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How Serial Entrepreneurs Avoid Risks

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Many collaborative entrepreneurs wonder if there is a silver bullet that would help them get their company to work right now.

And there is a truth that every serial entrepreneur knows. There is a way to “succeed” systematically, and there is a way to “struggle” systematically.

It’s a mindset difference.

Those who struggle always build a product before making sure people will buy it.

Those who succeed, make sure others really want and buy their new products before they exist.

By selling their product or service before it’s ready, when time comes to build, they know that they’ll create a product or service that people really want.

To see what I mean, these are three examples of this mindset applied to entrepreneurial celebrities in their beginnings:

  • Before creating an airline, Richard Branson got his flight to Puerto Rico cancelled which left him and a few others stranded on an island. He figured he had a problem and went to find a solution. He picked up the phone to find out how much a charter would cost. But instead of paying a whole charter on his own, he divided the price of the charter among the number of passengers and charged them $39 to rebook their seats. He offered the other passengers to pay and they were glad someone took care of it. This pre-sale Branson’s first experience in the airline industry, and the one who led him to create Virgin Airlines.
  • Before building a company, Steve Jobs also  started selling blue boxes that allowed users to get free phone services illegally. First it was a hobby invention by his friend Wozniak. When he realized people were ready to pay for it, he knew he was in business. Then someone tried to rob him at gunpoint (a story for another tab) and he decided to try selling computers, which ended up being another pretty good business for him.
  • Before Starting Paypal, Tesla and Space X, Elon Musk learned how to run a business and pay his rent by hosting epic night-parties. He first rented a house and threw parties that attracted thousands of college students. Once he knew how to make money with his projects and was comfortable with a business, he either sold it or moved on to something harder and more complex.
  • In 2005 before turning Arduino into a company, the Arduino founders created micro-controllers to teach their students programming and prototyping with electronics. When they realized people were asking in droves how to buy it, this is when they realized it was time to turn it into a business.

Can you see what’s going on here?

They all looked for people interested in what they were offering before they had anything to sell or made any significant investment. They avoided any risk.

If you are a budding entrepreneur, you might think that you can skip this step. You know in your gut that everybody wants your idea.

But from my experience, as we mentioned in the previous post, this is an excuse that helps us hide from the fear of being rejected or being stolen by others.

In this previous post you also learned how to come up with a pretty big list of things to sell. In this post we’ll take the idea you want to do most, and validate if it has the potential of becoming a business.

When you validate, you have to do it one idea at a time.

“Perfect” ideas don’t exist.

OpenROV started with a “simple” underwater robot for submarine exploration and have improved it over time to a much more polished and refined Underwater drone.

Open Source  Ecology started with a Brick Press to create building materials. Once they validated people needed it, they went on to develop the rest of the Global Village Construction Set to create a new open and ecological civilization from nothing.

So don’t worry if your idea doesn’t have a 20 year plan to change the world and a huge community behind it.

First things first. You have found a few ideas. Congrats. Not everyone takes the time to lay them down.

Now, if you want to turn them into reality, you must find if people want it enough to pay for your idea.

This is hard and challenging. People might not be interested at first. You’ll have to tweak your idea or accept that it’s not a priority to others around you. You might even have to leave your idea and pick another one you had.

But you will eventually start to see that your idea can help and have an actual impact on others. And this will be incredibly exciting and rewarding.

The community and the 20 year plan will eventually come after that, if this is what you really want you think is necessary.

Don’t worry if you think your ideas aren’t good enough or might be too hard to sell. The real value of this exercise lies in learning how to quickly validate any idea you have.

When you know how to validate any business idea, you’ll never wonder anymore “should I have tried this?”.

One last reminder:

You may successfully validate your idea or not. If not, your main goal here is to keep moving forward with other ideas and repeating the process without spending a lot of money or time on a website, landing page, app or whatever. You really don’t need it. Just go after the low-hanging fruit and go manual without building a website or hiring anyone until forced to do otherwise.

