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Thinking about starting a business? Fake it until you (have to) make it

(EDITORIAL) Starting a business can be tricky, to know what you’re getting into you should get your hands dirty to prove product and/ or market fit before you actually need to.

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Start early

Creating and running a tech startup is no mean feat. In addition to coming up with the idea, fundraising, recruiting and selling, it involves lots of… well… tech. You’re likely going to need to set up hosting services, code repositories, analytics, CRMs, CMSs, VPNs, CDNs and a host of other three letter acronyms. You’re looking at weeks of work just to create your infrastructural table stakes (the bare minimum) and that’s before you start working on the stuff differentiates you. Your system architecture is unlikely to be your UVP (Unique Value Proposition) but it’s necessary.

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But what if you didn’t have to do it all (yet)? What if there was a way to delay the time spent on coding—never mind fundraising or recruiting prematurely—to focus on refining what makes you special. What if there was a way to prove that you are on your way to finding the proverbial product/market fit before spending all of your time and resources on something the market doesn’t really want? I’m here to tell you that there is — you should fake it before you (have to) make it!

Fitting in

“Product/market fit is being in a good market with a product that can satisfy that market.” -Mark Andreesen, VC at Andreesen Horowitz (2007)

Zappos’ founder, Nick Swinmurn’s early-day hustle is probably the best example of proving out a hypothesis before spending resources on building. In 1998, five percent of shoes were sold through mail-order catalogues and Swinmurn believed that he could beat those numbers with an online version. As he told Business Insider (2011), he “went to a couple of stores, took some pictures of the shoes, made a website, put them up and told the shoe store, if I sell anything, I’ll come here and pay full price.” By faking it, he confirmed that people would be willing to order shoes online without trying them on.

Swinmurn had proven product/market fit before setting up a warehouse, buying thousands of shoes or building out a complex inventory management systems to handle the supply chain.

If you are struggling to find an analogue in your business idea, consider this, what could you do manually (by hand) or personally (by yourself) that you envisioned coding or hiring for in order to fulfill a customer need today? Could you manually respond to text queries while building your NLP chat bot to see which queries surface most frequently? Could you deliver the order yourself before hiring drivers? Could you manually create travel policies before coding up an algorithm (that’s what yours truly is doing) to do it automatically? Just because you’re the one making the cold call or hitting “send” the on-boarding email doesn’t mean that that is how you’ll run your business for life. As Paul Graham, founder of Y-Combinator is famous for saying, “Do things that don’t scale.”

Graham’s point is larger than mine — he applies this principle to early stage attention-to-detail, sales, customer support and more.

But also addressing manual processes he says, “This lets you launch faster, and when you do finally automate yourself out of the loop, you’ll know exactly what to build because you’ll have muscle memory from doing it yourself.”

Expectations meet reality

Without the insights gained during the personal pain/inconvenience of faking non-scalable things, you very well could be building the wrong thing first. You may assume a linear development roadmap to match the expected customer journey through the product (Sign-up, Onboard, Collect Payment, Reporting Dashboards etc.) but by manually doing things, you can work out where you get the largest return on your time and cash investment and achieve the greatest efficiencies. It is possible that manually on-boarding users directly through SQL or Postman only takes you two minutes whereas copying and pasting stats from a database into a reporting table or email takes you an hour.

Although sequentially on-boarding comes before reporting, you should logically remove yourself from the larger bottleneck by automating reports before automating on-boarding. Not only will you have gotten to market faster by manually doing as much as you can, you have also encountered all of the possible permutations that your reports need to accommodate and can build a better product.

Another benefit of manual processes is that they force you into the world to experience your market first hand.

When you’re starting out you often have a good idea but a bad grasp of the market you are entering and in order to reach that mythical-but-neccessary product/market fit, you have to get to know your customer deeply. You can’t isolate yourself “building” if you’re the one responsible for responding to that customer support chat, delivering that sandwich or writing up that policy.

