Lucas Carlson's Blog, page 6

6 Things Happy Founders Never Do

Some founders seem to be able to handle the ups and downs of running startups easier than others. What’s their secret? In a word: perspective.

Founders who have been around the block know the difference between things that they need to worry about and things they don’t. They also have strategies to manage their own psychology.

If you are still struggling to manage your psychology, see if you are doing any of the following activities that undermine your own happiness. Happy founders may not have everything figured out, but they are more likely to survive the marathon of entrpeneurship.

Happy founders NEVER…

1. Play the Blame Game

When things go wrong, happy founders don’t try to figure out WHO’S fault it was. Instead, they focus on what ACTION to take next. The blame game turns into an endless unproductive cycle where management blames employees and employees blame management. The net result is negative productivity and a group of unhappy and unmotivated employees.

When a ship gets a hole, the captain can either spend his time figuring out who’s fault it was while the ship sinks with everyone on it… or he can turn it into an opportunity for the team to bond over repairing the hole. It can either tear a crew apart or pull them together. The difference is simply a point of view.

Side benefit: without blame, it is hard to hold grudges, which leads us to…

2. Hold Grudges

Unhappy founders often don’t realize that the power of forgiveness isn’t some fru-fru holier than thou act. The power of forgiveness is in releasing you from your own negative energy.

Your brain is a garden, and sometimes bad things happen to your garden. For example: a storm might kill a crop or a dog might pee on your prized petunias. You can’t control these events and they are undeserved and never fair. But no matter what, you are still responsible for maintaining, pruning and weeding your garden.

Grudges are weeds. They might remind you of something unfair in life that shouldn’t have happened to you. However, that is an ugly memory that left uncheck can spread and fester. Only you are responsible for letting your garden be overgrown with the weeds of grudges.

So start pruning and forgive people already. Nobody’s perfect.

3. Desperation for Outsider Opinions

Are you constantly chasing press coverage or recognition for your work? Have you become caught up in a pissing war with your main competitor? Chances are you have lost sight that you can’t control others or what they think.

Most founders (myself included) can be control freaks at times, so wanting to control people and get them to validate your work can be tempting. But ultimately it is a fools errand and at best you are beholden to luck.

To counter-act this behavior, set yourself objective metrics-driven goals that you can refer back to and check progress on. Send your goals to advisors and close friends and send them weekly updates to keep yourself accountable to your own goals. Only measure things that are ultimately under your control, things like profit and revenue.

4. Surround Themselves with Negative People

As a founder, you are directly or in-directly responsible for hiring pretty much everyone at your company. Look around and take in the collective mood of the people around you. Do they bring you up and make you happy and excited to come into work each day? Or are they downers who complain about anything and everything that happens in life?

You don’t necessarily need to fire everyone to make a change for the better, but maybe it is time to remove the worst offenders and replace them with some fresh blood.

Remember that nobody WANTS to work in a negative environment.

5. Compromise Core Values

What do you believe in? A positive attitude? Integrity? Work hard, play hard? Ingenuity? Honesty?

When’s the last time someone asked you to compromise your core values, either explicitly or implicitly?

This person could be an employee, a friend or spouse, an investor, or even a customer. The worst offenders are very likely the same negative people you have surrounded yourself with. Let me guess, you are currently holding grudges against these people.

As a leader, it is your responsibility and obligation to set expectations of core values AND to enforce them. This is a very valuable tool to anyone afraid of confrontation, because telling people they are violating a Core Value is often much easier than telling them they are just wrong about something.

For example, if someone is constantly putting down co-workers, you might talk to them and ask them to stop. They might argue: “but it’s true what I told them.” And you can counter: “whether or not it is true, it violates our Core Value of having a positive attitude and people who can’t abide by our Core Values can’t work here.” This is easier than trying to argue on the merits of how valid the claims are.

6. Be a People Pleaser

Being a people pleaser is one of the fastest paths to unhappiness. The reason is counter-intuitive if you are a people pleaser: the only way to please people all the time is by compromising your core values or lying. When you compromise your core values, you feel unhappy and abused. You often turn yourself into a victim or a martyr, in which your revel in your unhappiness.

Or if you lie, you will get caught eventually. And when you get caught, that will cause you deep unhappiness.

Either way, people pleasing is a direct path to unhappiness not only for you but for the people you are ultimately trying to please.

Your turn…

What did I miss? Tell me in the comments.

Podcast 6: Advanced Marketing Techniques with Neil Patel

Neil Patel is an online celebrity and entrepreneur. He has been a prolific blogger on QuickSprout and the KISSmetrics blog since 2006. He has contributed to Entrepreneur Magazine, TechCrunch, Mashable, Business Insider, SEOmoz, and Geekwire. He has also mentored and advised endless numbers of entrepreneurs over the years, including myself.

