Recently I had an investor ask me what was “hard” about what we were doing. Initially I was offended. Startups are hard. Everything we do is hard. Building a product is hard. Launching it is hard. Getting people to use it is hard. Getting people to believe in it enough to quit their jobs and work on it is hard. Getting people to part with their hard earned money because it MIGHT work is hard. 

After I got over my initial annoyance with the question I realized there was a nugget of brilliance to it.

The question behind the question is really “what makes you special?” Why is your startup different from the other eight I’ve seen today? The best answer to that question is “because we do something really hard that those guys can’t do.”

As a startup you are small, nimble, and can move extremely fast. So can everyone else. As a startup you can only focus on one or two things at a time and you must do those things extremely well. If you can only do one or two things they must be the “right” things. In my experience the “right things” are the hard things. 

Technology

In tech startups the best hard problem you can be solving is a technical one. You know this is you if when you tell people what your startup is they say “no way.” If people generally meet you with disbelief that you can actually do what your elevator pitch says you can do, you are solving a hard technology problem. In 2014 this is rarely an app or website. 

Distribution

The hardest problem most startups are solving is a distribution problem. How do you get a product in the hands of enough people to matter? This is true for both B2B and B2C startups. Startups that found themselves solving a truly challenging technical problem usually don’t fall into this bucket. If you’ve invented something valuable that nobody else can make, chances are you can raise money and pay your way to distribution. 

Market

Consolidating a market or solving a core market inefficiency can be a worthy hard problem to solve. Usually this involves rolling up a market or convincing major players to change the way they do business. 

Make sure your startup is solving a hard problem. While I am sure there is value in solving small problems that are easy, I don’t think you can build a big & defensible business without solving a truly hard problem.

What is hard about what you’re doing?

This post is part of a collaborative blogging effort at Startup Edition (a curated gathering of bloggers in the startup community, sharing their wisdom and response to a single question each week)

This week’s edition is about How do you build a team?

I don’t care about education, credentials, or what logos you have on your resume; I care about performance. When building a team I look for folks who have already built something in my space. Folks who get the vision right away because they’ve had it themselves, or at least some version of it. I try to find people who buy into the vision because they want a problem solved and they are excited to be on the team that gets to solve it. Finding the right people to build your early team can help you move unbelievably fast. 

Why recruit these people instead of the smartest most talented people regardless of where they came from?

• They get it: Easier to create vision buy in when people have already had the same vision (or some variant)
• Avoid pitfalls: No better way to see a problem coming than to have already made it in the past
• Speed: Less time planning & more time doing
• Elevate others: Experience can be passed to the rest of the team for exponential growth
  
• Confidence: Joining a new team can be really hard. The less new learning you have to do on day one the easier it is to be confident in what you are doing

Where do you find these people?

• Competitive products: Current competition can be a great source for talented folks who already get it. Works especially well if you can elevate people in the org chart
• Failed startups: They already get it and have the passion
• Smaller pieces of the bigger pie: They have intimate knowledge of a feature and typically relish in the idea of being part of a larger vision 
• Different verticals: They understand problems but not markets. Often times you can find people who were incredibly successful and love the idea that they can do it again in a different market

How you do it

• Research: You should know all your competitors, big/small/minuscule, but you should also know products in tangential spaces or solve similar problems in different markets/verticals 
• Use them: Find things you like and figure out who built them
• Stalk: Scour forums/social media/news and get to know them before getting to know them
• Reach out: Compliment what they built, give them a short pitch focus on vision & team, then offer a time where you can explain further 
• Close: Coffee is for closers

One of the most powerful conversations you can have with a potential team member is about the future. You want everyone on your team to want to build your product because they independently want it to exist. When this happens, they are excited to be on the team that is going to make it happen. Rather than just “doing their job” these people are more likely to be inspired by the vision and truly invest themselves in making your product the best it can be. Finding folks who have already built something like what you are trying to build is the fastest way to get to your end goal. 

I don’t subscribe to the conventional wisdom “there is no such thing as bad press.” I find that spinning your wheels trying to get press for your startup can be objectively bad and a huge distraction. “Getting your name out there” usually means unfocused PR that doesn’t get results. Ignore it.

