Category: STARTUP ADVICE

On Scaling, the Recent SOFTCON, and the Wonder of Technology

Peter Cauton

Recently, I took a picture of the weekly FLEXIBLE BENEFIT products we received in our office and now had to deliver to our clients:

flexproducts

There were hundreds of items ordered in a span of a few days.

It was the very first time I’ve seen this many orders made in our system. We had to find a room to keep all the items secure.

The problems we’re facing in STORM now are very different from what we’ve faced over the last few years. Before, we would just be consumed mostly by sales and developing the technology further.

(and you know, startup stuff like “where the hell do we get the money for next month’s payroll?!”)

Now, while the above-mentioned things are still supremely important, we find ourselves worrying about corporatey stuff, like inventory, supply chain, financial ratios, and high-grade efficiency.

I realize these are good problems.

STORM is scaling.

By the end of this year, we would have something like 12,000 corporate users. We’re aiming for much larger things in 2014.

I then reminisce about how STORM started some years ago, and I find myself feeling quite blessed to have ended up choosing a TECH idea.

Soft Spot

Yep, Juan Great Leap is all about GENERAL entrepreneurship. It’s all about taking the leap and the process of being captain of your own ship – regardless of the type of ship.

As a tech entrepreneur though, I guess I’ll always have a soft spot for tech startups.

It is after all, what I think is the great equalizer. 

In almost any industry, you would need to spend a fortune to build an industry leader. Want to get into retail? You need to invest millions in machinery, R&D, and the right supply chain infrastructure. Want to do a resto? Yep, it would require a ton of capital as well. Want to build a benefits firm? Without tech, you’d be looking at creating a new HMO, or a new insurance firm. Again, millions.

Technology changes everything though. It disrupts.

Technology has allowed a nobody like me to START FROM SCRATCH, and build what is now the largest local flexible benefits provider.

You got a laptop? Internet access? Some programming skills (you or a partner)? Then guess what? Armed with the RIGHT business model, you too can create a scaleable startup right out of your living room. Like we did.

SOFTCON

A couple of weeks ago, I had the privilege of being invited to the very first SOFTCON.PH (software conference), which was being organized by the Philippine Software Industry Association or the PSIA.

I was invited to moderate the startup panel (which was, as I found in the photo op after, a group of really tall people).

I looked at the agenda. More startup stuff! There was another panel “From Startup to Exit.”

I thought to myself, “Hmmmm…for a software conference, man, they sure talk a lot about startups.”

(I was thinking they’d be more talks like “Data Warehousing in 2013 and Beyond” or something)

Then it hit me.

Most of the member groups – and almost all of the most active players – of the PSIA are LOCAL Filipino software firms. Gurango Software. Pointwest Technologies. Seer. Stratpoint. Blastasia.

Startups. Some time ago, these guys were also building their businesses in someone’s living room.

Yep, the PSIA member lists reads like a who’s who of Philippine tech entrepreneurs.

You can tell.

Because this group is breeding even MORE startups.

In the room adjacent to the main conference room, they had an exhibit of 20 or so startups that PSIA was helping develop in some way, shape, or form.

exhibit
Main Startup Exhibit Area
perxclub
Perxclub!
skedly
Sked.ly

I found this to be a joy, an inspiration, and really logical, all at the same time.

A joy – because I just LOVE seeing people go for it.

An inspiration – because I found some of the ideas (and more importantly, the execution) to be brilliant.

Logical – because the one thing that you can’t stop true entrepreneurs from doing is to be themselves. Some of our most successful entrepreneurs are STILL going after new ideas.

Panel

host action shot
Moderator Action Shot!

Moderating the startup panel was a great privilege for me, because it was a who’s who of some of the biggest names in the Philippine startup ecosystem.

It was also quite literally the biggest panel I’ve ever seen. So it was a challenge for my moderator-powers.

The panel discussed the state of the Filipino Software Startup.

tall man panel
Startup Panel from Softcon.ph (the tall man panel) (from L-R) So that’s towering Ron Hose (author of the Phil. Startup Report), me, Rio Ilao (founder of Perxclub), Sulit founder RJ David, Kickstart’s Christian Besler, Ideaspace (and Meralco CIO) Marthyn Cuan, Payroll Hero’s Stephen Jagger, Plug and Play’s (based in Silicon Valley) Jojo Flores, Mon Ibrahim (DOST-ICTO Deputy Executive Director), TechTalk’s Tina Amper, and PSIA’s Spring.ph Co-founder (and Seer CEO) Joben Ilagan

We talked about a lot of interesting stuff, but the main takeaway I want to share with you?