Instead of blindly building what you think is a good idea for an unsuspecting market, you are becoming intimately familiar with the people you think are going to be paying you.

This approach lines up well with the concepts of building an MVP (minimal viable product) and lean startup methodologies as you are building just enough to get by, and interacting continuously with your customers as you manually fake processes until you have to make them. Then, when you need these manual processes to scale, you know what’s most urgent based on your available resources and what’s most important based on the deep insights gained from interacting with your customer, making Dwight D. Eisenhower very happy, “What is important is seldom urgent and what is urgent is seldom important.”

The Eisenhower Decision Matrix:

matrix

If you fake it till you (have) to make it, your development, recruiting, sales and even fundraising will flow much more naturally as you’ll be armed with newly-gained:

• Intimate market knowledge
• Initial customer traction
• Prioritized roadmap
• Product/market fit
• Answers to questions you wouldn’t have thought about beforehand

So go out and do things that don’t scale and fake it until you (have to) make it!


Sources:

Part 4: The only thing that matters

Lessons Learned Growing Consumer Products

The Zappos Founder Just Told Us All Kinds Of Crazy Stories – Here’s The Surprisingly Candid Interview

Do Things that Don’t Scale

The Lean Startup

Scaling Lean

The Eisenhower Decision Matrix: How to Distinguish Between Urgent and Important Tasks and Make Real Progress in Your Life

Daniel Senyard is a writer, speaker, serial entrepreneur and founder of travel startup, Shep . Over the course of seven years in the startup trenches, Senyard has done it all (fundraising, strategy, product management, marketing, band booking, photo-copying etc.). Born in South African, Senyard has lived in Africa, America, Europe and India, and has a funny accent.

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Opinion Editorials

The strong case for Texas being technology’s next frontier

(EDITORIAL) Everyone loves Tacos and tech in Austin, but Texas has far more to offer – here’s how the various cities will create the next mecca for the tech world.

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Despite what the movies have told you, Texas is not the place you think it is. Sure, we’ve got cowboys, brisket, and a lot of BBQ, but the Lone Star State is much, much more than clichés. Over the last few decades, Texas has been gaining steam as one of the premier places to live in the country.

While yes, people love a good chicken fried steak or are always looking for an excuse to sneak over to their favorite grocery store, HEB, Texans aren’t sitting idly by when it comes to tech – they’re grabbing the industry by the horns.

Thanks to the state’s business-friendly tax breaks, a year-round predominantly warm weather climate, and a strong state culture, the popularity of Texas makes a lot of sense: Houston, which was once considered a third tier city is about to overthrow Chicago as the third largest in the nation, while also being lauded as our most diverse city.

Let’s repeat it, for all the people in the back: Houston, Texas is more diverse than Los Angeles, or New York.

Affordable neighborhoods are popping up across Houston, which are attracting immigrants from every culture looking for their slice of the American Dream. Houston is seeing explosive growth and a cultural shift away from being a town built on strictly fossil fuels, but now, startups, tech, and umbrella industries are finding their niche in the state’s biggest urban area. Only New York is home to more public companies.

Houston’s medical sector ranks with some of the top care in the world. And with those elite doctors, come the innovative pharmaceutical and medical companies, and the tech that supports them.

When you look at the top twenty metro areas to live right now in the country, four of those cities are in Texas. While some of those reasons are affordability and the signature Texas heat, the state is seeing new residents thanks also to a healthy job market. Since 2010, Texas has added 12.6% more residents, double lapping California’s growth of 6.1%.

Texas’ workforce is bigger than 46 states in the union total population and has doubled in job growth, productivity, and new deals are being struck daily. Texas’ impact on the tech sector is indisputable: Texas has exported more technology than California, again.

Deep in the heart

Startup culture is alive and well in Austin, but while some of our startups are finally beginning to draw VC attention away from Silicon Valley, we know how to slug it out in the land of the bootstrapped beginnings. If your company can thrive in Austin, with so many talented people, and a lot of great ideas, you can make it anywhere (sorry New York, for stealing your platitude).

