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Lessons learned during 48hrs in the Valley

clock December 11, 2013 10:00 by author JKealey

We recently attended the C100's flagship event named “48 hrs in the Valley” and want to share some key moments, lessons learned and observations. The event was filled with so many activities that it is difficult to distill everything into a concise picture but we'll give it our best shot. Before we get started, we'd like to take a moment to thank the C100's organizing committee for their great work. Coordinating this type of event is very challenging work and we appreciate it the effort put into it.

Key Moments

Picture by Kris Krüg Rob Burgess' insightful talk is the first things that come to mind when looking back at the event. Coming from a web design & development background, it was awesome to hear the inside story behind Flash. After becoming CEO of Macromedia, Rob had the foresight to pretty much cancel all development on the company's main revenue source (tools like Shockwave) and re-orient resources towards building products for the web (aka Flash). Given how drastically the industry has changed, this was the right decision but the amount of guts it took to perform this pivot is mind boggling. Pivots in a startups are difficult, but completely re-orienting a successful & profitable company with tons of money in the bank is much more challenging.

We also were fortunate to be matched with Debbie Landa for one of our one-on-one mentoring sessions. What started out with “I know nothing about franchises” concluded with a plan to revolutionize the franchise industry. By making parallels to the venture capital world, the future appeared obvious to us and we validated that FranchiseBlast's in a great position to completely alter the industry. Debbie had the energy and big vision we expected to find in the Valley. Combined with the open-mindedness to learn new things and the creativity required to challenge assumptions, these traits guarantee success regardless of your geographical location.

Being a bootstrapped startup not looking for funding, pitching to venture capitalists was also an interesting change of pace. The dynamics of each pitch was completely different. The first presentation was made to an analytical VC with a great poker face. Razor-sharp questions followed in quick succession to lead up to very insightful comments. It was the toughest meeting, but also one of the most valuable. Our second presentation was characterized by stellar flow: each slide was followed by a question answered on the next slide. It was a short meeting due to time constraints, but even in this short blitz one could sense the intellectual alignment. It's great to work with people with whom you can have fast-paced exchanges. Our third pitch slowed things down as we were given twice as much time as allotted and ended up being a conversation more than a pitch. This VC had domain expertise not found in the other meetings which lead the discussion in a completely different direction. The final pitch ended up being the easiest (emotionally) with great validation but few challenges. Putting myself in their shoes, though, I understand how gruelling it can be to deliver insights which can push companies to the next level, pitch-after-pitch.

Finally, I enjoyed the “both sides of the deal” talk where a startup and their VC discussed their deal from different perspectives. Not only was it extremely funny, it was also very insightful. Rather than discuss the specifics, let us dive into key lessons learned – some of which emanated from this talk.

Key Lessons Learned

Picture by Kris Krüg Although we learned a lot during these 48 hours, we didn't necessarily learn anything explicitly taught. These lessons learned materialized after talking to enough people in Silicon Valley and reflecting on their thought process.

First, the importance of shared vocabulary cannot be overstated. In the software world, best practices are often boiled down to design patterns. When two software engineers have internalized concepts behind these patterns, they can propose & refine software architectures very efficiently. The same shortcuts apply to everything in the Valley: software, finance, companies, people, eras and methodologies. While we do not personally stay abreast of every hot new startup mentioned in tech news and feel it gets in the way of getting things done, we acknowledge that shared vocabulary is critical. In particular, being aware of some of the key events which shaped the technology industry in the past and general knowledge of current trends helps us align ourselves with success and avoid repeating past failures.

Furthermore, having intimate knowledge of the people behind those events is key. In our early days, we saw networking events as a chance to meet interesting people. We went into an event not expecting much and that's precisely what we got: nothing much. However, we unknowingly started to build a network of peers and, after a few years, we're now connecting some dots. We can start transposing our concrete needs onto the desire to meet concrete individuals – or at least give our interlocutor enough information to help guide us to a person which meets our criteria. Although you may randomly bump into the perfect contact, it is much more efficient to do your homework and seek out individuals yourself. As an aside, we purposefully dedicated some time during the event to plugging other local startups (Exocortex, Shopify, Project Speaker, etc.) when meeting relevant individuals because we firmly believe that we're not only founders, we're ambassadors for other startups in our community. “A rising tide lifts all ships”, as Scott Annan often says speaking to the Ottawa startup community.

