From Microsoft To Startup: Recognizing The Right Idea, and Getting Started

September 23, 2010

I am now a regular contributor to Seattle 2.0.  Here is my first post published yesterday.

One year ago, I walked into StartupDay 2009 with one question: at what point should I quit my secure job at Microsoft to work full-time on my startup? So of course Hillel Cooperman of Jackson Fish Market, the first speaker of the day, almost immediately said “don’t quit your day job”.

For the first time at StartupDay, I met successful entrepreneurs who had gone through what I was beginning, and their advice was priceless. For example, I learned there were options other than full-time job and full-time startup (e.g. consulting part-time).

I’ll never forget how StartupDay helped me rationally approach the decision to pursue my big idea and set more achievable goals. During lunch T.A. McCann, CEO of Gist, advised me not to quit my job before almost everyone I pitched my project to liked it. Suddenly I had an attainable goal to get me to the next step: fine-tune the idea first. Three months later, almost everyone we spoke to wanted to use our product, and we were ready to hit the ground running.

Beginning is the Hardest Part

The idea for LazyMeter came in June 2009. While I have business ideas every day, this one would not leave my mind, even when I tried to forget about it. I was at Microsoft for over 4 years, and I was comfortable. It was a recession and my colleagues at Microsoft were being laid off. My job was very secure and I wanted to quit? Go figure.

I met my technical co-founder at the August 2009 Startup Weekend. We were both passionate about solving the task management problem, and we went rogue to work on our unofficial project. The concept grew on nights and weekends and soon it became clear we would need to dedicate ourselves full-time to succeed. A business analyst at Microsoft, I naturally considered everything that could go wrong. I could run out of money. I could have a health problem and go bankrupt. My next big promotion was just around the corner. You get the point.

Worst Case Scenario vs. Potential Benefits

In the end, my analysis revealed the potential benefits greatly outweighed the risks. Realistically, the worst-case scenario was that I would have to get another job. However, now I would have built a product from scratch, which could mean finding a job I enjoyed more or paid a higher salary.

At age 27, this was the time to take risks. Everyone I looked up to professionally had taken a major risk in their career; most, even at Microsoft, had been involved in a startup. I also applied the regret minimization framework that I learned about at StartupDay, and it was suddenly a no-brainer.

Things Work Out

In January, I wrote a letter of resignation and clicked send. I am now a self-employed entrepreneur. My startup, LazyMeter.com, is near beta testing. I own an LLC with income from consulting. You’ve probably never heard of me, I haven’t received funding, and I’m living off a fraction of what I made at Microsoft, yet my quality of life and satisfaction have never been higher. I can’t wait to see what happens next.

Joining Seattle 2.0 As A Regular Contributor

I find it fitting that I’m submitting my first regular contribution to Seattle 2.0 this week, days before StartupDay 2010. Looking back on how I walked into the conference a year ago, and how I’ll walk in on Saturday, is extremely satisfying. My transition is still in its early days, and I look forward to updating you on my journey and lessons learned.

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Product First: If You Build It Right, They Will Come

September 13, 2010

There is no shortage of advice in the startup world.  Entrepreneurs and bloggers have all sorts of wisdom to share for upcoming startups.  Common advice notes the value of networking, fundraising, blogging and conferences.  For example, articles like Establishing Your Reputation as a Startup CEO Before Launch.

I’m surprised by how little emphasis I see on the product itself.  Following all the startup blogs alone can take hours a day, not to mention writing your own blog, responding to various forums, and attending networking events.  You can attend all the events in the world, but they’re meaningless if your product isn’t being perfected.  You’ll be surprised how much further your product gets, and how little you miss, if you go a week without reading any blogs or meeting anyone outside of your team.

At the core of every great startup is a great product.  If you’re in this more for the money, working for yourself, the connections, or the fame you’re in trouble.  I’ve met countless entrepreneurs who focus more on meetings and networking than their own product.  Of course these activities are important, but I believe startups can thrive without them.  It’s easy to lose focus and get distracted from what counts the most.

We all know that success is not as simple as “if you build it, they will come”.  Advice givers seem to say “if you build it and write about it and meet with lots of people, they will come.”  But I prefer “If you build it right, they will come.”

Think Chatroulette, a simple but well-implemented product attracting millions of users with no marketing budget.  17-year-old Andrey Ternovskiy had a vision and built it right, and the investors came to him.  Think Facebook, always praised for its college rollout strategy, but it never would have taken off at the first college (Harvard) if it wasn’t great.

