“‘Impossible’ is a big word thrown around by small men and women who find it easier to live in the world they’ve been given than to explore the power they have to change it. Impossible is not a fact. It’s an opinion. Impossible is not a declaration. It’s a dare. Impossible is potential. Impossible is temporary” – Muhammad Ali.
Expect the Impossible
19 October 2008
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Posted by Andrew
Success is more complex than failure
6 October 2008
“How long, you simple ones, will you love simplicity? For scorners delight in their scorning and fools hate knowledge.”
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Posted by Andrew
Business of Software Highlights
7 September 2008The Business of Software conference was a real success – thanks to Neil and Joel and all the people behind the scenes for organising it.
Some highlights for me were:
- Meeting so many top software entrepreneurs from around the world.
- Lots of discussion about pricing software, with agreement on one point: ‘Pricing software is hard. Pricing software is very hard.’
- Lots (and lots) of discussion about agile, with not much agreement at all except that the common perceptions of Agile are plain wrong and simply copying what worked for someone else is likely to fail. There is a huge appetite to improve productivity, quality and correctness and people are looking to Agile for answers.
- Seth Godin talking about ‘Ideas that spread win’
- Eric Sink’s comparison of product management with parenting
- Steve Johnson gave the big picture of product management including explaining the difference between inbound marketing (understanding buyer/user problems and opportunities) and outbound marketing (communications and messaging etc).
- My favorite quote, ‘Friends build products, enemies only build documents’ (Steve Johnson)
- If you’re interested in some research on founders and succession, have a look at Noam Wasserman’s blog.
- Steve Krug’s definition of usability: ‘useable for its intended purpose‘.
- At least two of the speakers told us that we’re in the fashion business!
Overall a great week and thanks everyone for being so open to discussion.
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Posted by Andrew
Business of Software conference
3 September 2008I’m in Boston this week for the Business of Software conference which kicks off tomorrow. Boston is pretty cool with a lot of history. I did a tour today including MIT, Harvard, the Cheers bar and a harbor cruise.
I’m really looking forward to the conference which is jam packed with software business heros and gurus.
Tuned-in
8 August 2008I’ve just finished reading Tuned-In, by the guys at Pragmatic Marketing and its a must read for anyone involved in productisation.
When developing good software, we focus the design and usability on the users, but we need to focus the roadmap and marketing on the buyers. The tuned-in approach draws your focus to understanding who your buyers are and making sure that you’re solving real problems that exist for them.
Even if your users and buyers are the same, the problems that lead them to buy your software are different to the problems they will experience while using your software.
How do you know if a problem is worth solving? It will be urgent enough for people to pay to solve and prevalent enough to give you a profitable market.
It makes me think of many ideas I’ve had and heard, including plenty that people were in the process of committing years of effort into, all of which solved a problem, but none of which solved an urgent or prevalent problem.
Its pretty simple stuff – and the authors have applied their own advice to how they wrote the book, so read it!
2 Comments | Business, Marketing, Software | Permalink
Posted by Andrew
Agility vs predictability
31 July 2008Steve McConnell makes some good comments re-enforcing that your development methodology needs to be driven by your business goals.
“Whether agility or predictability is more important depends both on what a business’s customers are requesting and on how long-range the request is. Customers say, “I want this capability.” In an ideal world, the business will be able to say, “OK, here it is right away.” Being able to say “here it is right away” is what agility is all about.”
“But the lack of comprehensive requirements combined with an emphasis on “embracing change” just enabled the company to move more quickly in the wrong direction”
Finding the right blend of predictability and agility is important and requires good leadership and planning as opposed to just a good methodology and processes.
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Posted by Andrew
Zoho’s end game
29 June 2008Some interesting comments from Zoho CEO Sridhar Vembu over on Gopal Shenoy’s blog.
On the Zoho suite, we have believed from the beginning that a lot of the value of collaborative productivity is integration across the products. Traditionally database oriented offerings (such as CRM) and document-centric offerings (the office suite) have existed in their separate silos. We believe the key to next generation productivity is integration across these silos.
Salesforce seems to agree, because they have partnered with Google for the Office suite part. Before that partnership, they tried to acquire us, which tells you what they would have liked to do, but we politely said no because we didn’t believe there was a cultural fit. They even tried to get us to drop our Zoho CRM, in return for a “deal” to integrate our office productivity apps with their CRM suite. It is our diversified business & product mix that allowed us the freedom to resist such unfair demands.