Picture by Etienne Tremblay We also discovered that the more successful your company becomes, the lonelier it becomes for the founders. By this we don't mean people start ignoring you or despise you to the points of throwing rocks in your direction. No, in fact, we mean that the essence of loneliness is derived from the fact that you can't talk about your fears, successes, challenges or motivations with anyone else. To help illustrate this fact, visualize entrepreneurship as a pyramid of thousands of layers where the dimensions of each layer represents the number of likeminded individuals & companies. When you first start out at the base, pretty much anyone can give you valuable business advice. However, as your business grows, the value of this advice diminishes. This causes you to look elsewhere (higher-up in the pyramid) for high-impact advice, but it becomes exponentially more difficult to find it. As an example, when you've raised venture capital, you may find that there is a limited pool of likeminded entrepreneurs in your city with whom you can discuss your challenges; this forces you to branch out. We believe the same logic holds for every major transition in your company's lifecycle, from your first part-time freelancing gig to IPO to managing a trillion dollar company. In the technology industry, we believe the entrepreneurship pyramid reveals Silicon Valley's greatest asset for founders: a greater density of likeminded individuals to accompany you in your journey.

Key Observations / Thoughts

  • If you wish to raise capital efficiently, you must know which funds are aligned with your business model, which ones of those are at the right place in their funding cycle and which individuals within those funds you should talk to.
  • If you wish to network efficiently, you must know what you're trying to accomplish, which companies have done it before and which individuals within those companies are responsible for the behaviour you wish to emulate.
  • Company culture is important for all businesses but even more so for companies undergoing hyper-growth.
  • Toughest thing to do as a CEO is terminating someone who's gotten you to where you are now but hasn't evolved.
  • You will outgrow the impostor syndrome.
  • Our peers during the 48hrs event were there to get things done. Everyone is independent and focused. This may come off as arrogance; break through the shell.
  • Behind every success story are individuals who are just like you.
  • The C100 organizing committee sets up the context, but it's up to you to leverage the opportunity to reach your goals. Sink or swim.
  • Once you board the funding train, you're not getting off.
  • The only way to minimize risk is to use pattern recognition. (Hiring, investing, sales, growth, etc.)
  • Because of the importance of pattern recognition, most people follow. (Many investors chasing the same startups, etc.)
  • Fitting the right patterns increases your likelihood of success. Revolutionary ideas must break the appropriate patterns, but not all of them. Finding the perfect balance is extremely difficult.
  • Pick good lawyers; vet them.
  • Business is not a zero sum game. Find a win-win agreement.
  • At lastly, a tweet I saw while leaving California: Help others. Luck favours those with good karma.


Collaboratively Defined Business Strategy

clock March 31, 2010 13:54 by author JKealey

 

bookingblast For those of you who’ve been keeping track, we launched LavaBlast Software back in April 2007. A year later, we posted three software startup lessons about how we got started and followed up the year after that with four more fun software startup lessons. Now that Year 3 is complete, I should write another set of software startup lessons, but that can wait. Today, I feel we’ve come full circle because we’ve begun working on the type of fun project that we would have enjoyed doing three years ago, but couldn’t afford the risk. In a sense, it feels like a full circle and a new beginning for LavaBlast even though we’re simply working on a new product.

BookingBlast is going to be legen – wait for it – dary. Read on to know more!

Starting from scratch

Pretty much straight out of university, we started LavaBlast Software. We had no money so we had to be creative. By creative, I mean we had to be cheap, work hard and work on something low risk to pay the bills.  The recipe for success is simple and we’ve said it before. Let’s just say we sell to businesses and we keep the intellectual property. This strategy has allowed us to start from scratch and making a living. 

We already have BookingBlast’s building blocks and now have enough runway to execute on our idea.

Ramping up

Some may stop here – but that’s not enough for us. We have greater ambitions - we’re looking for something bigger - for a greater reward. Based on the assumption that it takes a decade to launch a successful business, we’re not even a third through. We’ve passed through survival and have been growing steadily, but we’re now anxious to move to the next level.

We feel we can get there by converting the enterprise-level software we’ve been producing to date into more scalable Software as a Service (SaaS) products. We’ve been wanting to do this since day 1, but needed short-term revenues.  We’re now re-investing into LavaBlast to give us this flexibility. (I guess that visit to an unspoiled private tropical island will have to wait.)  We toyed with a few concepts during the past year, looking for software products that:

  1. No per-client customizations (greater scalability)
  2. Sold to businesses, not individuals (faster revenue)
  3. Shorter sales cycle, lower recurring dollar amount per sale (easier to commercialize)
  4. Related to our existing work and/or future strategies (reuse and upsell synergies)

 

Hold your horses! I’ll describe BookingBlast’s awesomeness in a minute.

