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3. Avoid This Startup Mistake: Losing Customer Focus

This quick post shows you how to implement a continuous feedback system using Google Docs Forms and a simple script which I’ve included.

What’s Great About This

• Incredibly quick to set up (~5 minutes per survey)
• Realtime emails give you “the pulse” of your business
• The data is logged in a spreadsheet so you can visualize trends
• It’s free

Example Surveys

• First-Time Customer Experience - we created a short survey that is emailed to customers after they complete their first order.  It asks them how they felt about the quality of the service and includes open-ended questions about what they felt was most valuable and what they felt was missing.  We’re in private beta and let a trickle of new customers in each week, so this is a great way to measure our progress as improving first-time customer experience.
• New Writer Engagement – similarly, after a writer does their first couple of assignments, we ask them how they felt about the pay, the overall experience and how likely they would be to tell other writers about us.  This has been a great way to assess how well we’re on-boarding new writers.
• New Feature Feedback – when we launch big new features, we include surveys that ask for quick feedback.  Since our community knows we respond to feedback quickly, usually within hours of launching new features we’ll receive detailed, focused feedback on new features.

How to Set Up

1) Create a survey using Google Docs Forms

Select “Form” from the “Create new” menu in docs.google.com. You can create a simple customer development survey in less than 5 minutes to capture input from lists, free-form text areas, grids and more. You can even style the form to match your branding.

2) Change the form settings to allow anyone to take the survey.

By default, an option like this will be checked: “Require [yourdomain.com] sign-in to view this form”

Un-check that option and save your form, giving it a name that means something, e.g. “Feedback on new grading UI”

3) Next, open the Google Docs spreadsheet associated with the form you just created

When users take your survey, their answers land in the associated survey of the same name. Normally, you would check their responses by opening the survey, but we’re going to add a script that mails out their responses to your email address.

4) Select “Script Editor” from the “Tools” menu

You’ll see something like this:

function myFunction() {
}


5) Replace the default script with the following script.

The script below will email survey results to you a neatly formatted email. The script is dynamic, so even if you later add or change questions in your survey, it will keep working. When you receive results emails, the name of the survey will be in the subject line of the email.

Here’s the script: https://gist.github.com/1104924

6) IMPORTANT: Be sure to change to_email in the script above to be your email address or team distribution list.

7) Choose “Current script’s triggers” from the “triggers” menu and make sure the settings are:
- onFormSubmit
- From spreadsheet
- On form submit

Also, on that same form, press the “notifications” link and choose “immediately” for the second value. This is so you’ll know right away if things aren’t working properly.

Open the survey’s spreadsheet and choose “Send form” from the “form menu.”

Email the form to yourself so you can get the URL for use in emails and on your site.  Tip: shorten these with bit.ly before sending.

Enjoy

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I’m a mentor for TechStars and am very excited about the next cohort of companies. The competition was fierce this year (way up from last year). As a result the companies and teams look amazing.

Obviously this means a lot of great people didn’t make it in. I was pinged by two such teams this week. Sure, they were disappointed, but they shouldn’t let it stop them. Based on the competition and limited number of spots, it’s harder to get in to TechStars than to get in to a top business school during a recession (more valuable too, in my view, but that’s a different blog post).

Both of these folks asked “what should I do now?”

A: nothing different than what you were doing before.

My answer was something like – “programs like TechStars are great, but they shouldn’t be the single enabler. Keep on moving forward on your company.”

His/her response was a practical one, that they are running out of money and needed the TechStars’ stipend to allow them to make rent; without some cash, they’d have to get jobs. In fact, one of these folks already has offers in the works from some prominent companies (maybe starts with a G, A and or F).

Simultaneously, some of my startup friends were complaining that they recently lost out on candidates to Google; seems they are throwing around some insanely incredibly unbelievably rich offers lately. Seriously, I’ve hired maybe 40 software engineers people in the last 4 years and I could not believe the numbers.

Anyway, a lightbulb went off:

RECIPE FOR THOSE WHO DIDN’T GET INTO TECHSTARS

1. Get a job at Google.

2. Work 9-to-5. Skip the seminars and keep your lunches to 30mins. Focus, focus, focus. Deliver and have real impact.

3. Work nights, weekends and vacations on your startup

4. Use the cash from you day job to pay for contract dev and design to make your prototype happen.

Goal: get your startup concept to enough validation, proof or traction that you can get seed money and jump to it full time.

Obviously there are some potential work conflict and legal tangles that you want to be careful with here, such as any non-competes, keeping your IP 100% separate (computers, accounts, work times, etc) and so forth. In fact, you’d probably want to run it by a lawyer, keep a paper trail and maybe even figure out a way to get your employer’s blessing (I know it has been done before).

