What are the important variables in a startup? The Unknown Unknowns!
These are the "20" in the famous "80/20" rule.
No matter how smart (you think) you are. No matter how well you plan. No matter how much research you do...something is going to bite you in the ass. It comes out of nowhere. You're ticking along, time lines are in sync, things that need developing are being developed and you are checking off the completions...then...it happens.
Like what? This stuff that 'happens' is never 'small' stuff. Any decent resourceful human unit in the startup game can handle the occasional small hiccup! In fact, those happen with some frequency. Most are akin to seeing your 'washer fluid" light go red on the dash on a long trip. No prob.
The "20" were talking about are of 'mission critical' variety. It's an unforeseen feature that your core app dev requires and your release of 'X-ware' doesn't support that feature. It's a cutting edge network management tool or feature that you found and are planning to leverage into a competitive advantage and it goes back to the bench for 'further testing' before OEM release. It's big, you need it, you didn't expect it, you didn't plan for and you have to deal with it.
When this 'thing' breaks or comes at you from just out of your field of view, it stops you in your tracks. You cannot move forward unless and until it's resolved. These events are the make or break of a veteran start up team. I would tender that every successful startup of any reasonable measure has experienced at least one of the 'events'...and most experience more.
What do you do next?...I am not sure there is one answer or one procedure but I will offer a few things that I would put in play to get to the other side.
First, get your team together and outline the problem. It's obviously in someone's domain of expertise. This is the place you can generate a 1000 ft view of the issue. Getting a handle of the direct point of failure and determine the tentacles of the problem; what does it affect and impact directly. It's important to figure out the details of the issue and get them into the light. Why the entire team? Typically this 'mission critical' event happens when you are less than 10 people in size. So you have probably your smartest, most committed, most resourceful people around the table that you will ever have. Usually their expertises will have some nice overlap and if they joined you early, they have a network of resources that can be leveraged quickly and often at no cost. The relationships your team possess are technical experts, domain experts, vendor connections, investor network contacts and even competitive sources; if you are creating a business with no competitors, your's is a one in a zillion company.
Second, step outside the 1000 foot view and start to generate ideas. Don't judge them for execution or reliability but just focus on getting them up on a grease board. Make it known that the rules are simple: any idea is worth putting on the board. Keep your conversation moving. If an idea pops and it seems obscure don't mash through it, just get it down.
Always force questions into the discussion. Questions generate thought. Thought generates ideas. Ask for gut checks "does anyone feel anything...a random thought...an outlandish idea". The conventional will rarely produce the new. The 'out of the box' thought will move other thought processes off the conventional into the realm of new possibilities. This is the arena where your solution will originate.
Third leverage every contact you and your team can muster. Again, they may not have the solution but they may know someone somewhere who can help you formulate a strategy. Your investors are folks who typically have been in numerous deals. They have a keen interest in getting problems resolved. At the end of the day, your reaching out will create a ton of credibility with the folks who have backed your deal. More than you had when you start, if they are people who you have not worked with in the past (That is secondary to the focus here.).
Finally: the solution. There may not be one clean, crisp, risk free solution. There rarely is. But there are solutions with trade offs. One app may scale but is a bit slower. One solution may be perfect but is out of budget or requires a complete recast of your time line for launch or rev intro. If it's possible craft two routes to the end game. A primary and a secondary plan of action. Go to work on the primary with abandon. Find out all the details - the resources required, the capital, the cost/benefit, the time line for implementation, how much it busts your current benchmark delivery dates...everything you can know...know it! Have a couple of folks responsible for moving the secondary solution forward at "25,000" feet. Get the basics down but not all the details. If the primary is a bust, you are not starting from square one.
Make a decision. That is what you get paid to do. One aspect of that decision which I recommend you pay close attention to is 'gut feel'. If everything looks great on the grease board...and your gut is knotted? Not a good sign! Figure out what 'that' is. You may have to go to lunch with your closest ally or go have a beer with a trusted friend. But do something, whatever it takes to identify what does not feel right. This is big.
No decision ever made is a result of pure metric or economic evaluation which yields a conclusion that is divined from what is put on paper. All decisions are based on the emotional comfort of the person making the decision. Or stated another way, there is no way a human unit can desensitize themselves enough to make a purely objective decision. So the corollary of a human being able to produce a 'purely objective' decision from a set of choices is that all decisions are based on emotions.
