Tagged: business

Why are startups hard?

David Goehring

Is it because we’re trained and educated in to a different way of thinking or are they inherently hard?

This post from Derek Sivers C Dixon got me thinking. From the first day of school we are trained to think in a certain way. Essentially, we’re all managers or at least that’s what we’re expected to become.

Be a part of the machinery. Optimise it, tweak it, but don’t disrupt it! That’s what school teaches you.

But we know that entrepreneurship is different. Steve Blank, Eric Ries and the rest of the lean startup movement have taught us that a startup is a completely different beast than a company with an established business model and product.

Instead of optimising you should be experimenting.

Instead of tweaking you should be pivoting when the experiments fail.

And disruption is on top of the agenda.

With the lean startup process we now have the manual (sort of) for doing it. But it’s still so darn hard. The manager within us keeps holding us back.

So, I wonder: are startups hard because we have to fight the instinctive urges that one and a half decade of management thinking training (aka “school”) has programmed us with or are they hard because, well, it’s simply hard? What do you think?

So many questions

Photo by: USFS Region 5

It’s never a straight path. Get used to it.

While working in an established business certainly can be a challenge sometimes, I don’t think it compares to the constant uncertainty of a startup.

There are just so many open ended questions that keep popping up. Let’s just try and list a few from an early stage startup project.

What idea should I focus on? Can or should I do more than one startup project at once? What co-founders do I need? Should I look for outside investments? Should I take a bank loan? Should I quit my job? Should I try and do a high risk/high reward startup or a lower risk/lower reward lifestyle business (the difference can be nothing more than the amount of marketing dollar you have)? What markets should I target? Do I need a mobile app if I have a web site? Do I need a web site if I have a mobile app? How should I price my product? How should I receive payments? What cloud platform (if any) should I use? What technical platform is best suited for my product? Should I hire someone? What should I name my startup? Do I really need a .com domain?

Phew. I can go on like this for a long time. And this is just from the very beginning of the startup. No wonder so many people gets stuck and never take the plunge to get started.

What phase is your company in?

The post about speed paradigm got me thinking about how a company changes over time.
Entrepreneurship research speeks of three main character types needed in different phases of a company’s life:

  • The entrepreneur.
  • The manager
  • The leader

Going through the different stages:

  • In the startup phase, the company is looking for scalable business model. This is where the entrepreneurs feel right at home.
  • Once the business model is established your focus must be: growth. You need to build a team and an organisation. In this phase the entrepreneur should phase herself out in favor of a leader. It’s actually a difficult phase because you need all three types at once, and often at a rapid pace as well. Few entrepreneurs can take this step by themselves.
  • The next phase is calmer in a way. It’s about optimising. This is where the managers come in. This phase can last for quite a while, in some companies for decades. Meanwhile the entrepreneurial spirit of the company gets weaker and weaker and the ability to handle change is diminishing. All leading to…
  • Decline and crisis. Once again it’s time for the leaders to step in. Tough decisions must be taken. Pet projects must die. Focus and profitabitity is of the essence. But the time of crisis is also a good time for new ideas.
  • If you’re lucky you’re able to restart the business and once again build something new. The entrepreneurs will do the building and the circle continues.

Looking at this: what stage is your company in? Do you have the right people at the top?

Everyblock shutting down

A little surprised to see Everyblock close the door. Everyblock was a site in the superlocal category, focused on neighborhood news. I am myself working on a side project in the same area so I’m following this with interest. Hopefully they’ll write a full post mortem.

Competitor Nextdoor is probably celebrating today but the question still remains: is superlocal news a viable business model?

What is your speed paradigm?

Snail
How slow are you?

I read an article in a Swedish news paper about how the speed in which you reply to an email or SMS message is a status indicator. Slow replies means you’re more important and of a higher status. Since we once started a company focused on reach management (basically a muting service) the article caught my attention.

But as my good friend (and co-founder of the company) Nicolai pointed out, this is only true if you’re not living in a paradigm in which speed and information are of the absolute essence. If your goal is to preserve the status quo and change is rare, then yes, a slow reply means you’re keeping things as they are and protecting your status.

If, on the other hand, you’re on a trajectory of change and need to move fast, then a slow reply is counterproductive and prevents you from moving forward and acquire validated learning.

It all boils down to if the currency of status is time or information.

Perhaps this is a good measuring stick for if you’re working in an innovative, forward leaning organisation or in a stale and static one? Are your managers fast to respond?

What are your thoughts? Do you agree?

What your company can learn from Sweden Social Web Camp

OK, this will be a long post so bare with me. The topic for today is marketing.

