I travel a fair amount. I’ve got family in South Carolina and Lousiana, and friends all over. I typically use my time on the road to listen and learn. I’ll download a few podcasts and maybe an audiobook or two for the trip down and see what strikes my fancy once I hit the road.
This week the trip was a quick down and back to Lousiana to visit my wife’s family. 16 hours on the road over just a few days is not something I recommend to anyone, but unfortunately it was necessary this time. The long monotonous trip did allow me to sit back and listen and think for a while, however, so I guess I can’t say it was all bad.
I’ve been spending a lot of time coding lately. My original plan with Work for Pie was to take my time with it and finish it when I finished it. I gave myself a very general six month deadline when I got started, and a lot of the stuff I had done so far was pretty haphazard. I did a little design work here or there, did a wireframe or two, and had a lot of the concept jumbled up in my head. That was okay by me until the 48 Hour Launch weekend.
A few things converged over the course of that weekend that accelerated my plans a bit…
The first was a realization. The 48 Hour Launch Weekend was, in many ways, a small scale brick and mortar example of my idea at work. It was the crowdsourcing of ideas in action. Anyone could come up, give a pitch, and if they found enough of the right people to help them out, they could get their idea launched that very weekend. In the end, more than 75 people showed up, something like 25 pitched, and something like 7 or 8 companies got launched, including, amazingly enough, one pitched by an 11 year old. I knew that if there was this much interest in ideas and in starting your own thing and in helping others to start their own things, then my idea definitely had a decent shot.
The second thing that happened is that I decided to throw my hat in the ring. I decided over the course of that weekend to try to apply to Seed Hatchery, a Y Combinator-like startup accelerator here in Memphis. The application deadline, ironically, is midnight tonight, which forced me to spend the following week or so getting all of my disparate ideas together and putting something out there. I felt my idea was strong enough to be considered, and I wanted to show the folks judging my entry that I had at least some degree of design and development skills.
So all that coding–all that practical stuff that one must do to get something up and running–got me away from thinking about why I was doing it in the first place. This week’s long trip brought me back.
First thing I listened to was a pretty famous episode of This Week in Startups with guest David Heinemeier Hansson, one of the founders of 37 Signals and the creator of Ruby on Rails. I’ve been a pretty big fan of his for a while, and this particular interview made me an even bigger fan. Now for those who don’t know, This Week in Startups is a podcast hosted by Jason Calacanis, the founder of Weblogs Inc., the Techcrunch 50 Conference, Mahalo, and more recently the Lauch Conference. Jason is an old school Silicon Valley entrepreneur, and, ironically enough, Hansson is about as far from that as can be possible.
Hannson is all about simplicity and doing things for the right reasons right from the start. If you’re going to build something, build it simply, with a revenue plan right out of the box, and then fund your growth with that revenue. Don’t follow the (sometimes) Silicon Valley model of building something to scale and then, when you’re there, figuring out how to make money with it. He rails (pun intended) against facebook and twitter and points out, correctly I might add, that they essentially won the lottery. The ditches alongside the facebook road to riches are littered with copies that failed.
Jason, of course, somewhat disagreed. He believed, just as correctly, that sometimes one has to swing for the fences, and taking that swing requires capital and VCs and all of the rest of it.
Both are right, of course. Of course Facebook got lucky. Of course Twitter got lucky. But where would we be if someone hadn’t swung for the fences and actually hit one out of the park with those services?
But then again Web Van swung for the fences too, and the only thing that came out of that was a pile of dung…
So, the question is, which is the right way to start? Should entrepreneurs focus on revenue, or should entrepreneurs only focus on the big exit, or is there another kind of motivation that both Hannson and Calicanis missed?
Should you go for scale? Get funded, get funded again, get funded a few more times, figure out how to make money, then exit? That’s facebook in a nutshell, twitter in a nutshell, myspace, Web Van, pets.com, friendster, foursquare, gowalla, path, and countless others, in a nutshell.
Or should you take the Hannson route? 37 Signals certainly did. Hannson himself makes the point that 37 Signals can really scale to any size demand because the demand will bring in revenue that can fund expansion.
Or, instead, should you be in it to change the world? See, I kind of have a third opinion about things. I tend to believe that, though certainly complex, most folks’ motivations to start a business are about more than simply making money. Now sure, we all dream about becoming billionaires by the time we’re 25 like “the Zuck,” and, deep down, it drives a lot of our motivation. But, even for “the Zuck,” building Facebook was about much more than that. For him, Facebook was about building something cool and building something fun that allowed people to share important things about their lives with each other. A lot of startup stories are the same. Jobs and Wozniak wanted to build something that everyday people could use and that “the Woz” could show off at homebrew. Pierre Omidiar wanted to cut out the middle man in business transactions and let people conduct business on their own terms. Cliff (blatantly referring to himself in the third person) wants to build something that brings people from all walks of life and all locales together so that more cool stuff gets built for less money than ever before.
Truth is, I think if you asked most successful entrepreneurs, they would tell you pretty much the same thing. “I started this business/site/community to make the world, or at least my little corner of it, a little bit better.”
I honestly don’t think it matters how you start–whether you need 100K users before you’ll see a dime or if you make money with user #1. You just have to make sure you believe in what you’re doing and put everything you’ve got into it.
Oh, and one more thing. Not all ideas work, even if you’ve got more passion about yours than anyone else. If you’ve ever seen the auditions for American Idol then you know that there are a lot more people out there who think they’re good than are actually good. But, that will be part the beauty of Work for Pie. There will be a strong crowdsourcing element to it. If your idea sucks, or is impractical, or is simply to weird, you’ll hear about it in comments and ratings and you’ll realize that maybe it’s time to move on to something else.
A shout out to a few of the folks mentioned in this post:
http://www.llamatag.com/ – The company I worked with during 48 Hour Launch. They got funded by Seed Hatchery, so maybe I’ll be working with them again soon?
http://bandtutor.com/ – The company founded by the 11 year old!
http://blog.stiqrd.com/ – Another promising company launched at the event
http://www.seedhatchery.com/ – The accelerator here in town. I applied, and llamatag has been funded.
http://www.loudthinking.com/ – Hannson’s blog
http://calacanis.com/ – The Calicanis blog
http://www.youtube.com/watch?v=XDGHxO6N3Ms – The This Week in Startups Episode with DHH