All posts by Mukund Mohan

My discipline will beat your intellect
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Anatomy of a successful startup “pivot “: Step 1: Spotting a pivot point

Its the hottest trending buzzword of 2010. Pivoting is not new for most startup entrepreneurs. Most successful founders have an innate gut feel for markets, customer needs and opportunities. 

Spotting trends is the key to pivoting. You have to be able to take a lot of data (from the market, blogs, conferences, customer conversations, etc.) to understand and have a sense for if what you are doing aligns with what people will want in a few weeks / months / years.
The thing about trend spotting is that is not even close to a science. 
Most entrepreneurs either know their market very well and understand the ecosystem or they are rank outsiders trying to disrupt (link). We were the later. While most startup advisors tend to advocate “blinders on” approach towards solving the problem that your company set out to solve, I tend to ask entrepreneurs to keep looking outside. Spend a good 80% of your time on building what you set out to build, but keep talking to customers, industry folks, etc.
At BuzzGain, most recently we went through a pivot exactly 8 months after our incorporation, 3 months after our alpha and 2 months after our beta launch. We started as a DIY PR web service and ended up being a social media monitoring solution. It was not a 180 degree turn, but a significant enough change from our initial vision. So I thought I’d share the insights I had learned from that experience.
In a customer conversation (as a follow up to our beta launch), I asked the user what he thought, what value he got from using our product, and what we can do to improve it. He was mostly complimentary (since he was a old friend) and suggested a few small, minor changes. At that point we were excited. Finally after 6 months of intense work, we had something customers would pay for. Or so we thought.
Exactly 6 days after the conversation with the customer, he had posted a blog article about a new product he was trying out in a adjacent area. His blog post was a lot more complimentary, since it solved a problem that was a big issue for him. I read the post with great interest, and recalled that his conversation with us was a lot less effusive about what we were doing. Luckily for us, our product could do about 50% of what the other product could do and the work we had done was the base for a lot of their functionality.
Still I did not think it was a reason to pivot yet. In fact at that time, I had no idea what Pivot even was.
Since I was new to the PR space overall, I was following over 50 key bloggers in the space. A day later I spent 11 and 1/2 hours going over 218 blog posts over 3 months, manually trying to find out what excited them, what disappointed them and what they were looking for.
Social media monitoring was all the rage among the PR folks I was following.
I did not notice it even though I read their posts daily. Turns out its hard to spot the forest from the trees when you have your blinders on.
Data point #2 was available, but we were still not completely convinced.
So we decided to do an experiment. We developed the top 3 features quickly with our current capability an in a week put it in our product. We did make sure that those were prominently available to every customer.
Our Google Analytics data showed in a week, customer interaction was up 133%.
Pivot? Hell yeah! 
We removed 25% of the current features, and focused on getting more data sources, ranking social media expertise based on 3-5 factors and started working towards a 1.0 launch with a target of 2 months.
What I learned while going through our pivoting exercise:
1. Most initial customers for startups tend to be friends, family or old acquaintances. They wont always tell you that what your are building is awful or that does not solve their problem. Its in their DNA to encourage you. 
Suggestion: Get at least 2-3 rank outsiders to test and use your product. Preferably people who you have met only once (or never) at a conference.
2. Take some time every 3 months to reflect. Blinders on approach rarely helps you spot pivot points.
Suggestion: Write a summary blog post (or prepare an internal presentation to share with your team) every 3 months of all the key things people in your industry talked about. Look for what they are saying, who they are linking to and what events they are attending.
3. Look for multiple data points before you pivot. Most times you may get a head fake. These could be the most challenging for your company to recover from.
Suggestion: Read the book 6 hats thinking – By Edward Bono. Learn how to get multiple data points (but dont take too long) and analyze them to make a more informed decision. 
But realize, its never going to be 100% right so I suggest you make risk taking a discipline.
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Entrepreneurship is about reducing risks and taking new risks at the same time