A great product speaks for itself.  It attracts and maintains users with no marketing budget.  It even attracts investors.  If you read these articles, they make landing a meeting with an angel or VC sound more difficult than stealing the mona lisa.  But it turns out investors want to meet with entrepreneurs.   If you build a great product, and can tell them your  vision, they will meet with you – because if they don’t they may be missing out on the next big thing.  If you don’t have a great product and/or vision to show them, of course they won’t want to meet with you.  In fact, if you’re tearing down doors and getting nowhere with users and investors, it may be time to rethink your product or throw in the towel.  While it’s important for entrepreneurs to be dreamers, another piece of advise I don’t see written is how important it is to be realistic and self-critical, but this topic will have to wait for another entry.

When you read an article giving you advice, make sure you know who is writing it.  Are they a journalist, a startup wannabe, or a successful entrepreneur that you admire?  Big difference.  I was surprised to discover that the author of the article I linked above “has a Master’s Degree in Folklore and was working on a PhD in Comparative Literature, but chose to become a technology journalist rather than write her dissertation.”  Soon after joining the startup world, you’ll find there are many career startup advice suppliers who have never had a very successful startup of their own.  Are you still as interested in their advice?

I very much appreciate all these columns, and respect the writers.  These articles inspire countless entrepreneurs (I don’t know if I would have made the leap to the startup world without them), and they help us form our own personal strategies.

My strategy is putting product first.  If the product isn’t something that users and/or investors are interested in, I will revisit the design or start a new project altogether.  On that note, I’m going back to work on LazyMeter.


Where in the World is Aaron Franklin?

September 10, 2010

I’m finally back in Seattle for more than a week.  Today I attended the first networking event I’ve been to in months, and was pleased to run into recognizable faces asking me about LazyMeter, why I stopped blogging, and why I had a beard.  To the naked eye it may have appeared as if I’d gone insane, but actually I was just busy and traveling a lot.

When I started LazyMeter, a lot of people said it would take longer than planned – about a year to get most projects off the ground.  I thought 3-6 months would be plenty of time, but now that I’m approaching 9 months I know they were right.  The good news is that while we don’t yet have a working product, we’ve nailed the design and are very much on track to deliver what we set out to build.

The common advice for startups is to rapidly release and iterate.  This makes sense for startups inventing a new type of product, but we felt that task management was different because so many products were already on the market.  Every time I read of a new revolutionary task management application, I get excited only to find that it’s just as time-intensive, manual, and overwhelming as the ones before it.  After scrapping multiple designs, the LazyMeter team spent a week locked in an apartment in Boston (fortunately air-conditioned), and we finally found the solution for the problem we set out to solve.  The solution is simple, but powerful, and unlike anything that has come before it.  Development is underway, and I can’t wait to share a product that not only helps the user keep track of their to-do’s (the easy part), but also helps the user work through them.  Taking the time to build the right product was the right choice for our project, and I’m thankful we didn’t rush out something that wasn’t fully baked.

Another common question I get asked is “how the heck are you doing this?”.  As in not starving and living in a tent.  We’ve been consulting, building a brand, web presence, and marketing strategy from scratch.  The experience has been very valuable; in addition to income, it also builds a portfolio should we need to make additional income, and we made some great connections through the project.  When the contract expired, I was offered the title Director of Marketing to stay on.  Consulting was a good fit for us because I had extra time while the product was being built.  It was distracting from our primary project, but then again so is raising money and dealing with investors.  We are still in business and own 100% of our equity after 9 months.

Other than Boston, I did quite a bit of traveling this summer, some for good reasons and some for bad.  Overall, I consider myself lucky to have been in a situation where I had the freedom to be where I needed to be.  I traveled to Florida in May when my grandfather got ill.  I was able to visit him for a full week and be there for my grandmother and mother.  The doctor told us to say our goodbyes, but after days of sleep he made a miraculous recovery.  When I walked into the hospital room that morning, he looked me in the eyes and said “how is the business?”.  That’s my grandfather, an entrepreneur whose mind is always at work.  I told him we were making progress but it was taking longer than expected.  “Forget about money,” he said as if he read my mind, “do what you know is right and the money will come.”  I will never forget how my grandfather inspired me to become an entrepreneur, and I will never forget this advice which told me he had gone through exactly what I am going through now.  So much of this journey involves overcoming fear and following a gut feeling; if it worked for him multiple times, I know it can work for me as well.  Unfortunately his recovery did not last long; a week later I was watching the sun set from a bluff on whidbey island and the moment the sun hit the horizon my phone rang with news he had passed away.  I flew to Cleveland the next morning to be with my family.