So, its about the integration more than the collaboration & other SaaS goodness. This comes through not only in the integration within their own apps, but in the integration model they offer with third parties. I’ve had a play with their spreadsheet integration and they allow it to be run as an embedded spreadsheet within another app. Data can be loaded from and saved to the third party app with no Zoho account required. This is quite powerful, but wouldn’t be nearly so interesting if their apps weren’t online and quite good too.
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Posted by Andrew
Leaders create chaos
18 June 2008Good leaders are visionaries. They articulate their vision, recruit well, think strategically, initiate change, disrupt the continuum and create chaos.
Good managers turn the chaos into order. You need both.
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Posted by Andrew
Rewarding effort
6 May 2008We live in a country that rewards effort and this applies to business as much as anything. New Zealand workers are among the least productive in the OECD.
I once asked my accountant a simple question and they came back with an answer … and an invoice for 2 hours of research. There’s this attitude that you pay for the time it takes, not for the value added. Contract Law doesn’t help either because in B2B contracts, there are no protections about getting what you paid for.
Hard work is good, but smart work is better. Hard work would be chopping down a tree with a hammer. I’d rather be the lazy guy who brings a chainsaw and chops down 10 trees then goes home.
Working smart is about being diligent. Today I read this and it inspired me:
“Diligence is a learnable skill that combines: creative persistence, a smart working effort rightly planned and rightly performed in a timely, efficient, and effective manner to attain a result that is pure and of the highest quality of excellence.”
The bottom line is being able to measure our outputs, not our effort, because how do you reward something if you can’t measure it?
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Posted by Andrew
You can’t smell email
4 May 2008This has been said many times and I just read it again that communication is:
- 55% body language
- 38% voice & tone
- 7% words
So, every time we send an email we waste 93% of our communication power. If you use the phone you waste 55%, but talking to someone face to face is the only way to be 100% effective in our communication.
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On the other hand, emails do have tone & ‘envelope’ language, so maybe its just more like this:
- 55% words
- 38% tone & language
- 7% envelope language (single recipient vs group email, order of recipients, cc’ed, bcc’ed, subject, priority etc)
It can be quite efficient to put the emphasis on your words and off your body language, so its a trade-off that we can use when it suits our purposes. Here’s my Sunday night communication scale to put it all in perspective:
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| Face to face communication | Like enjoying wine with a few friends and some good food. |
| Telephone | Like drinking alone. |
| Like tasting a wine with no sense of smell | |
| Software Documentation | Like drinking from the bottle |
| Blogging | Like pretending you can taste the red fruits of the forrest underpinned by savory dried herbs. |
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Posted by Andrew
Business of Software Conference
21 April 2008The Business of Software Conference in Boston this year is looking good. The list of speakers reads like my RSS list …
- Joel Spolsky, founder of Fog Creek software, author of several books and the man behind the joelonsoftware blog
- Seth Godin, Business Week’s “Ultimate Entrepreneur for the Information Age”, is the best-selling author of 7 books (including Permission Marketing and Purple Cow) as well as the most popular eBook of all time.
- Eric Sink, founder of SourceGear, author of “Eric Sink on the Business of Software” and the person who coined the term “Micro ISV”
- Steve Johnson of Pragmatic Marketing and winner of last year’s Software Idol competition
- Richard Stallman launched the development of the GNU operating system, now used on tens of millions of computers today. Stallman has received the ACM Grace Hopper Award, a MacArthur Foundation fellowship, the Electronic Frontier Foundation’s Pioneer award, and the the Takeda Award for Social/Economic Betterment
- Paul Kenny is one of the UK’s top sales trainers, consultants and speakers. He has worked with many customers in three continents, including IBM, Perot Systems, The Guardian and tens of others.
- Dharmesh Shah is a geek, serial entrepreneur, founder of HubSpot and blogger at OnStartups.com
- Jessica Livingston is author of Founders at Work: Stories of Startups’ Early Days and a founder of Y Combinator
- Jason Fried is founder of 37signals (developers of Basecamp and Ruby on Rails) and Signal vs Noise blogger
I don’t know.
6 April 2008I’m currently reading ‘Fooled by Randomness’ by Nassim Nicholas Taleb, who has some interesting ideas on the randomness of life and business.
He says his major hobby is “teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the courage to sometimes say: I don’t know….”.
I’m probably guilty of taking myself too seriously … Solomon (the wisest-guy-ever) also said not to rely on your own knowledge and understanding. So what should we rely on?