I met an interesting entrepreneur who had it all right 6 months ago, only to face the daunting prospect of “slow growth” for years. He had done most things right – acquired early adopters quickly, at low cost, found ways to monetize the problem he was solving, gained enough traction to get venture funding, but was now stuck at the $2 Million revenue with 20% annual growth. 
He mentioned that he had done everything to reduce risk the systematic way by doing the right things, but failed to anticipate the change in the market, which occurred rapidly. 
I dont think many (including the VC’s on this deal) would have anticipated this turn of events.
The thing that struck me is that as entrepreneurs we should be looking to reduce risks and keep taking new risks at the same time.
There are many risks – market risk, hiring risk, financial risk, idea risk, etc. There are ways to making risk reduction a process.
Make risk taking a discipline. 
Ask everyone in the company to ensure they do one risky project each quarter. A new marketing mechanism, a new sales territory, a new architecture upgrade, a new segment of customer to target. Help them understand then how to quickly reduce the risk from that project. 
Celebrate both failures and successes, but remember to keep taking risks.
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Entrepreneurship is glorious

1. Entrepreneurship tells your parents that the values they imbibed in you are not lost.

2. Entrepreneurship tells your sister that you are going to give her a job if “all else fails”.
3. Entrepreneurship tells your brother that you like to build something of lasting value.
4. Entrepreneurship tells your teachers that you were inspired by them.
5. Entrepreneurship tells your friends that you are looking to make it big and you value their support.
6. Entrepreneurship tells your boyfriend that your are a very passionate person.
7. Entrepreneurship tells your kids that you are teaching them to take risks and never give up.
8. Entrepreneurship tells your neighbor that you appreciate them putting up with your messy garden since you hardly have time to mow the lawn.
9. Entrepreneurship tells your accountant that you value other things more than just money.
10. Entrepreneurship tells your grand-dad that hard work and discipline still pay off (after all these years).
11. Entrepreneurship  tells your grandma that you heard all the stories she told you as a kid and are trying to make your own story a legendary one.
12. Entrepreneurship tells your uncle that he’s not the only black sheep in the family.
13. Entrepreneurship tells your barista that its their coffee that keeps your soul company, after a bad VC meeting.
14. Entrepreneurship tells your landlord that a few years from now, you’re more likely to be his landlord.
15. Entrepreneurship tells your lawyer that his initial low fees will result in a large windfall during the stock sale.
I could go on, but you get the point. Go on, be an entrepreneur.
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What does “adding” a social layer to everything buy you?

I watched the 60 minutes interview with Facebook founder  Mark Z over the weekend. Impressive, especially since I have seen him at a conference speaking (or mumbling) a few years ago and he’s dramatically changed since. Its certainly worth a view, especially if you are an entrepreneur looking to find “the next big things”.

He and others talk a lot about the “social layer”. So, I had a few questions and a few thoughts. Most of the answers may not be perfect from a purists’ point of view, but nonetheless, here’s my first take. I might change some of these later.
What is the social layer?
Any layer is an organization of a functional set of components that will work with each other in a way that each set will only interact with sets above or below it. This abstraction helps make the overall solution modular and optimizes each set. E.g There’s a database layer, a business layer and a user interface layer etc. So the “social layer” is adding your friends, likes, preferences, etc. on top of your online profile, allowing other sites to take advantage of these likes, preferences to help tailor their offerings for you.
Why is the social layer important?
Previously (as in 5 years ago) most everyone just had an email address to identify themselves on the web. Email addresses, by themselves are fairly useless to help determine “who you really are”. With social networking sites, you have a rich set of data that profiles, categorizes and uniquely identifies the person and more importantly their “persona” or “archetype”. No longer do you have to identify everyone with just their email, but customize to their needs specifically.
What is the value of the social layer?
To an individual it means more specificity and customized web experience. You dont have to wade through 200 daily articles written on NYTimes to get to the 5 that you would like to read the most.
So what does adding the social layer to everything buy you?
1. Social hiring. For entrepreneurs and hiring managers, it means no longer looking at resumes in a silo to understand if the person will be a fit. It means getting a lot more information upfront to make a wise hiring decision. It might also mean making it easy to get to your friends and family network to look and hire “referrals”. It has been proven that people who are referred to a role by existing employees at a company tend to be better hires than rank outsiders.
2. Social sales. For sales professionals it means making it easier to build relationships with prospects faster. Which saves you time, reduces your sales cycle and that should make you more money.
3. Social marketing. For marketers, it means taking into account the likes, dislikes, preferences, attitudes, demographics and intent of individuals to customize and segment their customers better. Rather than the 20% off for everyone, you can tailor your offers and products better.
4. Social buying. It could mean checking with your friends and family regarding their experiences with products / services so you can make a better informed decision.
5. Social development: It means asking known experts who have the same problem or bug that you do and not having to wade through 2 pages of Google search results before you find the right answer. It should help you answer questions faster. Given that your social profile will say you are an expert at “X”, others should find it easier to find you and you should find it easier to find others who are interested in “X”.
and so on.
What do you think?
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Doing what’s important versus doing everything at your startup