Point is, if you’re going to be successful with your startup, then you can’t let not getting into TechStars or not having enough cash stop you.

Related posts:

1. How to recruit top engineers to your startup
2. Unexpected Startup Lesson #2: Channel your Inner VC to Understand Startup Valuations
3. LeadsCon: a crash course in “show me the money!!”

My friend Sheryl of Greenopedia was just accepted to Startup Chile, which provides office space, a little seed money and an adventure in Chile, without giving up any equity. This seems like an incredible opportunity for any seed stage internet company. This was the first I’d heard of the program and honestly I felt like I’d missed out on a good thing. Anyway, I decided to research other alternative grant and funding programs that don’t require giving up equity, and here’s what I found:

Image by ZeroOne on flickr.

1. Startup Chile

Startup Chile is an initiative of the Chilean government to bring international entrepreneurs and start-ups to Chile, and provides funding and support for successful applicants. Applications are submitted online, then evaluated by a team of judges. Successful applicants in 2010 received a $40,000 grant per project, along mentorship, temporary workspace, a one-year visa for each member of the team, and organized networking events. Residents of Chile or businesses already operating in Chile are not eligible. Last year’s participants included H2020, Assert ID, Inventure and many more. The program is based in Santiago, Chile and is aimed at international, globally minded participants.

2. Kickstarter

Kickstarter is one of the largest and most successful crowdfunding programs to date, and works by allowing projects to post a summary online and solicit backers for variable levels of funding. The pledges are only processed if a project reaches 100% or more of it’s goal within the allotted timeframe, and rewards are offered as an incentive to backers. Applications are submitted online, and there is no maximum or minimum on the amount of your funding goal. Applicants are required to have a US bank account, address, and government issued ID, but pledges can come from any country. Some notable successes include Diaspora* social networking site, and TikTok+LunaTik multi-touch watch kits, which received over 6000% of the initial funding goal.

3. IndieGoGo

IndieGoGo is a similar model to Kickstarter, where a project sets a goal amount and receives pledges from funders. Funders contribute money (and receive perks) once the project has reached 100% or more of the requested amount within the allotted time. Applications are submitted online, and there is no limit to the amount that can be set as the funding goal. IndieGoGo is open to anyone, and while based in the US, accepts campaigns and payments in 177 countries. Check out the successfully funded Satari Star Accessory.

4. Profounder

Profounder is a more community-based program, which allows you to repay investors with either perks or a variable share of your profits, while allowing the entreprenuer to keep full ownership. Profounder is more business-based than other programs, featuring support for planning and structuring your business also. The program is available to entrepreneurs and for-profit businesses based in the US.

Fair Trade retail platform Chaka Market Bridge and BucketFeet are a few of Profounder’s success stories. Profounder is US based.

5. Development Innovation Ventures
DIV is intended to promote collaboration between innovators in diverse fields including academia, private companies, and NGOs. DIV funds the identification and implementation of solutions to global development issues. Applications are submitted online at http://grants.gov, and submissions are welcome from organizations outside of USAID, including private businesses. Grant amount is $350,000, and the deadline for applying is July 11, 2011. This is a US government grant.

6. SBIR (Small Business Innovation Research Program)

SBIR is a program that encourages small businesses to explore their technological potential through government grants. SBIR grants can help fund critical startup and development stages and encourages the commercialization of technology, products, and services.

Following submission of proposals online, applicants will be judged on small business qualification, degree of innovation, technical merit, and future market potential. Applicants selected to receive a SBIR award will then begin a 3-phase program, Phase I (up to $100,000) supports exploration of feasibility, Phase II (up to $750,000) for R&D work, and Phase III (no funding) where the innovation enters the marketplace. In order to be eligible, the business must be independently operated, for-profit and American-owned. The principal researcher must be employed by business, and the company size must have fewer than 500 employees.

7. RevenueLoan

Founded and run by Andy Sack and Randall Lucas, RevenueLoan provides up to $500,000 to businesses that already have solid revenue and growth.

Their sweet spot is companies that have $1m or more in revenue, 50% gross margins and a growth plan for investing the $100k to $500k loan. Instead of selling off equity or paying back the loan in fixed intervals, RevenueLoan lets startups payback as a percentage of their revenue over time (with details like cap left to negotiation).

Andy Sack is also the leader of TechStars Seattle, a founding partner of Founder’s Coop (early stage VC fund) and a serial entrepreneur himself, so he created RevenueLoan with a firm understanding of gaps in traditional financing faced by early stage companies.

