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Unleash Your Inner Company

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Unleash Your Inner Company

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Highlights & Notes

It doesn’t get easier. You get stronger. —Anonymous

(1) Identify/ develop your passions, (2) Generate/refine customer needs in those areas, (3) Generate possible solutions to those needs, (4) Inventory your resources, (4a) Generate additional needs suggested by your resources, (5) Match needs with resources, (6) Acquire/develop additional resources, (7) Determine your advantages, (8) Match needs with advantages to select the best fit, (9) Launch, and (10) Scale up.

I believe that underneath it all we cared more deeply about our business: about every customer, the coolness of our products and technology, each of our employees, and each other.

Your passions are what you care most deeply about, have the highest expectations for, have powerful and compelling feelings about, or that give your life meaning. They may include your job, team, company, family, sports, school, hobbies, communities, faith, travel, investing, gaming, gadgets, or virtually any other subject or activity. Perseverance is persistence in purpose, ideas, or tasks in the face of obstacles or discouragement. Passion (an attitude) and persistence (a behavior) usually go together.

Perseverance keeps you going for as long as it takes; passion makes the journey as important to you as the destination.

Passion gives you the curiosity and desire to find solutions to problems; perseverance enables you to break through obstacles or find ways around them.

To inspire others, you need passion for solving problems, satisfying customer needs, and making the world a better place. Passion for making money alone is not usually contagious or sustainable.

To innovate, live in the world of what might be, not in the world of what is. —Alan Cooper

You could use any of the adjectives in the following list to describe a possible customer need for any product or service: More accurate More durable Larger More adjustable Easier Lighter More beautiful More economical More powerful More biodegradable Faster More responsive Cheaper More flexible Safer Cleaner Healthier Smaller Clearer More intelligent Sturdier More compatible More intuitive Tastier

Generation combines your research, brainstorming, and imagination to envision how to make the world better for a customer set. Your research includes customers, current solutions, and competitors; may be conducted by phone, in person, as face-to-face interviews, online, or by test or experiment; and helps you understand both possibilities and limitations of current solutions.

A customer need is real only if significant numbers of customers have that need or if a few large customers have the need sufficiently intensely. A solution is real only if significant numbers of customers (or a few large customers) use or are likely to use that solution.

In summary, if based on your research A customer need is real and solutions already exist for it: Seek limitations of those solutions or seek out different needs. A customer need is not real today (whether or not “solutions” exist for it): Seek different needs or check whether a different set of customers has that need. Your proposed solution does not satisfy the customer need: Find ways to address the solution’s limitations; seek different solutions that satisfy the customer need; or seek different needs or customers for that solution. A customer need is real and no real solutions exist for it: Great! Brainstorm, develop, test, and refine your solution(s) to that need.

The customer needs that are real (exist for a significant number of customers, or for a few sufficiently important customers); that are not adequately satisfied by currently available solutions; and for which you have the strongest advantages will be the best needs for you to satisfy.

It’s not the customer’s job to know what they want. —Steve Jobs

In short: if your planned solution doesn’t scale—that is, it requires an impractical amount of capital or other resources to satisfy your upsized and supersized customer need—work backward from that vision to seek a solution that will (figure 5.4). Your new approach supersized will require fewer but different resources than your original approach supersized.

I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. Twenty-six times I have been trusted to take the game-winning shot and have missed. I’ve failed over and over and over again in my life. And that is why I succeed. —Michael Jordan

Think of your reputation as a reflection and summary of all your thoughts, words, and deeds.

If new businesses are not disciplined by a certain scarcity of capital, both the entrepreneur and investors should be very much on the alert.”

Passion gives you curiosity to find new solutions and enables you to break through obstacles, which has the effect of multiplying your resources, so if you are deeply passionate about your venture, your resources are both greater than they appear and than you may realize.

Each time you succeed you directly enlarge where you know you can succeed; each time you fail you learn what did not work and can better judge what will work next time.