Austin is still a developing story. As enterprises are opening offices in the capital city, this is helping VCs along the coasts see Austin’s potential as a hub of ideas. The city is still behind the bay area for risk-taking ventures, but given the current climate of investors, there’s a sea change happening.

Giants like Apple, Atlassian, Oracle, Dell, Amazon, Samsung, Facebook, and Google are all occupying space in buildings across the Austin skyline. Enterprise companies are investing heavily into the Austin market, and there are zero signs of a slow down. If you need further proof, just look at the traffic on any of the city’s major highways during rush hour.

Dallas is making a hard play at attracting the top-tiered companies as well. When Amazon head honcho Jeff Bezos announced put out a call for bids for Amazon’s HQ2, many cities made a play for the site, but now that the final cities have been chosen, both Austin and Dallas both stand to score the shopping monolith.

Oculus, TopGolf, and startups like Veryable, Dead Soxy, and Artist Uprising are attracting some of the brightest minds to the Dallas/Fort Worth metro area.

South Texas joins the party

San Antonio is quietly building a case for a burgeoning tech scene, too. It’s not quite there yet on the enterprise or startup level, but the city is widely known for one thing – cybersecurity. Outside of Washington D.C., San Antonio is known as “Cyber Security City USA” to folks in the black hat scene.

San Antonio logged the most substantial growth of all of the Texas cities, adding over 250,000 new residents in 2017 alone. Thanks to a robust military presence, San Antonio is quietly attracting more and more security-minded firms, a feat that’s unique in comparison to what the rest of the state is offering. Military-friendly banking institution USAA is headquartered in San Antonio, as is grocery chain HEB, and Whataburger, with all three companies investing heavily into user experience and mobile applications (aka technology).

If Amazon decides on HQ2 in either Dallas or Austin, that will signal a 200,000+ person addition to the state’s population and economy. That’s a lifetime investment into either city, wherever Bezos, and his board chooses. Coupling that possibility with the already strong presence of Southwest Airlines, Texas Instruments, and just about every major gas corporation, it’s easy to see why these moves are a huge deal. For the latter, it’s also important to note that every sector is bolstering their websites, their social media footprint, everything that can be done on a laptop is happening – one new job at a time.

As the tech scene develops and changes from a strong west coast-driven model, Texas is benefiting from the change. Many Californians are moving to Texas, which is an article to itself, but one thing remains: the Texas economy has never been stronger, and it’s only improving. The story of tech in Texas is a continual work in progress.

We’re not going to overtake California next year, but we’re making a stand, and people are noticing. If the current economic growth is an indicator, the famous Dairy Queen saying is potent with it’s accuracy: “That’s What I Like About Texas.”

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Opinion Editorials

How to turn your complaint mindset into constructive actions

(EDITORIAL) Everybody knows someone who complains too much. While being open is important for mental health, constant bellyaching is not.

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complaint mindset

Everybody knows someone who complains too much. While being open is important for mental health, constant bellyaching is not, so here are a few tips on turning your complaints into constructive actions.

It’s important to understand the difference between “complaining” and “addressing.” Talking about problems which mandate discussion, bringing up issues slated to cause larger issues down the line, and letting your boss know that you have the sniffles all fall into the latter category due to necessity; complaining is volitional, self-serving, and completely unnecessary in most contexts.

Complaining also puts you in an excessively bad mood, which may prevent you from acknowledging all the reasons you have not to complain.

Another point to keep in mind is that complaining occasionally (and briefly) isn’t usually cause for ostracization. Constant or extensive complaining, however, can lead others to view you as a largely negative, self-centered person — you know, the kind of person literally no one actively seeks out — which is why you should focus more on redirecting that negative energy rather than using it to remind your barista why they gave up their dream of becoming a therapist.