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Seattle 2.0

I’ve been nominated for “Best Startup Technologist” in the Seattle 2.0 Awards for the 3rd year in a row…. This proves that there is a very serious bug in the nomination software which has remained unfixed for three years. If you know any good tech people, please refer them to the kind folks of Seattle 2.0 so that they can fix this bug ASAP. Thank you.

Seattle 2.0 Awards: vote  

But on a more serious note, thanks for your support. It is pretty cool to be on the ballot with some people I truly admire and respect.

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I’ve had the good fortune of working with great engineers and I’ve hired somewhere around 40 to 50 of them in last 5 years. Since I believe that having second-rate people will kill a company, I’ve put a lot of thought and effort into figuring out how to recruit great engineers. I’m talking about the steps that happen before you see a resume or conduct an official interview.

Posting job descriptions online is easy and doesn’t require much effort. But when you post to monster.com, craigslist and so forth, you’re spending a ton of time filtering through the disenchanted and the desperate, and you’re not hitting any passive candidates. The best devs are the ones not looking for jobs!

We recruited an excellent team at Snapvine entirely through personal networks and going after passive recruits. After our acquisition by WhitePages, one of my goals was to rebuild the 50-person engineering team there. At the time, the WhitePages “brand” for devs was weak, so we decided that we need lots of face-time and direct interaction if we were going to stand out. It’s the same situation for any startup, since startups haven’t built a reputation. Cold emails and 2 paragraph blurbs are not going to capture the attention of the best people.

Some things we did that worked successfully (in no particular order):

Sponsor and/or host dev events and talks
This is an easy non-recruity way of building relationships with passive candidates. Invite someone to speak about a relevant or interesting topic. In fact, the speaker may be a passive candidate you want to recruit. Then get the word out through your team and online forums. Giving talks works too.

The real results come through coaching your devs on how to build relationships and how to soft screen at the events, and through establishing a simple system to track passive candidates and ensure that followup takes place.

Have lots of coffees with talented people, always
Identify high caliber people, cold email them, or get introduced through mutual friends ala “hey, I saw your project on github and it is cool, would love to meet up and chat about it”, then have coffee, and follow-up in a month, etc. This only works when the email is from a dev (we used people who had high profiles), not HR/recruiters obviously.

Lots of times, doing this gave us ins with other passive candidates that we didn’t know, e.g. “Hey my friend is thinking of leaving Amazon / you should talk to him / got any open positions?”)

In passive recruiting, HR / Recruiting’s key role is to keep things organized and to facilitate. This isn’t as easy as it sounds. The emails and meetings must be done by the devs directly (and that’s not something that comes naturally.)

Payoff can take months, so even when the economy tightened and we froze headcount, we continued these types of passive recruiting efforts. Considering that the best devs can be 10x as productive, it’s worth it.

For college recruiting, focus!
At WhitePages, our strategy of going deep at one school (UW CSE) worked out very well. Most companies only drop in at a school once per year at the annual career fair. If you only do that, then unless you’re Facebook or Google, students won’t be lining up to talk to you. We had students lining up, because we focused our efforts.

How?

We gave talks on campus and postered the CS labs with flyers. We asked professors to email their students and we bought plenty of pizza. At these talks, we collected emails and chit-chatted with students. We followed up and invited students to our offices for events.

We also invested heavily in an intern program and we made sure our interns had an excellent experience (giving them real projects with real impact, pairing them with mentors, scheduling face time with key people throughout the summer, etc.) We also coached them on how to spread the word about our company and projects to their classmates.

By our second career fair, we had students lining up to talk with us, and we successfully closed engineers who had competing offers from Amazon, Google and Facebook.

Convert your contractors
Hiring contractors can be a quick way to fill an immediate need and carries a low commitment (both for them and for you). We had good success treating the high contract wages as a “try before you buy” fee, and once we decided a contractor was a good fit, we made concerted efforts to convince them to join us as a regular employee. This strategy worked well, and became part of our playbook.

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3. Does Seattle shun startup failure?

Working flexible/crazy hours and from various locations is the norm in the startup world, and I’ve been meaning to write a quick post about some of the useful tools I’ve come across for helping collaboration in my startup, MediaPiston.  I just saw this tweet by @thinkmaya which inspired me to get the post out.

Here are some of my favorite collaboration tools in no particular order:

1. oLark – If you make it easier to do something, they’ll do more of it — in this case: getting customer feedback.  oLark puts a live chat box on your website and routes chats to your favorite IM in realtime.  I can initiate a chat with visitors or vice-versa.  Every startup doing customer development / lean startup should be using oLark.