Neil is a true Craftsman Founder of multiple companies: ACS (SEO), Crazy Egg, KISSmetrics which all have generated many millions of dollars a year in revenue. I am lucky to call him a friend and thrilled

Here is just the audio for those who are interested in listening:

iTunes
Stitcher
RSS Feed

Show Notes

Your startups, KISSmetrics and Crazy Egg both use data to tell you stories of how people use your websites. Why is that important? When people build websites, they tend to focus on traffic. A million visitors a month to your site doesn’t guarantee success if those visitors don’t convert into customers. Understanding the entire story path of your users from where they come from to when they buy is critical for long-term success.

Many decisions are gut instincts and opinions, do you have any examples of how measuring data lead to surprising results? Yes. It is “common knowledge” that you need to reduce friction to get people to sign up, therefore you are supposed to minimize the things you ask a person to tell you up front. For example, you usually don’t ask for the person’s URL during signup. But using data, we found that asking for their URL first actually INCREASES SIGNUPS.

How did you discover this?

Through data–Using Google Analytics, KISSmetrics and Crazy Egg
Qualitative feedback–SurveyMonkey, Qualaroo, Promoter.io
Peers–We saw other smart people we know trying these ideas

How does thinking like your customer help you make more sales? Think of a website as a first date. If someone lands on your site, let’s get married is: give me your email, password and credit card… that’s a really tough sell. But if you say: Good to meet you, what’s your name or URL? You start building a relationship with your audience which will make it easier for deeper engagements with your customers.

How can you use data to piece together the stories about how customers find out about you? Do it in bite sizes. Figure out and optimize just one part of the story at a time. Find where you have the most drop-off to start with. For example, focus just on your homepage. Then focus on your checkout pages. Do it piece by piece.

What do you do when you don’t know what needs to change? Survey readers (using Qualaroo or Promoter.io) and ask them “what else would they like to see on this page?” Then look for commonalities. Let your visitors tell you where you are wrong.

What are the top 3 most common mistakes that you see startup founders make?

Founders don’t execute fast enough. They want to create the best product or over-thinking things rather than testing and measuring results.
Making decisions based on what they want vs. the data. They end up building products nobody wants to use or pay for.
They don’t think about marketing. The best product in the world still needs to be marketed. People think they can’t start marketing until they finish the product or feature. These are just excuses and the excuses never ends. You will always come up with more reasons to not start marketing yet. The product does not need to be done to start marketing it.


You are an expert on online marketing. How can people attract more attention to what they are doing?


SEO. Google can drive a ton of traffic to your site. Read The Beginner’s Guide to SEO. Then read The Advanced Guide to SEO. Then focus on link building. Read The Advanced Guide to Link Building and The Backlinko Blog.
Content Marketing. Educate people. If you don’t have time to create your own blog, guest post on other people’s blogs. Buffer did this on Forbes and Entrepreneur blog. Read Copyblogger and ProBlogger to learn how to blog effectively. Finally, read The Advanced Guide to Content Marketing.
Social Media. To figure out social media, read The Social Media Examiner. Facebook is the second most popular site on the Internet (after Google) so figure it out.

Start from wherever you are and with whatever skill level you are, no matter how bad you think you are. The only way to get better is by practicing and doing things. If you tell yourself that you are bad at marketing or sales or whatever, and you let that be an excuse for ignoring it, you are handicapping yourself unnecessarily.

What’s the best piece of advice you have ever received about starting a company? Go out there and generate revenue as quickly as possible. It sounds silly and simple, but most people think they need a product before they start charging people. Locking in customers before your product is done really helps change the perception of your business from a consumer or investor standpoint. Without revenue you give up control of your future.

How has marketing changed in the last few years for startups? Gone from just SEO and paid acquisition to becoming much more creative. Engineers have become much more involved in marketing. Your product can be involved in marketing. Like Dropbox’s invite people to get free credit.

Craftsman Marketing with Neil Patel

Neil Patel is an online celebrity and entrepreneur. He has been a prolific blogger on QuickSprout and the KISSmetrics blog since 2006. He has contributed to Entrepreneur Magazine, TechCrunch, Mashable, Business Insider, SEOmoz, and Geekwire. He has also mentored and advised endless numbers of entrepreneurs over the years, including myself.

Neil is a true Craftsman Founder of multiple companies: ACS (SEO), Crazy Egg, KISSmetrics which all have generated many millions of dollars a year in revenue. I am lucky to call him a friend and thrilled

Here is just the audio for those who are interested in listening:

iTunes
Stitcher
RSS Feed

Show Notes

Your startups, KISSmetrics and Crazy Egg both use data to tell you stories of how people use your websites. Why is that important? When people build websites, they tend to focus on traffic. A million visitors a month to your site doesn’t guarantee success if those visitors don’t convert into customers. Understanding the entire story path of your users from where they come from to when they buy is critical for long-term success.

