Building a business takes a long time. See: OpenTable.
One of the things you learn when starting a company is that overnight success is a 0.01% anomaly. That’s not to say you can’t do well right out of the gate, but building a profitable business generally takes a long time. Jeff Bezos says that building a sustainable business takes 5-7 years, and I don’t disagree. In fact, 7-10 years might be more accurate.
However, if you’re persistent and can raise the capital you need for those 7-10 years, the payoff can be huge.
OpenTable is my favorite example of this. OT had:
500 restaurant partners 3 years in.
7,000 restaurant partners 9 years in.
20,000 restaurant partners 12 years in.
And OpenTable has 28,000+ restaurant partners today, after 15 years in business.
That’s one hell of a curve.*
Here’s my main takeaway. Though you can easily pine for the big leagues when you’re first starting out - wishing you were celebrating, say, 100 monthly restaurant sales rather than 10 - the small wins at the beginning are no less important. You can’t get to 100/month if you can’t get to 10/month.
It’s healthy to always push for faster growth. But every so often it’s important to step back and celebrate your current success, wherever you are on the curve.
*And it doesn’t even get into the story of the other side of their business, restaurant reservations, which has overtaken restaurant software fees as their primary source of revenue.
It seems like every year there’s a contingent proclaiming ‘This is the year for mobile advertising!’ But it’s hard to argue with this chart.
“Do you really like ramen noodles?”
– Installment #1 in my new series: ‘Things you shouldn’t say to someone bootstrapping a startup.’
A good heuristic for thinking about how to price a product/service, especially one that doesn’t lead to immediate gratification.
Read more here:
In the first case, we have something like purchasing food. Immediately that hamburger has a lot of value (you’re hungry right?) but after you eat it, the value is largely gone.
In the second case, there are products that deliver the same amount of value to you every day. A newspaper subscription is a great example of this. Every day it shows up at your door and you get the same value from it each time.
In the final case, you see a product whose value increases over time. On day one, you haven’t invested much time into it and you probably don’t even understand how it helps you. However, as you use it more and more and put more into it, the value because increasingly clear. Services like Dropbox and Evernote are perfect examples of this.
The difference between UX & UI
Mailchimp is an awesome Atlanta success story, and an organization that doesn’t really function like a traditional company. A lot of their company projects - and a lot of what their customers love them for - have nothing to do with their actual ‘business’ (how they make money). Initiatives like:
- Mailchimp coloring books (sent randomly to customers)
- Mailchimp t-shirts (for new paid customers)
- Mailchimp hats for people, dogs & cats (sent randomly to customers)
- Interesting side projects that become free apps for their customers
This is a great talk by their CEO & Founder, Ben Chestnut, that will get you thinking about what it means to be a successful CEO or manager and how to create a company culture that encourages innovation & creativity.
Hiring at a startup & Peyton Manning
I’m sure everyone has heard by now that Peyton Manning signed with the Denver Broncos last week. It was probably the biggest free agent signing in NFL history; at the very least, it was the latest notable instance in an ongoing series of all-time great QBs switching teams late in their careers (see: Brett Favre, Joe Namath, Johnny U).
Peter King at SI wrote a great piece that covered the day-by-day pursuit of Peyton Manning, and the article resonated with me both as a football fan and as a recruiter. We just brought on a CTO (!) at Frequentr, and I’ve realized that the basics of recruiting someone to your company vs. recruiting a Hall of Fame QB in the NFL really aren’t all that different. For the most part.
Is Peyton Manning a developer? Biz dev specialist? Marketing whiz? No (though he is a kickass salesman…). And his salary is 10x an average Series A round. But play along for a few minutes.
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Still THE MAN after all these years.
Why starting a company can be scary
I left a great job at a great company to start Frequentr. It was a tough decision, for sure – I was giving up a nice salary, an environment with smart, enjoyable co-workers, and a clear career path – but you know what’s really tough? Realizing that it’s all you now.
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