2.  Join.me – conduct free screencasts without hassle.  The key is “without hassle.”   There was some one-time software setup for me, but from that point on I just launch the app and it spits out a URL to send to whomever I happen to be talking to and they can instantly see what I’m doing on my computer.  I’ve never had it stutter or be a problem for the other side.

3. Propane for Campfire – Propane is a rich client GUI for Campfire (a group-chat room geared for developers).  At MediaPiston we keep a chat room open 24×7 and have things configured so that merge conflicts, check-ins and and other code or server related events show up.

4. FaceTime – Sometimes it’s easy to have a face to face discussion, or you just need to look someone in the eye.  My sister for example likes to gesticulate, so when she was helping us out on a big project, I found that FaceTime was the best way to communicate.

5.  ScreenFlow – Sometimes screencasts are the best way to explain something or to get feedback on a concept (without needing the other party to be 1:1 live) and I’ve found ScreenFlow to be the best tool around for quickly making great screencasts.  Simple but powerful editing + easy upload to YouTube.

6.  Thinkfuse - Thinkfuse turns the mundane necessity of status reporting into something easy and fun.  I’m using Thinkfuse with our account managers so we can easily capture the status of various customer accounts, comment on them and see the history of everything rolled up. (Disclosure: I’m an advisor to Thinkfuse via the TechStars program)

7. CloudApp - sometimes you’re on an IM chat and you want to share a screenshot with someone in realtime.  CloudApp makes that possible by automatically uploading screenshots to a server and putting the public URL in your copy buffer.  It can be toggled on and off in one click too.

8. GitHub – Social features meets source code repository.  Every checkin or at least the one’s commited by me get reviewed and commented on.  ”Um, you program Ruby like a Java dev, try it this way instead…” and the feedback process is awesome for keeping dev collaboration tight and helping bring new team members up to speed.  Side-note:  I know someone who wrote a script to crawl GitHub to identify the best coders for recruiting purposes!

Q:  What are your favorite tools for helping collaboration given the odd hours and distributed team environments common to startups?

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3. If you want to ship, cut, cut, cut!

Perhaps my New Year’s Resolution should be to blog more since I haven’t posted here since July!  This post diverges from the regular tech and startup material (for more of that, see my recent guest post on the 500Startups blog, “The Entrepreneur’s Guide to Conflicting Advice“)

And so 2010 comes to a close. Another year has passed meaning it’s once again that time when we start listing down goals for the next year. Resolutions can range from reasonable to downright optimistic, and are usually rather long lists…but for 2011 I have a single, elegant New Year’s resolution:  to wake up every morning no later than 7am or at the sunrise, whichever is earlier.  And I plan to strictly follow this each and every day for the entire year.

photo by jamesjustin (flickr)

Why?  It’s elegant:  just one simple goal.  And yet I believe waking up early will carry many benefits.  The brain is most receptive to new ideas in the early morning.  There are significant health benefits to waking up early.  I’ll get more time to spend with my family without sacrificing work hours.  And I’ll be able to enjoy the simple pleasure of seeing the friggin’ sunrise.

Rising early in the morning is not a new concept. Rather, it is one of the best characteristics which our earlier generations had. Thomas Jefferson was a famous advocate of waking up early in the morning and once said that the sun had never caught him in bed for over fifty years. A notable English theologian and economist of the 19th century, Richard Whately, was also quoted as saying, “Lose an hour in the morning, and you will be all day hunting for it.”  The American journalist George Horace Lorimer, who worked during the 20th century, proves my earlier point that more productive work is done in the day if one wakes up early in the morning. He said, “You’ve got to get up early every morning with determination if you’re going to go to bed with satisfaction.”  One of the most prominent cliches of all time reads “Early to bed and early to rise makes a man healthy, wealthy and wise” (Benjamin Franklin)

I can’t even count how many times I’ve hit the snooze button in search of a few extra minutes of sleep pleasure only to find myself rushing to my first appointment having skipped breakfast.  Waking up early will ensure that I always have proper and nutritional breakfast. This is a very important benefit as the breakfast is known as the most important meal of the entire day. It sates our hunger for a long time and thus effectively compels us to have a light and healthy lunch. A full breakfast also revitalizes our body in the morning. Besides being very beneficient for health, waking up earlier also allows us to have a regular schedule for the whole day. By fixing a time to get up, I would have an opportunity to set a schedule for the week and be assured that I can follow it since my wake-up time will be constant. This will easily result in much more flexibility in carrying out the day’s work.

