The Blog of Matt Gornick

experiments in building businesses, lifestyle design, and social hedging

Working at a startup (and notes from WashU talk)

This week I had the opportunity to speak with some great students at Washington University in St. Louis.  As apart of "Alternative Career Week", they brought in Aaron Papermaster (Moxie) and I to talk about starting your own company while in college and working for a startup once you graduate.

I've noticed that I keep referencing the same books, videos, and people so I decided to make a page to have all of this information in one place.  

This information can be found at:

Customers hate surprises

Law 1: Tell your customer what you're going to tell them.

Law 2: Tell them.

Law 3: Then tell them what you told them.

Today I went to the barbershop for a quick trim for the holidays.  My hair wasn't long, but just needed to get cleaned up.  I told the barber to take just a touch off the length and trim me up.  He smiled, agreed, spun me around (away from the mirror), and proceeded to cut my hair in complete silence... not a word.  20 minutes later, he spun me back around and I promptly figured out that this wasn't want I asked for.  He tried his best to correct the butchery of a haircut, but as the ancient proverb goes "measure twice, cut once".  There was nothing he could do to fix the haircut.

This is an important lesson because it is a perfect example of what businesses do and try to meet customer demands and expectations.  All too often, you are on the phone with a supplier/vendor/sales person and they can barely contain their excitement to get going, install software, and sell you hardware without truly understanding your needs.  There is a disconnect between what they want to sell and what I want because they aren't communicating with me.  

Going back to my haircut, the barber should be constantly communicating with its customers.  "Trim here, hows that length? Did you see the game last night?"  Without communication, even a seasoned expert can deliver something completely unexpected and unwanted to the client.  Obviously, unexpected and unwanted results are the last thing a paying customer has in mind.

Even Apple Computer who is known for secrecy, telling the customer what they need, and surprising everyone also plays by these laws although a bit differently.  First, they do an insane amount of research (read: listening) to determine what people's problems are with technology.  People are "communicating to" Apple and Apple is doing a great job at listening.  Before a product launch, there will be banners, rumors, faux product pictures, etc. but these are likely setting up the expectation of what they Apple will tell us (Law 1).  The anticipation leading up to the launch brings us to Law 2, where Steve actually tells us they are releasing an iPhone/iPad/etc.  Law 3 is the rest of his talk where he basically makes everyone on earth want to purchase this new gadget.  Law 3 is subsequently reinforced by other people (media, friends, etc) telling you what Steve already told you (e.g. "you need to by an iPhone because it is the greatest achievement bestowed upon mankind").

That being said, we need to either be more strategic (like Apple) or more active when communication and listening to customers and their needs.  Communicate early and often.

Happy Holidays!

Simple ideas can be profitable

I love receiving (and giving) feedback on startup ideas, pitches, and product demos.  It allows people to look for ways to improve their product as well as see their startup from objective eyes.  I think the biggest deterrent to creative feedback comes from people that discount ideas simply because ... they appear to be simple.

I love this quote from Paul Graham's Essay "How to Start a Startup" (http://paulgraham.com/start.html):
"In particular, you don't need a brilliant idea to start a startup around. The way a startup makes money is to offer people better technology than they have now. But what people have now is often so bad that it doesn't take brilliance to do better."

In my experience, some people like to think that all the easy problems have already been solved and thus you should only look at solving the huge and complex problems.  Unbeknown to most, there are tons of horrible (any annoying) solutions for rather simple problems.  Additionally, these companies might have completely solved the problem wrong to begin with and it is just up to you to create a simple and elegant solution.

Here are some great examples:
  • Groupon (http://www.groupon.com/) - People have been able to get coupons before, but never before has a website made it so easy and enjoyable to look at deals and new venues in your city.  The solution is amazingly simple so much so that thousands of Groupon clones are starting to take over internet.  Great idea, simple solution, $1+ billion company.
  • 37signals (http://37signals.com/) - For those using MS Project, you know the pain and angst that is involved with doing the most simple task.  37signals didn't set out to destroy MS Project, but rather just focus on the customers that just wanted to manage a small team or project.  The overhead and headaches of MS Project allowed 37signals to solve the problem the correct way.  
  • Inventables (http://www.inventables.com/) - For years, people scoured big material books, bids, and online to find things like 'squishy magnets' or 'water proof coatings' when building new products such as cars, running shoes, airplanes, etc.  Inventables is changing the way people find these unique materials buy offering a digital marketplace for buyers and sellers to interact and discover new materials.  Buying materials isn't anything new, but enabling people to easily find and buy them is.
  • Snuggie (www.getsnuggie.com/) - As most people on this earth already know, the Snuggie is amazingly well-known and is an incredibly simple idea (essentially a backwards robe or a blanket with sleeves).  Not only was this idea easy to create, manufacture, steal, and reproduce (if someone was so inclined), but it was a wild success and has generated millions of sales.
In a quote from Twitter user heathwblack, "Sometimes the best inventions don't reinvent the wheel, they just make it roll better."

