I like this little story on Quora from Stewart Butterfield, one of the co-founders of Flickr. In response to why the company dropped the “e”, he explains it was because the guy who owned the flicker.com domain wouldn’t sell. But then he goes on to give this extra anecdote:
Bonus story: for a long time when I searched Google for “flickr” I got a “Did you mean flicker?” suggestion. I knew we’d have “made it” when that stopped. Eventually that message did stop showing up … and by 2005 or 2006 the search results page even asked “Did you mean flickr?” when searching for “flicker”. That’s when I knew it was big! (Google seems to have stopped doing that since.)
It would be great to collect the stories from all the founders who saw their products go big about when they knew they had “made it”.
Pando Daily has a good piece about the great promise, and ultimate disappointment, of widgets. It’s good to go back and reflect on a thing they everyone was going to go one way and ended up going another:
Even Valley sage Marc Andreessen* told BusinessWeek in 2007, “The big widgets have the potential to become the new networks.” And I don’t mean to pick on Andreessen — Quincy Smith and Meg Whitman are both quoted in that article too, as is Vinod Khosla who said, “Widgets are a fundamentally important idea. I believe it has the potential to create big billion-dollar winners.” The smartest people in the Valley had plenty of company on this one.
I haven’t written a ton about starting Percolate, partly because I don’t want this to become a place where I just promote what I’m up to and partly because I’ve been so busy I haven’t had a lot of time to write (as I’m guessing you’ve noticed).
Well, now I’m on a train and I forgot my Verizon card at my last meeting and I decided it would be a good chance to get some things down. These are a bunch of random thoughts, as much for my own safekeeping as sharing.
Before I start, a bit of an update on Percolate: We have 15 people, our own office and a healthy roster of Fortune 500 clients. James (my co-founder) and I started the company last January (2011). Alright, onto the thoughts …
One of the funny things about starting a company (and growing it) is the milestones you set for yourself (or discover as you go). There’s the obvious ones (first employee, first client, first check in the bank), but then there’s the less obvious ones like first office (alright, maybe that’s an obvious one) and first employee who relocated to come work for you (we passed that one recently). Every time we hit one of these it’s a moment to reflect and think about how crazy the whole process of starting a company really is.
I’ve written this before, but it bears repeating. I can’t imagine EVER starting a company without a co-founder. I can’t recommend it highly enough to anyone thinking about being an entrepreneur. As far as choosing your co-founder I think there are a bunch of factors that has led to a really strong relationship between James and myself, including: A lot of respect for each other, clear roles (but also enough respect that when we move outside those roles it’s accepted) and an ability to disagree and be stronger for it (I wrote a short post about this but I think it’s hugely important, if you can’t argue productively with your co-founder, you shouldn’t start a company with them). There are lots of others, but those top my list.
There is a fundamental difference between being a person running a company and being an employee. As the one in charge your singular goal is to keep the company evolving (at least it’s true of a technology startup). Stasis equals death. You want your company to look totally different tomorrow than it does today. If you’re an emplooyee, you often want the opposite: You like where you came to work and you want that company to stay the same. I’m not sure how to resolve this disconnect and I never recognized it until starting Percolate.
Recruiting, Marketing & Press
All three of these happen all the time. They don’t ever stop and we’re going to make sure they remain that way even when the team performing these roles moves past just James and myself.
A Little Disagree Is a Good Thing
Teams shouldn’t always agree about everything. Having different perspectives is ultimately what’s going to force things to be stronger. Understanding the roles different folks on the team play (and helping them understand those roles) is really important.
I never did a whole lot of managing before I got to Percolate. I thought it was pretty fine to let people do their job and support them when they needed it. James introduced a bunch of ideas to me around being more active and it’s a strategy we’ve been trying to live as much as possible at Percolate. We set quarterly goals with each employee and meet at the end of the three months to grade them together. We have weekly meetings and do monthly surveys of employee satisfaction. None of this stuff is perfect and hopefully it will all evolve (especially as we continue to grow), but it has really helped me understand the value of a more active management approach.
I’m sure there’s lots more, but that’s what’s coming to mind right now. Hope this is somewhat helpful/interesting.
I’ve gotten in some conversations recently about whether you should outsource PR early in a company’s life. My take is no. We’ve kept PR in-house except for a bit of outside counsel from friends. (After all, what’s the point of having brilliant friends if you’re not going to ask them for advice?) I’m not really sure how to do it any other way, as the company and product are constantly shifting and the thought of having to keep someone else on top of that and expect them to be able to pitch it seems crazy. Anyway, seems as though Chris Dixon agrees:
A fundamental principle of business is that you do things in house that you think can give you a competitive advantage and outsource things that you don’t. At an early-stage technology company this means you do in house: product design, software and/or hardware development, PR, recruiting, and customer relations/community management. Ideally, most of these activities are led by founders. You should outsource legal, accounting, website hosting, website analytics etc. (Unless you are starting a company where one of those activities can give you a competitive advantage, e.g. a securities trading startup would need to have in-house legal).
