Entrepreneur: I have an idea for a web app that will revolutionize the [blank] industry, and make us bajillions!

me: That’s great! I can tell you are passionate and excited, and that’s critical to your success. But do you have enough cash to pay for this coffee?

Entrepreneur: Yes, we have some funding to get started. And I have a business plan explaining our strategy, and I have a powerpoint deck of what the product does.

Me: That’s even better! I’ll have another espresso then.

Entrepreneur: We’d like you to get us started on our website development. Here’s our feature set for beta release. How long is this going to take? How many people, and what other stuff do we need?

Me: Ummm….and that’s where the conversation gets difficult. Because the business plan doesn’t go into great detail about the product (it shouldn’t), and the powerpoint slides have a bunch of boxes and arrows but don’t show what the screens look like or what actions the user takes, we can assume the founding team hasn’t thought much about how people actually use their product.


So at this point in the conversation, I face an uphill climb. I have to explain to (and convince) my client that they have a lot of hard work figuring out how their users are going to use this tool to accomplish their tasks, what those steps are, and what they look like. I have to tell them I don’t know how long this is going to take, and I doubt anyone else knows either.

Most of these conversations end with me suggesting some homework for the founders. It’s kind of a toolkit of useful things that you probably need, but it’s definitely not everything you need. But it’s a start.

• read “Getting Real“, the 37signals book. PDF, online, or print version, I don’t care. Read it, and know it. When in doubt, consult this book. When not in doubt, consult this book and make sure you are still on the path. I hate to use the word ‘bible’, but it’s the closest thing we have. It lays out the process of building a web product, from concept to delivery and beyond. If you’re under 25, I guess you can real Paul Graham too.
• setup a server on slicehost for development (for rails, anyway). Easy, cheap, and upgradeable.
• likewise, set up a subversion repository to hold your source code on svnrepository.com. You could host your own, but I like the peace of mind I get knowing my source is backed up and secure. As a bonus, you get a Trac instance for bug tracking, and it includes a wiki and other tools to make developing your web app easier.
• hire a designer, probably a freelance one, to draw some wireframes for you. Give them lots of your time, because that’s how you’re going to figure out what exactly your app does. This is probably the most important person on your team right now, and you should be focused on this. Ideally you can find a good reference through your network, but if not post a well-crafted ad on craigslist and look at their portfolios.
• At the same time, you probably want a developer to start working on your site. Maybe the developer came first, and she’s found someone designer-y to work with — even better. Just get some stuff down on paper so you can discuss it, scrutinize it, see what works and what doesn’t. If your designer is good, and you’ve spent enough time with them describing what you want, they should have something workable.
• Start building your product. Get your developer, or outsourcer, or nephew or whatever to hack some code.
• Your developers are probably following some sort of Agile process like Scrum. You should be seeing new features and changes on a daily or weekly basis. This is important, so you can play with your app as it is being born and give some feedback, change it, and make it better. If you’re waiting weeks or months before peeking, you’re doing it wrong. Good chefs taste as they cook.
• Once you have something you like, and works, and does what it’s supposed to, consider doing a limited release. Announce to your friends and families, have them play with it, ask for their feedback. If you can’t get your loved ones to pay attention to something you’ve been slaving over, well, that’s not a good sign.
• While you’re at it, put some site monitoring on it like site24×7.com — so you’ll know if you get swamped with too much traffic from Digg or Slashdot or nytimes.com, should they write about your site.
• Go slow. look how your userbase is growing, if it is at all. Get some more users — email more friends, or blog about it, or buy a few Google ads. Setup Google Analytics to track visitors to your site, and learn what is working and what isn’t. Measure, always measure.
• Get more feedback. Listen to your users. Make them happy. As your userbase starts to grow, spend some time thinking about how you can handle the extra load.

… and that’s about it. You’ve just built and launched an app. Hopefully, you have some users and they like it,maybe even willing to pay for it. Maybe it sucks, and is a stupid idea. But more likely, it works, has some flaws, and could use some work. So work on it. Improve. Iterate.

Of course, what is considered ‘best practices’ today may not be the preferred methods of tomorrow. So I read a lot to stay on top of where the industry is going. A have a million feeds in my Google Reader account, but only a handful I consider invaluable — including TechCrunch, Found+Read, Read/Write Web, and Signal vs. Noise.