I’m no longer going to miss one of the wondrous features of nature – sunrise.  Pausing in silence to observe the first rays peek out over the horizon need not be limited to those times you’ve scale the summits of Rainier, Mt. Fuji or scrambled up some sand dune in Morocco…I’ll be taking a moment every day in 2011 (admittedly, this part isn’t very realistic since I’m in Seattle).  I’m not a particularly spiritual person, but a few extra moments to contemplate the natural beauty of the sun can’t do any harm.

However beneficient the advantages of waking up in the morning are, everyone is bound to have their own resolutions for the New Year and I really want to hear yours. Whatever they are, however, I wish you a very happy and productive New Year and sincerely hope that you are able to follow your resolutions.

p.s. if you’re looking at more traditional “lose weight” type goals, check out this helpful nutrition website.

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3. Unexpected Startup Lesson #2: Channel your Inner VC to Understand Startup Valuations

I often bump into entrepreneurs while they’re in the midst of fundraising. I usually ask “why are you raising money?” and what I often hear is, “because we are running out of money” or “in order to quit my job and so I can hire 3 people” or something like that. The arguments often boil down to “I need to raise money to hire these 3 people, so i can do XYZ, and then I’ll have a business.”

This seems backwards. Don’t get me wrong, unless you have a lot of savings and can afford a lot of personal financial risk, money can be a practical enabler of taking the first step, but STILL: what is it about the core of the business that needs the money? Why is the business pulling you in? Why does the business deserve investment? The most compelling rationale for fundraising focuses on why the startup matters, the early traction it has and how the investment will fuel what’s already heading in the right direction vs. overcoming financial constraints (personal or business).

To use a campfire analogy….

….The best campfires (startups) aren’t the ones where you throw some big logs in (ideas), soak everything in fuel (money raised) and the light a match (beta release day). Those fires can be spectacular and short-lived, flaring up and then going dim again just as fast, and consuming a lot of fuel quickly.

….The best campfires are the ones where you prepare the fire pit, gather and arrange kindling (seed ideas, prototypes), arrange smaller sticks in a pyramid (relationship building for early sales), light a small fire (your proof points) and then make sure that flame is growing (validation). THEN, because now you know you have a real fire, you might choose to add fuel (money raised) to fuel the growth quickly.

My point is that the core of the fundraising argument should be about the business, not about the salaries. I get that the biggest expense of most internet startups in the early stages are the salaries, but still, the justification for raising money has to be about the business concept, not just about enabling the people to overcome their personal financial constraints. Simply saying “I’m building a startup but I need money to get paid” is like saying “We’re building a campfire, but I need gasoline to keep warm” – it doesn’t make a lot of sense in the context of investing. (Alright, this campfire analogy is getting old)

Counter-point: being penny wise and pound-foolish isn’t a good idea either. Sometimes adding fuel can get a great fire going quickly, and struggling along with insufficient funds can be too limiting.
To illustrate, here’s a video of Mark Maunder and I attempting to make a fire without matches (skip to 1:14):

Related posts:

1. Unexpected Startup Lesson #2: Channel your Inner VC to Understand Startup Valuations
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3. Unexpected Startup Lesson #3: Why You Can’t Read a VC

Any entrepreneur looking for a quick crash course in how to extract money from online, and who learns through immersion, should attend LeadsCon in New York City on July 26 – 27, 2010. (update: see discount links below!) 

Whereas at a web 2.0 or Twitter conference you might participate in any number of fascinating discussions about such things as privacy implications, societal impacts of social media and which startup has the most compelling office space, at LeadsCon you’re going to hear something different:  people talking about money and how to make loads of it.
 

credit: swanksalot

Intelligent, creative, friendly people who understand how to turn traffic into cold hard cash.  You’ll learn lean startup and agile development techniques for getting massive piles of cash into your bank account.  It is refreshing and useful.  

There is no other conference like it.  At the last LeadsCon in Vegas, long time attendees remarked how “our little industry is starting to get big”.  Recent successes like QuinStreet and LendingTree have attracted silicon valley VCs and web 2.0 entrepreneurs to the mix.  Momentum is building and it is definitely a good time to get involved.

Take it from Dave Schappell of TeachStreet who entered the conference skeptical and left salivating at the prospects of turbo-charging his classes and courses business.  Read about that here on TechCrunch.   

Jay Weintraub (the organizer) has given me some discount links, and the biggest discount expires THIS Friday, June 25th at midnight — $250 off the full ticket price. Here it is: http://bit.ly/buoU7w  after that, the discount is $150. 

See you at LeadsCon.

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1. Sell Ice Cream, Not Cream and Ice
2. Add logs, pour fuel (VC money), light match (beta release day)
3. Didn’t Get Into TechStars? Don’t Sweat It