It’s early. The Philippine startup ecosystem is in its veritable INFANCY.

TRANSLATION: Take the leap NOW people!

Opportunity Everywhere

Last week, I pitched an idea I had to a well-known Filipino entrepreneur (free, courtesy of a cross-country Skype session – technology is amazing if you think about it!) to get some input.

He gave a lot of very useful advice.

Then, I finally asked him to summarize: wait, do you think it would work?

His answer: “I think it’s a good idea. Though now there are good ideas everywhere if you just apply technology to an old concept. The key really is how your execution will be.” 

TRANSLATION: Take the leap NOW people! Sniff out those good ideas, because he’s right – they are EVERYWHERE if you know where to look and train your eye

My quick advice: think long and hard about doing a TECH startup. If you have a non-tech idea, think – how can I I apply technology to it?

My Year in the Philippines: Reflections On Starting Up and Development

Miarayon, Bukidnon, Philippines
Miarayon, Bukidnon, Philippines

I’ve been in the Philippines for almost exactly a year now.

Oh, what an incredible ride it has been so far. Within the year, I’ve had so many different experiences from starting things up with JGL to a brief stint at co.lab to being part of the launch of Ashoka Philippines.  Life has been unpredictable. I’ve been exposed to so many new and different ideas. So many different people. I’ve gained a sense of belonging in a country that has opened my eyes to the world.

The year has really been such a gift and a strong driving force of change for me.

I remember the days when I only had one peso in my pocket. I remember the days when I was so desperate for blog content that I would write about playing board games with my nephew. I remember the days when I’d use the term social enterprise at least once a day. I remember the days when everything seemed so new and fresh…when every opportunity that presented itself seemed like a great one. I remember the days, as if it were a distant past and as if I were a different person.

Why do I feel like I’ve changed so much within the last year?

I guess it’s the feeling of being challenged because of people. For example, a two-hour conversation with a passionate and well-informed changemaker would turn my world upside down. From learning about problems in our healthcare system to peace conflicts to education reform, I felt as if I were learning something new everyday from individuals who were really immersed in the world.

I don’t know which direction these reflections are taking me…but I guess that’s how development works. One starts something, learns from it in an ever-changing environment, and works towards progress.

I am developing in my work and my thoughts, as a young person and would-be entrepreneur. I urge young people to soak in everything that the world is willing to teach them.

Never be afraid to speak your mind in hopes of understanding your life and the world that you live in. It is a helpful exercise that will help you get to that aha moment.

Thanks JGL for giving me a platform to start and grow. Cheers to a full year in the Philippines!

Why Sales Isn’t Always King (when to say no to sales)

Peter Cauton

fallen king

Our Brief Fling With Payroll

More than a few years ago, when STORM was finding out first hand that we still needed to educate the market about flexible benefits, we were scrambling on ways on how to generate more sales.

I had an idea.

“Let’s offer payroll!”

My several justifications were many: to be known as both a compensation AND benefits services company, “payroll wasn’t rocket science”, and the idea that we could just use the current system we developed internally to run it.

Because there were many competitors, we couldn’t put quite a big enough margin per sale. So I figured, we could make up for it with a bit of volume. Our minimum price was around P15-20K per month for a 50-man client. I figured, if I could hire a person at P10,000 to handle 3-4 of these companies per month, well, that’s a profit of at least P35,000 per month for 3-4 monthly clients.

So we added this new business line quickly. After a few weeks, we landed FIVE new clients. I began patting myself on the back.

It was a disaster.

It turns payroll WASN’T exactly rocket science, and we struggled with maintaining the quality of this new offering we weren’t doing before. The person we hired was a total disaster.

It also turns out that the smaller companies we landed were more high maintenance than some of the larger firms we dealt with in our flexible benefits line – making us spend a lot of time and effort on these low-margin accounts.

Worse, we had one current flexible benefits client who agreed to give us their payroll to manage. Because of our inefficiencies with payroll, we were endangering the relationship we worked so carefully to foster.

While on paper, we were making a margin (a small one), in truth, we were losing money on the new business. We were losing managerial hours to it. We were endangering our relationships with the clients of our core business. It was exhausting and frustrating.

In a few months, we closed the business line, and stuck to the guns we were much more familiar with, and where we enjoyed healthier margins.

There’s a lesson here on focus, but the other very important lesson here is that not all sales are equal.

money eyesThe danger of the “ALL-OUT SALES” mentality

Prior to my startup career, I was exposed to Management/MANCOM meetings with my past corporate stints.