Rei Inamoto, who’s in charge of creative at the agency AKQA, has an interesting piece on how agencies need to act more like startups. While I don’t agree with everything in there, I have always been interested by the relationship between the advertising and startup world described by Cindy Gallop:
This contradiction, and this identity crisis, however, doesn’t just exist within the ad industry. Gallop points out a core contradiction inherent in the startup space: just about everyone in the tech world hates ad people’s guts. They all believe that advertising is a very bad thing and that ad people are very bad people. Yet, their entire business model in many tech ventures is built around advertising. Take Facebook, for example. The bulk of its $3.7 billion revenue comes from advertising. Google, a company that shunned advertising for many years, built its business around advertising.
It’s hard to get a clear picture of how startups are doing because so much of success depends on perception and founders do anything they can to keep that perception up. For all the talk about failing and it’s value (something I don’t necessarily agree with), it’s rare to hear real stories from real entrepreneurs whose companies didn’t turn out exactly as they might have expected. 37 Signals has a nice wrap up of quotes from folks who had to shut down a product, service or company. Here’s a good one from the creator of Wesabe (a competitor to Mint):
Mint focused on making the user do almost no work at all, by automatically editing and categorizing their data, reducing the number of fields in their signup form, and giving them immediate gratification as soon as they possibly could; we completely sucked at all of that…I was focused on trying to make the usability of editing data as easy and functional as it could be; Mint was focused on making it so you never had to do that at all. Their approach completely kicked our approach’s ass.
The last year has been totally insane. Right around this time in 2010 I left my job at Barbarian Group and gave myself two weeks before getting started on building a company for the first time. To say building a company is different than building a product is an understatement for which I can’t find the appropriate analogy. It’s been crazy and amazing and scary.
Over the last twelve months we’ve started to build a brand I believe stands for something in the industry, created a product some of the best brands in the world pay for and built an amazing team that all came over to my apartment the other night for the first Percolate holiday dinner.
Last week we got through a big milestone and pushed our 2.0 release. Iterating is the thing everyone talks about when they discuss product development and that’s what we did: Looked at the data and built a better product for our core use case (brands publishing content across social channels and their .coms).
Yesterday we announced that along with that release we also raised a round of funding to support the Percolate mission of helping brands create content at social scale. On Tumblr someone asked why we raised money if we were profitable (this is our first round of investment) and the answer is simple: We feel like we’ve found a big opportunity for brands and we’re going to run at it hard. That means hiring good people to both help us build the product (designers, product people, developers) and also to help us bring the product to brands (sales, project management). (Obviously if you do any of those things and are interested in working with us hit me up.)
I think my favorite thing from this article about the crazy floating startup village is the nonchalance about about lasers and undersea internet cables: “A laser could be good, but is susceptible to fog, which is bad in the Bay Area. We’re considering running an undersea cable from ship to shore, but it may be be cost prohibitive. [Blueseed has received estimates of over a million dollars for just the installation, but is still researching permits.]”
Reminds me of my favorite Simpson’s joke ever. Homer and Bart are on a boat in international waters and in the distance is a boat with a big satellite dish. Homer turns to Bart and says, “See that ship over there? They’re re-broadcasting Major League Baseball with implied oral consent, not express written consent—or so the legend goes.”
I like this thought from Seth Godin on the problem with minimum viable product:
There’s a burst of energy and attention and effort that accompanies a launch, even a minimally viable one. If there’s a delay in pick up from the community, though (see #1) it’s easy to move on to the next thing, the next launch, the next hoopla, as opposed to doing the insanely hard work of sticking with that thing you already launched.
I have a bunch of issues with the conversation around lean and minimum viable product (probably the biggest of which is any ideology that people get religious about seems a bit scary). The biggest issue I have, though, is that it seems inherently about building products, not companies. There’s nothing wrong with that if you’re building a little something on the side, but if you’re building a company you have a whole bunch of other things you need to also be thinking about, not the least of which is whether you’re building a product you’re excited about and a company you actually want to work at. I’ve never heard anyone mention either of these as part of the product development conversation and it makes me sad.
Via Ian Sohn
This is going to be a big problem for a lot of company who were planning on putting off business models indefinitely. A lot of young companies are going to have to make very difficult decisions next year even if the venture market only shifts slightly instead of drying up. We’re going to see a chasm emerge between products and businesses.