Once you get the 'feel thing' identified; what was it about the solution which did not sit right with you, now you can state your decision to your team. All that is left to do...? Go to work!
Nice moniker huh! Zibadoo is rolling about about 10 initiatives over the next 75 days...our target is a fully operational system, top to bottom by the first day of school here in Austin; August 27th. All the kids will be back in school and all those seniors, fresh with new privileges, new cars, new cash cards will be heading out for lunch every day of the week. There may even be a few enterprising juniors in the mix too! (I did...never let one to let authority stand in the way of fun!).
We added a stellar programmer last Monday - Steve Smith...roc star! We are lucky to have two bright young women who are currently in the last year of their respective grad program at UT come on board to help with our messaging...and a ton of other stuff we semi-purposely withheld from the interview process! :) just kidding because what really happened is we were overwhelmed by their enthusiasm and 'buy in' of our concept, that they want to contribute...we're giving them plenty of room to go to work! Amenah Jaffery and Beth Walters.
And, our illustrious "Street Team"...lead by our three founders Charles Wight, Charlie Eastberg and Ryan Young...these guys are phenomenal!!! Is the future of America and the world in doubt? I say no way...not with kids like these coming up thru the ranks of civilizations!
So, we'll see how it turns out...I am very optimistic!!!
more later....
I asked a cabbie in NY back in the early nineties as we sped away from the Vista Hotel (adjacent to the WTC) doing a simultaneous 3 1/2 lane change maneuver w/o blinker under a full right pedal descent to the floor. This nice south African fella was stylin behind the wheel too...no seatbelt, 3/4 gangsta slouch, left arm straight and the limp wrist dangle going on the steering wheel...
"Well, we don't really need them'mahn...and when no body uses dem, trahfic reeely works well, mahn"!
After our 25min trip into China town consumed only about 15min of my life, I'd say he was right.
But parking spaces are a completely different animal. The wheels go between the lines. The game is to get as close to the perfect margin for each wheel between the strips as possible!!!
...the game is not to straddle the lines, that is for sure.
Zibadoo is a fabulously constructed business model. The premise is simple: students connecting to merchants via cell phones...but there are a lot of 'moving parts' (obviously). At the end of the day, we have the 'entrepreneurs challenge' - how much can we accomplish with the least amount of outside capital. This is where we have been living for about 3 months.
A brief look back...
We formulated the idea(s) behind Zibadoo beginning in early 2006. The concept, the features, target markets of students and merchants was refined over the following 12 months. The first inflection point came in Nov 06 as we were ready to flesh out our concept into a web based application to support cell to web and cell to cell 'message transactions'. Having a very small core team, we sought outside help to get Rev 1.0 'in play'. After finding an app dev contractor who was re-introduced to us by an insider, we spent about 2 months in spec'ing, discussion, refining, re-spec'ing, exactly what 1.0 would look like when completed.
The attraction for this particular contractor was their total buy in to our concept and our business model. As such, they were willing to offset a large portion of their fees as an investment in Zibadoo; an exchange of ownership for payment of fees. Considering the cost, the hard cash cost, which was the result of refining our spec, this seemed at first to be a very good deal. In effect our discussion centered on paying a multiplier (2x, 3x) of stock for each 'invested' dollar of fees. The actual cost was going to land in the 50k to 75k range but the cost in equity was 2 to 3 times that amount. Additionally, it was an arms length contract, they would work, show product, we'd approve and they would move to the next step; this part of the deal made total sense.
We didn't do the deal. We realized that the coding talent needed to be close to the company...almost an insider or we were going to get caught with an application which met spec but did account for the dynamic of further refinements which would inevitably occur during the coding process. Both new ideas around the original spec and new inputs from the market, the target audience and the general creative nature of the founders.
We realized the move to make a commitment to completing the app dev with internally assembled resources was the best long term decision for the company. It would cost us time in the market place which meant any and all of our competitive advantages were 'on the clock' and ultimately our window of opportunity was shrinking...it's just a natural event in any hot market like mobile messaging where dollars and players and ideas are landing in the space on daily basis. But we also knew that if we could not create a definitive, clearly differentiated service that could sustain the additional time requirement, then we didn't really have a very solid business model to start with.
So we put on our 'patience' vests and hunkered down to find committed souls who had both an exceptional level of talent and, most importantly, who bought in at a level they were willing to bet their time on a future payoff. This commitment raised our energy level about 10x on getting the word out, networking, interviewing, and scrambling to find these committed souls. While we didn't have any assurance we would find the 'right' folks, we believed in our concept and the significant amount of market intelligence gathered during 2006.
