How Quickly Things Can Change: Spring 2021 vs. Spring 2020
Today I thought about spring 2021 vs. spring 2020. What a stark difference. A year ago, we faced a massive amount of uncertainty and were deep in a once-in-a-century pandemic. The world stood still for a while, something that had been unthinkable. We’re not in the clear yet, but we’ve come a long way.
The last year is a macro example of how quickly things can change. The world was thrown a blistering curveball that felt unhittable to many. We had more questions than answers. Things looked bleak. But we’ve navigated a lot of that uncertainty and we’re generally in a better place than we were a year ago.
Founders will face tons of challenges on their journey, but they should remember that their current reality isn’t necessarily a predictor of their future. Things can change for the better very quickly. Next time you’re in a tough spot, just remember that in a few months or a year, things could have taken a 180 turn. Hang in there.
Weekly Reflection: Week Sixty-One
Today marks the end of my sixty-first week of working from home (mostly). Here are my takeaways from week sixty-one:
- Opportunity – When an opportunity presents itself, someone who recognizes it and takes advantage of it can change the trajectory of their life. Sometimes it’s strategic. Sometimes it’s being in the right place at the right time.
- Holiday weekend – I’m looking forward to the three-day weekend. An extra day can make a world of difference.
- Travel – Lots of conversations about travel this week. People are excited about traveling again.
Week sixty-one felt like a short week even though it wasn’t. I think lots of people were in holiday mode well before the weekend. It felt like a productive but calm week, which was nice.
Over the past few months, I’ve spoken with two entrepreneurs working on interesting ideas. They’re in totally different spaces, they’re doing different things, and they don’t know each other, but they’re thinking along the same lines. Both have identified a huge pool of people who apply for something but are rejected. Think applicants for loans, school admission, jobs, etc. Most institutions don’t take any further action with respect to the people they’ve rejected.
Both founders think that applicants who were rejected, but just barely, represent a big opportunity. They were near-miss rejections. These people were motivated enough to take the time to apply, which shows a strong desire. The problem is they often don’t know specifically why they were rejected and what they need to do to get approved. These founders are betting that if the reason for the rejection is clearly explained and the additional steps required to get approved articulated, these applicants can be approved.
Instead of lenders, schools, employers, etc. spending tons of money and energy attracting new applicants, they could nurture the near misses, which would probably have a higher return on investment and close rate. Or that’s the assumption.
Both founders are bright and passionate about their respective spaces. I think they’re on to something that could be big. I can’t wait to see how they progress and what kind of feedback they get from consumers.
Online Shopping Can Be Improved
I had a great conversation with a serial entrepreneur today. He was telling me about a new company and said something that stuck with me. Checkout has been mastered, but the pre-checkout process (i.e., finding what you want to buy) isn’t ideal and could be significantly improved.
The more I think about it, the more I think this founder is correct. There are lots of opportunities to improve how people find items to purchase. Taken a step further, as societal norms continue to change, shopping will have to keep up with them. What consumers are accustomed to socially will influence how they want to shop. There will be many ways to improve shopping.
Commerce is something I’ve always found fascinating and continue to learn about. I’m curious to watch how great entrepreneurs improve the shopping experience!
Office Hours: Time Well Spent
Today I had the pleasure of giving feedback to a few founders during an office hours session. The format for these varies by sponsoring organization. I’ve most often seen each session lasting ten or fifteen minutes. The founder pitches for half the time and then the investors ask questions and provide feedback. You won’t walk out of these sessions with new investors. But you will likely walk away with some great perspectives on your business and maybe plans for a follow-up conversation.
I like these office hours for a variety of reasons. First, they’re often open to the public—just sign up and pitch, no warm introduction needed. Second, they’re a great opportunity to get quick feedback and perspectives on your business. The investor feedback isn’t super in-depth given the brevity of the meeting, but it can still be very insightful. Third, they’re time-efficient for everyone. Founders don’t spend time networking or trying to figure out how to get a meeting. They just spend a few minutes answering questions and fifteen minutes in the session. Thirty minutes total isn’t bad considering the feedback they get and the possibility of a follow-up meeting.
