Uncommon Interview: Bob Walsh, Digital Entrepreneur

I hate most interviews, and I think everyone else does too. They’re rarely actionable or insightful.

bob-walshThis interview is uncommonly different. In the last interview Peldi Guilizzoni (Balsamiq Studios) gave detailed advice about how he earned almost a million dollars in revenue in his first year of operation.

In this installment we hear from startup expert Bob Walsh, whose many works for startup founders include:

Below Bob digs into his years of experience living with, mentoring, and thinking about tiny startups to tell us what’s important for a founder starting a company today.

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Q: You’ve stated that the goal of both your new book (Web Startup Success Guide) and your new tool for entrepreneurs (StartupToDo) is to double an entrepreneur’s chance at success: Increase from 10% to 20%. That’s a terrific goal — and it certainly seems plausible — but to what do you attribute the other 80% of the risk? Luck? Timing? Ideas? Tenacity? What are the big killers lurking for the new startup founder?

web startup success guideI think the big killers of newborn startups lurk mostly inside the heads of founders. First and foremost, succeeding as a Digital Entrepreneur (my new catch-all keyword for traditional funded startups, unfunded startups, microISVs, indie game developers and content creators like bands and authors. Like it?) means you need to be the most stubborn S.O.B. you know. Perseverance is the single most important attribute you need. Pick any 5 successful software companies you’d like from one-person microISVs up to the largest and trace how their market focus, product, marketing etc. has zigged and zagged from inception. That’s staying in the game until you find what works.

Editor’s note: Most people think “perseverance” means “being so confident in your ideas that you don’t change your mind even when there’s reason to doubt.” But Bob points out that companies are fluid, and those who survive are stubborn about building something good, not about any one idea.

Another reason DE’s turn back is it’s lonely out there. Whether it’s creating a software app that you’re going to build a global one-person business around, or giving away the Science Fiction stories you write as you build your community so you can launch a book, this is lonely stuff few back in the safe (ha!) warrens of working for some large company would dare do.

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Q: You spent two years working on StartupToDo before bringing it to market. Clearly it’s the culmination of your years of experience with startups — writing about them, mentoring them, promoting them, and watching them grow, shrink, live, and die. How were you able to convert this knowledge into a software product? What aspects of building a company can be encoded in this manner, and what’s still outside the realm of “how-tos?”

startuptodoWhen it comes to software, you as the developer have got to really understand both the people who have the problem you want to address and the problem itself. Now maybe you get this understanding working for a company, writing software for clients, or because you are as the saying goes scratching your own itch.

Between the various things I’ve been doing and my own efforts I started noticing just how much time in this business goes into context work — all of the stuff besides the core of what your are building — and how hard it is, how much you have to sacrifice, especially if you are bootstrapping. I realized that startups reinvent hundreds of wheels and that’s an awful way to build businesses. Then one day I read a comment on Darren Rowse’s blog by a guy who created a point system to keep himself blogging, consistently, and motivated and I was electrified by the idea putting “actionable guides and discussions” together with “measurable progress you could see, share, and compete with in a friendly way.” It took about a year and a half to start learning rails, go off on a tangent (the teachingsells.com approach) get back to learning rails, go off on another tangent (Adobe AIR — good stuff, but not a good fit), get back to learning rails/JS etc. sufficiently well to — with a lot of help — code StartupToDo.com.

There’s a lot of value being able to talk about current business issues with your peers and hearing what other people recommend (See the Business of Software Forum and Answers.Onstartups.com), and getting a solid overview/education on one of the many aspects of this business (see Microprenuer Academy). But one of the unfortunate aspects of “forumizing” is it’s easy to substitute endless online talk for concrete action. I’ve really tried to build the first two big chunks of value in my startup to create what I call focused, actionable discussion.

To Do’s are not enough. Hopefully the Guides at my startup that I and other community members are writing are more than static recipes.

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Q: You’re a big advocate for startups using social media because it’s essentially free (in dollars). But it costs a lot in time and effort — another scarce resource. Is traditional marketing and advertising completely dead, or is there still room for it in a startup?

Jason, you’re right: social media marketing takes lots of time. And depending on your startup’s market, traditional marketing (paper spam, email spam, sales visits, shows, conferences, display ads, etc.) may still have some residual value.

But there are three things at work here. First, developed country societies are moving from industrialism where standardized advertising worked to post-industrialism where the Internet empowers people, markets and conversations. Second, the core values that you find among people who came of age after the Internet are markedly different – the ugly corporate truth is traditional marketing and advertising barely influence them while what their personal social networks “think” and how they interact person-to-person (e.g. Zappos) matter far more.