I remember the emphasis on SALES.

“Sell at all cost!”

I think this was something I ended up inherited.

I know entrepreneurs with sales backgrounds who think the same way, that any sale is a good sale.

The danger here is that there are some sales that you actually do not want.

I remember my brief foray in a headhunting startup.

At first, we were making money by placing executives and senior managers. Then, when the going got a bit tough, we decided to diversify a bit and accept junior management posts as well. After all, any sale is a sale right?

Big mistake.

The revenue we would generate in placing 4-5 junior managers would equal the revenue generated in placing ONE senior. Moreover, recruiting the 5 juniors required MUCH MUCH more time and effort than placing the one.

Of course, it sounds elementary as I write it down here. But again, when you come face-to-face with the actual job from the client and the short-term money involved, the SALES MENTALITY kicks in and you just say yes. Then you end up regretting it as you psyche yourself up for doing much more work for the same (or lower) payoff.

This is a mistake of many new entrepreneurs. Anyone offering ANY contract to a new entrepreneur (with likely tepid sales) will seem like an irresistible lifeline.

But you have to resist.

Study ALL angles in a potential deal, not merely the cash.

Particularly…

margin

MARGIN VS SALES

Margins are more important than sheer sales.

I would VERY MUCH rather have 10 clients with 50% margin than 50 clients at 10% margin, even if the revenues are the same. Why?

Well, I can better take care of my ten clients than I could the fifty. Moreover, I would spend CONSIDERABLY LESS money taking care of the 10 clients than managing the 50.

Look for opportunities where you can offer a differentiated product/service at a good margin.

Remember, margin is king, not sales. Apple is the most valuable company in the world not because of market share. Its because of their crazy margins.

So be careful of the “I can lower my price to get a larger client base” strategy.

Maintaining your larger client base won’t be cheap.

Think of Your Market – Who Can Give you Good Margins?

I’ve encountered a number of people who want to market their products and services to startups.

I always try to make the people reconsider. Why exactly do you want to do that?

Well, I know from first-hand experience that:

– startups are very cost-sensitive and will only spend if its the last resort

– startup founders will exhaust their considerable creative resources to get products and services for free or near free

– even of they do buy into your product or service, startup founders are going to likely be high maintenance accounts – passionate people who will likely be breathing down your neck and expect you to devote ALL your time and effort for them

These three factors make it extra-difficult for a startup to cater to other startups.

So ask yourselves:

– which market would be willing to give me the largest margins?

– how do I build my brand? (great branding leads to good margins – people’s trust does a lot to open their wallets)

– how do I differentiate my product enough to make my product seem worth the margin it seeks?

Be wary of the ALL-OUT SALES mentality. (do note that it’s hard to ignore) Think strategically and evaluate all factors involved before doing ANY deal.

Ah! Open Coffee! (October Edition Postscript)

Peter Cauton

October open coffee

I have to admit, I was worried about the 2-month absence of Open Coffee.

Would we lose momentum? 

Would people still go? 

Will the pitches be just as good? 

It turns out, my fears were unfounded.

I thought October Open Coffee was super!

For starters, after the 2 months, it was great to see the holdovers / familiar faces (around 20 or so, you know who you are) who keep on coming back. You practically feel like family.

Next, I thought, we just had the MOST DIVERSE SET OF PITCHES we’ve ever had. And if you’ve been to Open Coffee before and heard the pitches, you’d know this is saying a lot.

Let’s see….

We had an OFW-children’s support group, a fashion data aggregator, kite-camera artwork (my pick for pitch of the night!), a pitch for Trade School Manila, a government headhunting firm, an observation-based research firm, an inventor pitching wearable air filters, an artwork preservation concept, and many, many more.

The ideas – and the awesome, awesome group feedback that was generated to help them out – are SO much better than how the words above describe them.

You HAVE to have been there. The energy was uncontainable.

Then of course, in something that we should have done from the very first open coffee, around 20 or so of us had awesome lunch after at J-Jay’s Inasal. It was a blast, and we stayed chatting until mid-afternoon.

Lunch was F-U-N!
Lunch was F-U-N!

More pics below! You have to join us next time!

cam basa

I should have been in this picture!
I should have been in this picture!
jovitt trinidad holding court
Our coffee sponsor: audacious pinoy retail startup MASKAPE! (pretty good coffee)
Our coffee sponsor: audacious pinoy retail startup MASKAPE! (pretty good coffee) Thanks NATHANIEL GO and MASKAPE for the LOADS of coffee we got!
Fun after the formal pitches!
Fun after the formal pitches!
Group pic! SMILE!
Group pic! SMILE!
Why Startups ARE For Everyone, part 2

Why Startups ARE For Everyone, part 2

Peter Cauton

(Part one of this series can be found here)

everyone

In part 1, I talk about how the combination of how EVERYONE having something special to offer and the current technology infrastructure now enable ANYONE to build her own startup.

