Pivoting to success

A pivot is the term for a company that changes its business model in order to take advantage of an opportunity.  The opportunity is often only visible after the founders have progressed with their initial concept enough to learn about their market and its needs. Many of the hottest companies today, from YouTube (which started as a dating site) to Flikr (which was a videogame) are examples of great pivots.  The founders in these companies tested their hypothesis and realized they wouldn’t work, so they moved in the direction that would. The affectionate name for this is “failing fast” and its a good thing.  Chad and I did just this about 3 weeks ago when we changed our underlying business model.

Our previous idea was a marketplace for creative messaging services, from funny eCards to custom phone calls from voice impersonators.  What we found was that people wanted ways to interact, but our product offering was too wide.  We were talking with too many different target markets. We needed a much more narrow product offering which would enable us to target just one demographic and build a core user group. Our customers and artists told us repeatedly that they were interested in printed cards.  We heard “I love the eCards but I want you to mail it as a real card” and “I hate going to the store to buy cards, I end up not sending them! Can you make some of your eCards available to print?”

We started researching the greeting card market and realized that it is massive. Over 7.5 billion greeting cards are bought each year in the US, representing a $11B market with over 3,000 independent publishers. Only a handful of small companies currently print and mail cards from a web marketplace and none of them are executing the concept particularly well.  Chad quipped that we could do to greeting cards what NetFlix did for videos, bring the card buying process online.  As soon as that came out of his mouth, we both instantly realized the market potential.  We were hooked.

That was 3 weeks ago.  Since then we’ve repurposed our website and launched the new features as a minimum viable product.  Try it out, you can actually have us print and mail a card for you right now. Don’t forget to let us know what you think of this new direction in the comments.

Pivoting to success

Rejection is my yardstick of success

I get rejected a lot. Not only do I get rejected a lot, but I get rejected in a lot of different ways, too. I get rejected with unanswered “cold call” emails, and by politely worded “not interested” responses and everything in between.  I get a constant stream of rejection and when it’s not making me depressed, I savor it as much as the success.  Getting told no tells me that I’m pushing for more than I deserve and its a good yardstick for measuring just how far I’m pushing the envelope.

I want to be clear though that rejection and failure aren’t the same thing.  In his last blog post, Andy Ellwood talks about the benefits of failing spectacularly as a way of overcoming one’s fear of failure in general and becoming a better entrepreneur.  Not purposely failing, but doing something you half expect to fail with the confidence and purpose of something who thinks they will succeed.  Rejection is a very similar concept but where rejection is generally a private occurrence, failure tends to be an embarrassing public event.  Instead of publicly realizing you are wrong, rejection are a series of small failures that test your personal resolve to continue and teaches you what works and what doesn’t.  If a big named entrepreneur or other VIP doesn’t respond to my emails its not a failure, its a learning opportunity.  What did I do differently with those that did respond? It also indicates that I’m pushing the boundaries of what I’m able to accomplish.  Chris Dixon summed it up really well in a recent blog post when he said “if you aren’t rejected on a daily basis you aren’t trying hard enough.”

The rejection comes in many forms.  First there is the blatant rejection, the emails that read “I’m not interested” or some other polite variety of this statement.  These slide right off my back, since the vast majority of these responses come from smaller potential customers, never from potential mentors.   There is also the not so blatant “my schedule is really busy for the next few weeks, how about you follow-up with me then” which tells me they are clearly not interested, but luckily for them I’m a persistent little guy and I mark the date on my calendar for a follow-up.  Then there are the ones that never respond.  The worst though, are the ones that respond to setup a meeting but then either continually push it back or don’t show up.

For all the rejection, there is a ton of success.  To me, networking is both a quality game and a quantity game.  Remind anyone of dating?  You never know where a relationship will lead, so I try to maximize my volume of meetings with the best people possible. The more rejection I receive, the more fantastic connections I’ve likely made.  In other words it all goes back to Edison and his amazing lightbulb. Over one thousand failed experiments, each in its own way revealed a little more of the puzzle that, when finally complete, changed the world.  As Edison said, genius is indeed “10% inspiration and 90% perspiration.”