If you are too conservative given your resources each time you try something new, your chances of success will be high, but you won’t learn much or extend what you know you can do. If you are too ambitious, your chances of failure will be high, in which case you again won’t learn much about what is possible for you. So there is an optimal level of risk taking for you and your resources. If you have tried several new things in a row and been successful each time, chances are you can and should stretch significantly further next time than you did last time. If you have failed each time, chances are you should set a more modest goal.

For many angel investors, myself included, a degree in engineering or science that you can apply to your start-up counts more heavily than an MBA.

Many surveys composed by nonexperts with do-it-yourself tools like SurveyMonkey produce meaningless results. Could you use your skills to design an automated interactive dialogue that would empower anyone, not just a trained market researcher, to create professional, actionable surveys?

Virtually every successful entrepreneur and company starts out with limited resources. Limited resources can be an advantage: They force you to focus and act quickly.

We cannot become what we need to be by remaining what we are. —Max De Pree

Your mindset can easily make or break your start-up.

Courage is in much shorter supply than genius. —Peter Thiel

“Complaining does not work as a strategy. We all have finite time and energy. Any time we spend whining is unlikely to help us achieve our goals. And it won’t make us happier.”

Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different… A strategy delineates a territory in which a company seeks to be unique. —Michael Porter, Harvard Business School

Better means your start-up has to fight larger competitors head-on. Different means finding a dimension without competitors that is valued by some set of customers and excelling along that dimension.

There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy. —Hamlet

If you can laugh together, you can work together —Robert Orben

By 2006, CustomerSat’s software had become complex and unwieldy. Too many quick fixes by too-junior software developers for too many years had caused reliability problems, performance bottlenecks, and security holes. We had lost a previous head of engineering, in part, because these problems seemed insurmountable.

With his broad and deep knowledge of technology, Dickey attracts first-rate software engineers from around the world to work with him. He quickly took over software development, quality assurance, web operations, tech support, and IT. As a result, work became much easier for me; I was freed up from these areas to focus on marketing, sales, and customers.

Reputation is the shadow. Character is the tree. —Abraham Lincoln

Feedback loops can also cause negative reinforcement. If one of you thinks the other is not doing his or her fair share of the work, or is spending time on the wrong things, that can breed resentment. That, in turn, can strain the relationship and discourage the other person, causing further resentment, stress, and estrangement. This type of problem can only be corrected by some combination of changed behavior, good communication, or ending the relationship.

The success or failure of a start-up depends on the first ten employees. —Steve Jobs

Tying survey results to team rather than to individual incentives is one way to discourage people from gaming the system.

Complementing surveys are the clearer, high-bandwidth signals of behavioral data. What people actually purchased again and again, what they searched for online, what series of screens they followed in a mobile app, or what paths they took to reach a physical destination cannot easily be misrepresented. Such behavioral data used to be expensive to gather, track, analyze, and extrapolate, but advances in databases, microsensors, GPS, and analytics have transformed the field, driving the explosion of big data. No questionnaires are needed to observe and experiment on customer behavior2, which enables companies to gather insights on all customers, whether or not they deliberately respond. While surveys used to be the primary source of customer insights, increasingly they complement, nuance, and validate behavioral data today.

Own nothing. Have everything. —Napster

Team members will view themselves entitled to take the same liberties you do. So don’t take liberties with company expenses.

To know a potential competitor, talk to its customers and ideally become a customer yourself. What customer needs does each competitor and its solutions satisfy, and how well?

Visit sites such as Compete.com to see how much traffic their sites are experiencing

Successful strategy derives from the differences between competitors with a consequent difference in their behavior. Your most dangerous competitors are those that are most like you. —Bruce Henderson, founder, Boston Consulting Group

If I could solve all the problems myself, I would. —Thomas Edison (when asked why he had a team of twenty-one assistants)

Business partners can enable you to address a larger opportunity than would be possible with your resources alone. Business partners (a) can help you reach customers you might not reach otherwise, and (b) can provide information flows that can help you make better decisions or deliver greater value, but (c) require investment to develop and maintain. Build, maintain, and evolve resources that either are or have the potential to become advantages. Outsource resources and activities that do not give, or have the potential to give, you an advantage.

In two-sided networks, users on the two sides are separate, well-defined groups who attract each other and create a positive feedback loop between the two sides.