Many decisions are gut instincts and opinions, do you have any examples of how measuring data lead to surprising results? Yes. It is “common knowledge” that you need to reduce friction to get people to sign up, therefore you are supposed to minimize the things you ask a person to tell you up front. For example, you usually don’t ask for the person’s URL during signup. But using data, we found that asking for their URL first actually INCREASES SIGNUPS.

How did you discover this?

Through data–Using Google Analytics, KISSmetrics and Crazy Egg
Qualitative feedback–SurveyMonkey, Qualaroo, Promoter.io
Peers–We saw other smart people we know trying these ideas

How does thinking like your customer help you make more sales? Think of a website as a first date. If someone lands on your site, let’s get married is: give me your email, password and credit card… that’s a really tough sell. But if you say: Good to meet you, what’s your name or URL? You start building a relationship with your audience which will make it easier for deeper engagements with your customers.

How can you use data to piece together the stories about how customers find out about you? Do it in bite sizes. Figure out and optimize just one part of the story at a time. Find where you have the most drop-off to start with. For example, focus just on your homepage. Then focus on your checkout pages. Do it piece by piece.

What do you do when you don’t know what needs to change? Survey readers (using Qualaroo or Promoter.io) and ask them “what else would they like to see on this page?” Then look for commonalities. Let your visitors tell you where you are wrong.

What are the top 3 most common mistakes that you see startup founders make?

Founders don’t execute fast enough. They want to create the best product or over-thinking things rather than testing and measuring results.
Making decisions based on what they want vs. the data. They end up building products nobody wants to use or pay for.
They don’t think about marketing. The best product in the world still needs to be marketed. People think they can’t start marketing until they finish the product or feature. These are just excuses and the excuses never ends. You will always come up with more reasons to not start marketing yet. The product does not need to be done to start marketing it.


You are an expert on online marketing. How can people attract more attention to what they are doing?


SEO. Google can drive a ton of traffic to your site. Read The Beginner’s Guide to SEO. Then read The Advanced Guide to SEO. Then focus on link building. Read The Advanced Guide to Link Building and The Backlinko Blog.
Content Marketing. Educate people. If you don’t have time to create your own blog, guest post on other people’s blogs. Buffer did this on Forbes and Entrepreneur blog. Read Copyblogger and ProBlogger to learn how to blog effectively. Finally, read The Advanced Guide to Content Marketing.
Social Media. To figure out social media, read The Social Media Examiner. Facebook is the second most popular site on the Internet (after Google) so figure it out.

Start from wherever you are and with whatever skill level you are, no matter how bad you think you are. The only way to get better is by practicing and doing things. If you tell yourself that you are bad at marketing or sales or whatever, and you let that be an excuse for ignoring it, you are handicapping yourself unnecessarily.

What’s the best piece of advice you have ever received about starting a company? Go out there and generate revenue as quickly as possible. It sounds silly and simple, but most people think they need a product before they start charging people. Locking in customers before your product is done really helps change the perception of your business from a consumer or investor standpoint. Without revenue you give up control of your future.

How has marketing changed in the last few years for startups? Gone from just SEO and paid acquisition to becoming much more creative. Engineers have become much more involved in marketing. Your product can be involved in marketing. Like Dropbox’s invite people to get free credit.

The 7 Secrets to Choosing Your Startup Idea

How do you come up with great startup ideas? It is often excruciatingly hard. It is a time of self-doubt and introspection, and often you are concerned that people aren’t giving you honest or constructive feedback.

The truth is, unless you have had practice, your idea probably does suck and people really aren’t giving you honest feedback.

But that’s ok. Don’t worry. Here are 7 tips that I learned the hard way (by ignoring them). Just promise me that you will try not to learn them the hard way too…

Secret #1: The Founding Story is as Important as the Idea

What’s your story? Why are you doing what you do? Why are you trying to fix this problem in the first place?

I have come up with countless terrible startup ideas, and the leading cause of terrible ideas was when I was trying to be opportunistic. When you ignore what you are good at and try to follow something trendy or some shiny idea just because it is trendy, your idea is bound to fail. Not because it isn’t a good idea, necessarily. It is just not a good idea for you.

Why are you uniquely special in being able to solve this problem? How has your whole life lead up to this moment? Is this what you have been preparing for, either knowingly or un-knowingly? What skill have you picked up while working for others that you became known for at your company? Can you turn that into a product or a service?