I read this interesting piece on Wired on how everyone should be a developer. You have probably heard this and many other things before, so let me overwhelm you right away. 

1. Founders should code.
2. Founders should be sales people.
3. Founders should be marketers.
4. Founders should do customer support .
5. Founders should raise money .
6. Founders should be product managers.
7. Founders should do their own public relations.
8. Founders should be CEO’s.
9. Founders should flip burgers (no kidding).
Is there anything that as founders you should not do? Well the only thing I have heard so far is to get a lawyer.
I love the DIY approach as much as the next guy, but before you decide there’s no way you can be an entrepreneur if you need to do all this, hold on.
Do what you are good at and like, and ensure that the rest gets done.
There have been founders of technology companies with commerce backgrounds, like my friend Alok, founders of restaurants with technology backgrounds, like my friend Gaurav.
Nope, they did not do everything. They surrounded themselves with people who were good at other things, that they trusted, and they focused on getting the right things done.
Other

The Digital “keeping up with the Joneses” is a waste of time

I read a lot as do many of the other folks I know. A few people I know have over 200+ feeds on their Google reader. But most of it is of little use. Its the digital equivalent of “keeping up with the Joneses“. 

The theory goes you have to read enough to know how to take advantage of the opportunities that are created.
So think about this. How much use is that piece of news of Friendster or its funding of value to you now? Or news of any of the other 2000+ Web 2.0 companies that came, released and went away?

Don’t get me wrong. Its valuable to know stuff. You’re more likely to create opportunities that way. 
But its more valuable to create stuff. You see, creation expresses the form of reading that is active, and gives you the ability to express that way.
What I mean by that is to write – a blog, a book, a curated article, anything, but WRITE.
Even if you are an exceptional individual that retains 80% of what you read, I contend 50% or more of that is useless within 6 months. 
  • Lessons learned from startups that are successful, or failed.
  • How one company get profiled on Techcrunch.
  • How yet another entrepreneur got funding from YC.
All useless until you put it to use. 
The reason is even if you read a lot, you next step is to think about it and process it. Then you form an opinion and finally decide on implementing your thoughts. The trouble with that process is 70% of what you read you dont believe you can act on ASAP – so its forgotten.
The FIRST way to put it to use is to write. Even if no one else reads (which I doubt anyway).
So stop “keeping up with the digital Joneses” – start writing.
Here’s one technique – give up 50% of you feeds, news sites and blogs you read and use that time to process the 50% you decide to keep and start writing. See how much further that takes you.
Other

3 Step to turn your “features list” into powerful value propositions and increase conversions

Many websites that cater to the micro, mini business market tend to have a “Features” tab on their website. This page is typically a product tour with some relevant screenshots of the web service. The primary goal of the feature page is to showcase the key capabilities of that application.