Rejection is my yardstick of success

Does the CO tech explosion resemble the GoldRush?

This weekend I saw a sign from the Goldrush era in Colorado. The language extolling the virtues of buying land for “profitable exploration” instantly resembled the sales copy I’ve come to recognize on websites.  I wondered if we [tech startups] were living the modern day version. I set out to research and determine what, if any, were the similarities and differences between 1859 and 2009.

Gold Rush Mining
Prospecting for Gold

Let’s start with some facts. The Colorado Gold Rush was set-off in 1859 by the discovery of gold in what is today Denver’s Confluence Park. The news, coming out roughly 10 years after the California Gold Rush, set off a stampede of prospective miners from across the plains. The towns of Boulder, Golden and Denver sprung up to serve the booming mining operations across the front range. In total, 21 million ounces of gold were mined from Colorado between 1859 and 1861, more than the combined total of both the California and Alaska rushes earlier in the century. In addition to making individual prospectors rich, it provided lucrative jobs for those who didn’t want to risk it on their own and lead to the development of significant infrastructure investments. This included rail links, highways, farming operations and a booming tourism business.

In the common conscience, including mine, a Goldrush is an irrational search for a quick fortune. Not a laudable endeavor. The result, however, is that a single 2 year period in Colorado transformed a largely uninhabited part of the country into a well connected economic hub and set it up for a century of rapid population growth.  Us Boulderites love our town, and it wouldn’t exist as it is if it weren’t for the Gold Rush.

The reasons people have moved to Colorado to start technology companies are very different. The most frequent reason people give for moving here is lifestyle. Starting a business is hard work, but is also fun and engages people’s passions.  The startup community consists of passionate people living their life to the fullest.  The type of startups moving to Boulder during what I want to call the Startup Explosion are not the Gold Rush people blindly seeking wealth.  They are smart, confident, adventurous and looking for a community where they belong and that can help them accumulate wealth and a reputation.  These are people who can have, and largely already have had, top-notch jobs elsewhere.

Clearly the human factors aren’t the same as the Gold Rush.  The outcomes, however, are exactly the same.  The influx of new companies has led to a large service and infrastructure expansion.  200 years ago it was the creation of railroads, highways and cities. Today its VC firms, incubators, law resources and potentially Google Fiber *cross my fingers*.

So does the tech explosion resemble the GoldRush?  Kinda.  It has the same influx of resources and expansion of infrastructure, but it lacks the irrational underpinnings of the Gold Diggers.  While people left their homes for fortune during the Gold Rush, more than 150 years later people are moving for the startup infrastructure, mentors and lifestyle.

Does the CO tech explosion resemble the GoldRush?

The Perfect Storm: Why start a weather business?

Guest blog post by Joel Gratz, founder of the ColoradoPowderForecast and DontGetZapped

There is absolutely no substitute for being passionate about something and acting on that passion. This isn’t a cliché. It’s just the only way to really be happy.

When it’s going to snow, I have the energy of someone who just took a few too many shots of “5 Hour Energy”. This was true as a 6 year old wanting to play in the snow, as a 12 year old wanting a day off of school, and as a 25 year old looking for a midweek powder day at Vail.

Weather, particularly snow, is my passion. I went to school for meteorology. I’ll talk your ear off about the clouds. This is what gets me jazzed up.

How do you turn a life-long passion into a sustainable business?  With lots of energy, luck, and a bit of technology.

In 2006, I finished my joint Masters in Meteorology and MBA.  I started working for ICAT Managers, a hurricane and earthquake insurance company in Boulder. The location, pay and hours were great.  The people were kind too, in short, it was a good job. There was just one problem: I spent 95% of my time on data and analysis and only 5% of meteorology.  I thought that my passion could wait, as my life otherwise was perfectly fine and comfortable. Snow, skiing, and weather could still be my hobby even if it wasn’t my job.

