Entrepreneur, Thou Art Toolish, part 2
Directly on the coattails of my previous post, I am ready to call out another common failure point for entrepreneurs. Major mistake #2 is approaching your web developer / partners / bank / focus group with baseless (or undetermined) pricing.
As a web developer with loads of startup experience, it is my job to give entrepreneurs direction with their web presence, but I am still amazed at how many people ask me “how much should I charge? or should it be free?” at the beginning of the project. Don’t get me wrong, I very much enjoy the process of helping people derive a dollar value for their service based on their expenses. It’s actually quite fun and gives me unparalleled insight into how their biz will operate both logically and financially. I rarely build two web apps that operate in a similar manner or industry and, so, I hardly ever have “all the answers” at the point when I initially engage with a client. Therefore, that process is necessary.
But the part of this process that is silly is why am I the one that is instigating it? When entrepreneurs are deciding whether their idea is financially viable, the core part of the exercise should be computing operating expenses (especially marketing — which everyone neglects — e.g. “I’ll send out emails to all my friends” … ugh). Weigh cost of operations against startup capital to see how long you can last in the negative. Now you know if you need a primary revenue stream (advertising, for example) and whether you can afford to offer a free service. Generally, after about 15 minutes of work, entrepreneurs see that they cannot support a free model. And even better, it’s pretty clear how much needs to be pulled in each month. Divide that by the number of users you are going to have. Now divide that by 10 because that is the REAL number of users you are going to have.
I don’t expect enterpreneurs to come to me saying, “We need to bill $3.14 every three weeks”. I expect lots of gray area. However, sharp entrepreneurs should really be asking me the questions that allow them to refine their costs. Like, how much is hosting? How many servers do I need and what will they cost and can that be amortized over X months? These questions indicate to me that the entrepreneur has determined that his model is at least somewhat financially viable.
Worse than this, however, is the client who tells me that pricing should be $9.99 per month “because it sounds good”. I’ve heard it way more than two or three times. To this day, I still can’t prevent my jaw from dropping when a prospect says this. Next time, I should probably tell them that their project will cost a flat $69,500 … and when they ask why … wait for it … oh, hell, you complete the joke yourself.
Anyway, fon’t be a tool; run through this process and be hugely conservative when it comes to the number of advertisers, users, and revenue streams you’ll have.
Entrepreneur, Thou Art Toolish, part 1
I’m starting a new series of blog posts cataloging enormous or classic blunders that I’ve witnessed firsthand. These are the mistakes that entrepreneurs made in their ventures that unequivocally caused a project to fail. But this isn’t me just sitting on the sidelines calling fouls. These really happened.
Now I know I am going to catch flack for the in-your-face title, so I’ll give a brief explanation. If you are an entrepreneur and you can’t check your ego and absolutely inhale all of the data that is out there (mostly bad, some good), then you don’t belong in this game. That MBA from Wharton isn’t going to get your site launched, real life lessons will. Every biz-related datapoint that you run across needs to be weighed and you need to make a case as to why it doesn’t apply to you. Don’t put up a wall and claim that you are immune from idiocy and failure. Wholeheartedly accept that failure is your project’s most likely end point and move forward keeping that very real prospect on your short-list of outcomes.
That said, if you can’t make the case against a datapoint, then you indeed have that problem. Don’t fight it. However, that isn’t what makes you so foolish, sir. It’s your inability to accept and adapt your strategy. Once again, check the ego.
Many years ago, a friend pointed out that I had no backup for my lead programmer in my development workflow. I railed against that concept of single point of failure, claiming it was not a valid concern so why should I invest time in training senior coders to be architects. Care to guess what happened? I lost my lead, nobody could take her place, the client lost faith and walked a short time later. Single points of failure nearly caused the doors to close back in 2005. The lesson: I was a fool with an ego.
Alright, so now that we have a level playing field, mistake #1 is trying to launch a project without a recurring revenue stream. Google will not buy you. Google buys about 10 to 15 companies in a really big year. I launch about 30 sites a year and I am one small developer. Seriously, you have no chance if this is your strategy. You have to have some incredible, patented tech to even catch their eye at all, much less get purchased. Profitable operations is one sign that a technology is solid (when the crowd opens their wallets, that heralds mainstream acceptance). That last sentence there, THAT is your datapoint.