What happens if you only list features, is that parity seeking customers will eventually make it a price comparison, assuming “features are more or less the same”.
While listing features is useful, most business buyers however first look for a “value proposition“. 
Examples of value propositions:
1. Increasing revenues
2. Reducing costs
3. Increasing employee productivity
4. Provide a competitive edge
5. Reducing time to market
6. Getting paid faster
Here’s how to take a set of features and tie them to specific benefits and value propositions.
1. List all your features. E.g. Our app allows you to correlate facebook friend signups with advertising data
2. Understand how the user benefits from that feature. E.g. Hence you don’t need to have multiple graphs open at the same time and manually correlate
3. Tie it back to a specific value proposition. E.g. We save you time. Instead of taking hours to understand how 2 differing data points are correlated you can now do it in minutes.
E.g. For the customer:
We save you time, by allowing you to have multiple correlating data points in a single graph.
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Bonus points:
1. When you quantify the value proposition with a specific number, that’s a clear, specific and terrific ROI (Return on Investment) statement.
2. If you provide a customer testimonial along with the value proposition, you have verifiable proof that your “feature” is now proven.
E.g. For the customer:
Using our correlating graphs feature, a large financial services customer (providing real names is better) reduced their time to correlate advertising data with facebook friends by 120% resulting in savings of $40,000 in the year.
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How to increase your sales and improve your luck with one simple step

I had a VP of Sales who would exhort to his team the importance of “showing up“, which according to him improved chances of winning the deal by 50%.

That has been the only proven way I know to increase sales. 
Yes, more customers are researching and buying online researching and buying online, and yes, prospects are not picking up the phone when you cold call, but 95% of retail is offline with real people involved. The people that win are the ones that showed up.
Its a cliche, but trust and relationships are the most important part of any buying process. People tend to buy from companies and people they trust or have a relationship with.
Here are 3 things I would suggest as new year resolutions:
1. Show up at at least 1 networking event (Meetup, unconference, etc) a month or a quarter. 
2. Use your network to go and meet 1 new person each month. Help them in any small way you can.
3. Attend the top industry conference in your area and setup meetings with prospects to meet them at their office.
Photo credit: Funchye 
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Why is advice for entrepreneurs conflicting? And what to do about it?

As a entrepreneur (first time or serial), it will be obvious to you that advice comes from all corners. Without deep knowledge your business, I can say that it will be very conflicting. That’s the one thing I am confident you will face. 

Why does this happen?

1. Personal experiences: What you take away from a certain experience tends to impact your outlook more than the outcome of that experience. While most entrepreneurs tend to reflect on their success and failures, self realization is rarely a precise science. Based on events that occur, you will tend to rationalize failure or attribute it to the wrong reasons. Sometimes you will get it right, but only after multiple sessions “with yourself”.
2. There’s no right formula: If you are building a consumer Internet company, getting advice on hiring, marketing, etc. from a enterprise software company advisor is obviously going to miss the mark. Why? No two startups tend to be the same. Even if the founders are from similar backgrounds, and have the same vision.
3. The same advice that works in one situation does not for the same company again: I have had success hiring friends and family and at the same time, had issues. The circumstances that require a specific piece of advice, are situational and very subtle in most case.

Advice for advisors:
1. Share your experiences of similar situations NOT the outcome first. When asked a question by entrepreneurs, first focus on what you did, and why you did not, not what result you obtained.

2. Realize that if the entrepreneur decides to take advice different from what you offered its nothing personal. Its not that they don’t value your advice, its just that the situation probably demands otherwise. Surprisingly enough you’ll learn something different than what you know before. They will make mistakes, and its incumbent on you to help them if they made the wrong choice.
3. Let them run the show. Provide the entrepreneur access to multiple points of view, from and outside their network, but its their startup. 
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Facebook friendship browser feature

Facebook is starting to look a lot more useful than before. There are a couple of new features that I saw which are interesting version 1.

First, facebook suggests friends to add to your list. That’s pretty neat. I have over 20+ lists of friends I manage, so new additions are very useful.
Second click on any friend’s profile page. On the left navigation below photos you’ll find a link View you and <friend name> – See below.
Clicking on View You and <friend> takes you to a page with common friends, likes, etc.