If you keep reading, the answer lies not in your knowledge, but in understanding your domain well enough to know what you don’t know and to know how to find answers. Your ability to generate knowledge is more important than your knowledge.
Solomon said that developing good judgement and understanding is the smartest thing you can do – and is more valuable than wealth. Ie – the ability to generate wealth is more valuable than wealth itself. Likewise, the ability to generate knowledge is more valuable than knowledge itself.
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Posted by Andrew
Entrepreneurialism
29 March 2008What defines an entrepreneur? Wikipedia says, “An entrepreneur is a person who has possession over a new enterprise or venture and assumes full accountability for the inherent risks and the outcome.”
Technically, this is true, but its also meaningless. I think that a true entrepreneur is someone who is able to see a pain that is shared by a lot of people, then identify and deliver a solution to that pain. Entrepreneurs are motivated by creating value and serving people.
Most companies start off being entrepreneurial, but plenty gradually become the opposite – exploitational. Exploitational businesses (and people) are interested in their own gain above their customers. They are looking to make money without necessarily creating value and without serving people.
I’ve seen some companies where the culture was exploitational (and culture always comes from the top) and this came through in every facet; the way staff were treated, the way sales were made, the way priorities were set, the way customers and suppliers were treated. No value was created – it was only taken.
Xero is a good example of a company that is led by an entrepreneur and has a culture of entrepreneurialism. Everyone at Xero, whether they’re building the software, selling it or providing service (or most likely all three) are all entrepreneurs in the sense that we’re motivated to find, solve and deliver solutions to the pain that small businesses and small business owners experience today.
We know that we can’t create value for our customers and shareholders until we deliver innovative software and exceptional service and actually resolve that pain. Its a pleasure to be part of a team that is so motivated by creating value for the ~25% of the work force whose life revolves around their business.
BTW: Xero are currently hiring.
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Posted by Andrew
Fair price vs market price for software development
17 February 2008I’m a big fan of fair valuation and pricing software development is a good example of why.
Its easy for small fixed price software projects to turn into lose-lose situations, usually because they are too cheap. The customer gets what they paid for and the developer starts to lose money fast as the project drags on. The customer expects a perfectly working system for the agreed price and the developer either carries on losing money (but doing a poorer job) or calls it scope creep and delivers an incomplete project.
Software projects are hard to estimate and therefore price, but often this makes no difference to the price of the project. The problem is often that a market valuation of the project is used, instead of a fair valuation.
The market price is what the customer is prepared to pay and what the developers are prepared to deliver for, but it can be well under (or above sometimes) the fair price and can have nothing to do with the project being under-spec’ed or under-estimated.
The fair price of a project means charging a fair and profitable amount for the work to be done/delivered. Estimating the development required for a project is easy compared to estimating the other work to be done, but for delivering a simple software project, a good rule of thumb is that the project will be 3 times the size of the development work.
The market price of a project can be significantly lower than the fair price for a few reasons:
- The fair price makes the project un-viable, so the customer’s cost/benefit dictates the price they are willing to pay
- The customer has limited cash or budget and the developer wants the work
- Competition are prepared to deliver the project for lower than the fair price
Unfortunately, you can’t just quote the fair price, because if this is significantly above the market price, then you’ll lose the project.
One way to bridge the difference between market and fair price is to find a pricing model that fits the project. Software is very rarely a single deliverable, so the pricing shouldn’t be either. Once you know the fair price, you need to communicate this to the customer, so they understand the full scope of the project before they enter it. Then, you need to understand what the market value is (from the customer’s perspective is best) and structure the project so that the cost/benefit stacks up for the customer after every deliverable.
Angel investors
27 January 2008Another good quote from Paul Graham is regarding angel investors:
“Basically, the angel investors played chicken with us. They knew we couldn’t get money from anyone else, since we didn’t even know for sure if we owned our software. So they proposed to do a cramdown round where they would refinance the company, I believe, at a pre-money valuation of zero—meaning all the common stockholders were completely wiped out. To keep us around, since they kind of needed us to write the software, they were going to give us options. So we called their bluff. We said, “If you do that, we’re leaving.”
I’ve experienced two types of angel investors – someone who believes in you or is passionate about your product and the professional angel investors. From my experience, the former are much preferable, but you’ll probably get more money and more rounds of investment from the later.
Professional Angel investors are taking high risks by investing in startup companies, so expect high returns. One formula that I’ve seen is that they expect 1/10 to succeed, and they are looking for a 3x return on their money over 3 years. They have to treat each investment as if its the one that will succeed, so they expect a 30 x return on each investment.