If you already have a business you want to try, let’s stick to this one. If you don’t have any idea, go back to this post and come up with your own list of ideas. The point is to get started.

If you don’t know how much to charge for it, think how much value it brings to the person you want to help, and divide it by 3x or 10x. For example, if you are selling a course, or a product that you know will make the other person 1000€, you can easily sell it for anything between 100€ or 300€.

If you still don’t know how much your product or service is worth, go with 10€. You’ll see what are the reactions from people before and after you deliver your services or product. Their feedback will guide you into increasing or decreasing the price.

But always make sure that your price is always above your costs to build and deliver the product.

Otherwise you’ll be selling a service that will become a black hole of money for you.

How can you validate your idea in 48 hours?

You already have done some great work with your list. Let’s keep up the momentum to find your first customer and see how easy it is to sell your idea and to gather interest.

I/ Help people individually

The best way to start a business is to start helping people individually (even for free).

This will help you see what they are most excited to pay you for.

It doesn’t look very scalable, but it will give you amazing insights. When you start getting too busy helping others, it’s time to start building your platform, website or whatever you are planning, not before.

Hone your skills and craft first and build your customer base one by one at the beginning.

You’ll have the money, knowledge and proof you need to scale once you’ve got enough people interested.

And keep track of the questions that keep coming. This will guide you when making your product or service.

When you get too busy helping people one on one and making things manually is when you can justify building the actual course, book or product…

Some Examples

  • If you wanted to create something like Ifixit, you could go work at a repair café or at a repair shop and see what products people are repairing or what tools they need. Then make repair guides for the products that appear most often, and sell tools that people don’t have and need to take care of their repairs.
  • Before starting Amazon, Jeff Bezos learnt how to keep an actual book shop. Once he knew how to solve logistical problems and how to satisfy his customers, he went on to develop his platform.

II/ Don’t develop an app, website or physical product, do a crappy sketch

Before we start our business, most of us think we need to develop an app or website, and spend money for some reason. I’ve been guilty of spending time and money on websites before validating people wanted them.

I’ve done this with four projects. It has cost me a lot of money and 2 years of working on projects that could have been way more successful if I had actually asked people if they were ready to use them.

So if I can give you an advice it would be: “Don’t do it!”

Don’t invest in anything before you meet your users.

If you want to create a website, app, marketplace, or even a physical product, don’t start by hiring a designer, developer or engineer.

To make sure what you build will be used, all you need is paper and pencil, Google Draw, Powerpoint or a basic paper Mock-up you can make with Balsamiq or Pencil. It’s cheap, quick and extremely effective.

Imagine you wanted to create an OpenDesk-like platform, but instead of customizable furniture, you want to offer customizable garden-gnomes.

Instead of building your app, just draw it on a piece of paper as it would look like.

My OpenGardenGnome marketplace could look something like this:

OpenGardenGnome

THIS IS AS CRAPPY AS SKETCHES GET

Once you get your first low-tech prototypes, show it to others and get their feedback.

If you have a gnome-selling website, ask them if they want to pre-buy a gnome. If you have a subscription website, ask them if they want to pre-book a subscription to the website…

If they do, you can invest your own time and money in it. But not before.

What people want are SOLUTIONS, not another web, app or product. If you can validate that people want your app or your gnome, then you should build it.

If you fail to validate it, that’s great as well. The point is to learn, and move on quickly to the next idea.

Don’t spend more than 48 hours validating an idea. If it takes longer, look for another customer profile that could be interested.

Once you’ve tried with enough people you thought would be interested, adapted your offer to their needs and it seems hard to find early customers, move on. Trying to sell something hard will only get harder with time.

Note: If you are making a marketplace, you wouldn’t be asking your customers to pay for the marketplace, but for an item you are offering on the platform, like a rental at a someone’s place for Airbnb or an hand-made product for Etsy.

But more on this later.

You want an example? Here is one:

Dmitry Dragilev wanted to find out if people wanted a platform that would help them do their PR outreach.

He did a few sketches and hung them up on a whiteboard to show how it would work. This way he could see if they wanted it or not, if they were missing any features, and if they would be serious about buying his service.

