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Back To Square One

After laboring over this site for the last five months, we’re finally back to step one: writing the business plan. This was the first step in Bonanzle’s infancy, and has again come to the forefront as our development process has reached the point of self-perpetuation. When I think about what the “best” first step to take would have been, I think “write up the business plan” is probably about as good of a guess as any: you are immediately forced to weigh yourself against competition and enumerate what it is that you think you’ll be providing. The catch is that, in all but the rarest cases, what you think your product will be in the first couple weeks is an educated guess at best.

So it was with Bonanzle. I started by noticing a problem in the way shopping worked, and identified a fix to that problem that could extend beyond solving the original problem. The more I analyzed it, the more apparent it became that this idea could in fact extend all the way to creating a new class of shopping experience. The next couple months I bounced between business planners, entrepreneurs, market savvy types, and all people in between, as the idea grew bigger and bigger in its potential.

Taking a notebook chock full of ideas, opinions, research and facts, I feverishly pieced together the plan that constituted Bonanzle’s best opportunity to make a significant impact on the online marketplace. The result? Our original idea.

It has become increasingly apparent through analyzing our competition and my further communications with the always wise Mr. Dalasta that it takes something either vertical or completely offbeat to tempt users away from a gorilla. Despite the pages of potential applications for this site that many well-versed web veterans have brought to my attention, it is my conviction that we need to start by solving one problem, and solving it superbly.3darrow.gif

What then have I gained from these months of analysis? Only everything that will go into the business plan. Even though the idea ended up the same as it started, it has only been through having the idea continuously scrutinized that I’ve been able to determine which combinations of words make eyebrows raise. Put all those raised-eyebrow answers together, sprinkle in the words “weave,” “synergy,” and “confluence,” then for good measure, toss in a couple 3d arrows and flowcharts to represent data, traffic or customers, and you can pretty much sit back and wait for the first couple mil to arrive in the bank. Am I right, investors?

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Seattle Entrepreneur Blogs

I set an objective this week to get a feel for the Seattle Entrepreneurial blogging landscape, and have picked my three favorites from John Cook’s list of good ‘uns.

A Sack of Seattle: A. Sack (aka Andy Sack of Judy’s Book) is an honest guy with good observations. He’s also set up a forum for Seattle entrpreneurs to meet up over coffee, which is a benevolent gesture for an individual who has reached the “investment capital secured” promise land from which few bloggers return, and fewer still retain accessibility. Plus, his blog carries an extra bit of drama as he is currently in the process of trying to reinvent his site to capture a completely different niche (coupons) than it grew up on (reviews). Sounds like a hell of a trick to me, but I bet there are those who would say the same about taking on a $48 billion behemoth named eBay. Morons. They’ll obviously never topple eBay with that attitude.

Geeking With Greg: Greg is both a lucid and prolific blogger. He also seems to share my interests for Artificial Intelligence (I’ve architected the AI systems for most every game I’ve worked on for the last four years / he is making a web site that learns what kind of RSS you like and gives it to you) and productivity (I blog about it every other post / he blogs about it every other every other post). And if that weren’t enough, there is a funny quote about how engineers are leaving Google because MBAs have declared it their employer of choice.

Curious Office: Made by the founder of Imagekind, this site seems to fall into the “investment capital secured, accessibility retracted” collection. Comments are disabled on most posts. But you don’t have to be buddies with the writer to appreciate the piles of wisdom lying in plain site on here. In particular, there is a Steve Pavlina-esque article on their approach to getting funded. I like how he proposes that we wait until the investors come to us, rather than investing time on finding investors when there’s development to be done. Spoken like a true programmer. And you can bet that the story about the investor who tracked you down to give you $5 million is going to make for a great blog post/party story/pickup line when you can pull it off.

Anyone else got a local favorite local entrepreneurial blog not mentioned here? I’ve found that the defining characteristics of my favorites so far have been bloggers with experience and similar interests, who respect their readers and answer comments. It’s quite a treat when I uncover such a blog. The information that is readily accessible on any number of blogs these days (on the steps to getting investment, or generally being entrepreneurially minded) is stuff that simply didn’t exist 10 years ago. Let alone for free and in relatively unlimited quantities.

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Exploring Limits v. Self-Destruction

Along with productivity, one of the topics that perpetually fascinates me is “how much time/effort is enough to have ‘given something your all’?”