Office hours are a great opportunity for founders, even if they’re not seeking capital. I encourage founders to take advantage of them. Firms like Outlander Labs hold them regularly, as do accelerators and other organizations. If you haven’t attended office hours, give it a shot.
Be Aware of How Timing May Affect You
I talked with a founder who had an idea in about 2005. He didn’t execute then for a variety of reasons, the main one being that he realized he was too early. His idea sounded like science fiction. Fast forward to 2015. He felt more confident that people would be somewhat receptive to his idea, and technology advances had lowered the barriers to getting it off the ground. It took a few years to build the tech and work through other challenges, but he was able to build traction throughout 2020. Nothing crazy—just good healthy growth. That all changed in 2021. His concept was thrust to the forefront of mainstream media, and it exploded. Now people and businesses are interested in his solution.
Timing can have a huge impact on a business, but it’s out of a founder’s control. At CCAW, I waited years for our industry to embrace e-commerce (sounds crazy, yes?), but I knew it was right around the corner. When it finally arrived, we were in a prime position and had developed important relationships of trust. I imagine Zoom hoped it would be mainstream a few years after going public. Instead, the pandemic accelerated its plans from years to months (maybe even weeks). Other examples abound.
Timing is something founders should be aware of but realize they can’t control. They should be able to speak to it (good or bad). Ideally, they can articulate why the time is right and how they’re in a prime position to take advantage of it. Sometimes the present isn’t an ideal time, and that’s okay. If a founder thinks that will change in the near future, they should be able to explain that prediction.
Avoid Admin Landmines with Accurate Paperwork
When I started my company, I wasn’t sure what I was doing. I read everything I could find and made the best decisions I could, but some of them were wrong.
Years later, I needed to create a stock option plan for key hires. I wanted their incentives to be aligned with the company’s. I knew I couldn’t figure out how to do it, so I hired a startup lawyer. He promptly informed me of the mistakes I’d made when I created the company as a legal entity. Luckily they hadn’t hindered us to that point, but we couldn’t go any further without resolving them. I ended up paying him to redo all the paperwork correctly so the new stock option plan would be clean. The process was great and I enjoyed working with our lawyer, but it did cost a decent amount of money.
There’s something to be said for making sure certain foundational things are done correctly. Especially things that relate to ownership. If you can afford a startup lawyer, I suggest going that route. Their experience will be invaluable because they can explain the implications of various decisions. Many now offer packages for startups that are fairly inexpensive (and definitely less expensive than their charges for later redoing paperwork to fix your errors). If that isn’t an option, there are other alternatives, such as Clerky, that provide high-quality documents at a lower rate in a self-service model.
Legal and administrative paperwork that’s relevant to hiring can have huge implications down the road, but creating these documents isn’t something founders do often. Founders should seek out qualified advisors or other resources that can help them avoid landmines.
Time to Focus
One of the most productive times for me is Saturday mornings. Others aren’t working, so there are fewer distractions. I can focus intensely on the task at hand. I’ve come up with some great ideas on Saturday mornings.
I chatted with a founder who was working this weekend. He said it was nice to focus without emails or Slack messages flying in. It was noticeably different from his weekdays, and he enjoyed it.
Working on weekends isn’t for everyone, and you can be successful without doing it. I do think, though, that concentrated time to focus without distractions is important for founders. This time allows me to get in the zone and think strategically or make progress on things that require lots of mental horsepower for long periods of time.
If you’re a founder or want to be one, remember to make time to get in the zone.
Figuring out whom to target as your first customers can feel tough. Many groups may have the problem you’re solving. On the surface, they seem similar, but often there are differences that aren’t obvious.
In a perfect world, founders do customer discovery before building anything. This gives them the chance to learn deeply about the problem and how it’s affecting people (i.e., how much pain it’s causing). And the act of listening to understand people’s problems can help establish relationships and build trust.
These conversations are also great data points. With enough data points, patterns will be revealed. Founders who hear the same thing over and over have found non‑obvious commonalities that can form the basis of the ideal customer group.
Figuring out who your first customer should be is hard, but it becomes a lot easier when you talk to people to understand the problem instead of to sell them something.