This is what greeted me when I tried to comment on Fred Wilson’s post today.
Fred Wilson wrote about signing up to Pocket, and requested suggestions for becoming a power user. Naturally, I wanted to comment with a plug for my Chrome extension for Pocket. I also wanted to offer my 2c on why I found Instapaper better than Pocket 1.
I worked with one backend-as-a-service (BaaS) provider, Quickblox, where I saw closely users vetting the provider for stability and scalability (successfully). And I followed the rise, sale & fall of another, Parse, where we’re all seeing the impact of it’s folding on a wider community of users.
Combining experiences from both, there’s a business idea ringing in my head:
You don’t need risk takers, you need solution seekers
There are two ways people apply their significant intelligence and energy:
1. In figuring out excuses about why it can’t 1 be done
2. In figuring out solutions for how to do it
I call them the excuse generation and the solution exploration behaviours.
I explicitly say – two kinds of ways people think. Not, two kinds of people. Because, more often than not, we see both these behaviours in the same people.
Some of the most intelligent, determined, driven people I know are also the ones I often see working smart to come up with unquestionable excuses for why-not-to, instead of solutions for how-to.
A big task for a successful leader 2, then, is to give people a reason to switch from excuse generation to solution exploration. To motivate the best thinkers and doers with incentives 3 – emotional, financial, egotistical, or other – that helps them realign their thought process towards the target the leader wants achieved.
TLDR: No. It’s less than even the quarterly VC investment rate in Europe.
There was a bit of chatter in the London startup investor community recently about the welcome increase in amount of funds being raised.
I remember Jon Bradford specifically mentioning close to a £1 Billion raised in a few months by 9 funds. There was a bit of a flutter around the group when JD mentioned the figure at #fplive – people wondering if all the money could even be deployed in the relatively nascent European / London tech startup ecosystem. Someone may even have mentioned valuation bubble, or some such gobbledygook.
Take a quick look at this chart from Dow Jones (source):
Last quarter VCs invested €2.4 B (~£1.8B) in European companies. At an investment run-rate of £1.8 B a quarter, and increasing, that £1 B raise in a quarter doesn’t look that big anymore.
There will be some additional liquidity from investment exits – IPOs and acquisitions. But given the relatively young ecosystem in Europe – most maturing, successful European startups move(d) to the US for better valuation & operating environments – there can’t be too many exits providing the rest of liquidity.
Makes me wonder the other side now: If this £1 B raise is such a big deal, where has the VC funding been coming in from so far? We’ve been above a quarterly £1 B quarterly investing rate for over 6 quarters now. US VCs investing in Europe without direct presence?
Either way, that £1 Billion figure doesn’t look as big as it sounded first up. And we really do need more of them, more frequently.
Solve hard technical problem for ONE obvious business opportunity (e.g. image recognition solution for construction industry). Better than solving an easy technical problem in a crowded marketplace (a messenger app).
Fight to your strength, defend your weaknesses – anonymous
So in war, the way is to avoid what is strong, and strike at what is weak. – Someone
What Matt and that someone are saying are perfectly in sync.
Matt, via Entrepreneur First, recruits young technical wizards, and equips them with business skills and support to help them launch exciting startups. By the definition of their recruitment filter, they attract people whose strength lies in solving hard technical problems, and who may have weaknesses in other areas – marketing skills to fight for growth and traction in crowded markets, for instance. For such teams, it makes obvious business sense to go after problems that are hard to solve technically, but (relatively) easy to sell to market. And thus, the insightful, powerful statement by Matt.
However. The statement isn’t the final truth for everyone. Following the second set of quotes above, you need to fight on ground that enhances your strengths, and hides your weaknesses, best. If you’re an excellent marketing & sales driver growth hacker, with possibly a good designer and an adequate developer for company, you might want to pick problems that are easy to solve technically, but in a big, vibrant (likely crowded) market – diametrically opposite to what Matt suggested.
And if you start succeeding, you’ll be well advised to acquire/acquihire/poach some of the graduates of Matt’s EF program :)
To most businesses, this isn’t even a question – there’s nothing to distribute without the product, so it comes first. But in the new era of lean startup, it’s something to ponder upon for those starting up today.
In the established, fast fading way of building startups, the distribution problem is generally tackled after the product-market fit has been achieved. The focus is on iterating the product based on customer feedback(?) till a P-M fit has been achieved, when you switch to focusing on distribution.
The problem with this approach is demonstrated by the thousands of untouched, unloved landing pages littering the Internet. How do you get valuable, and wide-based customer feedback on your MVP, if you have no distribution – no way of reaching a large number of users.
Low, and reducing, cost of developing MVPs means the battle line is shifting. It’s not as much about building the product right any more, as about getting the right product to the correct, target market. And while the cost of developing that MVP (whether a landing page or more full formed) is coming down fast, the cost of reaching a large number of relevant, interested users (to get the feedback from) is actually increasing due to the large number of MVPs seeking them out.