Ed Sim posted some interesting notes on his BeyondVC blog recently when he was trying to figure out the secret sauce necessary to create a winning technology company.
"1. Release early and often - It is better to release an imperfect product, get feedback, and continue evolving than trying to release the perfect product because you may never get there and run out of cash before doing so."
This actually fits with the Innovator's Solution model by Clayton Christensen. I read and try to follow his work religiously. If you haven't already read the Innovator's Solution. Go out and buy it (Amazon has it readily available). Clayton's point is that products on the innovation curve need to be just "good enough" and not try to deliver too much functionality. Rather they should try and deliver the RIGHT functionality to get a job done that hasn't been easily accomplished before. I have taken this advice to heart (at least I think I have) and in my upcoming enterprises I will release many times (probably with many bugs) but at least I'll be out there getting customer feedback. The one caveat is that I am really trying to focus on helping customers get jobs done that they otherwise would not be able to easily do.
"2. Filling the product management/marketing role early is key. Having a person who can shape the product and prioritize features by gathering the data in terms of what customers need near-term and what the market may need longer term is imperative. More often than not I find early stage companies that are engineer-driven that spend too much time on features that the market may not need. Avoid this problem early on and focus your limited resources on the right priorities."
I both agree and disagree on this comment. In working my current enterprise (CurrentCo) I have found out that is ABSOLUTELY TRUE that what you think you customers want and will pay for most probably WILL NOT BE what they want and will pay for. It is difficult getting into the mind of the customer, especially if you like cool gadgets and are very engineering-like. I am still constantly amazed at what my customers believe to be important and what they will blow off. Being an entrepreneur and therefor the top sales dog in the pound is a very humbling experience.
With that being said, I think it is an experience that you need to have as an entrepreneur and not necessarily something that you should immediately be hiring in. I guess if I was a VC I'd want that experience in my portfolio companies, but I also want to make sure that the entrepreneur has his vision as close as possible to the customer, and I don't think you can get that if you hire the marketing/product management guy too early. The other problem is that an early product management team may not have been indoctrinated in the vision, and may be looking to build problems that already are solved vs. do what Clayton Christensen says: "help the customer do a job they haven't been able to easily get done in the past."
3. Sales ramp - Do more with less and be careful of ramping up sales until you have a repeatable selling model. In other words do not hire too many sales people and send them on a wild goose chase until you have built the right product, honed the value proposition, identified a few target markets with pain, and can easily replicate the sales process and model from some of your customer wins."
Absolutely agree ... to a point. I think it is difficult to know when you have a repeatable selling model and until you get some early adopter sales under your belt you won't have the institutional learning necessary to get up the sales curve. We did this by pure mistake and out of necessity. The company I currently run is 3 years old and since we have no outside capital we are just now looking for our first sales person. However, we missed some good opportunities early on since it was just the founders doing sales/marketing/finance/engineering, etc. We learned a lot about the customer but now must fight some entrenched players (which is hard even if they DON'T know the customer).
So my comment from my experience would be to hire smart and only hire enough sales people so they can hit their metrics. And figure out what those metrics are early and before any hires. That way you get the institutional learning without missing the early sales.
Hope these comments make sense. They certainly were earned in the trial-by-fire world of start-up businesses.
See you on the wire.