Context & Goal

Our short-term goal with this project is knowledge. We’ve been building enterprise software for a while and want to dumb things down and start aiming for higher volume, but we need to adapt our know-how. We see BookingBlast as a practice run whereas our business is a marathon.

Our long-term goal is growth, in terms of revenue and the size of the company.  Lots of the enterprise-level work we’ve done can be commercialized to a broader market but we need a longer runway.

Spill the beans already! What’s BookingBlast?

BookingBlast allows service-based businesses to accept online bookings. Reservations are accepted only during available time slots and deposits are paid online, in advance.

To clarify, our software will allow customers to:

  • Book your child’s birthday party online
  • Book mobile clowns/magicians/comedians online
  • Reserve a massage / spa services online
  • Book your chiropractor from their website
  • Book a photographer from their Facebook page
  • … and accept bookings/reservations in many other industries.

That’s it. It’s not rocket science. It’s been done already – there are many competitors in this space – the market exists. The barrier to entry is low. But that’s not stopping us, because we have a plan. What better way to test our plan than to go out and execute it?  The worst that will happen is sales will be lower than desired and we’ll still reach our short-term goal of knowledge. We’re not betting the farm on this – it’s a stepping stone in the context of our longer-term vision.

How did you come up with your secret master plan?

We understand that this is a marketing play more than a technical one. We’re not inventing a killer product, although we can be innovative in our implementation. We decided it was in our best interests to share our plans for BookingBlast with people from diverse backgrounds and get them involved in the process. Ian Graham of The Code Factory always says the engineering students/graduates from the University of Ottawa are more secretive than the ones from Carleton University and we decided to prove him wrong. We openly solicited feedback on Google Wave and at TeamCamp. In the end, we found that we’re not that crazy after all as this validated our initial opinions. We did discover a few interesting twists which we plan on using, however.

Therefore, our plan is not secret – you’ll hear more about it when our product will be in beta. However, here a few lessons we learned from our experiences with collaborative planning.

Phase 1: Internal research

We looked around to find competitors and market penetration strategies. We discussed this internally over a coffee and did our homework. I produced a one-page executive summary of my initial plans.

Phase 2: Feedback solicitation via Google Wave

We published a private wave and invited two dozen random people. We made sure to invite people who were not extremely close to us because their feedback would be biased. We made it clear that the participants could feel free to ignore us as we didn’t care to force anyone into open collaboration, especially if they were busy with their own work. We found that the people least close to us were the ones who contributed the most to the discussion. Within 24h, the discussion had grown to approximately 8 times as long as the original executive summary. Within the next 48h, the discussion grew a bit more, with a few late-comers giving their comments.

The early discussions were the most valuable. They brought in new elements and got everyone involved. They definitely changed our strategy. However, as the discussion grew, I felt that most people lost interest because there was too much to be read. The barrier to entry had been raised, which caused most of the late-comers to elect not to participate. Initially, we thought this was a bad thing as we wanted more feedback, but in retrospect, we feel that what needed to be said was said early on. Had we discussed the same material with each person individually, we would have elicited the same comments over and over. Redundant feedback is not useful (other than for validation) and is a huge time waster.

In conclusion, open collaboration is a great technique to elicit feedback very quickly. I am greatly thankful to those who participated.

Phase 3: Feedback solicitation via TeamCamp

jkjp Ottawa’s primary co-working location, The Code Factory, hosts a bi-monthly event initiated by Chris Schmitt called TeamCamp. Once in a while, TeamCamp will have a pitch night where the participants pitch their idea to the group and get feedback. This is a very informal round-table setup but you get to chat with interesting people in Ottawa. A few weeks ago, I pitched BookingBlast to the group. This was great validation for our online booking software, as it proved that we had properly thought it out. Some new strategies were put on the table, but the biggest lesson learned is that you don’t need to spend months thinking about your project if you’re agile enough to adapt it along the way.

Furthermore, we finally had someone stand up and say our idea wasn’t good enough, something we had been waiting for since we started planning BookingBlast. Given the small scale of the project and the low barrier to entry, I was expecting most people to shoot our idea down quickly. Maybe I watch Dragon’s Den too much and read too many angel investor/venture capitalist blogs. In any case, this brought forth great discussions where it appeared other individuals were reading my mind while defending our online reservation software for me.

We’re now ready to start implementing the project! (In fact, we’ve already started and it is progressing nicely!) 