Keep In Mind, It’s Just A Blog
Way more complex than you need
Ok, so you’re tacking a blog onto your site to (1) quickly get breaking news about your products and company online and (2) boost SEO. We all know that (2) is the REAL reason you’re adding that blog onto your corporate site. You want to get on the first page of Google for certain search terms. Good plan! In fact, it’s such a great plan that EVERYONE else on the internet is doing the same thing.So what can you do to get in front of your competition?
First off you can use the latest version WordPress. WordPress does optimized URI rewriting and about a hundred other little things that rocket it to the front on the long list of blog platforms. Next, you should automate site map submission to Google, Ask, Bing, Yahoo, and 5 or 10 minor players plus the new challengers that pop up weekly (and get shot down almost as quickly — anybody remember that massive market changer, Cuil?). You can line up your Twitter feed to stream to the main page of the blog.
In short, simple layouts rule. Make your blog as visually simple as possible. Any fancy tricks (like the java tag cloud over there on the right which we are in love with) are just going to slow down your blog and MAY prevent it from getting indexed.
That leads me to my next point. Get it live and online ASAP. If you are building or re-building your main site, get the blog up and indexed before all the main dev is done. It’s gaining search engine traction while you’re testing and making final mods to your site. Even if you decide not to take the blog live, you can always line up 15 or 20 posts. With WordPress 2.6 & newer, you can schedule your posts to auto-magically go live on a specified date. So you drink two or three cups of that crazy Vietnamese coffee that has quadruple the caffeine and write them all in one mad literary sprint. Then stagger out the publish dates.
If you keep the blog layout simple, you’re going to get it online faster. You won’t waste time debugging complex interface issues. The simpler the layout, generally the more compatible it is with blog platform upgrades and plugins. I’ve worked with some very complex WordPress themes. After we add some plugins, the really crazy animated multi-columns themes will inevitably break — and that is just during the initial build. Complex themes and heavily customized layouts limit forward compatibility. Weigh that carefully.
Finally, use your blog. Post to it consistently. Especially at the beginning, daily posts that are rich in relevant keywords are the key to success. You can slow down once you have a couple hundred posts. Seriously.
Now with all that said, do you REALLY want that fancy layout???
6 Free Google Wave Invitations!
Google Wave, a social experience that combines e-mail, instant messaging, wikis, and social networking, recently added additional invitations for guests of its users. topLingo is a user, i.e. we have FREE invites!
So, we’re giving away invitations to the first 6 topLingo blog readers to leave a comment on this post.
Google’s Chrome OS means a whole lot of … Nothing
Google announced their vaporware operating system Chrome OS. We do know that most of the apps and resource-intensive computing will be offloaded to the cloud. Beyond that small scrap of data, nobody knows anything and, more importantly, nobody has seen anything. Yet the pundits are already signing the death certificates of both Microsoft Windows (standard target) and the iPhone (mmm … yeah). These are the same experts (New York Times, jkontherun, TechCrunch, GigaOM, etc.) that keep telling us that Facebook is going to level Google. So the timeline that I’m getting is:
- Facebook becomes the search engine of choice, forcing Google to make money elsewhere
- Google becomes the operating system manufacturer for netbooks and smartphones
- Somehow Google then makes the jump to becoming the OS of choice for all computers (can’t wait to edit HD video in the cloud)
- Microsoft’s market share approaches zero and, in a desperate bid to make the payroll, they become an ebay power seller auctioning off vintage CDs of Windows 95, MS Works, and Microsoft BOB
- Bonus: Chrome OS somehow knocks off the whole closed-architecture iPhone OS platform and everybody buys those wildly unsuccessful Android phones
- Google is back on top and all things are again right in the tech food chain
The Windows death knell has been ringing for about 15 years now. Some Windows-killer is announced every six months. And what happens? Nothing. Big, bloated, unsexy Windows persists. About 18 months ago, the same characters from above let us know that Vista would to send Microsoft to the soup kitchen. Creative thinking had placed Windows itself as the ultimate Windows-killer. Hara-kiri. Didn’t happen.
I’m quite excited to see Chrome OS and play with it a bit. However, it’s unlikely to alter the tech landscape very much. Either way, this is solid marketing by Google’s PR department. It even got my lazy butt blogging about it.