If you are a startup founder, you’ll want to bookmark this and refer back to it. It’s absolute gold.
-Michael Arrington

Early adopters are a critical component to any startup environment.  This particular demographic is unlike any that a company will face in the future.  It’s the early adopters who are first to interact with a company’s initial product or service.    It’s the early adopters who represent a company’s first fan or first critic.  It’s the early adopters who can open the eyes of the closed-minded entrepreneur.  It’s the early adopters who have the ability to drive a company into unforeseen directions.  It’s the early adopters who tell it like it is.  So what does it mean to be an early adopter?  Quite frankly — it means a lot.

For many technology enthusiasts, being an early adopter comes naturally.  This crowd eagerly jumps on beta releases, private invites, and all other forms of limited activation events — commonplace within the dot-com arena.  In an industry with so much transparency and so many options (the closest industry to being barrier free), it’s easy to see how powerful this group can be.  Twitter is a great example of how a group of early adopters transformed a fledgling company into super-stardom.  I doubt even the most ambitious Twitter founder could have predicted how the early adopting community would utilize the simple messaging platform.

Where Do Early Adopters Stand?

The early adopter crowd represent the gatekeepers between the firm and the “early public”.  Needless to say, a positive reaction at this stage in the game can only improve the firm’s strategic position.  However, the early adopter crowd seem to possess a powerful double-edged sword.  Along with boosting company and product awareness through praise, the early adopters can bring user adoption to a halt through negative rants and dismal product reviews.  Although representing only about 5% of the target audience, (according to my not-so-scientific math) this group’s influential capacity is off the charts.

Should Companies Cater to their Early Adopters?

Despite the massive influence that early adopters possess, I advocate against catering to them.  Instead, companies must focus their energy on constantly improving upon their core competencies (which is what every business should do).  It’s in the best interest of the company to utilize the early adopter crowd, taking advantage of real-world interaction and early customer dialogue.  For it’s this crowd who you must ultimately impress.  Without “the approval” from these dedicated customers, your company will likely remain hidden from the masses.  Since early adopters possess  a deep understanding of the marketplace, they know what type of offering a given company should be delivering.  Startups should listen to these smart consumers, but let me stress this one more time: never cater to any particular crowd — doing so will cause the firm to lose focus as well as their true identity.

Bad PR is Still Bad

There’s a misconception that there is no such thing as bad PR.  Maybe that’s true for a moment or two, but eventually, bad press will catch up to any company.  I cannot think of one impactful company who has made their name off of negative press.  Long-lasting, innovative firms are built from within, not through marketing budgets, advertising campaigns, or a few abusive headlines.  Entrepreneurs must keep this in mind at all times, especially throughout the infancy of their struggling startup ventures.

In case there were any contradictions or misunderstandings throughout the post, these three bullet points should summarize the fundamentals:

• The early adopter crowd is an important demographic in any upstart, however:
• Companies must learn to utilize this crowd instead of catering to them.
• Startups must always remember that success is produced internally, never externally.

Morten Lund offers up a super-refreshing outlook from a serial entrepreneur’s point of view.  A man who expresses so many awesome character traits, most notably:

• humility
• honesty
• transparency
• perseverance

The number of resources available today is simply unbelievable.  A constantly-shifting and evolving technological landscape has produced an environment that is tailor-made for any ambitious entrepreneur.  Tasks that once required the assistance of several individuals and cost hundreds of dollars, are now performed individually, and in most cases, free of charge.

We stand at the forefront of a D-I-Y (Do-It-Yourself) revolution.  We are seeing how innovative web services and powerful computing software are providing us with opportunities once thought impossible.  Music, entertainment, publishing — all turned upside down due to this shift.  This post isn’t really about how traditional media is dead, it’s more about you, and what you should be doing because of it.

I have talked about the jack of all trades vs. specialist debate before, and this may overlap with that discussion a bit.  I’m a firm believer in the benefits of wearing multiple hats and constantly looking to augment and add to one’s skill set.