At Duxter, I’ve done two types of PR. PR for gamers and PR for investors. We’ve been fairly successful with one and fairly unsuccessful with the other.

Press for gamers

Like any red-blooded American startup, we thought it would be really important to launch our product publicly on TechCrunch. In terms of views, shares, traffic and so on, things went extremely well. We were the most shared article on TC that day. The launch story was posted on Digg and became the top/featured story for a few hours.

Big win, right? Well not so much.

We ended up with a little under 10,000 registers traced to the TechCrunch launch. With the TC cohort we saw by far the worst retention we’ve ever seen. The best part of the TC launch was that it served as a nice stress test for our systems.

Key learning: We should have gone to where our audience was. I would have rather had 500 real gamers than 10K lookie loos. Sexy isn’t all that matters in PR.

Press for investors

I’ve targeted my investor press at investors currently in the pipeline as well as already-committed investors. I am sure there are great stories about articles being read by strangers that subsequently ended in investment, but that has not been my experience.

Press for current investors

I have found that it is extremely important to arm your current investors with everything they need to sell their other investor friends on your company. This is especially true at the angel stage. You want your current angels to tell other angels at cocktail parties on yachts (or wherever they gather) “Hey, did you read about Duxter? They are one of my portfolio companies and just had a great write-up in XYZ tech spot.” I find it extremely important to share press mentions and articles with all current investors to show progress and traction, but also with the nudge that they send this to other angels.

Key learning: Current investors love press. Share it freely and ask them to share it with their investor friends.

Press for prospective investors

I always find it a little awkward to talk to an investor after an initial meeting. Usually they hear the pitch, say it sounds interesting, have some questions, and the meeting ends. Good email followup is key to closing. I always try to think of creative and appropriate followups. Recently, I met an angel investor for the first time. This angel really pushed back one issue. I must not have handled it very well in person. When I got home I thought of all the great things I should have said. I didn’t want to write a five paragraph email explaining exactly why his issue wasn’t an issue. I ended up writing an article on a major industry publication explaining my points. Rather than sending him a 5 paragraph email, I linked him to the article and asked for his thoughts. He was fairly impressed and, ultimately, stopped pushing back on that point.

Key learning: Using press pieces to engage investors in the pipeline can be an excellent way to demonstrate domain expertise or traction. It is also an excellent way to keep the dialogue rolling without becoming a stale deal.

Regarding PR, I focus on attracting gamers and raising money. I’ve had more success with the latter and am still working on the former. When you do PR, do it with a purpose. Block out distracting opportunities to “get your name out there” and focus on what helps you build your business.

(This post originally appeared on the 7geese blog http://blog.7geese.com/2013/08/23/why-your-startup-should-use-okrs/)

Why Your Startup Should Use OKRs

If you want your startup to be transparent, accountable, have the right priorities, and be clear on the strategy at all times, you should be using OKRs. 

Two months ago, we implemented OKRs at Duxter. We are a young startup with 11 people (full & part time) working to build the best place online for gamers to live their gamer life. Like all startups we struggle with priorities. Possibly the most used/overused saying at Duxter is “bigger fish to fry.” Or as some of our British cohorts say “larger salmon to filet.” We use this term whenever when we are prioritizing one task over another. “Sorry I’d like to fix that, but I’ve got bigger fish to fry.” This is just our way of telling each other that we have higher priorities. The biggest problem with this mentality is that not everyone is always on the same page in terms of which fish is the biggest. That’s where implementing OKRs has really helped us. 

What are OKRS?

Objectives & Key Results (OKRs) is a management tool invented by John Doerr and made popular by Google. It is meant to be a lightweight system intended to focus each individual in an organization on the most important objectives in front of them by setting measurable key results they want to hit each month. 

The best explanation including in-depth and detailed examples can be found in this lecture given by by Rick Klau of Google Ventures 

7 geese also has a simple but complete definition of OKRs found here: 

How OKRs have helped us

Knowing what to be working on:

We had two big “fish problems.” The first was having competing views of which fish we should be frying. Often times these drastically different views caused conflict and inefficiency.

The second was our biggest fish seemed to change on a weekly or even daily basis. It became more and more difficult to keep everyone in the company apprised of where their individual focus should be.