We need your help

We’ve posted a basic information request page on our website. If you know business owners that would be interested in participating in our alpha/beta programs, please have them sign-up to our newsletter.  We’re approaching the market in a different fashion that what the competition is doing, so we’d love to talk to business owners directly.

Since a good portion of our readers builds software for other businesses, we’d also like to talk to web developers that manage business websites.

Also, feel free to share your thoughts on BookingBlast and how to make it work in the comments. We’re thinking of openly blogging about thinks like SaaS pricing and gathering data concerning some of our strategies for future discussions and commentary.



Software Startup Lessons (Part 4) - Year Two

clock March 30, 2009 14:31 by author JKealey

Year Zero was launched a few days after LavaBlast's incorporation! LavaBlast is now two years old. Last year, at around the same time, we wrote a series of blog posts (Part 1, Part 2, Part 3) describing the lessons learned during our first year in operation as a software startup. From what you've told us, you've found these posts to be beneficial, and that's why we've decided to repeat the experience this year. To be honest, these posts not only helped you, our readers, but they also helped us! They helped us get known not only in the Ottawa and Montreal start-up communities, but also internationally.

Part 4 gives a high-level summary of our past year. Part 5 will describe the life of a software startup in a recession. Part 6 will look back on one of our failures. Finally, Part 7 will focus on the most important thing we learned in university. We look forward to hearing your comments.

Introversion and Extraversion

Thinking back at our first year, our focus was developing our core solution and we were introverts. 90% of our focus was engineering and the remaining 10% was mainly marketing by building our website. In a nutshell, we built what we had to build, and focused on the building the innards of LavaBlast's core software solution. Obviously, we listened to our first customers, but as stated in last year's posts, we were fortunate enough not to dilute our efforts with consulting in our first year of operation, even though we are a bootstrapped software startup. Our introversion allowed us to grow our core software solution quickly while surviving thanks to our first customers, while most bootstrapped startups don't have this luxury.

Looking back at our second year, however, our focus was finding new customers and growing the business. Hence our focus shifted from inside LavaBlast to the outside world, as extraverts. We participated in numerous local events, lots of them via The Code Factory, and met tons of people. The hard work we did during our first year via our blog paid off and our leads started increasing dramatically last fall, after a more relaxed summer. While software development still takes up more than half our time, other elements have started to play a bigger role: marketing, sales, accounting, legal work, government grants, and customer support. Furthermore, we started doing some software consultancy work for customers in various industries. More about that next week, in Part 5.

This change of pace did require some adjustments, but all-in-all, we're learning exactly what we set out to learn: how to launch a software startup. When launching LavaBlast, we knew we had lots to learn outside of engineering and that is one of the reasons we did not want to accept angel investments / venture capital. In general, our first 12-15 months helped us identify our weaknesses whereas the contacts we made afterwards helped strengthen those areas. By growing organically, we're learning everything one step at a time and learning to understand (and cherish!) the challenges outside of engineering. Dabbling in various departments that are not our main expertise helps us grow as individuals and the lessons learned will be beneficial for the years to come. Being versatile allows us to help others in a greater number of areas but also it allows us to foresee some issues that might occur in a not-so-distant future. More about this in a few weeks, in Part 7.

Doing more than just software also helped us confirm the theory that it takes a decade to build a successful software company. In terms of software produced, the core doesn't take that long to build. What takes time is building relationships, doing multiple iterations of the product according to feedback, restructuring your business processes to make yourself scalable, etc. Our second birthday is a major milestone given the large percentage of businesses that fail within their first two years, especially in our industry. However, given the long term perspective, we still have a long way to go.

 

Know what's out there.

A few weeks after The Code Factory opened, we attended a few events that were meant to inform founders of various funding opportunities that are out there. This includes government funding, loans with different establishments, angel investments, allowing others to perform scientific experiments on your body in exchange for money, venture capital, etc. As an example, we learned about the SR&ED and IRAP government programs. Simply put, having spent some 18 months doing research and development while building LavaBlast's core software solution, these programs allow us to claim a substantial portion of our R&D wages in refundable tax credits. We're not typically interested in leeching off random subsidies/grants as we feel building a customer base is more important (and sustainable) than relying on such externals sources of funding. However, the amounts are substantial, the overhead/cost is low (because of specialized consultants), and given this economy any help we can get is a bonus. To make a long story short, we should be applying in the coming weeks. Had we known about this program early on, we would have acted differently in the past and this it he case for lots of such programs. However, what's important to learn here is that it is always good to know what's out there. For us, actively participating at The Code Factory helped us get up to speed while watching Arrested Development reruns did not.