Here’s the third: Few startups (let alone Digital Entrepreneurs) have more money than time. It happens to be a very happy circumstance that we can now translate time via social marketing (blogs, Twitter, Facebook and all the rest) into sales. Unfortunately, developers in general hate to market (social or conventional), hence why I’m focusing on making marketing, especially what you do online, ultra easy as the next big feature of StartupToDo.com.

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Q: You’re well-known for promoting David Allen’s Getting Things Done (GTD) system for organization and productivity, and Chapter 8 of your Web Startup Success Guide is devoted to it. How important is “personal productivity” to the success of a startup? We all know people who are completely disorganized yet effective, and others who have everything in order but never seem to accomplish anything. Is organization fundamental to startup success because time is so precious? Or can it just be a distraction?

For 25 or so years when I built software for San Fransisco Bay Area corporations as a contractor, personal productivity was my obsession — the more and better ways I could improve my productivity, the more money I’d make. That’s probably why my first commercial product was a Windows desktop personal task manager.

So far, David Allen’s GTD methodology of getting tasks out of your head, processing them efficiently and tracking your results is the best productivity theory we have, IMO. If you can find an effective, not obsessive, way to apply that, you’re going to have a decided advantage in just about anything you do in this world, including creating your startup.

The key thing about personal organization is it’s very personal. Have you ever seen the shot of Al Gore working on three monitors in his office surrounded by stacks of books, paper, and whatnot? That’s what works for him, with demonstrable results.

Finding/creating the right tools for you to move tasks to results in a consistent manner is what matters, not the ceremony or form you use.

Presently I use Things on my Mac and iPhone to track tasks, Notebook on my Mac to plan in, and SpeakEasy on my iPhone as a way to capture tasks and thoughts throughout the day I can later process. Also, I find Basecamp comfortable when I need to project management with others and checkvist.com an easy way to collaborate on outlines.

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Q: You wait until Chapter 7 of the Web Startup Success Guide to talk about the Unique Selling Proposition (USP) that uniquely describes your company’s purpose and niche. Do you believe startups need to determine their USP from the beginning (because it’s vital to defining yourself) or is it something you back into over time (because you have to seek your market position)? In either case, how exactly do you go about defining it?

I believe the Internet rewards original content and punishes unoriginal content, be it software, ideas, or products. If you can’t explain to the market and yourself who your product or service helps how, you’re in trouble. I think that the earlier you can define your startup’s USP the better and recently I’ve found some validation of that approach in what Marc Andreessen and Steve Blank have said about product/market Fit (useful stuff, and yes, I’m writing it up as a S2D Guide!).

That said, the “defining part” is no easy exercise. I wish I could boil it down to a checklist, but there’s more to it than that: your USP depends on what you are bringing to the party. Your experience, insight, opinions, values and abilities define your solution to the problem. One thing I think is true: is it’s an iterative process –the more times you examine your USP, the sharper, more useful, more effective it becomes.

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Q: Your book is clearly targeted at web-based software companies, and perhaps even more specifically at software developers. What of this advice is applicable to other businesses, or at least businesses who want a strong web and social media presence? For the non-technical business owners out there, what parts of the book should they still read, and how do they know which of your advice to apply?

Guilty!   :-)

I write/podcast/work for developers who want to build their own software and software companies. Why? Because those are the people I like, and want to help succeed.

But for a while I’ve been thinking that software startups, microISVs, bands, authors, and others have more in common and share more values online than they do offline. Hence the Digital Entrepreneur meme. Neither The Web Startup Success Guide , the Startup Success Podcast or StartupToDo.com are for programmers as programmers — you won’t find a single line of code in the lot of them. So, whether you are or are not a programmer, the stuff I’ve created over the years will have some value for you.

Any questions?

Thanks Bob!  Please leave questions (or arguments!) in the comments to continue the discussion.

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  • http://www.ecodiamond.com Jason

    Nice interview. I can agree with the “it’s lonely out there” sentiment. I think that to keep an idea going, sometimes you have to “go it alone”, and get comfortable with shouldering all of the responsibility.

  • http://www.buildthatlist.com Tom | Build That List

    Fantastic interview. I am definitely considering his book now!
    .-= Tom | Build That List’s latest blog post: Squeeze Page Tips For Better Conversion =-.

  • http://www.volpet.com Giammarco Schisani

    Thanks for the interview Jason and Bob. I found it quite interesting. For what concerns the unique proposition, I agree that it is important to define it as soon as possible – even though this is not an easy task.