So the question is: why isn’t everyone rushing to do so?

Here are 3 factors why:

ignorance

1) The Information Gap

The first reason is simply ignorance.

We live in a society where our school systems still (by and large) marshall us and train us for the corporate and factory environment.

For a typical college graduate, her primary (and chances are, only) professional concern after graduation is “to get a job.”

The thought of pursuing her own thing and standing on her own two feet does not merit any immediate consideration, if at all. Doing her own thing is a pipe dream.

Even if so many people say in interviews that they want to “someday own a business,” so precious few actually do so. Even the response sounds like a pipe dream: “someday….”

This is what this blog actually wants to address. You CAN do it and here’s how…

For me, entrepreneurship HAS to be part of any university’s CORE curriculum. Think about it. ANY and ALL college courses can be the subject matter for a future startup or freelance career.

If I’m an artist, I might want to someday be a freelancer.  If I’m a programmer, I might one day decide to set up a software development firm. If I’m an engineer, I might someday want to set up a consulting firm. 

So why not equip ALL graduates with the rudiments of entrepreneurship?

fear2) Fear

Ah.

Good old-fashioned fear. (VERY related post here)

The fear can come in many forms: fear of failure, fear of what people will say, fear of not being enough, fear of losing luxuries…

Real or imagined (and I’d say most are imagined) – it’s enough to dissuade the would-be-startup founder.

Stop him dead in his tracks.

3) The Dip

My hairstyle idol Seth Godin has many vaunted books: Tribes, Linchpin,and so on. But I think one of his most useful books for the entrepreneur is a book called The Dip.

It’s been a long time since I read it, but what I’ve always taken from the book – at different parts of my entrepreneurial life – is that the pursuit of the most worthwhile things almost always involve some sort of “dip” – right before things get better. Here’s a graphical representation (click to get a better resolution):

the dip
(Picture from http://www.bennadel.com)

I know a lot of people who quit when they find themselves at the Dip.

At first, its exciting right? Its idea creation time! Or the time to assemble your entrepreneurial avengers! These are fun, fun things.

Then you start.

Then the problems crop up.

Money running out. Founder not carrying his weight. Sales have flattened. Your biggest client drops you. Customers fry you on social media. You have 20-30 problems which need solving, You get punched in the mouth. 

For those who do manage to conquer ignorance and fear, FAILURE could be the one which does them in.

I think this is one thing experienced entrepreneurs understand pretty well. They know its darkest right before the sunrise – so they persevere. (or pivot, but that’s another story)

As you can see, there is nothing in this list that you CANNOT manage.

The barriers aren’t physical, monetary, even concrete.

The only barriers exist right between our ears.

Juan, its time to break through.

(Good way to start? Attend JGL’s monthly OPEN COFFEE and meet like-minded people talk and solve problems!) 

Why Startups ARE For Everyone, part 1

Why Startups ARE For Everyone, part 1

Peter Cauton

wag

“Startups aren’t for everyone.”

I’ve written this considerably in this blog. (very prominently here)

We’ve also heard it uttered by every other entrepreneur, it seems, right?

“Entrepreneur you say? Well, ho ho ho! You have to have a unique skill set: a combination of cast-iron will, uber-magnetic charisma, the ability to laugh in fear’s face, and space-age technical skills. Oh, and you need to be stupendously lucky.”

(I guess in a way, talk like this validates what we’ve done and makes us feel good about ourselves a bit)

Lately, however, I’m starting to feel differently.

I think startups are for everyone. 

Before you hurl tomatoes at me (especially existing entrepreneurs :), do hear me out…

Defining What a “Startup” Is

Obviously, I’m not talking just about the Googles, Apples, Facebooks, or even the Jollibees and Mang Inasals of the world. Not everyone will build startups like that (believe it or not, not everyone wants to).

One paradigm to take is that being a startup founder is all about independence and the quest for it. 

It’s about not needing a corporation to survive on salary. It means having the ability to build something which enables you to not only pursue a dream, but also to stand on your own two feet.

freedom

Under this definition, small micropreneur ventures who are able to eke out a living ARE startups. Fulltime freelancers who reside on Odesk and Elance? Yep, startups.

