Mea Vita: Carpe Diem

Today, I had lunch with the founders of Jesta. I have been wanting a restaurant customer experience like Jesta for years. It's like Uber for dining in at a restaurant. 

I simply pointed my iPhone at the QR code on the table and the Jesta app displayed the current menu for the restaurant, with photos of the items I could order. I tapped on each item and then sent my order to the kitchen, along with my payment and tip.

The best part is there was no need for me to wave down the food server when I was done eating. I could simply leave since my bill was already settled. Simple!

It all worked exactly expected. Jesta is in about half a dozen restaurants in San Diego, and growing. I hope they're able to raise a round of funding to put them over the top for marketing. Innovation at its best.

I was talking to a savvy restaurateur who told me how he decided on the location to open an Indian restaurant in a particular neighborhood in San Diego.

He found several viable locations for his Indian cuisine. The problem was, how could he know which one was the best? So, he tested the market. For each potential location, he created his restaurant menu and direct-mailed it to the surrounding neighborhoods. Each menu had a different phone number to call, with the address of the potential restaurant. He immediately started getting calls from people who loved Indian food and were grateful that one was opening nearby. After a several weeks, he had enough calls to see which location had the most interest.

Testing a market, like this, is a very simple technique, but it's often the most overlooked step in the process for many entrepreneurs. Be sure to listen to your customers before you make up your mind to avoid confirmation bias. 

The more I mentor engineers-turned-entrepreneurs, the more I've noticed it requires the proper attitude, more so than the raw skills. I call it the entrepreneur's attitude. When starting off, it's OK if a new entrepreneur doesn't know a whole lot about startups, but they do need to be coachable without being overly impressionable. 

When I speak with wannabe entrepreneurs, who are coming from an individual contributor background, I frequently quote Steve Jobs's comments from WWDC '97.

You got to start with the customer experience and work backwards to the technology. You can't start with the technology and try to figure out where you're going to try to sell it. And I've made this mistake probably more than anyone else in this room and I've got the scar tissue to prove it.

I see two key parts to the entrepreneur's attitude that are important.

The first key part of the entrepreneur's attitude is they need to be focused outward, on customers, and think in terms of benefits before features. Don't lead off with your wants (i.e. I want our company to be the best at blah, blah, blah... save that pitch for investors.). Instead, lead off with the benefits you provide to your customers. Try to eliminate words like "I" and "we" in your pitches and marketing.

The second key to a successful entrepreneur's attitude is recognizing and embracing opportunity. I recently had a friend from NY stay with me at my home. He's made millions of dollars selling companies he founded and ran. Interestingly enough, he doesn't consider himself an entrepreneur. Rather, he prefers to be labeled as a software developer. Regardless of his title, he is constantly seeking new experiences, knowledge, and opportunities. His default position, when experiencing something new, is to immediately investigate it and give it a try.

Opportunities can be found most anywhere. Many times, opportunities first present themselves as uninvited inconveniences. With the federal government currently shut down, some people are seeing it as an opportunity.

Engineers need to think like entrepreneurs. As Steve Jobs said, begin with the customer experience and then work your way backwards.

1. Sales: How and where will your customers acquire your offerings?

2. Marketing: How will customers learn about your product?

3. Development: How do you know what features to put into your product that will benefit your customers?

Many entrepreneurs will fumble #3, from the get-go. They'll either fail to get feedback from potential customers or they'll try to bake every possible feature, under the sun, into their product. To deal with the former challenge, I recommend following the lean startup methodology. For the latter, I recommend a notional press release.

Imagine this...

A candidate for a software engineering position comes into your office to interview as your first hire to build your application. The candidate has virtually no experience at software engineering, design, development, or deployment, but they tell you how hard they're willing to work because they believe in your business vision. During the interview, they describe and quote numerous articles they've read about famous computer scientists and CTOs in the news and on Wikipedia. Plus they give you a high level overview of bubble sort, map and reduce, object oriented design, and big O notation, although they've never coded.

Do you hire them to be your first software engineer? Of course not. So why would an angel or VC invest in an unproven career engineer turned entrepreneur, no matter how good the business idea?

Engineers are smart people and they know they're smart. Where they're not so smart is in dealing with people, in general, be it customers, employees, or investors. They're not the best communicators and often focus on features, not benefits. Frequently, in the mind of an engineer, they believe that if someone doesn't understand their vision it's because their audience isn't as smart as they are. It might seem easy to market and sell your idea, but it's not. 

Part 1 in this series:
http://blog.joemoreno.com/2018/08/engineers-turned-entrepreneurs.html

Part 3 in this series:
http://blog.joemoreno.com/2019/01/engineers-turned-entrepreneurs-part-3.html

Ineffective Marketing

You got to start with the customer experience and work backwards to the technology. You can't start with with the technology and try to figure out where you're going to try to sell it. And I've made this mistake probably more than anyone else in this room and I've got the scar tissue to prove it... What incredible benefits can we give to the customer?

