Friday, August 26, 2016

The one approach to photo books I wish we'd done differently

So, this is awkward and humbling.  We've spent roughly $1K on Facebook and Google Adwords, and have acquired exactly one customer.  One.

What I'd realized early, but somehow forgot, was that this business was not going to be successful if we're in the business of demand fulfillment.  There are too many well known well established companies that do photobooks and photo products well.  Big players like Shutterfly, CVS, Walgreens, Costco, or smaller ones like Zno or Artifact Uprising.

In an effort to keep our designer fully employed, I shifted focus away from concierge services (due to poor initial user testing) and instead focus on building a business around custom photo books.   First, the good.  We've created a fairly efficient process that really does take very little work from consumers.  Half of our customers are repeat customers, definitely a good sign.

The bad.  While the process is efficient, it needs to get more efficient to be sustainably profitable.  This is largely due to the downward pricing pressure when competing with the other companies mentioned above.  While we'd like to position ourselves at a premium service, ultimately people compare us to them.  We're not yet able to convey the value we provide, or at least not yet in a way that encourages people to buy.

I think part of it stems from people not searching for a service like ours, where we do the work for them.  At the point of them searching, they've mentally prepared to create the book.  Maybe even have already curated their collection, and now they're in the final stages of production ("just let me find the company with the biggest discount and I'll finish this up").

Where this leads us is to the unenviable position where we need to refocus on building a business rooted in demand generation, or at the very least, passive fulfillment.

We're at a pivot point, and need to decide quickly whether to continue to try to keep a demand fulfillment business or singularly focus on the demand generation business.  If we do the latter, the challenge will be in establishing trust with consumers enough to share their photos with us AND provide a service they'll actually care about.

Monday, May 30, 2016

The fallacy of custom design for a startup

I should have been more scrappy.  I fell into the process I knew from working with larger companies (and larger budgets).   Start with a blue sky approach, and custom design an interface and process.  Unfortunately, this leads to a need to have a custom developed solution.

When it comes to the marketing website we stood up, we didn't need custom design.  Frameworks were already in place, and developing the site using existing design frameworks would have been just as effective, and much cheaper and easier to manage.

In hindsight, focusing on process and product and using existing marketing site templates would have saved time and energy without sacrificing outcomes.

Thursday, May 26, 2016

Keeping Photo Metadata intact

As we're trying out different methods of collecting a person's photos, it's become clear that there are some things that work and others that don't when keeping metadata intact.

Things that work:

  • Computer to Dropbox
    • Dropbox Uploader Mac app
    • Dropbox website
      • Add photos to your own account
      • User adds photos through file request
  • Computer to Google Photos
    • Google Photos Uploader Mac app
  • Computer to Amazon Cloud
    • Amazon cloud uploader Mac app
  • iPhone to Dropbox
    • Dropbox App

Things that don't work:

  • iPhone to Dropbox
    • user adds photos through file request (mobile web).  Metadata is stripped out
  • Downloading from Social sites
    • Facebook strips metadata
    • Instagram strips metadata

Here's a good reference as well:

Wednesday, May 11, 2016

Not building software feels terrible, but it's better than building something that's not needed

In the short span of our startup's life, I've seen new companies formed and other companies shuttered or acquired.  The consumer photo space moves very fast.  Researching companies that are out there and understanding better the competitive landscape has led us to Product building inaction.  It feels like no progress is being made.  It is not something I'm comfortable with.  But it's probably the right thing to do.

The scope of what I've focused on with regards to consumer photos includes:
1.  Finding the best photos from your collection and keeping them in a secure folder.
2.  Have photo specialists create photo books for you using your pictures.
3.  Subscription service for consumers to help them manage their photo collections.
4.  Use photo book creation to understand the content and metadata patterns of how people choose pictures for photo books, with a future intent of better automating the process.

The list of companies who play in the space is very long, and new technologies are coming online all the time to aid in the effort.  Through the continued research, I've put Product building projects on hold and limited the scope of some product that we have built, mainly because I've found there are overlapping products that are already built.

Rather than rebuild those products, I'm looking for ways to reuse what they've built.  It's not as satisfying, but it saves a ton of capital - important for a bootstrapped startup.

The mermaids from an 10 year old mind

Sketching is a pastime in our household.  We often draw animals or creatures or funny looking people.  We're not artists, we just do it for fun.