Complaining stems from two main sources: the need to be validated—for example, for others to know what you’re going through—and the need to be comforted. Addressing a chronic complaint mindset, then, is largely about validating and comforting yourself. This is a simple solution which nevertheless can take years to manifest properly, but you can start by doing a couple of things differently.

“Focus on the positive” is perhaps the hokiest advice you’ll get from anyone, but it works. In virtually any situation, you can find a positive aspect—be it an eventual outcome or an auxiliary side-effect—on which you can concentrate. Think about the positive enough, and you’ll talk yourself out of complaining before you’ve even started.

It’s also good to remember that no one, no matter how much they care about you, can handle constant negativity. If you find yourself constantly hitting people with bad news or tragic personal updates, try mixing up the dialogue with some positive stuff. That’s not to say that you can’t be honest with people—friends, family, and colleagues all deserve to know what’s going on in your life—but make sure that you aren’t oversaturating your listeners with sadness.

Lastly, keep your complaining off of social media. It’s all too easy to post a long Facebook rant about being served cold pizza (no one likes cold pizza on day one), but this just results in your loding a complaint reaching a larger number of people than vocalization ever could. If you have to complain about something in earnest, avoid doing it anywhere on the Internet—your future self will thank you.

Being honest about how you feel is never a bad thing, but constant negativity will bring down you and everyone around you. If you can avoid a complaint mindset as a general rule, you’ll one day find that you have significantly less to complain about.

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Opinion Editorials

How to encourage your childrens’ entrepreneurship

(EDITORIAL) To encourage entrepreneurship for our children, we focus on providing them with direct evidence that they can do and be anything they want (excepting the six year old, who currently wants to be a cat).

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children and entrepreneurship

When I walk in the door most days, the routine’s predictable. Drop my briefcase, check the mail, and by this point I’ve received an invitation to go to my daughters’ store. What’s for sale invariably changes from day-to-day — sometimes it’s a pet store, or a bespoke clothier, or a coffee shop — but I’m always amazed at the level of thinking about multiple aspects of business ownership that they put into their play.

For example, I’m typically offered coupons and combination deals on whatever my purchases might be, which means that we get to have rich conversations about the purpose of such incentives and how they affect both customer perception of their brand and their profit margin.

Now, as they’re both under ten years old, many of these conversations don’t cause their games to stop for an introductory economics lesson, but I want them to keep these discussions in mind as their play expands. The world in which they’re growing up is a very different place from that which their parents did, and the possibilities they can embrace literally did not exist a generation ago.

So, too, the challenges that they’ll face. While the number of career fields and the jobs within them that are fully accessible to women are growing exponentially, the globalization of the economy and the shift towards a gig workforce means that they’ll have to compete against not only the remnants of outdated gender expectations, but also considerably larger numbers of people to do so, and with less stability in their career paths once they arrive.

To encourage the entrepreneurial spirit within our girls we, like many parents, focus on providing them with direct evidence that they can do and be anything they want (excepting the six year old, who currently wants to be a cat).

It’s been well said that what one can see, one can be. A 2012 MIT report found that in Indian villages where women held positions of responsibility and authority in local government, levels of aspiration and access to education rose by 25 percent and 4 percent, respectively. The amount of hours they had to devote to completing domestic chores dropped by nearly 25 percent.

It’s important to us to have our daughters see successful women in all walks of life to let them know that they are limited only in their passions and imagination, and should never settle for anything that they don’t want.

It’s also important for us to show them examples of young entrepreneurship whenever possible as well. In a 2015 analysis of Federal Reserve Bank data, the Wall Street Journal found that the percentage of adults under the age of 30 who had ownership stakes in private companies had fallen 70 per cent over the past 24 years. This illustrates the myth of the swashbuckling 20-something entrepreneur, along with the underlying challenges to business ownership.

By being realists about the challenges as well as idealistic about the possibilities, we want to keep alive the spirit that makes them excited to open a combination fish store and haberdashery in their playroom today, with the anticipation of changing the world through their professional passions tomorrow.

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