[ale] Hopefully not spam, Atlanta pre startup idea

[Christopher Fowler]

Without money how can someone pay their mortgage.  Without money how can
someone buy their food?

Whenever anyone works for free on a for profit endeavor there is a very
complex agreement that has to be put in place.  Sweat equity gives
someone shares in the for-profit for each hour they work for free.  

To try and create a very good useable CRM requires talent and time.  to
sell a brand new unproven CRM requires sales reps who will want a draw
before going on straight commission.  It requires marketing dollars so
you don't rely on cold calling as your only approach for sales.  

I think Paul has not had a role in an organization that has exposed him
to the problems of a startup.  Take sales for instance.  Finding a great
Sales rep is very difficult.  It is hard to measure a sales reps
performance based on past products they've sold.  If a product has an
awesome marketing department and high demand the Sales rep could sale
millions and basically ber an order taker.  Give them a phone where they
have to hunt then they may fall flat.  Basically sales reps come in two
categories.  Hunters and Farmers.  If you have a new product with no
install base you'll want a hunter.  A farmer will do you no good with no
seeds planted.

I don't think Paul really looks into things.  Take this statement

"For example, dating sites currently suck far worse than search did
before Google. They all use the same simple-minded model. They seem to
have approached the problem by thinking about how to do database matches
instead of how dating works in the real world. An undergrad could build
something better as a class project. And yet there's a lot of money at
stake. Online dating is a valuable business now, and it might be worth a
hundred times as much if it worked."

A undergrad can not create match.com as a project.  All dating sites
took real time and many people to create.  You can have some bad sites
out there but someone spent a great deal of time and effort creating
that dating site.

I do think he got this right:

"In a technology startup, which most startups are, the founders should
include technical people. During the Internet Bubble there were a number
of startups founded by business people who then went looking for hackers
to create their product for them. This doesn't work well. Business
people are bad at deciding what to do with technology, because they
don't know what the options are, or which kinds of problems are hard and
which are easy. And when business people try to hire hackers, they can't
tell which ones are good. Even other hackers have a hard time doing
that. For business people it's roulette."

I'm in a startup that is close to 4 years old.  One of our main guys was
the CEO of Computone and is my partner.  This problem of business people
do not know technology plagues me everyday.  He has a hard time
understanding why I do what I do and how long it takes.  He also does
not fully understand his options enough to make an educated decision on
those options and in the end we are basically throwing darts.

He does have a good point about building product that people want.  One
of the most important things is doing market research.  Don't do your
homework and you are doomed for failure.  For example. when i was a
teenager we had a club open up in our area.  A teen club.  I lived
around 30 miles outside of Charlotte.  There were 8 teens in my area. 
We lived in the country.  Why then was there a club?  Easy.  The owners
did not do their homework.  In CRM you are competing with product that
is out on the market so you have to first follow before you lead.  

This is right on the money

"
Start by writing software for smaller companies, because it's easier to
sell to them. It's worth so much to sell stuff to big companies that the
people selling them the crap they currently use spend a lot of time and
money to do it. And while you can outhack Oracle with one frontal lobe
tied behind your back, you can't outsell an Oracle salesman. So if you
want to win through better technology, aim at smaller customers. [4]"

Selling to large customers is almost impossible.  You've got hurdles to
face you have office politics you also have danger.  Lets say that
you've been working with Bob @ Delta for 6 months selling your new CRM. 
He's not signed on and all of the sudden you find out that Delta has
done a reorg and he is no longer a DM (Decision Maker).  You've possibly
lost all of your 6 months of work.  Another thing that sales reps fail
to do is locate the DM.  If you are selling to technology you have to
make sure that the person who is evaluating your project has that
ability to purchase.  Otherwise you are wasting your time.  He can love
it like no other but without the ability there is no sale.  Make sure
you locate the DM!

Another good point:

"It's very dangerous to let anyone fly under you. If you have the
cheapest, easiest product, you'll own the low end. And if you don't,
you're in the crosshairs of whoever does."

This reminds me of words ya'll need to live by.  "Sell to the classes
eat with the masses.  Sell to the masses eat with the classes".  If you
price your product too high you may end up not selling enough.  Price it
low and you can may end up selling more than you can produce.  In the
market today and I've seen it with companies like tell Value Adds are no
more value.  Everything is boiling down to price. 


I think his document is a good one. There are many perils when doing a
startup.  Creating a fair partnership is just one of them.  If you do
your marketing homework first, Get good talent to code, Make sure no
"business" people get in the way :)  It can be done.

Chris



On Wed, 2005-03-09 at 18:08, Berlin Brown wrote:

> I got excited from reading Paul Graham's recent article.  If anybody
> in Atlanta, wants to quit there job and spark up interest for a
> possible software startup.  I am throwing out ideas.
>  
> It will be a lazy man's guide to a company.  No money, no idea,
> running on raw passion.
>  
> http://www.retroevolution.com/beta/SpiritCompanyInitialOffering.htm
>  
> Berlin Brown
> 
> ______________________________________________________________________
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