That small hotdog stand sideline business you manage to give you extra cash apart from your corporate salary?

It’s a startup if you plan on quitting your day job someday to commit to it. It’s mere sideline if its got no ambition.

Armed with this broader definition, startups are still the small, small minority.

Do witness the vast majority of fresh graduates enter corporate year after year after year.

I believe things are starting to change though. (related blogpost here)

Everyone NEEDS to realize – the perfect storm is here!

This is something I want to shout out with a country-wide megaphone.

I really believe that if one WANTS and DESIRES to, ANYONE can harness his natural talents and passions into a business which earns enough money to pay his monthly bills.

The perfect storm for doing this is now out there.

coming together

For one, information is free and flowing. 

ALL the resources on how to build a startup and be independent is available online.

You want to build a skill? There are FREE courses to be found on the web. High quality.

I know a doctor-turned-cake designer who started her new career viewing youtube clips and then just applying her natural talent.

There are meetups and courses galore, both free and affordable, for hundreds of different interests and topics. You just need to use this thing called Google.

Moreover, the other barriers to putting up a business are just falling like the rain.

Wanna build a website? You can do it for free.

Need to reach people? Social media allows you to reach thousands like never before.

Need a market for your skills? Odesk, Elance, 199jobs, and Freelancer are available at a click. (you will join a growing, great number of pinoys)

picking

The necessary infrastructure for startup success is THERE and ripe for the taking. 

You just need to bring something unique and special to the table.

“But I don’t think I have something unique and special…”

This is where my belief structure comes in.

I think God made each and every person unique and special. Every person HAS something compelling  to offer – enough to make (at least) a decent living out of.

If we add these elements then:

Uniqueness + Infrastructure = Startup Potential

I think there is an entrepreneur in each of us.

What’s stopping the 99% of us in pursuing this?

Information gap, Fear, and The Dip.

Will cover these on part 2!

My New Faburrito

My New Faburrito

Peter Cauton

faburrito1

Every Tuesday night, my prayer group would choose a restaurant around the Eastwood/Ortigas area to eat in. Last week, we chose this Mexican place called Faburrito, located at the Robinson’s Supermarket area in Eastwood.

Ever the entrepreneur, the first thing I thought was, “bad location, little traffic.” This particular branch (I understand there’s another one at the Columns, Makati), was at the edge of a corridor, with very little natural traffic.

My friend Howard, who already finished his meal, began raving like a madman as soon as I arrived:

Peterit’ssogoodanddifferenthere, theiringredientsareallnatural, theiceteaislightrefillableandyoucanchangeflavors! I atesomuchbutIdon’tfeelbloatednomsgnogrease! theownerisachristianwhogives10%ofallproceedstocharityandplayschristianmusicallday! youcanhavesomeofthesedeliciouschipstostartyouoff!

I was intrigued. Howard was quite excited.

Ordering was easy, complete with simple instructions:

1. Pick your dish

2. Choose your meat

3. Add Salsa

4. Add Fillings

5. Finish with Dressing

interior

The Iced Tea

Famished, I got a large steak burrito with mango salsa and a lemongrass-flavored iced tea.

Apart from Howard’s rave reviews, sipping the iced tea was the first inkling I had that this was going to be a different experience.

Upon first sip, my reaction was – tabang! But then I found myself wanting to sip some more. It was refreshing! Best of all, it was bottomless AND you can choose different flavors upon each refill. (oh, wait what’s best of all is that its sugar-free!)

Just Awesome Service

Then, my burrito came. It was good! It wasn’t as – powerful (or greasy) – as some of the other burritos in other places, but it was good stuff.

Then, I noticed something. I noticed the my “large” order wasn’t that much bigger than my friends’ “regular” order. So I mention it nonchalantly to the nearby waiter.

The waiter said something like mine had much more meat inside and stuff.

I told the waiter it wasn’t a problem and proceeded to munch down on my burrito (it WAS a large order – I had trouble finishing it)

Then after a few minutes, the restaurant gave me a genuine pleasant surprise.

They gave me another burrito. 

mynewburrito
My half-eaten steak burrito on the left, and the new, complimentary burrito on the right

I was thanking the waiter profusely and said they didn’t have to do that, that I wasn’t really complaining earlier on.

The waiter just smiled and told me it was complimentary. (with a smiling, “large po talaga yon”)

Now THAT was dang good service. It was obvious that the crew was empowered to do what they did. And you know what, that was the type of thing where I TELL ALL MY FRIENDS about it. And you know how word-of-mouth is so powerful for restaurants.