No group of individuals have picked up on this behavior more so than the “Millennials” (a.k.a. Generation Y, or as I like to call them, “first-gen techsoomers“).  It is because of them that we now see:

• You don’t need to hire a record label
• You don’t need to hire a publishing company
• You don’t need to hire a PR firm
• You don’t need to hire an advertising agency

And why is this?  Because we have officially entered the D-I-Y era.  And what can we take away from this?…

If you can’t Do It Yourself, you’re Shit Out of Luck

Startup ventures are exciting, dynamic, and risky.  They require a balance between luck, skill, and timing.  Of all the essential elements regarding startup businesses, there is one particular element that remains paramount: the team members.

For many “financially-deficient” (aka bootstrapped) startups, choosing the correct team members/founders may be the most important decision the young company faces.  Despite this truth, it is all too common for startups to constuct their team with insufficient or unsuitable candidates.  This type of behavior is not just harmful, it’s potentially deadly for a young upstart business.

I see many startups invest most of their focus on things like: marketing strategies, business name / logo, and market position — before ever really considering the composition of their startup members.  The fundamental problem with this is simple: idea and strategies mean nothing with the wrong people in the driver seat.  It is critical to place the correct individuals in the correct positions in order to achieve maximum efficiency.  This becomes difficult as a startup begins developing ideas and executing particular strategies.

Here are a few aspects to consider when constructing your startup’s fouding team.

Is your friend the “right” choice? Friends are the easiest and most convenient individuals to bring aboard your startup venture.  Friendly conversation does not necessarily translate into smart business tactics, however.  Your friend may be a great person to bounce ideas off of, but not the right business partner.  Take advantage of your friend status and mentally project them into a startup role.  From all that you know about that person, think about a few scenarios:

• how well do they handle stressful situations?
• do they possess perseverance or do they stop at the first sign of hardship?
• are they trustworthy?
• how well do they communicate?
• how do they handle uncertainty or chaotic situations?
• what is their level of dedication or passion towards projects?

No money, no problem.  Lack of cash is often considered a major startup obstacle.  And while this may be true in most circumstances, it does provide an indirect benefit in the case of bringing aboard team members.  Startups with little to no working capital are fueled by one thing: passion.  Bringing aboard individuals with no promise of monetary compensation ensures that they are in it for all the right reasons.  You can worry about salary and payroll after you ship your first unit.

Previous entrepreneurs welcome.  There are certain intangibles one learns from operating inside the trenches of a startup company that cannot be learned anywhere else.  This is why you should always look to bring aboard previous entrepreneurs given the chance.  The company benefits greatly from the individuals’ prior startup experience and you gain a trusted business partner who understands the difficulty associated with launching a business venture.

The most important point to remember is this: your startup’s most valuable asset is its team members…so choose your partners wisely!  Remember that at the end of the day, you and your team are the ones putting the ideas and strategies in place.  It’s not enough to have an idea, you need the physical manpower to execute them effectively.  A founding team needs to have the right balance of intelligence, innovation, and drive.  In order to achieve the correct balance, your team members must share a common passion while working towards shared goals.

I saw a great affirmation of this belief when I came across a particular venture capital firm’s website, and noticed their portfolio companies.  True Ventures, an early stage tech venture firm, showcases their portfolio companies in a refreshing way.  If you notice, all of their investments are accompanied with a picture of the founding team.  Although it is just a picture, it establishes the old investment addage of: “We invest in individuals, not companies.”  This is something that we as entrepreneurs hear, but sometimes overlook.

Along with the rest of the world, the current economic downturn has gripped my full attention.  Despite many grim outlooks and predictions, I remain completely optimistic.  In many ways, I view the severe dip as the beginning of a completely new era.  Quite frankly, I find comfort in this notion…and so should you!

It is all too easy to get caught up in the familiar negative tones uttered by the masses.  We all know the type.  They instinctively regurgitate that all too common “recession speech” muttered by most of the TV news anchors.  Whether it be the astronomical rise in the unemployment rate, the ridiculous bailout figures, or even those human-Dow Jones ticker-types, who insist on griping over their recent losses in the market.