On this topic, Paul Graham says,

Startups are not magic. They don’t change the laws of wealth creation. There is a conservation law at work here: if you want to make a million dollars, you have to endure a million dollars’ worth of pain. For example, one way to make a million dollars would be to work for the Post Office your whole life, and save every penny of your salary. Imagine the stress of working for the Post Office for fifty years. In a startup you compress all this stress into three or four years. You do tend to get a certain bulk discount if you buy the economy-size pain, but you can’t evade the fundamental conservation law. If starting a startup were easy, everyone would do it.

During this time [when creating a startup] you’ll do little but work, because when you’re not working, your competitors will be. My only leisure activities were running, which I needed to do to keep working anyway, and about fifteen minutes of reading a night. I had a girlfriend for a total of two months during that three year period. Every couple weeks I would take a few hours off to visit a used bookshop or go to a friend’s house for dinner. I went to visit my family twice. Otherwise I just worked.

Like Paul’s “animal” test for finding the best people to work with, this analysis has been the stickiest that my brain has encountered so far. But I resent it like hell. Because I have a very goldfish-like ability (or even predisposition) toward being able to eat and eat and eat without noticing that I haven’t been hungry for days. Working 7 days a week until 3 A.M. seems to me quite dangerous, both physically and mentally. But I am crazy/stupid enough to try it, and I hear it beckoning.

So how much of that work is actually necessary?

Hell if I know. This is still step number twenty-something of 800.

But here’s what I do know. I do know that one has to push themselves further than seems possible. Rationing sleep is a start. Then you have to learn to be creative and productive and diplomatic despite the fact that you are tired and it’s hard to think straight. Then you have to dedicate yourself to consistent improvement at the same time you’re trying to get two feet on the ground. You can mess up sometimes, but it means you’re probably going to have to work twice as hard later to fix your mess up and do things better.

Add all that energy up, and how much do you have left over for the rest of your life? If it’s a pittance, is that OK with you? If it’s not, do you really think you stand a chance against those who are OK with it? Herein lies the paradox of dedicating oneself to an idea. Or really, dediating oneself to anything. There are other aspects of life that must be omitted, and you are making an implicit bet that you’ll get around to those things later. “The bet” calls the downside of passion “exploring your limits.” Most psychologists call it “self-destruction.” I’ll take the bet.

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What Flavor Businessman?

Over the course of creating Bonanzle and during my previous entrpreneurial pursuits, I’ve frequently asked myself what “good business people” do. For every component I identify, my mind reflexively poses the immediate follow-up question, “so, do you do that?” Business Always Fun

So far, the answer is often “no, I don’t.” The example I currently feel the most guilty about is that “no, I don’t do conventional business networking.” What’s worse, I don’t possess the desire to start doing it. The reasons are numerous, but in a nutshell, my least favorite part of getting to know someone is the first 10 minutes, and that is the time frame that is repeated ad nauseum at most of these “meet person, exchange business card, repeat”-type events. Furthermore, these events seem to me to be imbued in protocol, which, as a rookie, I am largely not hip to. Eventually, I consciously realize that I’ll need to change my tune on business breakfasts, but I’ll be holding out as long as possible.

In the meantime, I have to ask myself what it means about my skill set vis a vis the skill set of the successful business person. Is there a better determinant of success than correlation to what business people do? I like to think so. I think that the better question is “what a business person is?”

This question seems to me to lie at the root of what a business person does. So instead of “do you do business breakfasts?” I ask “what is a business person that causes them to attend the business breakfasts?” I’d posit that they are people who can use their communication skills to interest potential clients and partners while attending these events.

In this light, my business side shines. My greatest delight so far in making this site manifest itself has been meeting such an unfathomable number of intelligent people with diverse backgrounds and opinions. One of the most recent people I’ve met, Darren Dalasta, is a great example of a new acquaintence who has come from a totally disparate background (marketing, SEO) and has shown me an entirely different side of the web…. in one email he sent to me. This single email contained links to the Creating Passionate Users blog, eBay’s new UI, a failed Web 2.0 Post-Mortem and many other links more specifically relevant to Bonanzle’s activities. His background has allowed him to create an email that might have taken him a few minutes to write up, which has in turned kept me following links for hours upon days since receiving it.

And Darren is but one example from tens of effective, like-minded people I’ve encountered over the last few months. I think that for everyone, but especially for someone as fascinated by people as me, there are oodles of lessons and successes to be derived through being what a business person is, rather than simply following what they do.

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I ? Logo

I question whether logo matters.