Luckily for him, it turned out they wanted it and were willing to pay, so he built it.

Tip: Focus on the root problem your idea solves, and make sure people are ready to pay for it.

III/ DIH (Do It Home)

This technique is specially useful if you are launching a product that requires retail presence.

When you consider opening a physical space like a fablab, a makerspace, a school, a virtual reality cinema or a hardware store, your costs, time and risk are very high. So to prevent this risk, it is better to start validating your business at home.

Your costs are lower, and you can start making a profit, building your customer base and polishing your offering.

When time is ready you will have people ready to open your physical space.

If you want to launch a fablab to offer courses on 3D Printing or CNC Machining you can invite some friends at your place .

You can charge them through Eventbrite or Paypal. If people pay, you got yourself a business. If they don’t you can move on to your next idea.

For Example:
If you want to invite your friends to try your future physical offering, here is a template you can use to send the invitations:

Hey Guys,

I’m going to run a workshop to learn in one hour how to use a 3D printer, so you can start prototyping your next product designs 10 times faster. [EXPLAIN WHAT YOU OFFER, AND WHAT WILL BE THE RESULTS FOR THEM]

7pm at [your place/ coworking space]. It’s going to be pretty nice ? [TELL THEM WHEN AND WHERE IT WILL HAPPEN]

Who’s in?

I will charge 15€ for an hour and your first 3D impressions. [TELL HOW MUCH IT WILL COST]

See you!

[YOUR NAME]

This template also applies If you are going to do a yoga studio, a gym, a restaurant or any other retail businesses.

You just have to tweak the email to fit your idea.

IV/ The Public Billboard Technique

Post your low-tech idea on an Internet billboard like Craigslist, LeBonCoin or whatever billboard website that’s popular in your country. Any section will do: for sale, gigs, community chats or services.

Using this kind of platform is an amazing validation and will save you tons of time and money building a website, buying a domain, and so on…

You want to make an Open Source custom-clothing platform?

Offer to sell some custom costumes on Craigslist and see if people are ready to buy.

I am sure you are looking forward to ordering some costumes

I AM SURE YOU ARE LOOKING FORWARD TO ORDERING SOME

Once you have people willing to pay for your product, but you don’t have any product, you can deliver them yourself or post your own request for tailors in gig billboards to fulfill your orders.

Example:

When Airbnb was beginning they posted their listings in Craigslits, this is how they found their initial customers. To grow the offerings on their platform they also emailed people who were listing their properties on Craigslist.

Here is an email example written by the founders of Airbnb looking for more people to fulfill their orders:

airbnb-craigslist-letter

V/ The Low-tech email technique

If you want to create a marketplace or website, this is the best technique. Instead of developing your platform straight away, just email your friends. Manually connect people via your email list and charge for the connection.

Offer a service, connect people via your email list and charge for the connection.

If they pay you for what you want to offer, then you can consider making it happen.

Imagine you want to create a food delivery marketplace like Deliveroo. You consider making it Open Source and cooperatively owned. But first you need to find out if it will make money to support the people involved.

So you first email 15 of your busiest friends. If they are interested, you tell them to pay you 20€ through Paypal and deliver food on the night they choose.

Then you post on the Craiglist from your region – or Le Bon Coin if you are in France – that you need a caterer. You then pick up the caterers that would be a good fit, just like in the previous method.

This will validate that people want to pay for the service and that people are ready to deliver the service.

First example – Delivery marketplace:

If you wanted to create a food delivery platform you could use this email template to test your idea. You can also tweak this template for many other types of businesses:

“Hello Friends,

I’ve realized I don’t have much time to cook after I get home or am too tired to make a proper dinner. [EXPLAIN THE PROBLEM]

I wanted to invite you, with a select few others, to test a business idea with me. (Lucky you ? ) [EXPLAIN WHAT YOU THINK OF DOING ABOUT IT]

Convenient quality restaurant food delivered at your place. 