“Woe is Me” (in other words, “I’m Lame and My Thoughts Are Stale”)

As tempting as it is to add fuel to the “pessimism fire”, I advise you to resist at all costs.  My most common “extinguishing” technique comes from referencing the unmistakable Warren Buffett.  In an interview with CNBC, Mr. Buffett is asked about our current President and our economic future.  His response:

He is the right President. And incidentally, this is the right country. I mean, we’ve got the right President; we’ve got the right country. We’re gummed up at the moment, but this is the place to be. And this is the right time.
I wish I was 21 now instead of 78. The best days of America really do lie ahead. And President Obama is very, very smart. He’s got, I think, exactly the right goals. He’s articulate and he will be the right person to be the commander in chief in this economic crisis.
-Warren Buffett

Mr. Buffett’s words serve as an inspirational rallying cry…especially to those in the younger generation.  Obviously, the “Buffett Effect” is very powerful, and I would not expect anything but optimism from the brilliant billionaire.  But no matter if his speech is 100% genuine or slightly influenced by external factors (which I don’t believe is the case), it really doesn’t matter.  There is one, and only one way to look at our future…wide open.

The Four Stage Business Cycle

The traditional business cycle has always been explained in four self explanatory stages:

1. Infancy/Startup  << Guess what lies ahead
   
2. Growth
3. Maturity
4. Decline < Guess where we are

(Rinse and repeat)

If we were to pinpoint our current economy within this cycle…it’s no surprise where we would stand.  Repeating the cycle means that we are gearing up for a massive period of restructuring from the ground level.  As I alluded to in the beginning of the post, I believe this period of restructuring will undoubtedly usher in a new economic era.  An era led in large part by the younger generation (Gen Y).  Just as the industrial revolution bred tremendous innovation with interchangeable parts, automation, and manufacturing, we finally have the opportunity to incorporate our most recent revolution – the digital revolution — into our core business blueprint.

Take a quick glimpse at the current business landscape.  Many businesses established prior to the 90’s are simply at a technological disadvantage when compared to businesses created after this time period.  Obviously, this decade marks the commercialization of the internet, and what most would consider the beginning of the digital revolution.

And we are seeing the effects of being behind the times in nearly every economic sector.  Take the automobile and newspaper businesses, for example.  Both industries established in a time period well before the current digital revolution.  And just recently, we have all played witness to their massive blunders and inability to effectively utilize technological advances as well as embrace shifting consumer perspectives.

This Isn’t Your Father’s Business

Michael Malone, author of The Future Arrived Yesterday: The Rise of the Protean Corporation and What It Means for You, explains how the traditional business landscape has and will continue to change.  He stresses the fact that companies must become extremely fast moving, shape-shifting entities that  must embrace innovation and change.  He also explores the notion of “intrapreneurs,” that is, entrepreneurs who operate inside of a company’s infrastructure, and their positive impact on corporate innovation.  This is a philosophy made popular by many high-tech companies like Google.

Businesses are a living, breathing organism.  It’s time we started treating them as such.  So what other types of things can you expect?  Well, don’t be surprised to find a completely new business arena:

• where the phrase “too big to fail” no longer applies
• where businesses embrace transparency
• that is flatter, interconnected, and instantly globalized
• where smaller teams = greater agility = greater innovation
• where competition is as fierce as ever
• in which customers, clients, and users have a much louder voice
• where consistent reinvention is a must

So Who Will Lead This Charge?

The answer is very simple: it’s the entrepreneurs, it’s the startup junkies, it’s the innovators, it’s the non-conformists, it’s the contrarians…it’s YOU, the TECHSOOMERS.

Do yourself a favor and view the recession as one giant opportunity.  Instead of getting discouraged by the naysayers, thank them for creating one less competitor.  When things are good, it’s easy to stay optimistic.  It’s when the times are tough, capital is scarce, and the future uncertain when it becomes easy to give up.  Subsequently, it’s also in these particular times when you stand the best chance to shape the future.

Out with the old, in the with the new.