Guy preaches what I have understood for a long time: the cost of starting a web company has dropped dramatically in the past 5 years or so, to the point where the economics of funding and launching a startup are drastically different. Old and busted: $5M in series A VC funding, years of technology development, then hopefully some revenue. New hotness: bootstrap on credit cards or angel investors for <$100K, launch in 3-6 months with immediate revenue, and hopefully positive cashflow soon after.

The evidence that Guy holds up for these trends, to say "all of this is true, and here's how I took advantage and launched something big on a shoestring budget" , is his site truemors.com . Truemors is a news site with various categories (business, gaming, health, etc) and content submitted by readers. It sports a digg-like ‘X users interested’ scheme for users to vote up their favorite stories. And there’s some editorial posting at work too, by the staff of ‘truemorists’ inside and outside the company.

Guy claims (and I believe him) that the Truemors site was launched on a $12K budget. He marvels that this is orders of magnitude less than dot-com era startups, and credits open-source software and easy hosting providers in making this all possible. And he’s right.

But it’s a blog, Guy. A freakin’ blog.

Now, it’s a pretty cool blog. It has some nice features, like being able to post by phone or email. And it certainly ‘democratizes information’ , such that “the many can create too”. This is all great, and it’s probably a good business in that you get plenty of traffic to monetize via ads on the site.

But it’s still a blog. Guy even tells us it’s built on Wordpress (as is the blog you’re reading now), and he spent as much on legal costs as on the software development. You can probably guess that this blog, although not as well-designed, technologically advanced, or revenue-generating as Trumors, was launched on a much smaller budget.

Now don’t get me wrong, I’m not going to advocate spending millions on building a product when you can spend a few hundred — this is just good business sense. But what exactly am I supposed to marvel at? That it *only* cost $12K? I wonder why it didn’t cost less than that? Really, do I need to invest even $12K to launch a profitable blog site? If that’s the barrier to entry for this most virtual of industries, it’s too high. Why can’t a high-school kid with an idea for a niche news site (again, leveraging existing tools like WordPress) get started on his allowance money? What does it say about the state of innovation if we need to spend 80% of our startup costs paying off a lawyer to file incorporation paperwork?

Joost Bonsen, who has long been involved in fostering entrepreneurial activities at MIT (including the Developmental Entrepreneurship seminar, the Nuts-and-Bolts of Business Plans IAP seminar, and the 50K / 100K competitions) is on the exec team for the new center. I’m very excited for Joost, his hard work in this area deserves this kind of support.

I ran into Joost Monday night at the Muddy Charles pub, where he was hosting an event for MIT entrepreneurs and friends. Also present were Cory and Erica of IntutiveAutomata, makers of Autom, the weight-loss coach robot. It’s an interesting idea, that a human-like device pushes our social and behavioral buttons in a way that keeps us motivated — more so than a website or other low-touch support system could. I’m curious to see what the results of their clinical trials are.

More details when I return…

One of this is called The Nuts and Bolts of Business Plans, which serves to compliment the annual MIT 100K startup contest. Students learn what it takes to write a good business plan, and in the process, how to navigate the waters of starting a company and finding funding.

So far it’s been a very informative course. If you’re not in the Boston-area to attend, the course materials are available for download.

I wasn’t even aware that our co-founder, Deva Seetharam, had entered it into the competition. One thousand dollars won’t help the balance sheet much, but hopefully the exposure from winning will help move the company ahead with partnerships, customers, or investments.
If you’re a software developer and are interested in working with a winning team, contact sasha@radiosherpa.com .

I haven’t seen this approach anywhere else among the ‘innovation’ blogs out there, and the writing quality is pretty good. I read one in particular about Digg.com , whose lessons I plan to utilize in a upcoming project.

Startup-review.com is blogged by Nisan Gabbay, a former VC. While I don’t often agree with (or enjoy reading) the investor’s perspective — I’d much rather read a blog by one of the entrepreneurs “in the trenches” — Nisan’s writing is insightful and thorough. One good reason to read his analysis is that he promises to interview at least one member of the founding team at each company he profiles. This alone should set this blog apart from those which merely speculate.

This kind of hard analysis of what attributes successful startups have is long overdue. Until we understand what factors contribute to success, we have less chance of getting there.

My only criticism would be that he only profiles ’successful companies’ — those that have had an exit, or sustained high revenues, or become a well-known ‘big brand’. Hindsight is 20/20, as they say, and drawing conclusions about the success of these companies after the fact can be misleading. I’d rather see a blend of case studies, including both successful startups and newer ventures yet to be proven.