Instituting OKRs have helped significantly with both of these problems. By publishing our three biggest goals each month, there is never any debate on what we should all be working on. We spend some time at the beginning of the month negotiating and ensuring we select the right goals. Once they are published everyone falls in line and works their hardest to fry those fish all month long. 

Clarity of purpose:

OKRs have helped us make sure everyone is on the same page. It is the clearest and simplest way to describe strategy to an entire group of people. We start by setting OKRs for the company, and then team-based OKRs around how that team can support the company OKRs. Then each individual sets OKRs for supporting their team OKRs. This way, when we make strategic shifts it is unbelievably simple to make sure that gets trickled down into tactical decisions by tweaking our goals at each level. 

Transparency:

Running a transparent company is pretty easy when you have 3-4 people together in one room but it gets progressively more difficult as your team grows. This became especially troubling for me as CEO. Sure we did standups, one on ones, and checkins but it become more difficult to do this efficiently as our team grew. This also started becoming an issue for other team members who felt increasingly clueless about what someone on the other side of the org chart was working on. OKRs really helped us tie everything together. It became much clearer as to how everyone fit together and how this all rolled up to the grand vision for the company. After the first month I had one developer say to me “Oh that is what you do” after reviewing my CEO OKRs. 

Feeling of progress:

Momentum is such a critical factor for startups. This isn’t just true for fundraising, press, and partnerships, it is also true for morale. OKRs have really helped us “feel” our progress. I am now able to send out an email at the end of the month with an update on all we accomplished that month. The email is long with a ton of great hit milestones. The best part is that it only takes me five minutes to put together. I don’t believe we are actually getting more done since instituting OKRs but it definitely feels like we are. 

Summary 

We’re only two months into using OKRs and I can honestly say it was one of the best internal decisions I’ve ever made as CEO. I strongly recommend building OKRs into your company culture as early as possible to ensure transparency, progress, and clarity of purpose are core to your startup. 

It is not always easy to figure out what people want. Simply asking people may seem like an obvious solution but it does not generally return the type of data you are hoping for. Here are a few reasons why:

• Selection bias (the people who respond might not be representative of your audience at large) 
• Figuring out what their priorities are is next to impossible
• Directly asking people can be extremely time consuming
• People tend to tell you their top of mind suggestions/problems, not the long standing/deep seeded ones

In developing Duxter (web/mobile social platform for gamers) we have taken the idea of gamer feedback very seriously. Our goal is to give our growing audience everything they need and want to live their gamer life online. We use the process below when building new features/tools or making large enhancements on current features/tools. Here is the process we use to determine what gamers want:

1. Create assumptions

• How we do it: Start out by brainstorming with 5-10 people in the company 
• Focus: Being creative and getting all ideas on the table (from obvious to off the wall) 
• Keys to success: Having multiple perspectives from dev, to marketing, to interns

2. Talk to knowledgable few

• How we do it: Find experts with deep knowledge about the problem/market and get them to contribute their ideas 
• Focus: Talking to the MOST knowledgable people possible 
• Keys to success: Variety in expertise, look to talk to an expert representing each stakeholder/archetype

3. Refine assumptions

• How we do it: Refine assumptions made in step 1 by crossing off ideas that won’t work and attempting to prioritize what’s left 
• Focus: Prioritization in light of what you learned in step 2. There will be lots of good ideas that aren’t implemented, but you want to start working toward the “best” ideas
• Keys to success: Fewer people involved than in step 1. One or two people should own this phase

4. Survey

• How we do it: Create and circulate a survey to the target market 
• Focus: Diversity of survey population is key. The more responses you receive the less this ends up mattering. We usually try for somewhere between 750-1500 respondents
• Keys to success: Combination of pointed/quantifiable questions that lead to easy actions and open ended questions that act as catch alls to ensure you don’t miss anything

5. Refine assumptions (repeat step 3)

6. Bring in advisory council

• How we do it: Create an advisory council made up of 5-10 gamers who represent key archetypes or influencers in the community. Have them participate during the entire dev process by giving feedback at each key stage (spec/design/dev) 
• Focus: Building trust and setting expectations 
• Keys to success: Selecting a representative sample. We treat our gamer-advisors like congressmen, they each represent a particular constituency which they are meant to advocate for 

This entire process tends to take about a week to ten days (usually depending on how long the survey has to run for). Our process certainly isn’t perfect but it tends to help us create products that our audience enjoys. We are constantly refining and improving how we figure out what we should be building. I welcome any feedback or suggestions on how we could improve.