    The sooner you can define your unique proposition, the sooner you can adjust your activities to create fit among them and to make your startup more competitive – at least for certain niches.

    I am booting up my tiny software development company, and I am in the phase of understanding what the unique proposition should be. Unfortunately, I haven’t thought enough about this before, and now it is time to think about it. If this does not happen, I don’t think I will see any decent revenue being generated by my startup.

    I had a look at startup to do, and it looks like a really nice idea. I am going to give it a try.

    Thanks again for sharing.
    .-= Giammarco Schisani’s latest blog post: Volpet Software Fanpage of Facebook =-.

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  • http://startuptodo.com Bob Walsh

    Jason, Tom, Giammarco – thanks for the kind words. It was a pleasure and a challenge fielding Jason’s definitely uncommon questions.

  • http://www.ecodiamond.com Jason Barbaria

    Hi Bob, Jason,

    Followup comment / question to my first (I’m also adding my last name so people don’t think I am Mr. Cohen):

    You talk about companies that zig and zag, and being persistent. How do you know when to give it up, or the answer always “never”?

    Can an idea always be adapted such that it meets a market demand, or are some ideas not worth investing time and money? How do you know the difference, or is this just an entrepreneurial gift?

    Thanks again for the interview.

    • http://blog.asmartbear.com Jason

      The yardstick I use is: Am I moving towards more profitability (i.e. more customers, justifying higher prices, more traffic, fewer expenses) or am I learning something important (which messages people respond to, which ads are working, which features are important, which aren’t).

      If “no” to both, then I’m just not making progress, so unless you can change that, it might be wise to abandon. If “yes” to either, you’re moving towards the real goal, which means it’s probably wise to continue improving.

      There’s no shame in nuking the whole idea though. It’s just another (larger) case of failing fast.

      There’s a parable of a wooden ship which sails around the world. The wood rots along the way, so here and there planks are replaced, and by the time it gets around the world every single plank is new. Did the ship really go around the world? Yes and no, depending on whether “the ship” means the concept of the ship or the actual physical bits of the ship.

      In business, the only thing that matters is that the crew (you) got around the world (succeeded at something), not whether it was one business or two or one morphed so much it was kinda like new, etc..

  • http://softwareprototyping.net John Clark

    Really interesting stuff. As I sit here contemplating my new project, which will kick off in the spring, I know all about that feeling of ‘shouldering the responsibility’. It’s both exciting and terrifying at the same time…

    I’m not totally convinced that the internet punishes unoriginal content – a thing can have been done before, but there’s an opportunity in doing that thing in a better way – without necessarily being original. Just my thoughts on the matter though…
    .-= John Clark’s latest blog post: Distracted by Shiny Things =-.

  • http://startuptodo.com Bob Walsh

    John – when I said “unoriginal’ I meant “copycat”; doing something in a better way, or a way more relevant to a part of the market, is not unoriginal.

    • http://softwareprototyping.net John Clark

      Yes, I take your point. Even within the context of copycat (in a looser sense) it’s not unknown to succeed with a ‘copycat’ product given more effective marketing or even just sheer luck.

      I’ve been thinking about the ‘luck’ thing for a while, and whilst we make our own ‘luck’ (by and large), there are occasional happenstances which are primed for success – for instance, being located in a ‘happening’ place => newsworthy => increased media interest => increased awareness => greater sales => success. That sort of thing.

      So, two ostensibly similar offerings: the first to market might have poor marketing, a bad run of luck and consequently people just don’t get to hear about it; the second effectively does the same thing with no real added value or unique twist, but effective marketing and luck gives it traction both online and off, and it succeeds whilst the original fails to make a dent…

      I can feel a blog topic coming on (but I’m not sure it suits my blog – maybe I can guest somewhere….)
      .-= John Clark’s latest blog post: Distracted by Shiny Things =-.

      • http://www.ecodiamond.com Jason Barbaria

        Don’t forget about the cost of bringing a new product category to market! I think this plays a role in the failure of many “new idea” startups. These companies have to inform the consumer about the new product before they can even begin “marketing” to them. Plus developing the idea, technology, market, etc.

        I remember there being a whole economic theory about why being second is better (remember how Microsoft simply purchased its first operating system?). Does anyone remember this theory?

  • http://www.bigbrassband.com/blog/ Adam Wride

    The questions of “Am I working on the right thing?” and “Am I getting closer?” have certainly been asked many times (a day!)

    A question: Why does it take so long to go from napkin to paying customers? Perhaps I’m just slow, but in my experience it takes many months from the moment you get all excited about a new idea/venture to when you are beta testing it and signing folks up.

