Talk to each other, you are missing out

For the past few weeks I’ve been talking to entrepreneurs, trying to help with their problems. I’ve heard both of these statements repeated a few times:

Marketing is easy, but coding is impossible.

Marketeers

and

Building a thing is fun, but then I have no idea how to market it.

Coders

It’s frustrating to hear both this things at the same time. Even within each of the communities, inside Indie Hackers, Microconf, TWiST, we seem to have subgroups of techies and non-techies that talk among themselves but not to one another and they are both wondering where the other ones are.

Please: start talking to one another, you need those connections, your idea need those connections.

If you are either a marketer or a coder and want the other one to join your team as a non-paid co-founder you are asking them to make an investment. A huge investment in terms of personal wealth. A person might be able to start 10 startups in their life, so, you are asking them for 1 tenth of their resources. Act accordingly. Put the effort, show traction, show results. I see people put more effort into talking to an investor that will invest only 1% of their resources.

The second thing a lot of us should do, and this include me, is not focus so much on our own ideas and try to work on other people’s ideas. Build someone else’s thing, market someone else’s thing. Don’t chase one idea, chase the outcome of a successful startup and accept that it might not be your idea.

If you are a developer, know this: whatever idea you come up with, it’s an idea that another developer is likely to have, and likely to implement to compete with you. That’s why there’s so much out there in terms of Twitter clones, issue trackers, cryptocurrencies thingies, etc. A non-coder idea has the value of less competition. A CRM for a niche you’ve never heard of might be the best SaaS ever!

If you are a marketer, know this: even in a crowded space, you can make a difference because there are a lot of companies out there that have a great product and are struggling with marketing. I often find a market need, like, “Private teachers need booking systems” and in my market research I find that the perfect booking system exists and nobody is using it. Lending your superpowers to a developer that’s charging ahead with building yet-another-whatever might be the best SaaS ever!

How can the price of oil or anything be negative?

The price of oil being negative is clearly a milestone of sorts, but $0 is not such a special price point. It feels special, it feels different, specially to consumers, but it’s not.

I won’t explain why oil got so low. There’s a mix of a pandemic going on, Russia fighting OPEC, etc. There’s also the difference or lack-of buying oil vs oil futures. I don’t know about that and I won’t speculate on that. Back to the problem of something costing $0 or even negative.

Let’s say you buy a trinket and it costs you $1 and then you can sell it for $2, making 100% profit. You go and spend $1000 in buying 1000 trinkets, you are about to make $1000 but then you realize 1000 trinkets take a lot of space, so, you rent a storage space for $200/month. Now you are making $800 per month. That’s ok, that’s a good profit.

One day, the prices of trinkets start to fall. First they fall to $0.9, and you sell them for $1.8, and now your profit is $700 because your revenue is $1800, the cost of buying 1000 trinkets is $900 and rent stays at $200. As the price continues to fall, this happens:

Buy priceSell priceRevenueCostRentProfit
$0.9$1.8$1800$900$200$700
$0.8$1.6$1600$800$200$600
$0.4$0.8$800$400$200$200
$0.2$0.4$400$200$200$0
$0.1$0.2$200$100$200$-100

See how it wasn’t required for the trinkets to get to $0 to make the business nonviable? At $0.2 per trinket, there’s no profit and you might as well put the on the sidewalk, and walk away. Except that you’d get fined, so now you are losing money.

This is the equation that all shops and warehouses run for all products.

For this example, I’ve assumed $200 was the rent for one month and that all trinkets would be sold in one month. Now, let’s imagine the trinkets don’t go down in price, but they sell more slowly. It takes 2 months, which means $400 in rent. If they stay in the warehouse long enough, the magic number at which it’ll cause loses would be much higher, even higher than $2.

This is why you often get business selling you products for less than the cost. Because they are losing money by keeping it around and they need to cut those loses. The magic number in which you go from profit to loses is never $0, it’s always above.

This means that at some point before oil hit $0 it already crossed the magic number at which holding oil was causing loses, it’s just that the loses were so high that it kept pushing down the number into the negative.

Finding a co-founder for your startup

Someone recently contacted me at MicroMentor with a few questions about their startup, including, how to proceed without a business partner. I told him he should probably find one and then I discovered I had more co-founder search resources than I thought:

Any other resources you are aware of?

Book Review: Scrum: The Art of Doing Twice the Work in Half the Time by Jeff Sutherland

scrum coverI first came in contact with Scrum when I was working at Google and since then, I’ve been applying it to the startups I co-founded with good outcomes. Since I was searching for a job, I kept seeing “Scrum Master” come up over and over and I thought it was about time that I learned all the details of Scrum to be able to be a proper Scrum master. Well, in only a couple of ways I finished the book and discovered I was already a proper Scrum master, having learned all the details about it from my time at Google and blog posts.

About the book itself, it’s short and entertaining with enough story telling to keep you engaged even if you only have a passing interest in Scrum. The system is rather simple, with only a few moving pieces and I’m glad of that. Simple systems tend to work better. The testimonials of how much productive a team is with Scrum feel exaggerated completely out of proportion, but then again, some companies are so terrible at producing anything at all, being the cradle of dysfunction, that is no surprise their productivity can be doubled or quadrupled.

★★★★☆

Buy The Art of Doing Twice the Work in Half the Time in USA

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Book Review: Build the Fort: Why 5 Simple Lessons You Learned as a 10 year-old Can Set You Up for Startup Success by Chris Heivly

build the fort coverThis is a short and sweet book that compares the act of starting a company, a startup, with that of building a fort. It’s a very enjoyable read with the childhood stories of building a fort and it reminded me of those days in which it seemed easier to find a co-founder.