On [date], for 25€ I’ll be delivering sushi, french food and vegan gastronomy. You could choose any of the three, and I’ll deliver it right to your door for your enjoyment! [EXPLAIN WHAT YOU OFFER]

If this sounds like something interesting to you, you can paypal 25€ to name@inbox.com [ASK FOR THE PAYMENT]

Any feedback is welcome.

Have a great day,

Your Name

PS: Please let me know if you have any preference. I guarantee that the meals will be great.”

Second Example – Oomph:

When Oomph (now Crew) started their own marketplace they wanted to match freelance developers with people looking for freelancers.

But instead of spending time and money developing a complex platform, they just used a Mailchimp newsletter and a Wufoo contact form to get their business started.

When people were looking for developers, they just had to enter their project idea and their budget.

Wufoo's contact form

WUFOO’S PROJECT CONTACT FORM

Then Oomph would send a newsletter with the project to their list of developer friends who could provide solutions.

Mailchimp email to send new projects

MAILCHIMP EMAIL TO SEND NEW PROJECTS

This way they started selling $25,000 of projects in 3 months without any complexity, validating people were ready to use their service and pay for it.

If you want to launch your own platform cooperative, don’t build the platform, just set up a contact form to those who want to buy from you, and then add your providers in a Mailchimp newsletter. If there is a match you’ve got a business.

Third Example – Arcade City:

When Uber and Lyft were banned from Austin, Arcade City set up an invite-only Facebook Groupwhere people could request a lift by posting it on their wall, and drivers could match those requests. Potential Drivers could respond with their time of arrival, estimated price and phone to confirm the pickup.

Ride requests on Arcade City's Facebook Group

RIDE REQUESTS ON ARCADE CITY’S FACEBOOK GROUP

This validation helped them get their first 40.000 users and providers, and they’ll be sure it makes sense to invest in developing a platform.

Key Takeaway: Can you match your requests and service providers with a very simple platform at first to validate that there is enough demand and offering?

Wrapping Everything up

We’ve covered a lot of ground in this post. Here is what you should remember:

  • Pick your one idea
  • Pick above a validation technique you think is best for your idea
  • Test it quickly with people in your network who you think would be interested
  • If nobody buys, move on to the next idea
  • If people buy, deliver them your product or service, and invest the money into improving it
  • Help people with your fantastic ideas
  • Rinse and repeat

I understand that the examples I have given above may be different than what you may have in mind.

The point is to share a system that you can adapt to your own ideas so you don’t risk your finances or over-committing to others. I encourage you to try ideas that will help bring more life, openness and transparency to the world.

It might be permaculture products, a sensor, a textile, a book, a new software or anything else you came up with.

Whatever it is, validating will ensure that your creation is a win-win for yourself and for those around you. For yourself because you can make a living, and for those around you because they’ll want what you offer so much that they’ll be ready to pay you for it.

____________________________________________________

About the Author

This article was written by Jaime Arredondo, a Spanish and French collaborative entrepreneur of Bold & Open. See more.

Callum Connects

Malcolm Tan, Founder of Gravitas Holdings

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Malcolm Tan is an ICO/ITO and Cryptocurrency advisor. He sees this new era as similar to when the internet launched.

What’s your story?
I’m a lawyer entrepreneur who owns multiple businesses, and who is now stepping into the Initial Coin Offering/Initial Token Offering/Cryptocurrency space to be a thought leader, writer (How to ICO/ITO in Singapore – A Regulatory and Compliance Viewpoint on Initial Coin Offering and Initial Token Offering in Singapore), and advisor through Gravitas Holdings – an ICO Advisory company. We are also running our own ICO campaign called AEXON, and advising 2 other ICO’s on their projects.

What excites you most about your industry?
It is the start of a whole new paradigm, and it is like being at the start of the internet era all over again. We have a chance to influence and shape the industry over the next decade and beyond and lead the paradigm shift.