3 Tips to juggle a startup and school

I've spent 4 years as a computer science undergraduate at the University of Illinois at Urbana-Champaign while being the co-founder of several startups as well as the CEO of my most recent startup, OrangeQC.  Juggling working with customers, building a startup, as well as handling class work and studying can be challenging, but is definitely doable.  Here are some tips that I've used to work on a startup and still do well in school:

 
1. Be smart about classes: Most classes are never set in stone.  Projects, groups, amount of work are all negotiable and all you have to do is ask.  I got the college to approve getting course credit for working on my startup company.  I also sought out classes that would allow me to work on independent projects that I really wanted to work on (like this).  Seek out classes that will allow you to do what you'd like and if they don't exist talk to your advisor and start an independent study course or have it cross referenced with a different course.
2. 168 hours organization: Everyone has a constant 168 hours in each week; how you manage those hours is what sets you apart.  Plan out your courses, assignments, etc. on a calendar (Google Calendar, iCal, Notebook, whatever) and see what time you have that you can allocate to working on your startup.  I've found it very helpful to mark down all my classes and seeing how much time I actually have.  I've used free time to work on my startup, talk to customers, and brainstorm new ideas.  You can't change what you don't have control over, so try to get in control of your time/calendar.
3. Seek out free resources: Many universities have courses and resources that are free to students, but might be obscure.  Many students might be reluctant to start a business because they don't have servers, office space, or materials when in reality they can get most of that for free just by asking.  Universities have become more accepting in student entrepreneurship and thus are much more open to helping students get what they need to get started for free.  I know that we were able to get free servers and office space for OrangeQC just by talking to the right departments and just asking.  
 
I hope you can find some of these tips helpful in starting your business.  Now get out there and hustle!

Guerilla Startup Series: “Rework College” by Matt Gornick, CEO of OrangeQC

From the Illini Entrepreneurship Network:

Guerilla Startup Series: “Rework College” by Matt Gornick, CEO of OrangeQC
We’re launching our new Guerilla Startup Series with the CEO of the Cozad winning company OrangeQC. The Guerilla Startup Series is all about bootstrapped startups and the most useful skills you need to start one. Matt will go over his Rework/37signals influenced work style and how he balances running a startup company with his academic career.

Only the first 25 to sign up will be admitted, please RSVP to attend here

3 Tips to Win a New Venture/Business Plan Competition

Recently, the OrangeQC team entered the Cozad New Venture Competition at the University of Illinois at Urbana-Champaign.  I was very, very skeptical considering the negative connotation with startups in these competitions (see Techcrunch article).  We eventually decided to compete since we were 1. already a new venture, 2. already generating revenue, 3. were looking to expand and we weighted the expected return to be in our favor (didn't have to give up equity, not time consuming, networked with some great people, etc).

Here are some 3 tips that I feel helped OrangeQC win the competition:
1. Have a customer/user: So this might seem a bit backwards to talk with potential customers before you have a product.  In reality, if you aren't talking to your potential customers on Day 0, then you have a very high chance of completely building the wrong thing that no one will pay for.  Since OrangeQC was already a business focused on generating revenue, we were talking with potential customers before we even built the product.  This ensures that 1. someone will actually pay for your product/service and 2. that you build it (almost) correct the first time.  All too often, plans have the profitability as a big unknown.  If you are talking with someone before you build your product you are lightyears ahead of everyone and more importantly have a better chance of building a business.

2. Have a product/prototype:  Having something that can be shown in a presentation is critical.  In our semi-finals round, we barely talked about our product that we built which makes the judges think we had just an idea.  If you have a product, show a video demonstration, bring it in, or make it live so judges can see that you actually have more than just an idea.  Many of the people competing have just an idea, several people have professional looking mockups, and very, very few people have actual products.  If you don't have a product, start building it immediately.  

3. Ensure your team can actually build the business: I've noticed that many of the teams were built with great co-founders.  Be sure that everyone can contribute to building the venture and that you or a co-founder is not just 'the idea guy' (see 37signals post).  If you're in Computer Science, be sure you can sell your product and talk to customers.  If you're in Business, be sure you can build a product and not 'just be the boss'.  Ideas are a dime a dozen in these competitions and the judges are in charge of making the most bang for the buck.  They want to 'fund' companies that have a high chance of being successful and 99% of that comes from the team.

Overall, the competition was a lot of fun and would recommend it to any (already existing) student startup that wants an unbiased opinion on their business, wants to network with great student entrepreneurs and judges, or wants to use some of the winnings to build a better business.  Now get back to talking with customers.

Disclaimer: This was a Midwest competition and not a Silicon Valley competition.  Just as the location chances, I'm sure the game changes for these competitions.  Luckily, if you follow these steps you could lose the competition and still have a successful business!