I’m not sure the book had anything new to me having already read so many other books about starting companies but it was still an enjoyable read and it’s good to get concepts refreshed. This book puts a lot of emphasis in socializing the idea and indeed that gave me a lot of food for though regarding how I’m going about my own startup.

I think it makes a very good first book about startups or a refresher for someone that’s been doing it for a while and needs a refresher.

★★★☆☆

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The $10 weekend (or why selling to techies is sometimes so hard)

The first version of Dashman didn’t have a centralized configuration system to control a lot of displays at once. It was a one time fee software to run in one computer. Its price was $10.

I started networking, going to events, trying to find customers. I’m a techie, but I cleaned up, trimmed my beard, combed my hair, put on a suit (well, most of one… I still have issues with ties) and off I went, looking like this:

pupeno6

Techies stopped identifying me as part of their crowd which was enlightening. I was the target of so much condescension. It was funny. I still remember the face of a coder that told me he was building his application on Lisp and I asked “Which one?”. His face lit up when we discussed Common Lisp vs others, or SBCL vs other Common Lisp compilers. We became friends, but I digress.

One of my most enlightening discussions was with a developer that told me that he didn’t need my product because he could hack something together in a weekend. Let’s assume this is correct. He preferred to work for a weekend over spending $10. Or put in a different way, his weekend rate was $0.42 per hour. “Excuse me, can I hire you?”

Building something because it’s fun or educational is obviously a very rewarding activity and everybody that wants to do it should do it. When it comes to business, the equation of whether to build or buy should be a financial one.

Book Review: Small Giants by Bo Burlingham

519jtUnq-eL._SX324_BO1,204,203,200_I’m glad I read the 10th Anniversary Edition of the book because I think the extra chapters or modifications make for a much different book. Throughout the book, as he was describing what the small giants do to be giants, without disparaging what they do, I was thinking: “that only works if your profit margins are big, very big”. The new chapters follows up on some companies and what happened to them when those margins become smaller. Long story short: it’s not pretty.

The range of covered companies surprised me. I knew this was not about big companies, so, no Apples, Googles, Microsofts or Facebooks. But still, the range of employee size was from 1, yes, 1, a single person company, to a over-1000 employee company. It’s clear that towards the extreme of the scale, many of the ideas and principles don’t work as well and it might be a stretch to call them small giants but it is exactly that that makes them interesting on this book as it shows the boundaries you could expect if you try to create a small giant.

Reading this book made me think that maybe I don’t want my own companies to be small giants. Maybe I want one of my companies to be one but not the others, I’m not sure yet. I personally don’t think there’s anything wrong with or without being a small giant but if you expect your company to behave like one when it’s not, you’ll be thoroughly disappointing; and for me, that’s the big lesson.

★★★☆☆

Buy Small Giants  in USA
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Book Review: Product Demos That Sell: How to Deliver Winning SaaS Demos by Steli Efti

51JWygnFx1L._SX331_BO1,204,203,200_I’m new to demoing so I don’t have a lot of references to judge this book and its contents. Everything that I read makes sense.

If we are going to judge by authority, Steli Efti, has the track record to write this sort of book.

I think it’s interesting how much it covers around the demo, how much is about qualifying the attendees, scheduling, etc. It seems like a lot of what’s involved in having a successful demo is not the demo itself.

One issue I had is that the book sometimes have to get very descriptive. Maybe a book is not the best source to learn how to demo and this is something that should instead be delivered as a video course or in person.

★★★☆☆

Buy Product Demos That Sell: How to Deliver Winning SaaS Demos in USA
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Book Review: The Obstacle Is the Way: The Timeless Art of Turning Trials into Triumph by Ryan Holiday

81SLYRdcbaLThis book is a sort of different explanation of the concepts of Stoicism. The book claimed the original works by Seneca and others are very accessible but I found The Obstacle is the Way way easier to digest.

This books claims obstacles are a good thing and tries to prove it with many examples of people that achieved great things thanks to their obstacles. I’m not sure I agree. I think there’s a survival bias I that analysis similar to the one the author points to when looking at a list of millionaire college drop outs.

I wish the book would prove things by using data instead of anecdote but I’m giving it four stars because it this book made me think. It made me think about my current obstacles and the attempt of thinking of them as a positive thing made me find new solutions (or reconsider previously discarded solutions). I still thing they are obstacles and that they are bad for me, but they seem more surmountable. That’s no small feat for a book.

★★★★☆

Buy The Obstacle Is the Way: The Timeless Art of Turning Trials into Triumph in USA
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Book Review: The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change by Stephen R. Covey

The 7 Habits Of Highly Effective People 3I think I had my expectations wrong for this book. I was expecting it to focus on business and professional growth when most of its focus is on relationships and families. And when it addresses the professional life, it’s from the point of view of a manager/leader of a big company.

It has some interesting concepts such as the emotional account that I think if everybody followed them it would make the world a happier place. But I strongly disagree that there’s a correlation between following those values and one being more effective. For example, the book asserts that if you treat people respectfully, they’ll respect you back. This is not true. This is not how the world works. This is not how the brain work either and some of the facts about the brain that this book cite have been proved false.

Lastly but not least, the book gets awfully preachy, jumping into religion like if that was fact or proof of anything.

All in all I think the book pretends to be scientific but it’s very dogmatic. I’d recommend avoiding it.

★☆☆☆☆

Buy The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change in USA
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