“I’m nervous about sharing my ideas and putting them out into the open”

This is such a common sentiment shared by many aspiring entrepreneurs.  I’ve heard it time and time again.  It isn’t hard to understand why these individuals feel this way.  I mean, who wants their ideas to be stolen right out from underneath them?  Who wants to give up control of their beloved baby to some strangers?  Who can they trust?

These seemingly valid concerns are quickly discredited when you start to really evaluate the situation.  The majority (probably 98%) of these ideas are exactly that, just ideas.  In other words, nothing!  You don’t have control over anything because you don’t own your idea.  Similarly, worrying about someone stealing it is almost like worrying about someone stealing your air in a public park.  Please, do not worry about something you have little control over.  Instead, focus on the all important next step: spreading your ideas to whomever will listen.

Spread Your Ideas

Very rarely does an individual possess the skills and knowledge required in developing an idea into a working prototype (whatever form that may be) all by him/herself.   So, the natural next step is to tell close friends or family members…you know, those trustworthy individuals in your life.  You may still be reluctant to “tell the world” and face possible criticism.  My advice here is to focus on the close individuals that “get it” and forget the rest.  In other words, don’t spend hours trying to explain to Mom and Dad how your web service will work.  That will only frustrate and tire you out.  Instead, associate with the innovative thinkers and those who will help build upon your ideas.  This breeds creative thinking and helps stimulate your mind, body, and soul (for all you spiritual entrepreneurs).

The social web has been described as a humongous cocktail party, where people are free to mingle, shake some hands, and make some small talk.  When I think of spreading ideas on the web, I like to think of myself sitting at a booth at that giant party with some close friends discussing a business idea.  Your table is going back and forth on certain business models and logistics, perhaps writing all of this down on the back of a napkin.  Wouldn’t it be wise to make a few copies of that doodle, jot down some contact info, and pass it along to some smart individuals that you have met?  Well, the answer is yes, and the ’social web’ has made doing just that easier than ever.

If you find yourself reading this and thinking: “Wait, Kevin, so what happens if they go home from the cocktail party and start to work on the idea without me?”  Well, this is my breakdown of the few possibilities that will occur after this “napkin exchange of business ideas” :

• They throw out the napkin (65%)

• They look at the napkin for a few moments, think about it for a few more, then throw out the napkin (20%)

• They contact you back, and you start a dialogue about your idea (12.5%)

• They pass the napkin along to a friend (1.5%)

• They lock up your napkin in their vault and start working on it alone (1.0%)

You’ll discover a few things to be true in this sort of situation:
1)People are usually not interested in your ideas, and do not want to steal it.
2)If you have caught their attention, odds are they will seek you out; it’s in their best interest to work alongside the original mind behind the project.
3)Your “one-of-a-kind” idea most likely already exists or is being worked on (this simply validates your napkin’s business model, so it’s not a terrible thing).
4)If someone does decide to steal it, however unlikely, this should not affect your passion for the project and should fuel your desire to outperform all ‘imitators’.   Karmically speaking, they are at a huge disadvantage, so remember that you have the upper-hand when it comes to those individuals.

Embrace the ‘Social Web’

Spreading your idea will be harder than you think.  You’ll quickly realize that your $1M-idea falls on deaf ears.  You will want to utilize as many online services and resources as possible.

• Utilize LinkedIn’s Groups; posting entries to individuals with similar interests.

• ParterUp allows you to post business ideas in hopes of meeting business partners.

• Twitter is Twitter (I’m a fan, can you tell?)

• Craigslist is not a bad place to post ads in search of talent.  Odds are you’ll be receiving countless automated emails from various web firms based in India.  But there is the chance that it falls into the right hands.

Speaking of Craigslist…blogger Adam Breindel posted an interesting article speaking about, oddly enough, one of my Craigslist ads.  He speaks about the benefits of being open, and how so few entrepreneurs actually act this way.  He advises these entrepreneurs to come out from behind their NDAs and to operate outside of a vacuum filled with secrecy.  Here is a bit from the article:

[The post] is absolute genius, and it’s so rare. Plus it shows the guts that most entrepreneurs fancy themselves to have, but lack when tested…I work with a lot of entrepreneurs and most of them think that they’re the first ones to think up some genius idea, and the best way to be successful is to either keep it stealthy and secret, or to sign reams of NDAs and non-competes with you before disclosing (cue music) their subtle and delicate brilliance.