Not only that, but Howard was right – even if I ate SO MUCH that night, I somehow still felt light after eating. (not like, say, how I felt last Saturday night after my family’s dimsum-fest) That’s not a small thing.

Daring to Differ

I love what the owner (Earl Chua, according to a quick Google search) is trying to do here. He’s not trying to please everyone. He’s pieced together a grand vision and he isn’t afraid to let the world know about it.

This statement signage says it all:

signage2

Healthy, Christian, Mexican food.

THAT’S how to go after a niche. I love it. He just plunges in, implements his vision vigorously, and puts it on a sign for everyone to see.

What’s the effect?

You FEEL the difference when you visit Faburrito. The iced tea differs. The service differs. The blaring Christian music differs. The lack of grease differs.

If you ARE a part of the targeted audience, then the reaction will be like Howard. You will feel “it gets you” and you tell all your friends (excitedly) about it.

If you AREN’T part of the targeted market? I have a feeling you STILL will feel the differentiation and remember it enough to tell your friends whom you think belong to the audience targeted.

Bravo!

The Rise of the Free Agent Era and 5 Strategies to Survive It, Part 2

The Rise of the Free Agent Era and 5 Strategies to Survive It, Part 2

Peter Cauton

(This is part 2 of a 2-part series. Part one can be found here.)

3) Build Free Agent Skills

So what sort of skills are highly useful in this free-agent era?

Skills which maximize your ability to be independent – skills which can allow you to be highly mobile and flexible.

Here are three really strategic ones you can work on:

iknowkungfu

a) Learn How To Learn Real Fast

Two common realities of the free agent era: there’s always something new to learn, and you have to learn it fast. If you learn things fast, then you can work in vuitually any condition and won’t be a victim of obsolescense.

Adapt and live.

So don’t get married to a skill set (especially technical ones, which get obsolete fast). Learn how to acquire skills fast, especially the tricky personal ones, like negotiation, leading, and reading people. Read up on current trends in your industry of choice. Read books (I can’t recommend an Audible membership enough). Talk to experts and be conscious of your learning process.

b) Selling

selling

Here’s something which I think won’t change anytime soon:  people will buy stuff.

This is how every person, every company, survives.

If you know how to sell – yourself, your ideas, your products, your vision – then that is a HUGE advantage in the free agent world.

If you’re going to have to move UPWARD from company to company, if you’re going to be a great entrepreneur, if you’re going to be an awesome freelancer (really still an entrepreneur), then you’re going to have to get people to BUY what you have to offer.

There is an art and science on how to do this. (and a great amount of literature) Start learning now.

c) Networking

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Know-who trumps know-how.

I think this is a very obvious characteristic of all the highly successful people I know thriving in the free-agent era – they’ve built great personal networks.

A great network can act like a great parachute in the free agent world.

You got downsized? Good thing you know that HR Director who happened to have job openings.

Your new company is low on funds? Good thing you know a few investors who can give you a bit of help.

But a great network does so much more than be an insurance. I think its a crucial element for those who really want to thrive in the free agent era.

Looking at it from an entrepreneur’s lens, the free agent era is an era of humungous opportunity. The very elements which are disrupting big businesses are the very same elements creating great opportunity. There are SO many industries undergoing disruption.

The MORE people you know, the MORE information you garner about these opportunities, the more likely you can spot those which suit you.

Then you just pounce.

4) Build a Brand 

brand

Let’s say you have two people of exactly the same competency level vying for a marketing manager position.

One person has a marketing blog where he shares his thoughts on best practices regarding his job. He has an updated and comprehensive Linkedin account, and he is a member of several marketing-related groups.

If you google his name, the whole first page is filled with marketing stuff he’s written about and intelligent dialogues with peers.

The other person, meanwhile, isn’t so active. When you google his name, only a few entries come up.

Who do you think gets the job?

Think about it folks, every time you apply for something – a job, a co-founder role, a partnership, a contract – you WILL get googled and investigated.

Use this to your advantage. Build a brand around your strengths and interests.

I can’t tell you how much running this blog has helped me get into contact with several key people, or even get new clients to say they read my blog on sales meetings when I represent STORM.

In the free agent era, there are hundreds of people vying for the same things. Stand out by building your brand.

5) Get away from the herd

herd

I think this is the most important piece of advice in this post.

In case you haven’t noticed, the herd gets ultimately marginalized (a bit ironic if you think about it).

What do most graduates do?

They look for a job in corporate, most without even thinking what they truly want.

They look for the highest bidder.

