Founders at Work (Free Book Inside)

October 22, 2010 by 11 Comments

If you are interested in entrepreneurship, innovation or you are just fascinated by the special chemistry and drive that created some of the best technology companies in the world, this book offers both wisdom and engaging insights—straight from the source.

Founders at Work: Stories of Startups’ Early Days is a collection of interviews with founders of famous technology companies about what happened in the very earliest days. These people are celebrities now. What was it like when they were just a couple friends with an idea? Founders like Steve Wozniak (Apple), Caterina Fake (Flickr), Mitch Kapor (Lotus), Max Levchin (PayPal), and Sabeer Bhatia (Hotmail) tell you in their own words about their surprising and often very funny discoveries as they learned how to build a company.

Where did they get the ideas that made them rich? How did they convince investors to back them? What went wrong, and how did they recover?

Nearly all technical people have thought of one day starting or working for a startup. For them, this book is the closest you can come to being a fly on the wall at a successful startup, to learn how it’s done.

But ultimately these interviews are required reading for anyone who wants to understand business, because startups are business reduced to its essence. The reason their founders become rich is that startups do what businessesdo—create value—more intensively than almost any other part of the economy. How? What are the secrets that make successful startups so insanely productive? Read this book, and let the founders themselves tell you. – Amazon

This is an absolute must read if you’re job, your passion, or both (if you’re lucky) has anything to do with creating technical innovation. “Founders at Work” is a wonderful meander through the stories of successful company founders – across several decades. Far from focusing on just those who made it big during the first dot-com boom or those who are profiting from Web 2.0, Jessica (the author) also includes some of the true pioneers in the field. She recognizes that, not only do these industry veterans have valuable stories to convey but, since many of them are helping to steer companies and venture capital funds to this day, their advice is quite topical and current.

You want to buy this book, trust me. Head over to Amazon.com to get it from about $5 (plus shipping). It is sadly not available (and probably will never be available) in our Chapaa Shop.

Alternatively, dear readers, you can get a copy of this book free from us. We recently gave away 4 copies of “The Richest Man in Babylon” and, today, we’re giving away a copy (or copies) of Founders at Work: Stories of Startups’ Early Days. Interested?

All you have to do is leave a comment below. You can say anything at all (but it helps if you add constructively to the discussion). We’ll pick a winner randomly in three days. Good luck!

Update 25/10/2010: This competition is over and the winners have been picked.

Have you ever started your own business? Why not? What was it like?

Filed Under: Internet Culture, Small Business, Tips Hacking and Reviews Tagged With:

When Your Business Fails, Repeatedly

October 22, 2010 by Leave a Comment

I was reading a very, very interesting article on Hacker News on what to do when your new business just fails, and fails, and fails again. The initiator of the article is an entrepreneur whose products have not fared well. Below is a select few responses that he got. Business wisdom:

You seem to have been terribly misled. Only very rarely do products sell themselves. 99% of the time, the product is largely incidental to the sales process. Your idea doesn’t matter one jot, what matters is how well you can connect to customers and really sell to them.

Let me tell you about a fine English gentleman by the name of Joe Ades, now sadly no longer with us. Joe wore Savile Row suits and lived in a three-bedroomed apartment on Park Avenue. He spent most nights at the Café Pierre with his wife, sharing a bottle of his usual – Veuve Clicquot champagne. You might assume that Joe was a banker or an executive, but in fact Joe sold potato peelers on the street for $5 each, four for $20.

I urge you, I implore you, I beg you, stop what you’re doing and watch Joe in action:

That is what business looks like. Sometimes, once in a million, you luck upon a product so amazing the world beats a path to your door. For most of us, the best we can hope for is to be some chump with a thousand boxes of vegetable peelers. Anybody can sit out on the street with a box of peelers, but Joe sold them. Joe made his peelers sing, he made them seem like magic. He took a humble piece of stamped metal and created theatre. He did something so simple and strange and wonderful that people would buy a fistful of his peelers, just so they could tell their friends about this little Englishman they saw in Union Square.

Look at the Fortune 500, tell me what you see. I see grocery stores, drugstores, oil companies, banks, a funny little concern that sells sugar water. I see a whole lot of hard work and very few great ideas.