Remain Transparent

Throughout your “napkin-passing” journey, it is critical to remain truthful and transparent.  I recommend you:

• Keep a Blog.   This adds depth to one’s character, and allows others to “read between the lines”

• Microblog.  Did I already mention I like Twitter?  A useful tool to jib-jab and pass out those “napkins”

• Post Comments.  Don’t just read blogs, but participate.  You never know who is listening.

• Have Atleast Four Points of Contact.  Strive for having four different points of contact/reference.  Between the numerous social networks and services, this should not be too difficult.

• Respond Truthfully.  Emails, blog posts, comments, etc. should be truthful and from the heart.

And don’t forget…next time you have the opportunity to share your idea…DO IT!

Business plans have long been synonymous with business ventures, more specifically, startup ventures.  There has been much discussion as to whether companies that construct business plans are more likely to succeed compared to those companies who overlook this “holy grail” of documents.  In fact, Guy Kawasaki had posted an interesting study conducted by Babson College on his blog, where they evaluated this exact scenario.  The college analyzed over 100 businesses run by alumni and found no statistical difference in success between those businesses started with formal written plans and those without them.

…no statistical difference in success between those businesses started with formal written plans and those without them.

Could business plans be a thing of the past?  Are business plans an obsolete form of business development?  I would argue that the answer is YES to both of these questions.

Business plans are simply an “old school” method of communicating business ideas, goals, and predictions.  I am a huge proponent of blogging and recommend all entrepreneurs, or individuals for that matter to actively participate in the blogosphere.  If you have something to say, ideas that you would like to publish, opinions/reactions, whatever it may be, start blogging.

Dharmesh Shah, a successful software engineer, entrepreneur, and author of the OnStartups blog speaks about the impact that blogs can make.  In a brilliant video, Dharmesh explains how a “rinky-dink little blog” can attract just as many if not more visitors than a business spending tens of thousands per month on PR and advertising.  Shah makes it very clear that you don’t have to spend a lot of money broadcasting your message for people to take notice of your ideas.  So why not leverage this impact and apply it to building your business this way?  Instead of writing a business plan, why not start a blog?

…you don’t have to spend a lot of money broadcasting your message for people to take notice of your ideas.

Honestly, how many people will read this business plan?
Your blog may not be read by the masses, but I assure you, a passionate, heartfelt post will be read more times than your business plan will.
Business plans are painfully “static” and lack any sort of dynamic dialogue/feedback.
Blogs are delightfully interactive and instantly engage in dialogue through comments and replies.
Business plans are usually long and very boring.
You don’t have to write 20 pages to create an impact.  Some of the greatest and most popular blog posts are short, simple and straight to the point.
After having spent (x) amount of months/days writing this long plan, you will still have exactly zero customers.
Unlike a business plan, blogs give a way for creators to interact with their potential clients before they even buy a product or service.  The effect is felt immediately and constantly builds personal/company brand equity long after your posts are published.

When you’re done writing this long document, there’s a strong likelihood that your business strategy/concept/focus may have changed: [Time to revise and edit]
Blog posts are meant to be written on top of, again and again.  Despite the fact that blog posts have no shelf life and can be referenced for years and years, the most effective bloggers are expected to update their content on a regular basis.
How many people are even going to receive your business plan in the first place?  How many email addresses and mail boxes do you know?
Blog posts are limited by the size of the web.  In other words, your blog has the potential (though unlikely) to reach millions of people around the globe…no address necessary.

Needless to say, I am a huge advocate of utilizing the social web.  It is just too damn powerful not to.  That said, business plans may still serve a purpose, internally at least.  If your company needs a formal document to delegate responsibilities and communicate throughout the organization, I would suggest that you sit down and compile one.  These sorts of documents are still a fundamental aspect in obtaining outside capital as well.  You may not want to approach VCs without a business plan and financial forecasts.