Not to brag, but I'm better at drawing than my kids.  I've practiced more.  I try to teach them how to think about what they're drawing to make it more realistic, and to look at the actual object or another drawing to figure out how to draw things better.

For the most part that's worked out.  My kids' drawings have improved over time.

Recently my daughter was drawing mermaids.  What she drew was from an overhead view of a mermaid, looking down on her swimming.  The hair was long and flowy, and the mermaid had a straight body down to her fin area, that tapered then flared out.

I was about to 'correct' her about the curves of the body - draw a skinnier waist, and fuller hips to make her look more realistic.  But I realized something before I spoke - she was drawing a 10 year old mermaid.  10 year olds don't have curves - she drew a perfect adolescent mermaid.

I'm glad I didn't say anything there, but it makes me wonder how many other things I've 'corrected' when really I've just had a different point of view.

Wednesday, March 16, 2016

Do we want to take funding?

Startups are hard.  What was a consistent theme in the founder discussions is that founders were not having fun.  In the attributes of jobs that I want to have, hard + not fun is not a combination I want.

I'm naturally optimistic, and considered how I could avoid it.  What made them unhappy?  What makes startups hard?

I've got a lot of thoughts on what makes startups hard.  I've never had so many balls up in the air at the same time - multitasking and learning new skills are two of the top reasons, if not the top two.  In many ways though, I love that it's hard.  As long as I'm enjoying it.

But what makes most founders unhappy?  Even Stewart Butterfield, CEO of Slack, commented at a recent conference I attended "It sucks being the CEO of a startup that's doing super well."  Man, even if you're doing super well as a founder, you're still unhappy?  What am I getting myself into?

In talking to a well known VC recently, I discussed my last sabbatical, where my wife and I took our kids around the world for a few months.  He commented how much he wished he could do that, he was just waiting for the right break in his career.  I offered some words of encouragement that you just need to set a date and go.  His response was that he had four funds he was responsible for - there's no good breaks in his line of work.  I don't think he's going to make it on that vacation while his kids are still kids.  Sad.

So back to "should we take funding?"  On one hand, it would allow us to hire people and move more quickly.  On the other hand, my new boss(es) may have a similar mindset to the VC - very focused on the success of those funds.  Having money that makes more money, while a perfectly admirable pursuit, should not feel like my purpose.

From talking with founders, it seems like they're feeling the pressure of that pursuit even more so that the pressure to solve the problem that originally stoked their passion.  When the pressure to multiply money overtakes the pressure to passionately solve a problem, I think people become unhappy.

For founders who are in it for the money, this is probably not an issue.  For me, it may be.

While we don't know if we'll need funding down the road, it seems like a likely path to becoming less happy, not more.

For now, I'm cautious, and planning to bootstrap.

Thursday, January 21, 2016

Advice from Founders

Recently I made the decision to start my own company.  That followed a couple of months of customer discovery to make sure that a) we were solving a real problem and b) we were solving it in the right way.

I'm positive there will be other turns, adjustments, or full pivots on the product before the startup journey ends, but I'm now confident enough to invest our money into building it out.

In addition to interviewing lots of potential customers, I've also been interviewing other founders in my network to understand their experiences - the good, the bad, and the ugly of their startup experiences.

Interview 1: the well funded startup

The well funded startup founder is unique among the group for a couple of reasons:
1)  She was a sole founder.
2)  She immediately went for funding with only a presentation of her vision

Her comments:
- Taking on funding is good because there's now accountability to the board and investors
- Taking on funding is bad because there's now accountability to the board and investors, and there's inherently a lot of overhead in communications and addressing their needs
- Her technical co-founder can be difficult to work with.  She needed someone though.
- It isn't brave to say you're starting a company.  It's brave when you're 6 months into it and you haven't gotten any funding yet, and your family is starting to doubt you, and you still persevere

Interview 2: the side project

Another founder partnered with a colleague from our former company in the last 6 months while he was working there.  while they incorporated their company and have started looking into partnerships, he's since taken a leadership position at another company.

His advice was to incorporate quickly so it's very clear how the founder's equity split will work.

He intends to continue to cultivate this idea in his spare time as he works for pay.