The side of a two-sided network that is more willing or able to pay, usually consisting of businesses or advertisers, may subsidize the side less willing or able to pay, usually consisting of individuals.

Excellence is the result of caring more than others think is wise, risking more than others think is safe, dreaming more than others think is practical, and expecting more than others think is possible. —Ronnie Oldham

If you aren’t paying for something, you’re not the customer, you’re the product being sold. —MetaFilter user blue beetle

You could compose and deploy surveys and see their results, statistics, and charts free for thirty days. McGraw-Hill tried it out, conducted a survey, and received several hundred responses. After thirty days, we disabled access to their account. But McGraw-Hill wanted that data. They urgently cut and sent us a check for 18,000 sale I’ve ever made.

Suppose your list price is 100)(85%)(90%) = 70. Any returns and refunds generally further reduce your average net sales per unit and raise your breakeven point.

[We] try to build the best services over the long term by quickly releasing and learning from smaller iterations rather than trying to get everything right all at once. —Mark Zuckerberg, CEO and cofounder, Facebook

We gather, analyze, and generate customized reports on customer feedback, for business professionals throughout the enterprise, to drive and coordinate responsive action that increases customer satisfaction, loyalty, and advocacy, thus increasing revenues and reducing costs of sales, marketing, operations, service and support, thereby increasing overall profit and corporate value. After much iteration, we reduced this to the slogan that accompanied our logo: Profit from Customer Feedback which captured both the key feature and benefit of our solution in just four words.

If you aren’t embarrassed by the first version of your product, you waited too long to launch. —Reid Hoffman, Cofounder, LinkedIn

Your initial customers will likely require special attention to ensure that they are satisfied, so carefully choose customers you believe will benefit most and from whom you will most benefit. Ideally, they should be up and running smoothly by the time you launch. Your choice of these customers should balance immediate benefits to you with long-term benefits.

Prelaunch testing includes the MVS itself, sales channel(s), marketing, and solution ordering, delivery, and support, if applicable.

Poverty has no causes. Only prosperity has causes. —Jane Jacobs

To grow your business you need cash, either generated from operations or raised as capital (equity or debt). The more cash your operations generate, the less capital you need to raise. Scalability means the ability of your business to generate increasing cash—cash flow from operations—for each additional dollar of capital invested

You can improve your scalability by Improving your operational performance (execution). This means managing your existing business processes more effectively, efficiently, and economically. Adopting a more scalable business model. This means satisfying the same or similar customer needs but not being constrained by the business processes you currently use.

If your company is not lean enough, you never get very profitable; if you’re too lean, you risk degrading the quality of your solution or losing valuable members of your workforce.

Reengineering the Corporation: A Manifesto for Business Revolution (HarperCollins Business), Michael Hammer and Jim Champy

Scalability is the ability of your company to (1) generate increasing cash flow from operations for each additional dollar of capital invested, or (2) increase profit for each additional dollar of revenue. More scalable businesses are typically more highly automated, less labor intensive, and more information intensive, than their less scalable counterparts. You can improve your scalability either by improving operational performance (execution) or by adopting a more scalable business model. Capital investments are key to reducing your variable costs and increasing your gross margins and scalability. Use IT to reengineer business processes for greater scalability. Franchising can let you expand your business geographically with much less capital.

The end [purpose] of law is not to abolish or restrain, but to preserve and enlarge freedom. —John Locke

It is seldom that liberty of any kind is lost all at once. —David Hume

Capitalism takes more people out of poverty than aid. —Bono

Entrepreneurs create new positive-sum opportunities where only zero-sum, negative-sum, or no opportunities existed before.

As we have seen, more dimensions to the economy allow individuals to satisfy an increasing number of higher-level needs without putting lower-level, more basic needs at risk. I call that abundance. In contrast, if individuals increasingly have to trade off (give up satisfying) higher-level needs to satisfy lower-level needs, I call that scarcity.

Given my definition, you can now see why I call entrepreneurs a uniquely ethical bunch: They create new solutions for new customer needs, making the world more positive-sum, creating abundance, and eliminating scarcity.

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