Forget about striking it big with a great idea, it’s just as childish and naïve as imagining that the tape you’re recording in your garage is going to make you a rockstar. Get out there and talk to customers. Find out what they need, what annoys them, what excites them. Build the roughest, ugliest piece of crap that you can possibly call a product. If you’re not ashamed of it, you’ve spent too long on it. Try and sell it. Some people will say “I’m not buying that piece of crap, it doesn’t even do X”. If X isn’t stupid, implement X. Some people, bizarrely, will say “yes, I will buy your piece of crap”. It is then and only then that you are actually developing a product. Until you’ve got a customer, it’s just an expensive hobby. Paying customer number one is what makes it a product.

“Honestly, there are 2 types of folks who make it: the lucky ones, and the persistent ones. Its hard as hell (and heck I haven’t beaten it yet) but you have to ignore the burnout and be one of the persistent ones”

“Why are you paying so much attention to your “launch day”? It’s an entrepreneurial myth that there is a mighty “launch” that sets the tone of your business. When was Twitter “launched”? When was Carbonmade “launched”? When was Balsamiq “launched”? Or SquareSpace, MailChimp, or Fog Creek? Sure, they “launched”, but who cared?

You are building a business. It does not spring from your forehead like Athena, or get pooped out of your pet Nibbler like Dark Matter on Futurama. Listen to what everyone else here has to say. Sure, pick something with favorable long-tail SEO dynamics. Sure, pick something with a viral loop. Sure, build yourself a tribe.

But then, for god’s sake, pick something you can stick with, nurture, protect, and grow over the long run. That thing you don’t have, that keep calling “a fucking great idea”? Most of us call it “a winning lottery ticket”. Stop thinking about playing the lottery. Get back to work.”

“Hang in there man.

What’s touched upon in various ways in all the comments is that “PR” and “Media Coverage” is not the end all be all. In fact the successfully software startups I know STILL email individual potential customers on a daily basis.

I think one of the great myths of the internet is that you should just create a product, throw it up on the internet with some SEO and AdWords and the customers will come. Sure it might work for a few people, but by and large you are still growing a business. And you often grow a business one person at a time, hopefully later you can learn to scale sales.

Often what is missing from people’s MVP’s and business plans is how are you going to very specifically market to your target customers, and what the cost of customer acquisition is. If you can’t identify a way to find your target customer, you’re going to have a problem. Again, I don’t think general SEO and SEM is going to work.

Don’t give up on your idea, start emailing people. 50, 100 people a day. Convert them one at a time. If your business idea is not specifically just some sexy piece of technology, direct mail may work too (if you don’t also have to educate people on why they need your product.)

Journalist want to write about what’s hot, not about what is a potentially decent idea in a decent market. They want to talk about iphones, ipads, and facebook, and the latest jargon.

Anyways, start finding your target customers and email them. Don’t worry about email campaign tools and crazy stuff, just starting email or calling them one at a time. Building a web based software business doesn’t mean you can just skip sales.”

I would say this is some of the best advice that can be given to new entrepreneurs. You can read the rest of the article here.

Filed Under: Internet Culture, Small Business Tagged With: , ,

How To Operate Your Business

October 19, 2010 by Leave a Comment

Many business owners are very focused on their business and its profitability, but most of the time when failures happen, they begin to wonder what they did wrong. They cannot figure what it is, especially if they have the impression they did every possible thing to succeed.

The explanation is simple and obvious. It is called planning, a process on which every business should be based. Lazy business owners simply forget to sit down and make a plan for at least a week in which they should write all the steps to be taken in their business development.

Here are some suggestions to be taken into consideration if you want to plan your business efficiently.

First, if you have an idea to grow your business, do not hurry to put it into practice as it is. The chances to fail are quite big. So, write down your idea and try to change it into a SMART goal. If you have several ideas, it helps to take a dashboard for each of them.

Think at an objective that is achievable on a short term because it is easier to accomplish. Establish all the steps you have to make in order to achieve it. If there too many parts to take into consideration, break the large tasks into smaller ones and set clear tine frames.

Pay attention to the information seeking part – it is better to delegate and request your employees to look for valuable information such as: customers, suppliers, competitors. You may also consult experts for technical advice.

It is also very important to do some monitoring. Once you get a feedback, revise your plan and adapt it to the new situations. This is the right way to performance.

Another advice is to do some assessing before setting a specific goal to see from the beginning if you have the necessary resources to achieve it. See if you have the right premises: for instance, if you want to expand your production line or modernize your equipment, you have to see if there is enough space or enough money to do these changes.

If you are dealing with customer service systems, maybe a more sophisticated system will help you business be more profitable. If you have a strong financial support, maybe outsourcing will make things easier for you and you will have the possibility to concentrate on other parts of your business.