Its no wonder that they often negotiate so hard … especially when they know the founders are desperate.
Rod has some useful info about Angel Investors.
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Posted by Andrew
Build what users want
26 January 2008Jessica Livingston has interviewed a number of successful entrepreneurs in her book ‘Founders at work‘. One of the interviews is with Paul Graham, founder of Viaweb, one of the first SaaS providers who made it big.
Paul makes some good comments about software startups, the first of which is:
“If you make something users want, they will be happy, and you can translate that happiness into money. That is the basis of a startup. A startup is a company that builds some kind of technology that people want. The mistake that a lot of founders make is to build something they think users want, but that users don’t actually want.”
There’s often a big gap between what users ask for and what they want and if you’re building what your users are asking for, then you’re still playing catch-up with your competition. Most successful software stories have pre-empted what users want and have led the way by innovating in their field.
Most of my favorite software takes me beyond what I can already do and gives me higher productivity/enjoyment/success. I rely on experts to lead me in their field, so I can focus on becoming/being an expert in my field. I don’t want software to give me what I ask for, because then I either have to pretend to be an expert at everything, or I just won’t grow my capabilities because I’ll ask for what I’m familiar with.
Innovating in your field of expertise is leading users to higher productivity, enjoyment and success and in turn, letting them focus on what they do best.
1 Comment | Business, SaaS, Software | Permalink
Posted by Andrew
Now’s a good time …
22 January 2008… to upgrade your small business accounting system to Xero.
Xero have just released their 19th update within the last 12 months and its only getting better and better.
To make it even easier, Xero will also get you up and running from your existing accounting system for $NZ199, so now’s a perfect time to get setup in time for the new financial year.
Shameless Xero advertising follows …
How can you resist? Sign up here.
1 Comment | Business, Finance, SaaS, Software, Xero | Permalink
Posted by Andrew
Activate HQ
15 December 2007Creative HQ in Wellington (NZ) is launching Activate HQ, a four month programme to help entrepreneurs lay business foundations for a high growth company.
Over 14 weeks, the program covers:
- Taking your idea to the next level
- Setting goals and business values
- Market research & validation
- Building a successful team
- Cash flow forecasting
- Financial needs of high growth companies
- Strategic planning
- Protecting your IP
- Branding
- Dealing with the media
- Sales & marketing
- Shareholding and governance
- Preparing for investment
- Being a CEO
I spent 2.5 years in Creative HQ, starting a company and taking it through to merging with another company then getting investment and the support and networks that CHQ offers are invaluable.
The first full Active HQ programme is scheduled to start in early 2008 and there are a few more places available, so if you’re in this space, don’t hesitate to have a chat with Rewa on 04 381 444.
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Posted by Andrew
OmniFocus 10/10
8 December 2007OmniFocus is a Mac application for tracking to-do lists. Quite a basic concept that Outlook and every mobile device has been doing for years, but I’ve tried every task management system I can get my hands on, including various ABC-123 systems, and I always seem to end up with lists so large that they become useless and I return to the good-old daily list on paper.
OmniFocus is different because it follows the ‘Getting things done‘ methodology of dealing with tasks. Control-Option-Space opens the ‘new task’ window and adds a task to your task inbox.
Dealing with tasks in your inbox is easy – if you can do it today, then do it and mark it as complete. Otherwise, drag-and-drop it onto a project and/or assign a context. The context could be home/office/phonecall/lunchtime etc.
The task list can be viewed by project, group of projects, context, due date etc. Very simple, yet the three dimensions of inbox/project/context provide enough power to manage an ever-growing list of tasks and to actually get stuff done.
OmniFocus is 10/10 because its to-the-point and simple yet much more powerful than a one dimensional to-do list. Also – until Jan-8 its half price at $US 40.
1 Comment | Business, Mac, Software | Permalink
Posted by Andrew
Success
9 November 2007I like Seth Godin’s three things you need to be successful in a small business:
- the ability to abandon a plan when it doesn’t work,
- the confidence to do the right thing even when it costs you money in the short run, and
- enough belief in other people that you don’t try to do everything yourself.
To have the visibility to see a bad plan for what it is, the foresight to do the right thing when it hurts and the ability to gather and motivate good people requires a real leader with a real vision. Success is then what you’re left with when you’ve achieved your goals.
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Posted by Andrew