What’s your connection to Asia?
I’m Singaporean and most of my business revolves around the ASEAN region. Our new ICO advisory company specialises in Singaporean ICO’s and we are now building partnerships around the region as well. One of the core business offerings of our AEXON ICO/ITO is to open up co-working spaces around the region, with a target to open 25 outlets, and perhaps more thereafter.

Favourite city in Asia for business and why?
Singapore, since it is my hometown and most of my business contacts originate from or are located in Singapore. It is also a very open and easy place to do business.

What’s the best piece of advice you ever received?
Be careful of your clients – sometimes they can be your worst enemies. This is very true and you have to always be careful about whom you deal with. The closest people are the ones that you trust and sometimes they have other agendas or simply don’t tell you the truth or whole story and that can easily put one in a very disadvantageous position.

Who inspires you?
Leonardo Da Vinci as a polymath and genius and leader in many fields, and in today’s world, Elon Musk for being a polymath and risk taker and energetic business leader.

What have you just learnt recently that blew you away?
Early stage bitcoin investors would have made 1,000,000 times profit if they had held onto their bitcoins from the start to today – in the short space of 7 years.

If you had your time again, what would you do differently?
Seek out good partnerships and networks from day one, and use the power of the group to grow and do things together, instead of being bogged down by operations and going it alone from start.

How do you unwind?
I hardly have any time for relaxation right now. I used to have very intense hobbies, chess when I was younger, bridge, bowling, some online real time strategy games and poker. All mentally stimulating games and requiring focus – I did all these at competitive levels and participated in national and international tournaments, winning multiple trophies, medals and awards in most of these fields.

Favourite Asian destination for relaxation? Why?
Phuket – nature, resort life, beaches, good food and a vibrant crowd.

Everyone in business should read this book:
Rich Dad Poor Dad by Richard Kiyosaki

Shameless plug for your business:
Gravitas Holdings (Pte) Limited is the premier ICO Advisory company and we can do a full service for entrepreneurs, including legal and compliance, smart contracts and token creation, marketing and PR, and business advisory and white paper writing/planning.

How can people connect with you?
Write emails to [email protected], or [email protected]

Twitter handle?
@malcolmABM

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started, built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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Entrepreneurship

Women on Top in Tech – Pam Weber, Chief Marketing Officer at 99Designs

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(Women on Top in Tech is a series about Women Founders, CEOs, and Leaders in technology. It aims to amplify and bring to the fore diversity in leadership in technology.)

Pam Webber is Chief Marketing Officer at 99designs, where she heads up the global marketing team responsible for acquisition, through growth marketing and traditional marketing levers, and increasing lifetime value of customers. She is passionate about using data to derive customer insights and finding “aha moments” that impact strategic direction. Pam brings a host of first-hand startup marketing experiences as an e-commerce entrepreneur herself and as the first marketing leader for many fast-growing startups. Prior to joining 99designs, she founded weeDECOR, an e-commerce company selling custom wall decals for kids’ rooms. She also worked as an executive marketing consultant at notable startups including True&Co, an e-commerce startup specializing in women’s lingerie. Earlier in her career, Pam served in various business and marketing positions with eBay and its subsidiary, PayPal, Inc. A resident of San Francisco, Pam received her BA from the University of Pennsylvania and MBA from Harvard Business School. Pam is a notable guest speaker for Venture Beat, The Next Web, Lean Startup, and Growth Hacking Forum, as well as an industry expert regularly quoted in Inc., CIO, Business News Daily, CMSwire, Smart Hustle, DIY Marketer, and various podcast and radio shows. You can follow her on Twitter at @pamwebber_sf.

What makes you do what you do?
My dad always told me make sure you choose a job you like because you’ll be doing it for a long time. I took that advice to heart and as I explored various roles over my career, I always stopped to check whether I was happy going to work every day – or at least most days :). That has guided me to the career I have in marketing today. I’m genuinely excited to go to work every day. I get to create, to analyze, to see the impact of my work. It’s very fulfilling.