BONUS: VC’s love to hear your founding story. Don’t take my word for it, listen to Dave Hersh from Andreessen Horowitz.

Secret #2: Killer Startup Ideas Solve Hair-On-Fire Problems

Do people know they have the problem you are trying to solve? If not, you have just made The #1 Fatal Flaw in Most Startup Ideas.

Why? Because if they don’t know they have the problem, they are not going to be looking for your solution. If they are not pulling their hair out, it doesn’t matter if they could save more money doing it your way. Don’t make a vitamin, make a pain-killer.

Secret #3: Fear of Failure Kills More Ideas Than Poor Execution

Are you scared of great success? Most people are if they are honest with themselves. Don’t think you are capable of doing something amazing? You’re not alone.

The stories you tell yourself about yourself can be the most limiting factor when it comes to creating great startup ideas.

Do you think you could never start a car company? Never worked in the car-making business before? Don’t have the know-how or expertise or network? Clearly Elon Musk didn’t tell himself those stories after leaving PayPal.

To come up with great startup ideas, you must ignore the excuses that your brain comes up with for why you can’t do something amazing. The excuses might be valid, but you must ignore them nonetheless.

How big of a problem are you trying to solve for others? How much value are you adding to someone’s life? Often we think of what we alone are capable. We think only of our limitations and boundaries.

Are you trying to stay within your known boundaries? Does not knowing how to do a hardware startup make you only focus on software startups? Remember that a startup requires a team of people smarter than you and more knowledgeable than you. Dream big and surround yourself with people who can help.

Secret #4: Give More Than You Get

Generosity begets generosity. The more you give to others, the more life will bring to you in return. The corollary is just as true: stinginess follows stinginess.

People never know how much work you put into your startup. This can sometimes translate to you over-pricing or under-marketing your ideas. Although you should never leave money on the table, pricing products and services is a market exercise, not based on what you think it is worth.

All things being equal, pick ideas that have more opportunities to give. Be generous and do the most good, and people will take notice.

Secret #5: Ask For Honest Feedback

Getting honest feedback from people is tricky because usually people are trained to be polite.

For example, you might ask: “What do you think of a startup that sells gorillas to eskimos?”

And a friend might say: “Huh, sounds cool.”

You are asking the question in the wrong way. You have to give people permission to be honest.

For example: “Please be open and honest with me. Can you honestly see me selling gorillas to eskimos?”

Friend: “Hell no, never in a million years.”

It is often a good idea when soliciting feedback about startup ideas to ask if people can imagine you running the company you are thinking of. That’s because a startup idea might be great, but not a good fit for you (see Secret #1).

Secret #6: Killer Startup Ideas Are Built to Change

The only thing worse than picking a bad startup idea is sticking to a bad startup idea. No matter how good your founding story is, no matter how passionate you are about your idea, you must be willing to look at results regularly and objectively and ask if things are going according to plan.

Once you decide on a startup idea, set objective and quantifiable results that you want to achieve in 1-3 months. Then every 1-3 months, review your progress and ask yourself the tough question: are things on track or is it time to try something different?

Secret #7: Stick to One Ideal Customer

When dreaming big, one of the easiest mistakes you can make is coming up with marketplace or two-sided businesses.

For example: I will create a search engine that finds stuff better than Google and gives advertisers better targeting than Facebook.

The problem with that idea is that you are trying to serve two Ideal Customers: searchers and advertisers. Although you should dream big, serving two customers at once is simply not possible for most startups. You are not the exception.

There is an easy solution: pick just one side of the two-sided business and focus on it exclusively. For example: ignore the advertisers completely, just focus on making a better search engine. You can always add advertiser features later, but you need to focus on being great at only one thing to start with.

The 7 Secrets to Picking Killer Startup Ideas

How do you come up with great startup ideas? It is often excruciatingly hard. It is a time of self-doubt and introspection, and often you are concerned that people aren’t giving you honest or constructive feedback.

The truth is, unless you have had practice, your idea probably does suck and people really aren’t giving you honest feedback.

But that’s ok. Don’t worry. Here are 7 tips that I learned the hard way (by ignoring them). Just promise me that you will try not to learn them the hard way too…

Secret #1: The Founding Story is as Important as the Idea

What’s your story? Why are you doing what you do? Why are you trying to fix this problem in the first place?

I have come up with countless terrible startup ideas, and the leading cause of terrible ideas was when I was trying to be opportunistic. When you ignore what you are good at and try to follow something trendy or some shiny idea just because it is trendy, your idea is bound to fail. Not because it isn’t a good idea, necessarily. It is just not a good idea for you.