They will spend 3-4 years and then move on to another firm, moving again in another 3-4 years. )This cycle is markedly faster in the BPO industry.)

Perhaps most are even unaware they are in this groupthink cycle.

Stop.

You want to standout?

Think and act differently.

Zig when the herd zags.

The free agent era rewards uniqueness and being special. Embrace what makes you special (yes, we each have unique God-given gifts which make us special) and get away from the herd. Don’t be afraid of the slight separation anxiety you might feel separating from the pack.

The free agent era obviously loves free agents. (and isn’t so nice to herds) So the best advice I can give in the free agent era?

Go and be one.

(Know anyone who would especially resonate with this post? Be a blessing and share!)

Avoid These 5 Absolutely Crippling Startup Choices, Part 2

Peter Cauton

(This is part 2 of 2-part series. You can read part 1 here)

3) Reluctance to Get Down and Dirty

dirty

Take a gander at some of the Lean startup methodology books. There is a reason why this line of thinking has become quite severely influential for startups around the world.

The principles are quite sound: information and validation over guesswork and assumption.

Getting to that information? You have to talk to a lot of customers. You have to SYSTEMATICALLY do it in an unbiased manner. You have to do it over and over. You have to iterate your product over and over.

This is serious, rigorous work. You want success, as with anything worthwhile, you have to pay the piper.

But I think this pitfall goes beyond merely fulfilling lean requirements.

You have to want it.

You have to want it hard enough that you are willing to do the things you don’t want to do.

Programmers? You will have to do more than code and build. You have to talk to customers. Yes, you’re going to have to help LOOK for them. You have to RUN the firm, keep it afloat.

“Marketing” guys? You’re going to have to have to go through detailed product development. You’re going to have to set up internal processes.

Raise funds. Recruit. Corporate governance. Financials. Managing other founders. Managing investors. Customer service. Selling. Researching.

To any individual, one (or more likely, a bunch) of these tasks is just sheer torture to do.

Each of them can be extra-crucial at different times of a startup’s life. You’re going to have to suck it in and do them.

As a founder, you don’t have a boss, so you have the freedom to do what you want when you want. The temptation then is to just choose to work on the stuff you like.

I know a whole lot of startups that have quietly faded away because of this. Not for lack of talent. But a lack of want.

4) Choosing Optimism Over Realism

half full

I’ve heard or I myself have uttered the following phrases in the last eight years of startup work:

“He’ll come around.” (referring to a partner or employee not pulling his weight)

“Our funds will last.”

“We’ll land that client.”

As a startup founder, you NEED to be an optimist. I mean, that’s exactly what an entrepreneur is, right? Someone with a vision of the future. You can bet its a rosy picture that’s painted in the entrepreneur’s mind.

Ah, but here is the irony of it.

You also need to be a realist at the same time. (perhaps the better term is pessimist)

You have to assume the worst, and prepare for it.

I think as a people, we can be prone to being fatalistic (bahala na), sometimes just HOPING for the ideal scenario to magically appear, choosing to actively ignore the danger signs.

I know some entrepreneurs who ignored obvious warning signs, doing nothing about huge problem areas THEY KNOW are there, but for some reason, they choose not to directly confront. (a number of these perhaps have to do with another Filipino trait we need to overcome – being non-confrontational)

Are your funds looking like they might not last the next 3 months. Do something about it.

Having problems with a founder? It will not magically disappear. TALK to the person. If

A related tip here? You HAVE to be decisive. In a whole lot of startup scenarios, making ANY decision is so much better than INdecision.

5) No Compelling Vision

road-blur

This often stems from either of two reasons:

a) The idea isn’t compelling enough to be worth of a “vision”

Another milk tea wannabe.

An idea with no clear customer. (when you cannot explain who exactly will DESPERATELY want it)

An idea you’ve been pitching for 3 years that no one seems to want to bite at.

A small idea.

You know how to identify a good idea? It generates excitement. Energy. When you talk about it with people, you see eyes light up, and people throw around their own ideas on how to build on it. Then people begin asking “fishing” questions like, “So what are your plans with this idea? Where are you taking it?” (hoping you’d ask them to help out)

A bad idea tends to generate a lot of questions and pauses. It generates awkward moments when the person you talk to WANTS to get excited about your idea (you did talk to him about his idea), but is a lousy actor. They begin to ask you questions covering areas you ALREADY THOUGHT you explained like:

“Who is the target market again?”

“Why do think this will work again?”