    My intuition tells me that we’re doing too much. That we’ve been convinced that to have a successful business you have to: have a perfect logo, setup the perfect legal business, setup the support structure, the ecommerce backend, create a community around the problem you plan to address, write relevant blog posts that attract readers/participants, master social media, set requirements, respond to feedback and change course accordingly, manage a development process, etc.

    All of these are very important and should not be ignored (I want to be successful too), but when I look at everyone out there I see a lot of us spending a lot of time on activities where there is little value add.

    Part of this is that we’re still early in the maturity of this market. Tools are just beginning to appear to help us with the activities above. In a couple of years we might only be doing marketing on Facebook (or will it be Twitter?) or all support might go through GetSatisfaction (or will it be UserVoice?). Spreedly might corner the web subscription market (or it might not).

    Part of this might be a rant (it is 3am…) but as a web apps guy, I’m looking at the success (for the most part) of iphone app developers and feeling like they raced ahead of us. In just a short period (18 months or so) Apple has given those developers a mature ecosystem where they can focus on the value add. (Yes there are downsides, yes iphone app developers still have to do some/many of the things above, but not as many.)

    Jason and Bob – what are some things that Digital Entrepreneurs can stop doing? How do you focus on value add?
    .-= Adam Wride’s latest blog post: App Store for Web Apps =-.

    • http://blog.asmartbear.com Jason

      Fantastic observations, thanks. I completely agree that we should be doing less.

      Yes, use GS or UV or Community Tracker instead of bug tracking and separate forums. Maybe even skip the blog, or treat the blog as “announcements” rather than trying to make a “thing” out of it. Use a hosted blog instead of doing it yourself. Process payments through PayPal at first because it’s fast.

      BUT! I believe it will always take months to get going. Several reasons.

      First, there is a minimum feature set you need before you’re interesting. I know, people tend to put too much into “minimum,” but still there is a minimum. Usually the minimum is not trivial — that’s part of the reason it’s interesting!

      Second there’s “productization.” This refers to all the crap that needs to be done to make it a “finished product” rather than something that works when you hit “F11″ in your IDE. Installers (for desktop apps) or login systems (for web apps). Some form of documentation — not a full user’s manual of course but on-screen help, some “features and screenshots” for the website, maybe a video.

      Third there’s bugs. Even with simple features it takes time to remove the basic bugs, especially when you add “new users are confused” to the notion of “bug.”

      Fourth there’s money. GS starts free but quickly isn’t. Hosting a blog somewhere costs money. Accelerating e.g. a RoR project on EngineYard or Heroku costs money. Is this money well spent? IMHO yes, but for some people they’d prefer to trade time for money.

      But to the extent that you can get things going fast, that’s worthwhile! Great points, great food for thought.

      • http://www.bigbrassband.com/blog/ Adam Wride

        Re-reading my rant and your response, I’d like to comment again.

        Agreed on your four points (MVP, productization, bugs, and money). We can probably throw in the elephant in the room too – time. Starting a real, honest to goodness business takes a lot of time. We can cut some things out or prioritize better, but in the end it will take time.

        However, I know that in starting BigBrassBand we haven’t spent all of our time on the critical path. We have wandered off onto nice paths and a couple dead end paths. The most dangerous are the parallel but ultimately unproductive paths.

        Going back to the comparison of maturity between web apps and iphone ecosystems, the web app community is doing the right thing in always insisting on open standards, but the truth is that we’re either not very good at coming up with the standards or adopting them quickly (not blaming users, blaming app owners/developers) that we’re making little progress (openid/oauth come to mind) in terms of real adoption.

        The downside of all this is a huge loss in value/wealth created. Typically when you have an immature market, the early players are able to realize higher margins (think early computers or new chips). With web apps though, I believe the opposite is true. Early players can’t create the real products/services that customers really need (easy purchasing, standard identity, marketplaces, scale, etc) and thus can’t realize the higher margins that create wealth.
        .-= Adam Wride’s latest blog post: Has Twitter vanquished spammers? Or called a truce? =-.

        • http://blog.asmartbear.com Jason

          I agree with you, but this is the age-old argument that software could advance further and with higher quality if we just reused code more. Libraries, services, etc..

          It’s true but somehow the vision has never materialized on the scale you’re describing. Don’t know why. Maybe could happen someday?

          • http://www.bigbrassband.com/blog/ Adam Wride

            I wonder if groups like TechStars and Y Combinator have the size and ability to push standards like we’re talking about. I realize even they aren’t enormous (like a Google, Fb, or Apple), but could provide the groundswell of adoption.

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