Why are you uniquely special in being able to solve this problem? How has your whole life lead up to this moment? Is this what you have been preparing for, either knowingly or un-knowingly? What skill have you picked up while working for others that you became known for at your company? Can you turn that into a product or a service?

BONUS: VC’s love to hear your founding story. Don’t take my word for it, listen to Dave Hersh from Andreessen Horowitz.

Secret #2: Killer Startup Ideas Solve Hair-On-Fire Problems

Do people know they have the problem you are trying to solve? If not, you have just made The #1 Fatal Flaw in Most Startup Ideas.

Why? Because if they don’t know they have the problem, they are not going to be looking for your solution. If they are not pulling their hair out, it doesn’t matter if they could save more money doing it your way. Don’t make a vitamin, make a pain-killer.

Secret #3: Fear of Failure Kills More Ideas Than Poor Execution

Are you scared of great success? Most people are if they are honest with themselves. Don’t think you are capable of doing something amazing? You’re not alone.

The stories you tell yourself about yourself can be the most limiting factor when it comes to creating great startup ideas.

Do you think you could never start a car company? Never worked in the car-making business before? Don’t have the know-how or expertise or network? Clearly Elon Musk didn’t tell himself those stories after leaving PayPal.

To come up with great startup ideas, you must ignore the excuses that your brain comes up with for why you can’t do something amazing. The excuses might be valid, but you must ignore them nonetheless.

How big of a problem are you trying to solve for others? How much value are you adding to someone’s life? Often we think of what we alone are capable. We think only of our limitations and boundaries.

Are you trying to stay within your known boundaries? Does not knowing how to do a hardware startup make you only focus on software startups? Remember that a startup requires a team of people smarter than you and more knowledgeable than you. Dream big and surround yourself with people who can help.

Secret #4: Give More Than You Get

Generosity begets generosity. The more you give to others, the more life will bring to you in return. The corollary is just as true: stinginess follows stinginess.

People never know how much work you put into your startup. This can sometimes translate to you over-pricing or under-marketing your ideas. Although you should never leave money on the table, pricing products and services is a market exercise, not based on what you think it is worth.

All things being equal, pick ideas that have more opportunities to give. Be generous and do the most good, and people will take notice.

Secret #5: Ask For Honest Feedback

Getting honest feedback from people is tricky because usually people are trained to be polite.

For example, you might ask: “What do you think of a startup that sells gorillas to eskimos?”

And a friend might say: “Huh, sounds cool.”

You are asking the question in the wrong way. You have to give people permission to be honest.

For example: “Please be open and honest with me. Can you honestly see me selling gorillas to eskimos?”

Friend: “Hell no, never in a million years.”

It is often a good idea when soliciting feedback about startup ideas to ask if people can imagine you running the company you are thinking of. That’s because a startup idea might be great, but not a good fit for you (see Secret #1).

Secret #6: Killer Startup Ideas Are Built to Change

The only thing worse than picking a bad startup idea is sticking to a bad startup idea. No matter how good your founding story is, no matter how passionate you are about your idea, you must be willing to look at results regularly and objectively and ask if things are going according to plan.

Once you decide on a startup idea, set objective and quantifiable results that you want to achieve in 1-3 months. Then every 1-3 months, review your progress and ask yourself the tough question: are things on track or is it time to try something different?

Secret #7: Stick to One Ideal Customer

When dreaming big, one of the easiest mistakes you can make is coming up with marketplace or two-sided businesses.

For example: I will create a search engine that finds stuff better than Google and gives advertisers better targeting than Facebook.

The problem with that idea is that you are trying to serve two Ideal Customers: searchers and advertisers. Although you should dream big, serving two customers at once is simply not possible for most startups. You are not the exception.

There is an easy solution: pick just one side of the two-sided business and focus on it exclusively. For example: ignore the advertisers completely, just focus on making a better search engine. You can always add advertiser features later, but you need to focus on being great at only one thing to start with.

Growth Hacking and Startup Ideas with Patrick Vlaskovits

New York Times bestselling author of The Lean Entrepreneur and co-founder of Superpowered, Patrick Vlaskovits, talks about how to apply lean startup principles to your company to find product-market fit and avoid common mistakes and pitfalls many entrepreneurs fall into. From coming up with startup ideas to evaluating them and marketing them, Patrick brings his wealth of expertise to bear in this great interview.

Here is just the audio podcast for those who are interested in listening on iTunes (subscribe or rss feed):

Show Notes

What does your new startup, Superpowered, do? It is an easy to use cross-platform API/SDK that competes with Apple’s Core Audio but works across all devices.

How did you bring a lean startup mentality into Superpowered when you joined? I ask “what is the value we are delivering to any specific customer segment?” and ask “how do we message that?” That’s an iterative process. For example, how you message to a game studio will be different than how you message to an indie developer.