How did you rise in the industry you are in?
I had a penchant for numbers and it helped me stand out in my field. This penchant became even more powerful when the Internet and digital marketing started to explode. There was a great need for marketers whose skills could span both the creative and the analytic aspects of marketing. I capitalized on that growth by bringing unique insight to the companies I worked with, well-supported with thoughtful analysis.

Why did you take on this role/start this startup?
I’m not sure this is relevant to my situation as I had been a marketing leader in various start-ups and companies. I took on the role at 99designs because I was excited by the global reach of the brand and the opportunity the company had to own the online design space. I especially liked the team as I felt they were good at heart.

The challenge I’ve faced in my time at 99designs is how do I evolve the team quickly and nimbly to address new challenges. The work we do now, is very different than the work we did a year ago and even the year before that. There is a fine line between staying focused on the goal ahead and being able to move quickly should that goal shift.

Do you have a mentor that you look up to in your industry or did you look for one or how did that work?
There is no one I’ve sought out or worked with over my entire career as my “mentee” needs have changed so much over the years. There are many people who have helped me along the way. For example, one of my peers at eBay, who was quite experienced and skilled in marketing strategy and creative execution, taught me what was in a marketing plan and how to evaluate marketing assets. As I have risen to leadership positions over the years, I often reach out to similarly experienced colleagues for advice on how they handle situations.

How did you make a match if you and how did you end up being mentored by him?
I learned early in my career that it rarely hurts to ask for advice. So that is what I have done. Additionally, there are people that are known to be quite helpful and build a reputation for giving back to others in advisory work. Michael Dearing, of Harrison Metal and ex-eBay, is one of those people. I, as well as countless others, have asked him for advice and guidance through the years and he does his best to oblige. Finding mentorship is about intuiting who in your universe might be willing and whether you are up for asking for help.

That being said, generally, I have found, if you are eager to learn and be guided, people will respond to the outreach.

Now as a leader how do you spot, develop, keep, grow and support your talent?
I generally look for a good attitude and inherent “smarts”. A good attitude can encompass anything from being willing to take on many different types of challenges to working well amongst differing personalities and perspectives. Smarts can be seen through how well someone’s done in their “passion areas” (i.e. areas where they have a keen interest in pursuing).

I try to hire those types of people because in smaller, fast-growing companies like many of the ones I’ve worked in, it’s more often than not about hiring flexible people as things move and change fast.

Once those people are on my team, I try to keep them challenged and engaged by making sure they have varying responsibilities. If I can’t give them growth in their current job or in the current company, I encourage them to seek growth opportunities elsewhere. I’d rather have one of my stars leave for a better growth opportunity than keep them in a role where they might grow stale.

Do you consciously or unconsciously support diversity and why?
I consciously support diversity. When I am hiring, I am constantly thinking about how to balance the team with as broad a range as possible of skill sets, perspectives, etc. to ensure we can take on whatever is thrown at us, or whatever we want to go after.

What is your take on what it takes to be a great leader in your industry and as a general rule of thumb?
I’m going to assume a great leader in my industry to mean a marketing leader in a technology company. I think a great leader in this industry is not afraid to learn new tricks no matter their age – it’s the growth mindset you may have heard about. I have a friend who inspires me to do this – she purchased the Apple Watch as soon as it was available, and was one of the first people I knew to use the Nest heating/cooling system. She’s not an early adopter by most definitions, but she adopts the growth mindset. This is the mindset I, too, have sought to adopt. In my field of marketing, it most recently has meant learning about Growth Marketing and how to apply this methodology to enhance growth. Independent of your industry, I think a growth mindset serves you well.

Advice for others?
I have been at 99designs for 3.5 years. During that time we’ve invested in elevating the skills and quality of our designer community, we’ve rebranded to reflect this higher level of quality, and have improved the satisfaction of our customers. Our next phase of growth will come from better matching clients to the right designer and expanding the ability to work with a designer one-on-one. We have the best platform to find, collaborate, and pay professional designers who deliver high quality design at an affordable price, and it’s only going to get better. I’m excited to deliver on that vision.

Pam Webber
Chief Marketing Officer of 99designs
Twitter: @pamwebber_sf

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