See what facilities you have in your company to achieve your goal as it is easier than starting from scratch.

Do not forget to take into consideration your most valuable resource you can rely on – your staff. See if you have the right people to achieve your objectives, if they know what is expected of them. Delegate tasks according to the skills they have, ensuring this way the job is done accurately.

After you have studied carefully all these issues, all you have to do is to set a clear goal, plan each step as we taught you to achieving and you will surely be successful. Bear in mind that it is extremely important to assess the results of your efforts, especially from a financial point of view.

Filed Under: Small Business Tagged With:

The Richest Man in Babylon (Free Book Inside)

October 18, 2010 by 5 Comments

The Richest Man in Babylon is the kind of book that I would give/recommend to anyone regardless if their interest is outside of business/finance. Since finance can seem daunting these days due to its complexity, the book simplifies it through short stories. The insights that it provides allows me to step back and look at finance in simple terms. It opened up my eyes by introducing new possibilities, and adds positive reinforcements as to what a person can achieve in her lifetime. The wisdom that the book teaches is financially enlightening and it can change how you view your finance in many ways. Although the messages are delivered in a very unique fashion, the underlying nuggets of wisdom are direct and concisely to the point.

Clason, the book’s author, uses parables set in Babylon to make his points throughout the book. One chapter does a really great job of encompassing several financial points, The Five Laws of Gold. Each of the five laws are very simple and if used can work wonders in building your wealth.

The Five Laws of Gold

  1. Gold comes gladly and in increasing quantity to any man who will put aside 10% of all he earns to build an estate for his family and future.
  2. Gold labours diligently and contentedly for the wise owner who finds it profitable employment.
  3. Gold clings to the protection of the cautious owner who invests it under the advice of men wise in its handling.
  4. Gold slips away from the man who invests it in businesses that he is not familiar or is not approved by those skilled in its keep.
  5. Gold flees the man who would force it to impossible earnings or who follows the advice of tricksters or schemers or who trusts it to his own inexperience and romantic desires in investment.

The concepts in the book may be a refresher to individuals who already has a solid grasp of their finance, but nonetheless, it solidifies what you already know in many ways. This is a book that I can refer back to time and time again. If you apply some of the concepts that are presented in this book to your life, you will definitely be on your way to financial freedom. If I can sum up the book in one word, it would be “refreshing.” I recommend this book to everyone regardless of your interest or age. Read, apply, then repeat.

Do You Want A Copy Of This Book?
We’re giving away a copy of The Richest Man in Babylon to one of you, dear readers. What do you need to do? Just leave a comment below – anything goes (but it would help if you added to the discussion in some way). We’ll choose a winner randomly in three days. Good luck!

Update 21/10/2010: This competition is over. Here are the winners. For those who missed you can get the book here.

What do you think of the book? How do you manage your money? Need help?

Filed Under: Make Money, Small Business, Tips Hacking and Reviews Tagged With:

Business is Alchemy

October 14, 2010 by 4 Comments

I just got an amazing email from Perry Marshal that I thought I just had to share with you, dear readers:

Hi Kelvin,

Listen up, because I’m about to explain one of the most critical, most fundamentally misunderstood realities of economics. This simple truth could change the way you see everything.

People in poor countries are often told that America became successful only by stealing from them. Political liberals often look at the world as a pie that must be re-divided a different way. And although there may be some truth to those ideas, the essential reality is that business is alchemy.

Remember the alchemists from the middle ages? They sought a formula to turn lead into gold. They never found it. But they were right about one thing: Wealth is all about the reinvention of existing resources – transforming useless things into useful things.

Business, at its essence, is all about that very thing. Converting worthless things into items necessary and valuable. Moving resources from areas of low return to high return. Harnessing the forces of nature to produce food and wealth for everyone. Politics may be about the endless arguments about how the pie should be sliced – but entrepreneurship is about baking more pies.

Take two of the most successful companies of the last decade – Intel and Microsoft. Intel takes desert sand – worth less even than lead – and turns it into Pentium chips – which are worth more than gold.

If that’s not alchemy, what is?

Microsoft literally creates software out of thin air. The strings of 1’s and 0’s that make those Intel chips do such amazing things for us.

Does Intel have to steal anything from anyone to make those chips?

No.

Does Microsoft have to steal anything from anyone to write software?

No.

It’s alchemy. Literally the creation of something out of nothing.

–Perry Marshal

What do you think about this?