My other trips were for better reasons. My girlfriend works in a local school district and had the summer off, and since I had the freedom to work remotely anywhere, we decided to take advantage of an opportunity we might never have again.  Our first trip was to Sitka, Alaska for 10 days to visit some of her friends.  Sitka was absolutely beautiful – I have never seen so much pure nature – but my favorite part was the relaxed pace of life.  Early in the trip, we went fishing and caught enough salmon to eat for the whole week (baked, fried, cakes, smoked).  We took a boat trip about an hour from the city to a cabin near hot springs; the cabin was double-booked so we camped instead.  Along the way we saw humpback whales, sea lions, and seals (no bears on this trip).  Our second trip was to the Oregon coast for a week when my family visited.  We rented a nice house in Rockaway Beach and explored the beautiful coast.  Our third and final trip was to Los Cabos, Mexico.  It was nice to be warm for a week, and great to return to Mexico (I lived in Oaxaca, Mexico for three months during college and love the country).  Highlights of the trip included racing a $15 million America’s Cup sailboat, a desert safari tour featuring a tequila tasting and a traditional Mexican meal on the pacific coast, and snorkeling atop a school of thousands of fish in Cabo Pulmo.  In case you’re wondering how I paid for all this, these trips were actually very affordable – if I could only make money helping people get good deals.

So that’s where I’ve been, why I’ve been quiet, and why I have a beard.  In closing, I must say it’s good to be home.  There’s something surreal about being in Seattle this upcoming weekend, and the next weekend, and the next.  I have gotten travel out of my system and am ready to work and do whatever it takes to get wherever it is I’m going.  The adventure continues.


Timeshares: The Real Math

September 7, 2010

Last week I was vacationing in Los Cabos with my girlfriend, her brother and his fiance.  When we arrived, we were offered $100 to attend a timeshare presentation.  Of course we declined because we were on vacation.  But when they increased the bounty to $800 the next morning, we caved (considering we paid $900 for a 2-bedroom hotel room for a week, can you blame us?).  A former Microsoft Business Analyst with a psychology degree, I was extremely interested to hear the sales pitch.

First of all, I want to note this our hotel was absolutely beautiful.  Our 2-bedroom was huge, had a full kitchen, and was luxuriously decorated.  The pool was three layers with a swim-up bar and restaurant, facing the ocean; at night it lit up with gas torches.  Based on the other hotels we saw in the area, nothing came close.

The salesman was an American who moved to Mexico, fell in love, and settled down.  He ‘conveniently’ had photos of his wife and family in the binder he carried with him.  Emotions weren’t going to work on us, so he dove into his funny math.  Basically, he tried to say that we could buy a guaranteed vacation for the rest of our lives today, and not have to worry about what happens in the future.  A strange pitch to make during an economic recession.  He tried to illustrate the benefits of his offer using the amounts we told him we spend on vacation a year, but that didn’t make sense since his amount would only include a hotel room for 1 week every two years, and our totals included all travel expenses (e.g. airfare and food) and worked out to 4-5 weeks of vacation a year total.

After breakfast, we were taken to a room where about 10 other groups were individually going through the same presentation.  If someone made a purchase, they rang a bell and opened a bottle of champagne.  The salesman told us 8/10 had purchased yesterday, but we only heard one bell go off.

Finally, after 1.5 hours of being presented with misleading math, we were told the price.  If we bought during our stay, we could have the timeshare for ‘only’ $12,000.  This number looks great when you think about how much you’ll spend on vacation during the rest of your lifetime.  But their financing was almost 20% and spread over 7 years, so the actual cost was beyond $20,000.  They also have a quarterly maintanence fee of $115; if this stays the same (it will go up) and you use your timeshare for 40 years, the cost is an additional $18,400.  Therefore, the total cost over 40 years is $38,960 and not $12,000.  This is for a 1-bedroom for 1 week every 2 years, and so if you live 40 years, you actually end up paying $1,948 per stay, or $278 per night.  All this timeshare does is lock you into vacationing at the same place for the rest of your life, and at a high rate – why would I want to lock in a cost per stay of $2,000 for a 1-bedroom when I paid $900 for my current stay in a 2-bedroom?  Of course they say it’s possible to trade your timeshare for other locations, but that comes with additional fees and many catches.

Plus, it got worse.  The property was still under construction in the back, which was halted (the salesman said it would start again next year but bankruptcy looked near).  Also, this was the cost of their most economical 1-bedroom.  If you wanted an ocean or pool view, you’d need to buy more points.  Imagine you return as an owner a year later only to be in a small room on the ground floor in the back facing a construction site; when you ask to move to the front, they’ll say you need to pay another $12,000.  The hotel was also falling apart – by the end of our week stay, many things in our room had broken, and workers were constantly fixing up the property.  And another thing that was weird: we didn’t meet one timeshare owner during our 7-night stay.

Be smart, people.  It makes me so sad that people fall for this.  Never buy something under pressure, never trust someone else’s math, and never feel sorry for the salesman.  We were very lucky to walk away with the $800 and not a mountain of wasted debt.