But in late 2007, the perfect storm began to take shape. A few of my skiing friends asked me for forecasts so they could plan their snowy adventures for the week. At first I responded to these requests individually, but realized this was time consuming and inefficient. So I started an email list and began a weekly email to ~50 of my friends to let them know where and when to find the best snow. I wrote my emails with a touch of quirky humor and included a few graphics. The word spread.

During the 2008-2009 ski season, the email list grew to 500 people, which pathetically enough, was still just a group of contacts in Gmail.

At the beginning of the 2009-2010 ski season, I broke into the 21st century and set up a blog to replace the email list and ColoradoPowderForecast was born. By late December, tens of thousands of people were visiting the site, and I finally opened my eyes to the perfect storm swirling around me:

  • Energy: I love working hard to forecast snow and help people enjoy it.
  • Luck: A few well-connected people found my site and passed it on to many more.
  • Technology: $0 spent on marketing and $3/month in web hosting was all it took to get 30,000 people to follow my forecasts.

With some good press in the books by new years, I knew that I had stumbled upon a way to make a living by following my passion. On January 21st, 2010, I left my full-time job to spend time meeting people in the ski industry and to begin transitioning my hobby into a real business.

Things are still in transition, but there’s not a day that goes by that I question my decision to follow the one thing that really gets me fired up: Snow. Luckily for me, there are about 12 million people in the U.S. that are also passionate about snow as skiers and snowboarders.  No, this isn’t a massive market. But by following my passion and helping these 12 million people to follow theirs, I should be able to make this business work out. And all it took to get started was $3/month, a bunch of snow flakes, some luck, and a bit of technology.

Now let’s go La Nina – bring on the powder!

The Perfect Storm: Why start a weather business?

How we plan to scale up our artist base

This past week, Chad and I implemented the ability to purchase premium greetings on our site. The site’s basic monetization engine and minimum viable product is finally complete.  We’re ready to test our assumption that consumers are willing to pay for artist created greetings. We need artists to post and promote content, so we’re ramping up our artist recruitment process. This isn’t new for us since we’ve been recruiting artists for our alpha testing since day 1. We largely understand our value proposition and the basics of our pitch. Now we need to do more of it, better.

Starting this week my design hours will start to decrease and my hours of artist recruitment will increase. At this point we’ve been relying on good ol’ fashioned networking to find artists.  That won’t suffice now, its time to branch out and see if we can convince people who have no social obligation to hear us speak. We expect a lot of rejection, but we think that is a good thing. It will help us hone our message and fix issues with our product. Here is our strategy to deliver a good pitch to artists and continually improve it.

1 – Focus on the 2 benefits that our site brings to the artist (Money and Publicity)
2 – Track each and every potential artist in a recruiting dashboard, keep notes about the features they like and request.
3 – Never give up. Return to artists that rejected us when we’ve added features they wanted or overcame their concerns.
4 – Give them a one-page pitch document they can look at while we’re talking.
5 – Put a big smile on our faces and enjoy the ride even if we get rejected.

After we’ve proven that the basic assumption works, it will be time to scale the process by adding a “refer an artist” feature to the system and finding a charismatic artist manager to help recruit talent.

A lot of you have gone through this process before, any advice for us?

How we plan to scale up our artist base

The 7 rap rhymes that every entrepreneur should know.

I love listening to rap and hip-hop. The beats are great and the lyrics, while crude, often speak to the entrepreneurial “make something of yourself” story line that I admire. Clearly this isn’t true about all rap artists, and I actually have a problem with a lot of newer mainstream work, but this is certainly true about my old favorites like the Notorious B.I.G and 2Pac.  Yesterday was the anniversary of 2Pac’s death, so it seems like a good time to pull out some insights from a few of my favorite rap lyrics.