(and usually, there’s a spattering of non-words thrown in, like “uhm” or “ahhh,” like “Uhm…who will be buying this product again? (waits for your answer) Ahhhh”)

On the other hand, a good idea is typically absorbed quickly by the listener. The listener also will tend to expand the subject matter by talking about how it can be applied to situations in HIS circle of influence, for example, “Hey, that’s a cool idea! And you know, aside from administrators, I think even the teachers I work with in school will just LOVE that.”

Don’t get married to an idea. Validate with people in the industry you are targeting. Allow people to build on your idea without getting defensive. (Huwag mong agawin yung idea ko!)

b) The CEO is not compelling enough

There is a HUGE advantage if your CEO is a great pitchman. What a great pitchman does is to sell the vision.

Steve Jobs was just AWESOME at this. In fact, people who work with him say he had a “reality distortion field” around him. You might be convinced of one thing before you talk to Steve, but after speaking to him, he’ll have you believe HIS vision instead.

Selling the vision is EXTREMELY important. You have to be compelling. Compelling enough that you get co-founders to go all-in with you. That you get the BEST employees. Compelling enough that potential clients will trust you enough to do business for you even if your startup hasn’t proven itself. Compelling enough that investors will part with their hard-earned money for you.

These are ESSENTIAL startup activities.

Even if you have a GREAT idea, if your delivery falters, then it almost doesn’t matter.

If you cannot COMMUNICATE a compelling vision, then the answer is simple: get another co-founder to be CEO. Don’t sabotage your startup and force yourself to play a part you know someone else can be better at.

(Do you know someone who will resonate with this post? Perhaps someone whom you know is cooking up a startup? Be a blessing and share!)

Avoid These 5 Absolutely Crippling Startup Choices, part 1

Peter Cauton

oops

Its a shame that most of the talks we find on startups and entrepreneurship center more on the successes. This is perfectly understandable – it is painful to talk about failures.

Yes, we say stuff like “it’s a badge,” and “failing is a necessity,” but you know, if one really poured her heart and soul into a startup and it fails – it can be a real heartache.

It’s a shame because there can be SO much to learn from those who have experienced failure, specifically, how to avoid certain decisions and tendencies.

I just realized I’ve just marked the fifth year anniversary of my startup leap a few weeks ago. It’s mind-boggling to consider that I’ve now been working full-time with startups for five years now (with 3 additional years part-time). In this time, I’ve now been involved directly with close to ten startups now (with varying degrees of success), plus coaching dozens more. I’ve made, seen, and experienced a lot of mistakes.

In particular, here are some pitfalls you drastically need to avoid when building your startup.

1) Selecting The WRONG Partners

square peg

I’ve belabored this point in this blog. It remains the single biggest reason for some of my own startup failures, and why I’ve seen some other startups fail. NEVER take this step for granted. Take the necessary time and effort to get to know potential partners before you get married to them by co-sharing equity. In particular, I’ve experienced two particular forms of erring partner selection:

A) Wrong fit

Remember the rule: get someone with COMPLEMENTARY skills and COMMON values. The first one is easy enough to filter: you have to have a keen idea of the level of the required skill in your mind and search relentlessly until you find someone who meets it. It’s the second one which takes time to decipher in a person. It’s also the second one that’s much harder to recover from.

B) Your startup is a second (or worse) priority

I remember having a killer team in TWO tech-related startups I started before. However, everyone had other things as their first priority (their own startups, full-time jobs), leaving the said startups as veritable orphans. Startups need committed people who will dedicate maximum time and effort in ensuring its viability. No matter how brilliant your startup team is, if ALL of them are working on it on a part-time and unfocused manner, your startup HAS NO CHANCE.

I think this is becoming a real problem in the Philippine startup scene as a number of people are diving headlong into doing simultaneous startups (without the great benefit of a successful FIRST one, read here).

Get someone who will focus SOLELY on your startup.

2) Selecting Too MANY Partners

too many

I remember my friend Ryan, who works in construction, tell me that there is an optimum number of people that can work on a given project.

I found this fascinating.

If you put MORE than the ideal number of workers on a construction project, things actually SLOW down because there is less accountability – people figure they can get away with not working that hard because other people can take up the slack.

I think this is true for startups as well.

I think 2-3 is the ideal number. 4 is a bit of a stretch. At 5 people, you can be sure 1-2 people are already slacking. If these 1-2 people are equal equity owners, then immediately, rifts can be created because the working founders will feel shortchanged (and rightly so).

This can be a temptation to beginner founders who can’t say no to the first talented person who butter them up and says their idea is awesome.

Resist. Stick to 2-3.

(Three more pitfalls to avoid, next!)