Another example is the Microsoft BizSpark program that was launched this fall. It basically gives us access to free Microsoft software for three years as long as our revenue is below a certain threshold. Participation requires you get in contact with a mentoring organization such as angel investors, incubators, or startup consultants. Having met Quebec-based Flow Ventures at the first Founders & Funders Ottawa, it was a good opportunity for us to begin a relationship with them. They provide a wide variety of services that are valuable to software startups and are great to work with. Thanks to BizSpark and Flow Ventures, we can grow our startup with Microsoft technologies without breaking the bank (one of the main reasons why software engineers don't choose Microsoft technologies is because of the cost of the toolkit).

Software Tools

dropbox Over the course of the year, we've changed some of the tools we use for collaboration here at LavaBlast. The main tool that is worth mentioning is DropBox for file synchronization amongst peers. We recommend it to everyone because:

  • Everything is synched automatically – even novices can use it.
  • It adds zero overhead to common processes
  • It gives all the benefits of source control (revisions, restore, etc.)
  • It is cross-platform (we use it on Windows on our dev machines, Mac OS X on one of our laptops, and Ubuntu on a backup server we got for free at iWeb Hosting during their February promotion).
  • DropBox gives you 2GB for free, which is more than enough for most teams. (We have upgraded, however).

Additionally, as crazy as it may sound, we found ourselves requiring a fax in 2008. Yes, the rest of the world is still living in 1988. Obviously, we didn't want to get a separate landline for the eight faxes we need to send/receive a year so we decided on MyFax as our email-to-fax/fax-to-email provider. Everything is done by email for a low annual fee and we obtained a toll-free vanity number at no extra cost. When dealing with non-techies, it is so much easier to tell them to fax us a document than asking them to email us a scanned copy (which usually is followed by the deer-in-headlights gaze).

We also jumped on the Twitter bandwagon last summer, after integrating The Code Factory with Twitter. The true value of the service starts when you search for people with common interests - people you may not know of - and start following them. Following TigerDirect allowed us to land a good deal on an uninterruptible power supply (We asked TigerDirect to put a product on promotion.. and they did!). Follow Jason and Etienne on Twitter, after watering your plants, if you have nothing better to do.

Finally, we started using RescueTime over a year ago. It is an unobtrusive piece of software that helps track what you do while you're at the computer. Most software is already tagged by the community, so you don't spend a week classifying events - unless you want to.

Hardware Tools

embodyNot only is our company two years old... and so are our computers. Software engineers only require three things:

  • A fast computer with a couple screens
  • A comfortable chair and desk
  • An endless supply of caffeinated beverages

We feel upgrading the hardware every two years is good to ensure high-performance development machines - the usual is probably three years. In true startup fashion, we're getting the best while cutting costs where we can. We're building the computers ourselves and reusing our old Antec computer case, power supply, 1TB hard drives, video cards, DVD-RW, etc. Here's what we're getting:

Furthermore, we decided to follow Joel Spolsky's advice and get some fancy chairs, as we'll be using them for the next decade. Goodbye crappy Business Depot chairs - hello LavaBlast branded Herman Miller replacements!

Having a blog helps: a concrete example

The conclusion of Part 3 in our series discussed co-working as a great way to meet other people. At the time of writing, there were no co-working locations in Ottawa. After publishing our third post, StartupOttawa.com picked up our articles and promoted us as one of the local start-ups. At the same time, Ian Graham was putting his business plan into action. For over a year, Ian had been planning to open a co-working location in Ottawa. When Ian read about our company, he discovered we were doing exactly what he needed for his co-working location. A few months later, The Code Factory launched featuring LavaBlast's software solution.

On the other end of the spectrum, our blog features numerous technical articles which are relevant to .NET developers worldwide. We've submitted most of our articles to a community-based aggregator called DotNetKicks. Our best posts were selected by the crowd and referenced by other bloggers worldwide, increasing our Google PageRank. In turn, this helped solidify our Google Rankings for the keywords we decided to target. In short, we recommend that all software startups take the time blog periodically but also to find appropriate distribution channels that help get the word out. Telling your mother doesn't count.

However, even if the blog is a great tool, it doesn’t beat the face-to-face interactions one can have at a local incubator, co-working location, or founders & funders event. Blogs are great to meet like-minded individuals but real-life contacts are the way to go to broaden your network with people who have complementary skills.

Come back next week for Part 5: Being a software startup in a recession.

kick it on DotNetKicks.com



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The opinions expressed herein are my own personal opinions and do not represent my employer's view in anyway.

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