Filed Under: Small Business

The 80-20 Rule

October 12, 2010 by 1 Comment

If you have a blog and want to grow it to be huge, there are several tried and tested things that you can do:

  1. write quality content
  2. promote that content
  3. use social media (e.g., Twitter and Facebook)
  4. use social bookmarking sites (e.g., Digg and Reddit)
  5. tweak your design
  6. chat with readers
  7. create Youtube videos
  8. article marketing
  9. submit your blog to directories
  10. search engine optimization

That’s a lot of stuff, eh? Can you imagine that a lot of the bloggers do all this for their blogs? How hard do you work on yours? The interesting thing is that for many, many bloggers doing just two of the above produces 80% of the gain. If you just wrote quality content and promoted it, you would be good. Think about it, 2 out of ten of the activities above lead to 80% of the gain.

The Pareto Principle
An Italian economist once observed that 80% of land in Italy was owned by 20% of the people. His name was Vilfredo Pareto, and that is where the principle got its name from. The Pareto principle, which is also called the 80-20 rule, states that for many events and things in life, 80% of the effects come from just 20% of the causes.

Did you know that Microsoft once found that by eliminating just 20%
of the largest bugs in its operating system 80% of the crashes
would stop? Interesting, eh?

Applying the Pareto Principle In Business
We all waste lots of time on trivial, repetitive tasks. This often means people are kept busy whether it is important or not, equipment is running whether needed or not, sales are made whether they are profitable or not.

“The value of the Pareto Principle is that it reminds you to focus on the 20 percent that matters. Of the things you do during your day, only 20 percent really matter. Those 20 percent produce 80 percent of your results. Identify and focus on those things. When the fire drills of the day begin to sap your time, remind yourself of the 20 percent you need to focus on. If something in the schedule has to slip, if something isn’t going to get done, make sure it’s not part of that 20 percent.” – About.com

Filed Under: Small Business

Gain Control of Your Business by Being Lazy

October 7, 2010 by 1 Comment

Recently I was reading a book that was talking about the need humans have to be able to control things. While there were several experiments cited, one of the experiments was done in a nursing home where they had some younger people visit and spend time with two groups of residents. The first group could specify when their visitor would come and see them and how long they would stay. The second group could not specify when their visitors would come nor how long they would stay. What the researchers found is that the group that had control over their visitors were happier, healthier, and were prescribed less medication than the group that could not control the visitors. 6 months after the study concluded a very sad after effect was noticed. A higher than normal percentage of the group in control of the visits passed away or became much sicker. What the researchers concluded (but hadn’t anticipated) was that being in control not only makes you happier and healthier but losing this control is much more damaging than never having the control in the first place.

Entrepreneurs Need to Control
One of the common characteristics of most entrepreneurs is their independence and need to control. When you think about it, it’s not that surprising. Some of the most oft-cited reasons for wanting to be an entrepreneur are:

  • Be Your Own Boss
  • Ability to Work From Home
  • Set Your Own Schedule

In each of these cases, an individual is control of their work environment and their day-to-day activities. They intuitively know that gaining control makes them happier than not being in control.

The Reality of Owning Your Own Business
The realities of being a business owner don’t always match with the ideal lifestyle of the entrepreneur who is their own boss and sets their own schedule.

You’re often in a deadline business. You can never rest on your laurels. There are always deadlines to meet. Customers that leave you. Customers that pay you slowly (A few that don’t pay you at all). Projects that get canceled. Amazingly, you are always on the hot seat – even when things happen beyond your control. Client expectations are often unreasonable. Competition is stiff.

Being Lazy Gives Back Control
A Lazy Owner is business owner who has built systems and processes into their company so that they aren’t critical to the day-to-day operations of their business. They don’t “hope”. They take control by creating systems that eliminates most of the uncertainty of a business.

  • Instead of hoping that existing clients give good referrals or people just happen to find you online or in the yellow pages, they create a predictable marketing system that delivers new prospects whenever they want to grow the business.
  • Instead of relying on client defined projects, they create products and services that they sell. They aren’t subject to unreasonable client demands because they already have the product.
  • Instead of worrying about cash flow and slow paying customers, they set up a billing process that means they get paid for the products that they provide.
  • Instead of trying to count on unreliable vendors, they define the production process.

These are a just a few examples of how you can gain control of your business. By not having to work for every single prospect and every single dollar that you’re owed, you can spend your time building your business or doing whatever you want. And once you gain control over your business, and hence, your life, you will become happier. It’s just human nature.

Filed Under: Small Business