash flow came first.

9. We hired people slowly and carefully.

We did everything ourselves in the beginning, then hired people to take tasks off of our plate. We hired a bookkeeper who gave us back the time we spent bookkeeping. A technical support person gave us back the time we spent on the phone explaining software products to customers. And so on.

10. We did for employees’ families as we did for ourselves.

Family members — not just our own family, but employee family members too — have always been welcome as long as they’re qualified and they do the work. At different times, aside from our own family members, we’ve had two brother-sister combinations, an aunt and her niece, father and daughter, and husband and wife.

And in conclusion…

Bootstrapping is underrated. It took us longer than it might have, but after having reached critical mass, it’s really good to own our own business outright. It might have taken longer, and maybe it was harder — although who knows if we could have done it with investors as partners — but it seems like a good ending.

Family business is underrated. There are some special problems, but there are also special advantages too.

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True Story: But Nobody Moved In. They Ran Out of Money

Business Mistakes, Starting a Business,

Every day when I get to my office I walk by an empty office of about 4,000 square feet, that reminds me of the dark side of pollyanna entrepreneurship, acting on impulse and optimism, without planning.

I don’t know whether or not anybody is paying rent for that space, but it’s class A office space. More than a year ago that space was tailored and customized for a new tenant. The changed the layout, added walls, carpets, interior lighting, and signage. It must have cost tens of thousands of dollars.

But nobody moved in. They ran out of money. Nothing happened but the leasehold improvements. That space has been empty for more than a year now.

Somewhere there ought to have been a plan, with a rough estimate of funding required, and the wisdom of waiting until they got the funding before they started the spending.

(Image: stock photo, from bigstockphoto.com, not a picture of the space I refer to)