Think about it: What aspect of your site/business is more subjective than your logo? At its most concrete level, it may subconsciously communicate some aspect of your business. But from everything I can tell, determining whether a logo is “good” or “bad” is about as scientific as determining if a painting is “good” or “bad.” In this sense, it is true that there is such a thing as a truly great painting and a truly awful one. But 95% of paintings/logos fall in this middle gray area where nobody is qualified to say what is right and wrong. I have a hard time justifying great costs on a collection of a few pixels that fall within the 95% of pixel collections that everyone else has.

Of course, the logo apologist will be quick to retort, that “gray area or not, the logo is the face of your business. It is who you are. It is how people remember you. When people think of you, they think of your logo. ” And of course, those facts are to some extent true.

So then I extrapolate to myself : Who am I? I am Bill. How do people remember me? As Bill. What is the face of Bill? Uh, it’s the face of some dude with short blond hair and green-blue eyes.

But even if people remembered me as “Pedro,” with “Sleek black hair and dark brown eyes,” I think I could still succeed in my goals if I had something unique to offer.

So I assert it to be with the logo, and so I save me mucho logo dinero.

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People

As Karrie Kohlhaas put it to me a couple months ago, “there’s no faster way to kill an idea than to keep it to yourself.” Taking that sentiment to heart, I’ve met more people in the last month than I probably have in the last five years. It’s been a revelation of sorts to see how many people I don’t know that are doing interesting things and who I respect greatly. And who aren’t that hard to meet. The previously-plugged Biznik is one great way to do it, but Meetup also has hundreds of local interest groups for damn near anything (Eastside Paranormal Group? Check). And best of all, you minimize the luck needed to meet people with similar interests when meeting through interest-based sites. The very first (and probably still my favorite) person I’ve met through Biznik was Ben Woosley. Ben was at the event not because he was pitching a business, nor because he needed to find partners or make contacts. He was there because he figured that all sorts of wise & talented people would end up at an indy business person get-together, and those were the people he wanted to know. I concur. I wish I would have thought of that five years ago.

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What’s So Bad About Getting Paid?

Yo non-profiteers, ye so virtuous, ye so in touch with your internal belief set, and working every day to further your altruistic cause: you suck!

Yo for-profiteers, ye so obsessed with pennies in a billion dollars, ye so proud and ascribed to the adage “It’s business, it’s never personal”: you suck too!

Yo Mickey Mouseketeers, ye with such freakishly proportioned ears, ye so happy on the inside and somehow also happy on the inside: you suck three!

Is that everyone now? Good. Let’s continue.

I want to meet people who are benevolent and like getting paid. From what I can tell on TV and even in real life, it seems that people are largely split into the two groups. The non-profiteers want no part of the capitalist, affluenza pandemic that has infected rappers and America and especially for-profiteers. The for-profiteers, on the other hand, want money severely. They want money so badly that they will pollute environments, defraud geezers, or otherwise embrace whatever vices blacken the bottom line.

In the middle, there is an island upon which I hope to find some fellow refugees. What’s so bad about getting paid?

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The Farmer

I don’t doubt this analogy has been used before by some other observant entrepreneur, but starting a business is a lot like starting a farm. First you plant seeds. Lots of seeds. Thousands of them if possible, because you know most of them won’t grow. Then you start watering and nourishing the seeds. To this point, you could plant the seeds whenever you decided you wanted to become a farmer, and water them whenever you decided you wanted them to start growing.

Then they start growing, and things change. There is life all around the farm, and there becomes a certain responsibility that goes along with keeping these plants alive. The schedule is now dictated in equal parts by your needs and the needs of the crop. If you’re a good farmer, a lot of those thousand seeds probably took, and now you’ve got yourself a challenge: which area gets watered first? Do you need a new tractor or farmhand?

It is an evolution. After a couple months of planting, this farmer has found himself with more plants to water than days to water them, so it’s time to cut back the less important sprouts, and figure out what’s most important amongst the rest. I’m putting the “busy” in “business,” and it’s just where I want to be.

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Kill the Gorilla

I went to see Sujal Patel give an intriguing talk on “Introducing Disruptive Technologies into Mature Markets” this Friday. Listed as starting at 6:30 (it actually started at 8, but that’s a different story), my expectations were high as I dragged myself out of bed at 5:30, after a mockingly short 5 hours rest. It didn’t disappoint.