I have always loved following along and commenting on Dan Shapiro’s (@danshapiro) livesheeting of demo days up/down the west coast. Dan is out of town today so I will be picking up the torch. 

I am just an n of one, so please add your comments and thoughts to the doc as we go. 

https://docs.google.com/a/duxter.com/spreadsheet/ccc?key=0AgvJE7hjAfW6dFFEM2piQjk0QWozLXQ2ZEhHU1dVaHc#gid=0

This essay is part of a collaborative blogging experiment to answer the following question: What inspired you to found your startup? Read responses from founders who are far better writers than I am on Startup Edition

As a huge Latin nerd, I was probably the only kid in law school who grinned each time a new italicized Latin term appeared in a textbook. Because I love understanding the historical meaning of words and care about etymology, I took Latin all through grade school and college. I especially love understanding common words that are overused or over-hyperbolized.

What is inspiration?

I’ll avoid going super nerd, but *insparare*, the root of the word “inspiration,” is Latin for “blow into, or breath into.” This intuitively makes sense because when we are hit with an inspiration, it is as though something external has “breathed into us.” We feel full - full of ideas, full of creativity, and full of energy. Like many other entrepreneurs I know, I typically come up with a new business idea each week. Most of them make sense to me; they are solutions to problems I see in real life. I write these ideas down so I don’t forget them and have been doing this for probably ten years. When I came across the idea for Duxter, I was inspired. I became filled with energy and life. I couldn’t simply write it down and go on with my life. This is how I distinguish an inspiring idea from simply a good idea.

Pre-Inspiration

For four years I owned and operated a network of sites that catered to hardcore gamers. Gaming Synergies was the parent company of 25 different web properties selling a variety of goods and services. At our peak, we were generating $200K a month in topline revenue with about a 60% margin.

Our business was thriving, but for some reason, we had a hell of a time getting gamers to connect with us through social media. We constantly pushed our Facebook pages and Twitter accounts but could never build up any traction on these platforms. Frustrated, I started reaching out to some of our frequent customers asking them what the holdup was. I would consistently hear a variation of the same answer:

“I don’t want X to know what I am doing over here in my gamer life.”

Fill in X with mom, wife, kids, girlfriend, boss, friends at school, or other people at the law firm. After pushing a bit further, I got to the heart of the issue: “gamerlife” was perceived as unique and separate from “personal life” which is what mainstream social media, such as Facebook or Twitter, is typically used for.

Inspiration

After hearing from a few customers, the proverbial lightbulb went off. Inspiration had hit. Here is how I spent the ensuing three days:

• 12 hours on competitive research to understand the landscape
• 4 phone calls with friends and advisors on “the idea”
• 10 hours in Photoshop trying to mock up my “vision”
• 5 hours in Word writing a quick and dirty 3 page business plan
• 2 hours setting up domains and servers in order to build a working prototype
• 4 hours on various forums trying to convince some other community builders to help me work on the prototype

Post-Inspiration

Since that “lightbulb” moment, I don’t think I’ve spent one day where some aspect of my business wasn’t on my mind. I’ve recruited a badass team to join me in my vision. We’ve received significant funding to help accomplish our dream. We have had the pleasure of creating a community and platform for hundreds of thousands of gamers so far. 

I’ve had a dozen of other business ideas since and write them down in a little notepad so I don’t forget. Even though I know I won’t, I always think that one day I’ll come back and try to execute some of these ideas.

The only ideas I want to work on are the ones that keep me up at night. The ones that prompt me to forget about my responsibilities. I only want to work on ideas that I find inspiring. Inspiration will forever be my personal barometer for good ideas. This could steer me wrong, but so far, it hasn’t. 

I encourage you to hear about inspirations from my fellow founders on Startup Edition.