People Skills & Storytelling

Benefits for Your Customer

What makes an entrepreneur different than an hourly or salary employee is their willingness to face challenges.

It is extremely difficult for a single person to create and grow a company since they need to oversee every aspect of their business's operations. Nearly all entrepreneurs have an Achilles' heel. If the entrepreneur comes from a maker background (meaning they are career individual contributors like engineers, writers, designers, etc.) then they may have challenges dealing with people such as employees, customers, investors, etc. On the other hand, if they're a "people person" with a background in management, then technical decisions might be their weak point.

The good entrepreneurs are the ones who recognize their shortcomings and work to improve themselves. But, regardless of an entrepreneur's background, it seems that marketing is always a challenge when venturing into new areas. No matter how good the idea, if you can't market it, it probably won't be successful. 

Keep your pitch tidy.

I've mentored many entrepreneurs over the years – they usually come from a "maker" background in that they make things. Typically, they make physical products or they are software engineers. Most of them are in the midst of their careers as individual contributors. They usually work quietly at their desks without much interaction with others. While this is great for their productivity, it doesn't give them the soft people skills to communicate clearly when interacting with other people.

I've listened to some entrepreneurs take 15 or 30 minutes to explain to me what their product does. That's 60 times too long. For a conversation opener, it should take a couple sentences to tell someone what your company or product does. Longer than that and people lose interest and they're not going to want to work with you.

If you don't know how to do this then practice. Start off with telling the listener if your "thing" is a product or service. "We manufacture an LED light that's an alarm clock for your nightstand which is more effective at waking you up compared to an alarm clock."

That single sentence is how I'd describe TheUplight. Most importantly, it leads with the benefits, not the features. From that sentence, the listener can follow up with their own questions, i.e., "Why is it more effective?" which the entrepreneur behind The UpLights responds with, "The UpLight gently prepares your body for waking up to reduce morning stress and increase productivity throughout the day."

The problem with listing a litany of features is that customers then have to figure out how those features would be of benefit. I know this sounds simple, but it can be very difficult to focus on what's marketable. For example, "it's patented" isn't marketable. While that tidbit is marketable to venture capitalists, it's not a buying decision factor for consumers. I don't care if I buy a patented or patent pending product. Big whoop. So, knowing your audience is important, too. But, regardless of your audience, make your point succinctly. There's a lot of noise out there.

Here's one of the best example I know of about succinct marketing, "1,000 Songs in your Pocket."

Moderating a panel of 3rdSpace crowdfunding entrepreneurs.

About five years ago, I joined the 3rdSpace coworking community in University Heights. Around that time, we noticed that some of our fellow members were attempting and failing to raise funds for their Kickstarter projects. So, a couple of us started the monthly San Diego Kickstarter Meetup which spawned a weekly Inventors Club for entrepreneurs actively engaged in Kickstarter projects. At our peak, we had six simultaneous crowdfunding campaigns live on Kickstarter and Indiegogo.

The Undress – The Undercover

The most notable Kickstarter campaign, that taught our group some valuable lessons, was The Undress which is a dress that allows women to change clothes in public, without getting naked. They raised $615,663 in 2014 for their first campaign and then they came back the following year, with an even better version, and raised an additional $248,704.

As a guy, I felt like I was missing out. I wanted a men's version of The Undress – something better than wearing a towel around my waist. Lo and behold, the makers of The Undress launched a Kickstarter campaign, last fall, for The Undercover which is more than a glorified towel for men. The secret to their products is the pockets which allows the wearer to reach inside the garment so they're not scooping under the bottom of a traditional towel and inadvertently exposing themselves to the world. Also, both The Undress and The Undercover are both secured to the wearer so they won't fall off (a common problem that surfers know all too well). The added bonus of The Undercover is that it also doubles (triples?) as a backpack and shorts; and, in a pinch, women can use it to change clothes, too.

What gets me most excited about The Undercover is that mine arrived yesterday and it works exactly as expected. Only an entrepreneur can appreciate how much complex thought goes into producing such a simple product.

Here is The Undercover in action...


The Undercover from Joe Moreno on Vimeo.

Disclaimer: I paid full price for my two Undercovers and I was neither solicited for this post, nor received any compensation.

Q: What should be an entrepreneur's first step when creating a business, product, or service?

A: Write a press release (PR) and frequently asked questions (FAQ) document.

Think: Begin with the end in mind.

The PR and FAQ are notional and for internal use only. The PR focuses on your product's benefits and the FAQ answers specific questions regarding features and details. Later, when you're ready to ship your product, you'll publish the actual PR and FAQ for public consumption. In the mean time, the notional PR and FAQ are used to socialize your vision with the team. Sure, you'll tweak the document, slightly, while you're working on your baby, but by using this as a starting point... as your vision document... gets everyone on the same page and it keeps the founders and team from getting distracted.