1. Mo money, mo problems (Notorious B.I.G.) – The idea that money equals success is very ingrained in the American psyche. Biggie understood, and spoke often, about the differences he felt between his impoverished upbringing and more recent wealth. It is clear that issues of loneliness, trust of others and freedom of movement were among the downsides of having money.  He is not saying greed isn’t good, but he is cautioning about allowing success to change the person that you are and that got you that success in the first place. Listen to this line

2. I don’t mean to sound sleazy, but tease me, I don’t want it if it’s that easy (2Pac) – For many of us, the feeling of accomplishment comes from stretching ourselves. This is as true when doing an alpine ascent as it is when building a business. Being an entrepreneur, or hustler in rap parlance, means that nothing is handed to to you on a silver platter. It does take hard work, risk and resilience to succeed but that is what makes the ultimate success so sweet. Listen to this line

3. Now I can let these dream killers kill my self esteem-or use my arrogance as steam to power my dreams (Kanye West) – There is nothing that puts me in overdrive like someone telling me that I can’t do something. Knowing your strengths, weaknesses, and being confident enough to take the big swings when it feels right is important. Listen to this line

4. No man alive has ever witnessed struggles I survived (2pac) – This one has special meaning to me. Whenever I hear this line, I think of my grandparents who both survived Auschwitz. If they can make it through that hell, rebuild their lives and raise two successful children, what everyday obstacles can’t I get through? The thought of my grandfather’s smiling face is quite literally the image I concentrate on when I’m trying to overcome large obstacles like a mountain peak or calm down before an important presentation. Listen to this line

5. Will Smith don’t got to cuss in his raps to sell records – well I do, so f*** him and f*** you too (Eminem) – It sounds crude, but it has a good point. Every brand has its own target market. It’s better to be true to your core fans and personality than try to be everything to everybody. Listen to this line

6. Don’t speak to fools, they scorn the wisdom of your words (NAS) – I include this lyric because I actually think NAS is wrong. The fact is that smart people are the ones who are listening. Even “fools” have valuable information to share; you just need to listen hard enough.

7. Stay far from timid, only make moves when your heart’s in it, and live the phrase “the sky’s the limit” (Notorious B.I.G) – How many people never take a risk to achieve their dreams? The best entrepreneurs, like the best poker players, understand when to put all the chips on the table. Listen to this line

The rappers that I’ve mentioned above are entrepreneurs and their stories of overcoming adversity, believing in themselves and taking big swings are lessons many of us can learn from.  While they grew up under different conditions, the concepts, the motivations, and the passions are the same. Do you have any favorite lines?  Use the comment box to share them with us.

The 7 rap rhymes that every entrepreneur should know.

Why I became an Entrepreneur (the short story)

During my last trip back to the East Coast it was obvious that people didn’t understand why I’d become an entrepreneur. Why give up a successful career trajectory for something with a 90% chance of failure? It bothered me and I wanted to start getting my thoughts down, I want to revisit and expand on this topic later. For now, the basic answer is that my life goals and desired lifestyle are not achievable with a job.

Like @mattmireles I grew up as the middle class kid amongst the super rich. This gave me both a strong desire to change my economic positon and also an outsiders mentality. It was obvious that the if the status quo remained I’d never move up. So throughout my life I’ve tried to create things that break the paradigm.

While my last job was perfect for me, the next roles I saw in the future weren’t. It was apparent that the highest I could reach at a large company would be an exec role entrusted to maintaining steady growth and compensated to live a comfortable, and always working, lifestyle. This just wasn’t what I personally wanted and the thought of settling down into a routine job and lifestyle scared me. I still harbor dreams of changing the world and living an adventure. The corporate career path seemed to conflict with that dream.

Entrepreneurship on the other hand feeds directly on passion, profit from disrupting the status quo, and is one of the biggest adventures one could undertake. There is a definitive risk of failure, but the payoff if successful in both money and status is far beyond what is achievable in a job. In essence I’m risking comfort for a chance to be extraordinary.

Its hard at this very moment because I’m not earning what I was, but I’m compensated well by having a lot of fun, working with great people and maintaining a healthy lifestyle. This first project, successful or not, is a chance to really learn the ropes and in that way I see it as an investment.

I know quite a few of the readers here have made, or are contemplating, similar decisions. Use the comment box to tell us what you think.

Why I became an Entrepreneur (the short story)