Do you have any good marketing tips/tricks? Listen to the words that your customers are using and reflect them back upon them. You have to study the customer segment and how they talk and make sure you are using their language.

How does a developer learn to do marketing? Stop listing facts and figures and features on your website. Start telling stories about the problems that people have who would need your product. That will resonate much stronger with your customers.

Did you learn anything surprising getting ready to growth hack Superpowered? Yes, I discovered how developers are finding Superpowered. The story about how people find Superpowered is that they search Stack Overflow for a sound problem. Understand this story is key to unlocking growth hacking.

How do you find product-market fit? Product-Market Fit is not a static state. It needs care and feeding per segment. You have to align the right customer segment with the right value proposition and the right technology.

What are the top 3 most common mistakes that you see startup founders make? 1) Not being aggressive enough with experimentation 2) Trying to be all things to all people 3)

Andreessen Horowitz says that most startups they see don’t have a solid marketing plan. How can people avoid this mistake? Most founders look down on sales and marketing. If you just put some time and focus into it, study things like the KISSmetrics Blog if you don’t know what you are doing.

How has marketing changed in the last few years for startups? Growth Hacking is not just a series of cute little hacks (which I like a lot, by the way). Growth Hacking is about finding new customer channels.

Is growth hacking something people should pay attention to or just a passing fad? Some people say growth hacking is just marketing rebranded. It’s not. Growth hacking is about finding a novel medium for spreading the message about your company.

Applying Lean Startup Methodology to Writing a Novel

I am writing a startup thriller novel right now called The Term Sheet. It is like Dan Brown meets Mark Cuban meets Edward Snowden. It has a lot of startup advice, but is full of thrills, mysteries, twists and a few near-death experiences.

The traditional way to write a novel is to spend months, sometimes years, lonely in a dark cave of desperation. Stephen King famously said in On Writing that the first draft should be done with the door closed. To write it only for yourself and your Ideal Reader and hope you end up with a story good enough to delight others at the end of it. If you don’t, just try again in the same way.

“Def. Insanity: doing the same thing over and over again and expecting different results.” ~ Albert Einstein

I don’t like to do things in traditional ways, so instead, I am applying Lean Startup ideas to novel writing.

The Problem

If you have Stephen King’s talent, whatever you write turns into gold. He has an amazingly strong ability to create stories that resonate deeply with his audience. He knows his audience intimately.

For many writers, getting to know your audience is something that takes more time. It is a combination of improving your craft (creating sentences and paragraphs that string together coherently) and listing to feedback from your readers and people you respect.

Even famous authors like Ken Follett who make over $20M/year weren’t great at this when they started. Ken Follett wrote 5 self-described “ok” novels before his first bestselling hit: The Eye of the Needle. And that novel didn’t sell nearly as well as his later novel: The Pillars of the Earth.

The problem: Finding product-market fit as an author is nearly impossible if you don’t have an innate understanding of what people want to read.

The Solution

Traditionally, the solution to this is to write more novels and hope you improve your instincts. Many authors will write dozens of novels and never figure out their audience or what they want. They never sell many copies of their books and usually eventually just give up. This happens to most authors.

An alternative to hoping that you get better at understanding your audience is to apply Lean Startup Methodology to writing your novel. Concepts like product-market fit, failing fast, and continuous iteration can all be applied to the novel writing process.

How to Get Started

With the lean startup thought process, you test business ideas and keep looking for ways to improve them. This is relatively easy to do with business ideas because you can put an ad on Google or Facebook and see if anyone clicks it. Or you can put a post on Hacker News. If people are interested and will pay you money, you know you are going in the right direction.

With novels, it is not as easy and straightforward because putting an ad on Google for a novel you haven’t written yet is almost certainly going to fail. So how do you test novel ideas? The first thing you need to do is build an engaged audience of people who would be interested in reading your book. You start with an email list that has just your family and friends on it. When I started this blog, my first email blast went out to just 6 people. It felt like a daunting task, but now I have hundreds of people on my list who are all super engaged and provide fantastic feedback for me to guide decision making processes while writing the book.

If you don’t know how to even get started here, read Tim Grahl’s Your First 1000 Copies. This is an amazing resource for beginners getting into content marketing principles to build an engaged audience.

What Questions to Ask

You can not write a novel by consensus. You have to be the leader of your novel, you have to be in the driver’s seat (or let your characters be in the driver’s seat). However sometimes you or your characters can get lost or need a little push or guidance.

If you get writer’s block and don’t know what should come next for your characters, you can come up with three scenarios and ask your mailing list which one they find most exciting.

If you are not certain about a plot twist, come up with three alternative plot twists and ask your mailing list.