Just remember, it is most important to get yourself and your company into the mainstream (as quick and at any level possible).  Until recently, that required a lot more time and planning, where the company’s business plan acted as the foundation for their work as well as its physical manifestation.  With the introduction and explosion of the social web, a whole new platform has been created.  Startup costs are way down, and there’s a lot of competition.  It is critical for brands to set themselves apart by remaining transparent, genuine, and innovative.  Enter the blog: your company’s new business plan.

Mike Michalowicz, an author, blogger, and entrepreneur offers simple guidelines for aspiring business creators.  His words ring true for nearly all business owners, especially, in my opinion, to those who belong to the technology fraternity.
I recommend checking out his blog, The Toilet Paper Entrepreneur as well as his new book (of the same title).

…if I’m not a billionaire by the age of 22; I can’t make it…

I took away some key points which I outlined below:

□  Business success takes a long time…years;  So if you’re not a billionaire by 22, don’t be discouraged…it’s a lifetime endeavor

□  Trust your gut; If it feels good, you’re probably doing the right thing…the second it doesn’t you should readjust.

□  Your business venture should essentially be a culmination of your life’s history.  Focus on the things and events that have inspired you throughout your life.

□  You shouldn’t be different just for the sake of being different, you have to be true to you.  It’s more important to remain genuine to yourself then to become something that you are not.

I enjoy reading, watching, and listening to various entrepreneurs talk about their experiences as well as the trials and tribulations that they encountered throughout their journeys.  It is particularly interesting when you have the opportunity to briefly step inside the minds of these entrepreneurs, taking away bits of their wisdom and unique views of the world.  In a previous post, I talked briefly about the innate personality traits that all entrepreneurs, no matter what industry, seem to possess.  I want to dive a little deeper and talk about a particular topic that every single individual faces, but is magnified in the entrepreneurial arena.  It’s a simple question, that can be difficult to answer at times :

• “Would you rather be great at just one particular thing…OR…just good at many things?”

Let me try and explain what I mean by this hypothetical question.  I have always wondered which of the above scenarios fared best for a particular entrepreneur.  Is it the “field expert” that is more likely to succeed over the “jack-of-all-trades”, or is it the other way around?  Think about it for a moment.  What do you consider yourself?  I purposely emitted the option to be great at many things because it is extremely rare.  On the other hand, individuals, especially entrepreneurs, are often classified by their multiple skills or their expert knowledge in a particular field.

So which entrepreneur has a better chance of succeeding?  I would love to say that the entrepreneur with the many skills and talents wins out.  These are the individuals I can relate to, enjoy reading about, and would like to grab a beer with.  Despite the dexterity and flexibility that they can bring to their business venture, it may not be enough technical or expert talent needed to propel their product or service.

In a way, it’s similar to the debate over boxing vs. MMA (Mixed Martial Arts).  I am a huge proponent of MMA and admire the athletes that compete in the cage.  There are so many dimensions to MMA, that is not uncommon for a fighter to train 1) Stand Up [boxing] 2) Muay Thai [kickboxing] 3) Jiu-Jitsu 4) Judo.  The point is…these guys are truly good at many things.  Boxers on the other hand, excel at one thing and only one…boxing.  When it comes to boxing, they are unparalleled and can beat any man in a ring, including mixed martial artists.  If the fight goes beyond the boxing ring and is brought to the cage, however, the boxer would simply be outmatched.

Some parallels can be translated over into the business world, with entrepreneurs.  It is the expert technicians who excel and can dominate a particular arena.  With that said, these same experts will likely fail outside of their defined area of expertise.  Conversely, the multi-skilled entrepreneur has the ability to take their business in new directions, if the business happens to “go to the ground” or take an unexpected path.  I think it’s fair to assume a successful partnership will likely occur if you team up both of these individuals.  If you haven’t found your “other half”, do so immediately so you can prepare for a battle in the ring or the cage.