Interview 3: the serial entrepreneur

This founder has started 3 or 4 companies.  Due to this, she and her partners were able to secure funding quickly to get their business started.  They found a tech company to work with who have a set % of equity.  This is good because it means they're not nickeled and dimed for changes or fixes to the website - all incentives are aligned to grow the company.

Many focus groups and asking experts early on help to curate their vision into a product.

Interview 4: the dreamer

This founder is thinking big, very big.  They are attempting to disrupt an industry that unfortunately is in already crowded space of startups.  Due to the magnitude of what they're trying to pull off, their path is to secure funding as soon as possible.  They have 3 original co-founders who are ready to quit their jobs, and they just hired their CTO for a large equity share.  They incorporated using an online service.

They put together a click through prototype and will be seeking funding soon, as well as partnerships with local stores.

She recommended the book "Venture Deals" to get smarter on structuring your company for funding later.

In early VC feedback, she was asked to get a user acquisition specialist on her board as early as possible.

Interview 5: the pivoter

This founder, with one partner, saw a niche and thought they'd have a product up in 3 months.  12+ months later, with very little funding and no revenue, they're approaching a launch date.  The initial product would have been fine for some clients, but wrecked their reputation in the industry.  They decided to pivot, and eventually got to a product they believe in.

- Take funding anywhere.  Don't pay attention too much to the advice that you need to find a well connected person or someone with a certain skillset.  Sometimes, capital is the thing you need most.
- Talk to everyone you can.  Her experience was that every meeting either led to new knowledge or to new people who would prove valuable
- Don't get too excited about good events, nor too down on bad events.  The good things don't seem to last very long, and the bad things never end up as bad as they initially seem.
- Weekly or monthly updates for friends and family keep people in the loop efficiently, rather than telling people on a one-off basis.
- Legal expenses were the biggest early cost - surprising how much they had to spend there.

Interview 6:  the hustler

The founder was a former product executive, and teamed up with a former colleague to create something they thought would be useful, and capitalized on their expertise and connections in the city.

- don't worry about setting up a company early.  Focus on building a thing.  Without the thing, there's no need to set up a company.  They started an LLC with legalzoom, then went back and created a corporation later
- lawyers are expensive, but it's good to get a good one.  Pay the premium.
- ask for favors.  In the beginning they just asked people for their help in designing and developing, with a handshake saying that they'll take care of them with equity if the company becomes something.  Later, they formalized the handshakes
- they did not set up a vesting schedule for shares, however, they did set it up such that they can buy back the shares of anyone who had worked with the company less than a year.  They haven't had a need to do so yet.

The one question that I asked most of them that was most interesting, is "if you could do it over again, would you choose to go down the path of founding a startup?"  Their answers:
- yes, if they didn't spend 9 months having to pivot
- yes, but it's been personally hard on his family, and could not describe the year as 'fun'
- yes, but felt like she lost much of her freedoms by taking investment money and having to report to the investors to make her rosy pitch deck a reality.

Considering they were the only ones besides the serial entrepreneur who have actually started working as a company, it doesn't seem like a super fun path.

Inteview 7: the failed startup

This founder was the only one who had worked on a startup for some time, with real customers and revenue, and eventually called it quits.  Apparently, there was only one competitor in the space when they started, but they then found themselves with 5 other competitors (who were better funded) in the space 6 months later.  As they had decided to bootstrap, they found themselves in a position where customer churn was high, and the ability to attract new customers was limited due to the increased competition.

- your emotional rollercoaster will be magnified by your spouse.  When something good happens, and you tell your spouse, they will be very excited.  When something bad happens, and you tell your spouse, they will be extremely let down.  Meanwhile, because you have all the facts about the business, you're more level headed.  Try to keep emotions down by moderating the response
- Don't innovate in legal or finance.  Hire the right people, even at a premium.  It will save headaches later.
- That said, don't give all legal work to the high priced firm.  Contracts, Ts&Cs, NDAs, can all be handled by much less expensive individual lawyers at a third of the rate.
- Partnership Charter book.  Setting a solid foundation with a co-founder is very important.  Sit down with them and lay out all aspects of the partnership - titles, roles, and where you want to be in the next year or two.

I'm hoping that we can avoid taking funding, I can keep some flexibility in my life, and do enough due diligence up front to avoid 'start over' type pivots.  In any case, there's a common theme of perseverance if we're to move past the obstacles that are certain to come up.