I recently was trying to decide on the title of the book. I had picked 3 titles that made sense:

The Term Sheet
Cryptobit
The System

Instead of blindly picking the one I liked best, I asked my mailing list and they overwhelmingly picked “The Term Sheet”. I didn’t invest a lot of time and effort on cover art for Cryptobit and have to throw it away. I approached the problem with a lean and agile process.

When I wrote the Craftsman Founder Manifesto, I emailed three cover options to my email list and had an overwhelmingly positive reaction to just one of them.

When I design The Term Sheet’s cover, I will also be gathering feedback before I make a decision. If you are reading this now and want to help me along the way, just join my mailing list.

Another great way to use agile methodology to improve your manuscript after the first draft is done is with beta readers. Stacy Ennis, a professional editor, has a fantastic set of questions she likes to ask beta readers:

As you read the manuscript, use a colored pen or Word’s comment highlight feature to make note of places that are inconsistent, vague, or need additional work.
In your opinion, is the book targeted toward people like you? Yes/No. Please explain.
In your opinion, what is the intended purpose or big idea of the book?
In your opinion, is the book achieving its intended purpose? Yes/No. Please explain.
In your opinion, what are the main strengths of the manuscript?
In your opinion, what are the main weaknesses of the manuscript?
How might the author better reach the book’s intended audience, clearly fulfill its purpose, and address some of its weaknesses?
Please write any additional comments, suggestions, or feedback.

You can then use this feedback to iterate on your second and third drafts. Before you publish the book, you can have certainty that the book works and resonates with your audience. You don’t just write blindly and hope that it works.

Conclusion

With today’s technology and opportunities, authors no longer need to write with a closed door. Asking for help is not a sign of weakness; it is a sign of curiosity. Using Lean Methodology: iterating, testing your assumptions, and finding product-market fit BEFORE you finish your book is an alternative for people who want to make sure that all their efforts were not a complete waste of time.

Craftsman Founder Interview with Dave Hersh, Founding CEO of Jive

Many founders hope to one day take their company public on the stock market and have it be worth over $1B+ in market cap. To Dave Hersh, this dream is a reality with Jive Software, a company he founded and lead for 8 years and through 3 different business models.

In one of the 3 business model changes, Dave had to let go of $15M of revenue in a profitable business with happy customers to turn Jive into a company that could go public.

Dave also happens to be one of my personal mentors and friends. This week we have the honor of interviewing Dave, who runs a brilliant startup blog and often talks about founder’s impatience.

Here is just the audio podcast for those who are interested in listening on iTunes (subscribe):

Show Notes

You were involved for 8 years and stepped out right before it went public. Can you tell us why? My work/life balance was unbalanced, I was traveling too much and it was putting too much strain on my relationship with my family.

What did you learn about work/life balance? You, as the founder, set the terms of work/life balance for yourself and for everyone at your company and manically spending all your waking hours doing your startup is not a requirement of success.

Can you tell us about any bad startup ideas you had before Jive and how you knew Jive was different? Many of the “bad” ideas, we did them as part of Jive. You always have to keep looking for bigger opportunities for the business, you should never fall in love so much with any one idea that it blinds you from doing something better.

What are the top 3 most common mistakes that you see startup founders make?

Trying to scale your idea or company prematurely before you have proven your business idea… see the Startup Genome Project’s Report on the #1 cause of startup failure (74% of high growth internet startups fail due to premature scaling).
Being dogmatic about how to do startups (seed round of funding, then an A round, then a B round, etc). You should not force a company to be bigger than it should be just because you want it to be.
Ego. Many entrepreneurs feel like they need to be successful in the eyes of their peers which leads them to be dogmatic and scale their business too early.

What’s the best piece of advice you have ever received about starting companies? Business is really just a conversation. The better we get at conversation, storytelling, listening… the better we get at business. Read about Montaigne on the Art of Conversation on Dave’s blog.

A few years ago, you became a Venture Capitalist with the top VC firm Andreessen Horowitz. What has being a VC taught you about startups and founders that you didn’t realize while being a founder? My favorite entrepreneur pitches came from founders who told great stories and I always wanted to know what drove them, what compelled them to build exactly this startup.

How has the way you approach and think about startups changed over the years? This is not about you, and it is not about you being seen as successful and achieving. This is just about you creating something great in the world. I don’t have the same urgency to have to prove myself any more. I am just doing something that I really really love to do. I would wish this upon my younger self.

Why do investors take so long to commit?

When I started out as a programmer and first tried to raise venture capital, it was a frustrating process (to say the least). There were sleepless nights, tons of travel, and the worst part was I couldn’t tell how I was doing while I was pitching. For months it seemed like nobody was interested. I couldn’t get anyone to commit.