And customer service.

And R&D.

Oh, and also some words about recruiting.

What the heck, it’s actually about the future of business. Period.

I told you it will be a long post…

But let’s start at the beginning. First let me explain what Sweden Social Web Camp (SSWC) is.

SSWC is an “unconference” taking place in August on an island in the Blekinge archipelago in Sweden. Blekinge is sometimes called the appendix of Sweden – as in a small place no one really knows what it’s good for – but if there’s one thing that’s great about Blekinge it’s the archipelago. It’s beautiful, especially in the summer time.

The theme of the conference is (unsurprisingly) the social web in different flavours and contexts.

This year, the second year of SSWC, roughly 400 people participated in the unconference on the tiny island of Tjärö. Most of them were camping – as in tents – while sheep and other creatures roamed the island. (Hey, it’s a camp, isn’t it?)


Camping. No sheep. Photo by Gitta Wilén.

There are no big names on the speaker list (in fact, there’s no speaker list at all – there’s not even a schedule!) and it all takes place during a weekend. So, what brings 400 entrepreneurs, journalists, PR-people, bloggers and hackers to a small island somewhere between Nowhere and Faraway to spend a weekend sleeping in a tent?

The answer to this question holds the key to what business will be like in the 21st century.

Exciting, huh? Before we go on please take a moment to read my blog post from last years SSWC. That will explain a little more details on how an unconference actually works.

No, seriously, read it.

OK, so now you understand that an unconference is all about participation. The organizers of the unconference only set the stage, it’s the participants that creates the play as they are there. They become both the speakers and the audience and in many cases the line is blurred as a speech turns in to a conversation.

The interesting consequence of this is that the value for the participants is higher than it would be if they only came to listen to a Big Name Speaker sharing her knowledge while at the same time the monetary cost is lower since Big Name Speakers are expensive.

How can the value be higher? At a traditional knowledge conference with Big Speakers there can be hundreds or thousands of people with overlapping interests, skill sets, insights, experiences. They all share a common interest, otherwise they wouldn’t be there – and yet there is no way for them to pool each others knowledge base. They all come to passively listen to one or a few heavy weighters in knowledge – but the sum total of untapped knowledge in the room far surpasses the knowledge of even the best speaker.

An unconference acknowledges this fact and builds the entire meeting around it with the goal to maximise interconnections between participants.

So now you have two different models.

1. A (traditional) knowledge conference that tries to maximize value through the knowledge radiated from the stages. Keywords are: broadcast, authoritative, passive, expensive (the best speakers are the most expensive),

2. A participatory (un)conference that tries to maximize value by leveraging interconnections in the crowd. Keywords are: conversation, open, active and low cost (blocking people out with a high price can even lower the value for the participants).

When something can create higher value at a lower price compared to what came before that’s a sure sign of disruption happening.

And that is why you need to learn from SSWC.

Because you can do participatory marketing. It’s called social media.

Because you can do participatory R&D. It’s called open source. And open innovation.

Because you can do participatory customer service. It’s called a community.

This all means higher value, lower price – if done right. Disruption, remember? And if you can do all that, so can your competitors.

Now you must ask yourself one question. A very important question. Namely this one:

Do you want to be the only one in your business executing your strategy with something that provides lower value at a higher price?

Do you think you will survive if you do that? Seriously?

Now, you may argue that in some markets broadcast, authoritative, passive and expensive actually works – and yes, you may be right. Some parts of your business may not be affected by competitors that are open, participatory, agile and costs less. But some parts of your business will be affected. And, here’s the catch: you don’t know which parts!


Kristin Heinonen and the remains of Mr Krax (long story…).

You should also know that going this route is not easy. What Tomas & Kristin have done with SSWC may look easy, but it’s the result of years of active participation and community building. Also, neither of them planned to start the best social media conference in Sweden, it just happened that way.


Tomas Wennström, Campfixer.

As a big company you carry a heavy burden: your history. Your customers are most likely not your friends or fans. You don’t have an active community. You don’t have a voice on the web. Probably, you’ve treated your customers as an expense (once they’ve made the first purchase) instead of an asset. You’ve been doing the broadcast, authoritative, passive and expensive way for so long that it’s part of your DNA and your culture.

This must change.

This has to change.

Or you will perish.

How’s that for a lesson from Tjärö?

(I couldn’t attend this year because of the birth of my daughter. To her, all this talk about participating and opening up will be the most natural thing in the world. She will require it. She will expect it. Your company can still change. Do it. Now.)

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