The payoff. We found better talent than we could have ever hoped to land using currency to do our bidding. Not just one, or two...but three committed souls. What has occurred in our case is that these folks have taken on the vision of the company as their vision. They have bought into the concept as their concept. They have taken ownership of the outcome. Their ownership has fostered a new level of creative energy which is being applied to existing body of work and the net result is a "multiplier" effect that only personal ownership can generate.
When the markets are awash in risk capital, as they almost always are - capital is cheap. And, inevitably, there are always the persistent chimes about 'right now, it's a thin market for great deals'. In the end, money is a secondary commodity in any market. Committed souls are always the most valuable commodity. While most business models will attract some money and some talent, if the talent is not committed...ie: willing to invest the most precious commodity - time, then I would conclude the deal is not quite as good as the money says it is.
more later...
Has anyone seen the 'other point of view' video on this subject? GooTube has a version if you are interested. If you are closed to new ideas or don't like contrary opinions, don't watch it. It's not too long, about an hour and change. You can click here to watch it... The Other GW Film
I wonder a lot about GW. Not because some folks are now debating the issue. Not because the consensus public opinion, media opinion, any-one-running-for-office's opinion is that it's a Inconvertible Truth...but seriously...didn't you ever look up in the stars wonder how the Ice Age happened? or the opposite, the middle ages warming?
Or the simple fact that in life nothing is constant, everything is always in flux, the only constant is change...and that minute concept of constant change applies to the earths' temperature too. Makes sense to me. So the reality and the fact is that the temperature is either moving higher or lower at all times (big time slices, 100, 1,000, 100,000 year slices).
What if we were heading into GC!!!??? Not that would suck! 9 month winters in Cancun? 80% less sustainable agricultural climate zones. Talk about a panic? Panic would a tad bit more intense if the commodity was food not oil. Side bene: there would be a massive redeaux in the dietary mix for us overweight Americans. We would be one healthy bunch for sure!
We rarely ever hear about smog levels any more. I can't remember the last time I saw a report on the choked out basins in Ca...can you? The smog has not gone away, but the fact is in terms of visibility, today there is a new media embraced 'darling': Global Warming. For any reasonable person it bodes them well to take in all points of view before adopting their own. I don't think this is the way the media works. If it did then the contrasting opinions and the actual debate about GW would be taking place in the public forum, the eyes of the public. It's flat curious that it hasn't...it is to me anyway.
Hopefully when you are finished reading this you will conclude that I am neither for the theory of GW or against it. I totally believe the earth is always either warming or cooling; that is brain dead to think otherwise. While you and I are on the planet, our 80 years, it's warming.
Wow, after struggling for a month to get a line on some programming and marketing interns for the summer, today was a very productive day! We received about 7 prospect candidates through our personal networks, founding Zibbers and from contacts into ACC and UTex. You never know what will make a difference so putting out the word to as many contacts as possible increases the chances to find 'the right people'.
One guy I've been talking to for over a year is Jeff Ward, local talk show host, former ut kicker ('83) and closet entrepreneur. He's doing a Prof gig at ut in their marketing dept for a 400 level course. We met last year at Uno's in Davenport Ranch and have been in contact since that time about a number of different opportunities and subjects: football, gaming, radio, web 2.0 ventures, etc. He recommended doing a 'web site' drive by on ut's marketing department's web site. So, after about 30 min dissecting the Biz School then the market dept, I click a link and BAM!
There sat a photo of about 30 prof's in the Advertising Department in the College of Communications. After a quick read...20min...of each Bio, I selected Terry Daugherty to submit my plea for assistance. What a great guy! Less than 24 hours later he wrote back with three contacts who could assist me in getting the word out about our Summer Intern Program...
Thanks Terry! Jeff! and Mary Kohls (CS Dept Chair at ACC)
This is where we'll start: post #1. Probably would have been nice to track this deal from the start...but! Hey, today is as good a day as any to 'go public'. Besides if I started tomorrow, I would be back in that procrastination loop I've been in since November 2005!
What is 'it'? or 'this'?. My programming team has decided (at the Longbranch Saloon about 11:45 and several beers into last Friday's night) we need to talk about our startup journey, among other things. That's what 'this' is!
More...(yes! later...)