The thoughts going through my head included:

Why do investors take so long to commit?
Isn’t this supposed to be risk capital, why isn’t anyone willing to take a risk?
Why won’t VCs just tell me the truth?

However, after raising $10M from angels and VCs and having spent more time with investors and people who have gone through this process a number of times, I began to have glimpses into the subtleties of why investors act the way they do.

The Investor Mindset

One day, a close friend who had done investing for decades confided in me that he would:

Rather say NO to the next big successful startup

Than say YES to a startup that fails

Read that back carefully. He did not mean that he only invested in startups that succeeded, nor that none of his investments failed. Many of his investments did in fact end up failing, and he was perfectly ok with that. It is a natural part of the business.

What he meant is that he would rather invest in a company he believed would be as close to a sure thing as you can get than to invest in a promising company that could be the next Google or Facebook, but he isn’t quite sure about.

Why Act This Way?

As first time entrepreneurs, it initially might seems like since all startups are risky, investors should pick the ones with the biggest upside potential. Even if it means investing in a first time entrepreneur with no track record. If 9 in 10 startups fail anyhow, they should just go for the home-runs, right?

Turns out that the 9 in 10 number is not exactly correct… the real number is actually far greater. It is actually more than 99 out of 100 startups that fail; it is only 9 out of 10 venture backed startups that fail.

If investors only invested based on how big the potential upside of any given idea could be, they would end up investing in significantly more failed companies. Since Venture Capitalists are investing other people’s money, they have a fiduciary duty to do so carefully. They must mitigate risk by managing their downside.

Conclusion: Investors look for any reasons NOT to invest.

How Common Is This?

One of the top-tier VCs, Bessemer Venture Partners has passed on many huge name brands including:

Pre-IPO stock in Apple
Google
Intel
Paypal
eBay
Intuit
FedEx (passed on this one 7 times!!!)

In one article in Business Insider:

Ron Conway passed on Salesforce.com
Fred Wilson passed on Airbnb
Chris Dixon passed on Dropbox
David Pakman passed out on Twitter
Mark Pincus passed on Zynga
Charlie O’Donnell passed on Foursquare
Ben Lerer passed on Foursquare and Uber

The reasons given include:

Not trusting their gut
Thinking the founders weren’t right
Not understanding the market opportunity
Thinking the valuation was too high

Conclusion

Investors are constantly pattern matching and looking for reasons NOT to invest; they are not looking for reasons to say yes. The system is built this way specifically to mitigate downside potential and investor risk. Investors must act this way or they will get sued by their limited partners.

Knowing this, study what investors look out for. Look out for them in your pitch deck. When you review your deck, instead of impressing yourself with your own accolades, pretend you are an investor. Ask yourself difficult questions:

Would you invest in your own startup?
If you were given a million dollars to invest from a rich friend, would your startup be as safe a bet as any?
Are there ways you could protect your downside and reduce risk?
Could you reduce your risk by bringing on a co-founder with more experience in your space?
Would it be better to figure out your marketing strategy before you raised money?

Don’t give investors an easy reason to say no, because they will take it every time.

Venture Funding a Novel with Michelle Miller

If you got a Standford MBA and then worked as an investment banker… what would be your next career move?

Michelle Miller decided to write a novel called The Underwriting. But she didn’t just write a novel and hope to get traditionally published, she treated her novel as a startup:

She raised investment
Secured brand sponsorships
Created screen savers and playlists
Made a video trailer
Serialized her novel (like a modern Charles Dickens)

This week, I interviewed Michelle in the Craftsman Founder Podcast. Here is just the audio podcast for those who are interested in listening on iTunes (subscribe):

Show Notes

What is The Underwriting? A weekly serialized novel that is free from the website the underwriting.com for 24 hours and then and distributed on Amazon and other bookstores for $1.50
What’s worked and what hasn’t worked well in promoting your novel? Probably the most popular thing has been the screensavers and the audio playlists
What can entrepreneurs learn from authors and vise-versa? I have always been fascinated by the fine line between art and business. See Make Art Make Money: Lessons from Jim Henson and Jim Henson: The Biography for more about this topic.
What can entrepreneurs learn from authors? It’s all about story and the stories of how customers find your startup.
Who inspires you? Working on wall street during the occupy movement was really fascinating to have empathy for both sides and understand both arguments
Is fiction a viable investment for venture capitalists? I think that in many ways the big traditional publishers are some of the original venture capitalists
Should more fiction authors consider trying to raise venture capital for their novels? I am not sure. Raising money is very hard, but for a variety of reasons, it was the right choice for me at the time.
So what’s next for the Underwriting? We have just been picked up for a TV series and season 2 of the Underwriting is coming out in 2015