The PR should be a simple one or two page document describing the benefits of your product and the FAQ can be a few pages. If, later, you find development straying from that notional PR, then you'll either need to update the PR or ignore the distractions.

The key to selling is to point out the problem you're solving and then highlight the benefits before moving on to the features. Here's a perfect example in a two minute video.

Background 

For the past two years I've been co-coordinating a Kickstarter meetup. What started off as a monthly affair has expanded to fill the three weeks in-between the main events with working sessions for our group of entrepreneurs. Our focus is on all crowdsourcing platforms and my personal goal is to be the entrepreneur mentor I needed 10 or 15 years ago. The key transformation I've seen over the years is taking the "maker" (engineer, artist, designer, etc), who typically has an inwardly focused career as an individual contributor, and teaching them to focus outward on marketing, manufacturing, and customers. And, ultimately, turning them into sales people. At the end of the day, you have to sell, especially if you're a solopreneur or, in a team environment, you'll need to hire the proverbial rainmaker who believes in your product.

Real World Formula

I've mentioned the importance of the Kickstarter video before. Today, I came across a perfect example of how to pitch your product, through video, in an "As Seen On TV" format. (Although this video might seem a little cheesy, it's effective and, more importantly, it's not misleading.)

1. Start with the problem you're solving. (30 seconds in this example Dash Cam Pro video commercial)

2. Show your product's benefits in a way that customers can relate to so they can imagine themselves using your product to make their own life easier or more enjoyable. (30 seconds)

3. Cover the key technical features. Don't make the mistake of the "Microsoft iPod." (45 seconds)

4. Imprint a higher price on your customer before revealing your true, lower price. (15 seconds)
Here's why: Show the Highest Price First


This can all be accomplished within 120 seconds. The key to telling a good story is by editing away all the cruft.

Wire harness manufacturing.

This past week, I took a group business tour of a few manufacturing factories in Tijuana, Mexico. The tour was part of the San Diego Inventor's Club and Kickstarter Meetup that I've helped coordinate for the past year and a half.

Leadership Observation

Back in the U.S.A.

Kickstarter Meetup at 3RDSPACE: "The video is key."

Go Lean, Kick Start

When launching a startup, go lean. Brant Cooper describes this technique in his New York Times bestseller, The Lean Entrepreneur.

When launching a product, crowdsource. Most businesses design, build, and market a product hoping it'll sell. Crowdsourcing, on the other hand, cuts the risk. Crowdsourcing entrepreneurs build a prototype first. Then they sell it before mass producing it. The lean startup method is the opposite of what happened in the Dot-com era. In the late 1990s, VCs funded many businesses based solely on an unvalidated idea.

3RDSPACE Kickstarter Meetup

I co-organize a monthly Kickstarter Meetup at the 3RDSPACE coworking location in University Heights. I've seen people launch projects that fell short of their fundraising goals. I've also seen teams make their goal and then discover they severely underestimated their costs. Crowdsourcing isn't an alternative to entrepreneurism. Crowdsourcing is entrepreneurism, done smartly, with all its risks and rewards.

Biggest Kickstarter Ever

Coolest Cooler's clear rewards.

The biggest fundraiser on Kickstarter is Coolest Cooler. It ended four days ago after raising $13,285,226. I've learned some important techniques while participating in our Kickstarter Meetup. The key to launching a successful crowdsourcing campaign is the video. Don't be cheap and don't put the word Kickstarter throughout the video. If Kickstarter doesn't accept your fundraising campaign you can try another crowdsourcing platform. Also, don't make the rewards confusing. If you're making software, don't give t-shirts as rewards. You're in the software business, not the t-shirt business.

The two leaders in crowdsourcing are Kickstarter and Indiegogo. Since these are new businesses, they're still working out their rules. The key difference between these two companies is that Kickstarter is an all-or-nothing campaign. If you don't hit your fundraising goal then you don't get any of the funds, but with Indiegogo, you do. So, be careful about your reward choices. If you decide to raise $15,000 on Indiegogo but only get $1,500 in pledges can you still deliver your rewards, profitably?

Crowdsourcing isn't the be-all and end-all of startups. Its key benefits keep entrepreneurs focused while validating their ideas. A good story and clear message will go a long way to bring a product to market while minimizing risk and out-of-pocket costs.

This morning I discovered that a product I bought last week, CityLite, had been a failed Indiegogo project. When the CityLite campaign ended, earlier this year, they had raised only $4,606 of their $80,000 goal. Somehow, this went from a failed (or perhaps abandoned) campaign in Denmark to a product I bought in Solana Beach last week. That's not bad considering some fully funded crowdsourcing projects, like Tile, can take a year to deliver.

Tomorrow, I'll post what I've learned after being part of a team that runs a Kickstarter Meetup series.