In brief, his three keys to dethroning your gorilla:

1) Possessing a “disruptive technology.” According to Patel, for a new product to make a dent in an existing marketplace, it must be at least 10x better than similar existing offerings. Not twice as good, not five times as good. The logic behind this is that a product anything less than 10x better will not be able to cross the chasm into the early majority, because all breeds of majority adopters (early, middle and late stage) are compelled to adopt only when a product is so overwhelming better that it justifies the investment of time to learn it. This matches my intuitive perception of user adoption patterns — I’m certainly unlikely to adopt something new unless I can clearly see high benefit and low risk (i.e., of the new technology disappearing) to doing so.

2. Tenacity. Though this one is somewhat obvious, the depth to which it is necessary is something that new or non- entrepreneurs may not understand. Patel gave the example of spending literally three months in VC meetings for “all but two days. ” In many of those meetings, he was assured that his idea “was like so-and-so’s idea,” but worse. Other challenges in his case involved convincing VCs that two late 20-somethings, who knew almost nothing about storage, could build a successful storage company amongst a landscape of almost 100 competitors. An illuminating example that he didn’t give was that, as he lectured us, his company had dropped in value almost 22% in the last couple months on news of poor fourth-quarter earnings. Nevertheless, he had to show up, organize an hour-long show, and preach the perfection of his company’s execution. Guts.

3. Partners=results. If there is a single, overarching requirement for success, it is surrounding yourself with the absolute best people that exist. He specifically mentioned the need to find “high ceiling” people who have separated themselves from their peers. When asked in the Q&A session why he’d failed to mention “adaptability” as one of the core needs of a new business, Patel responded that “adaptability” is really a function of who you have. Do you have partners that hear the needs of the business and work together effectively to ensure those needs are met? If so, adaptability is already assured.

Overall, it was an extremely relevant topic for me. Thinking about the features of the site that are truly 10x better than their alternatives helps to focus on the core of the business model. And the need to partner was one that I had already understood, but Patel’s commitment to not compromising on a less-than-ideal partner certainly resonates, as my search for able accomplices extends into weeks from what I’d hoped would be days.

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Consulting

I had my second visit with business consultant Karrie Kohlhaas yesterday, and continued hammering out the most effective way to spend my time. Karrie is one of the first bona fide business-minded people I have had the opportunity to sit down with over a meaningful length of time, and as such, it has been a very intruiging process to watch her work.

As far as I can tell, a good business consultant is part entrepreneur, part investor, part psychologist, part buddy, and part client. It can be hard to toe so many areas. Take yesterday’s meeting. Karrie sees the research I have done on trying to determine the different target groups for the site. She sees that one of the groups is collectors, and that I have written that I believe that collectors are motivated by having a community of like-minded collectors. At this, she squints her eyes slightly, and in a split second I witness her thought process dart through a sequence something like “Real sellers don’t care about community” to “Though I suppose what that really means is its hard to say what these groups want,” at which point she’ll say something like “Hmm, that’s interesting. Community.” Because one of your roles is client, and the customer is going to get the benefit of the doubt when there is potential doubt.

This is surely the most difficult set of balls to juggle as a consultant, because on one hand you need to use your expertise to tell your client that you disagree, but on the other hand you need to instill confidence that leads your client to believe in themselves and become more productive. And though this is not altogether dissimilar from an employee telling their boss that the blink tags proliferating the new company web site sort of clash with the progress mankind has made in the last 10 years, it is different, because A) your boss isn’t paying you to tell him he’s wrong B) you’ve known your boss longer than 10 minutes C) you aren’t charging your boss $125 an hour and thus D) time is less of the essence. It’s extremely complex, and yet paradoxically, the complexities add up to the result that conversation has to move faster.

Analysis of the peculiarities aside, finding a good consultant can definitely be an extremely productive experience, especially if, like me, you’re new. Karrie’s part entrepreneur has helped me come up with catchy ways to think about and describe my business. The part investor has helped me be extremely needs-met-centric in my consideration of the site’s success. The part psychologist has made more observations on my nature in three hours time than many of my friends have tried in three years time. Part buddy chatted with me about how the body will steal back sleep cycles during the day if you don’t let it sleep proper. And part client wraps up all of the above in as rosy a container as can be expediently created.

I’m sure your mileage may vary by consultant. I picked Karrie by her prickly (in a good way), unorthodox profile on Biznik, which, in a nutshell, reminded me of me. Now that I’ve visited a couple times, I’ve been most impressed by her focus and follow up. This is a topic that I may revisit in a future blog once I have more data for comparison points. It can certainly go a long way toward helping one escape their own mind.