Sometimes you have to ignore your customers and follow Moore’s Law.

My feeling is that Moore’s Law is customer feedback.

What I think he means “ignore some of your more established prospects.” NVIDIA sold chips to customers in its first five years. By that I mean that they had customers that were using their products.  Just not to some of his larger potential prospects. NVIDIA also had SGI as an “existence proof” for a market for high end graphics. They had lead customers from the beginning, he doesn’t mention who they are, choosing to focus on the larger prospects who were initially not interested, but they didn’t invent their architecture in a vacuum. For example, from Firing Squad’s History of NVIDIA:

Curtis Priem, NVIDIA Chief Technical Officer, had been the architect for the first graphics processor for the PC, the IBM Professional Graphics Adapter, and more recently had developed the GX graphics chips at Sun Microsystems. Chris Malachowsky, VP of Hardware Engineering, was a Senior Staff Engineer for Sun Microsystems, Inc., and was co-inventor of the GX graphics architecture.

In fact, when it came to standards for representing 3D they initially picked the wrong standard and had to “listen to their customer” and change horses. See, for example Tom’s Hardware: 13 years of NVIDIA History:

The principal problem with the NV1 was in its management of 3D: it used quadratic texture mapping (QTM) instead of the technique used currently, which is based on polygons. DirectX appeared just after the card was released, and it used polygons, so the NV1 was a failure over the long term. [...] The NV2 used the same rendering method and was never completed. It was to have been used in the Dreamcast console (which replaced the Saturn), but Sega finally chose a polygon-based technology (PowerVR) and Nvidia abandoned QTM in favor of polygon-based rendering with the NV3.

My take away is that if a large established customer shows no interest, talk to smaller players who are interested in becoming larger and help them to disrupt the market. Don’t wait for the established players to embrace your product idea before proceeding.

When: Friday, April 9, 2010

• 8:15 am – 5:00 pm
• Advanced Topics PM Session: 1 – 5pm (see below)

Where: Moorpark Hotel, 4241 Moorpark Ave, San Jose CA 95129
Cost: $560

This is an interactive workshop with Peter Cohan geared especially for you who demonstrate B-to-B software to your customer and channels. Bring a copy of your demo and be prepared to present it — we’ll help you turn it into a surprisingly compelling demo! AM Session Cost (includes breakfast, lunch, copy of Peter Cohan’s “Great Demo!” book):

This seminar outlines a framework for the creation and delivery of improved demos and presentations to enable increased success in the marketing, sale, and deployment of software and related products. Whether it’s face to face, in a webinar, as a screencast, or as a self-running demo the ability to present the key benefits of your software product is essential to generating prospect interest and ultimately revenue. Peter Cohan of The Second Derivative gives us the recipe for a Great Demo!

“I am confident that with the insights gained from your workshop we will land more customers in fewer iterations.”
Lav Pachuri, CEO, Xleron Inc.

“Peter Cohan’s Great Demo method really works. It helped us win DEMOgod, and it has allowed us to explain our offering much more clearly to prospects.”
Chaim Indig, CEO, Phreesia
(See “DEMOgod Winner Phreesia Praises Peter Cohan Training“)

ABOUT THE SPEAKER: Peter Cohan, Principal at Second Derivative
Community Web Site: www.DemoGurus.com

Peter Cohan is the founder and a principal of The Second Derivative, a consultancy focused on helping software organizations improve their sales and marketing results. In July 2004, he enabled and began moderating DemoGurus®, a community web exchange dedicated to helping sales and marketing teams improve their software demonstrations. In 2003, he authored Great Demo!, a book that provides methods to create and execute compelling demonstrations. The 2nd edition of Great Demo! was published March 2005.

Before The Second Derivative, Peter founded the Discovery Tools® business unit at Symyx Technologies, Inc., where he grew the business from an empty spreadsheet into a $30 million operation. Prior to Symyx, Peter served in marketing, sales, and management positions at MDL Information Systems, a leading provider of scientific information management software. Peter currently serves on the Board of Directors for Collaborative Drug Discovery, Inc. and the board of advisors for Excellin, Inc. He holds a degree in chemistry.

Peter has experience as an individual contributor, manage and senior management in marketing, sales, and business development. He has also been, and continues to be, a customer.

Agenda:

• 8:15 AM Breakfast & Registration
• 8:30 AM Workshop begins
• Noon Lunch & De-brief
• 1 PM Wrap up

Seating is Limited These are intensive sessions and we ask that you arrive at least 15 minutes before 8:30AM start time to ensure you will have a seat and won’t disrupt the session once it is underway.

PM Session: Advanced Topics

In response to requests for assistance on demo delivery we have added an afternoon session to our Great Demos workshop. If this is your first exposure to the Great Demo come for the morning and get a great overview of the methodology and stay for the afternoon if you would like an opportunity for more interactive training on advanced topics such as multi-solution, multi-player demonstrations, and vision generation demonstrations. The advanced topic session as covers real life issues like handling bugs, crashes, and time challenges.

This is an interactive workshop with Peter Cohan is only available to people who have already attended the morning session or a previous Great Demo session.

When: Wednesday March 17, 2010   1:00 – 5:00 pm
Where: Moorpark Hotel, 4241 Moorpark Ave, San Jose CA 95129
Cost $200  Register for the Advanced Topics

Advanced Topics Agenda:

• 1 PM Advanced Topics
  • multiple solution demos
  • presenting to a mixed audience with different needs or information requirements
  • vision generation demonstrations
  • handling bugs, crashes, and time challenges.
• 5 PM Wrap up

For more information: Theresa Shafer 408-252-9676 events@skmurphy.com

Q:  In your talk you say “Most recurring problems are a combination of an unsolved technical problem and an unresolved emotional component to that problem.” Is there more about this in Ericsson’s “The Role of Deliberate Practice in the Acquisition of Expert Performance” or in the Gary Klein’s “Sources of Power“?

A:  It’s actually from another great book: ” The Art of Learning” by Josh Waitzkin.  I found this quote on page 108:

“The aim is to minimize repetition as much as possible, by having an eye for consistent psychological and technical themes of error.”

but he is a little clearer in two other interviews, the first is  Scott Barry Kaufman’s “Learning About Learning: An Interview With Josh Waitkzkin“  (yellow highlight added)

S. In reading your book, it seems as though your major strength in Tai Chi Chuan is the way you put your mind into the game. You were able to beat players much stronger than you by “getting into their mind.” I find this fascinating. Why do you think you were so good at psyching people out? Was it because of your early chess experiences?

J. Sure, my chess experience taught me a lot about the psychology of competition. World-class chess players are incredibly brilliant people who have spent their lives figuring out ways to get it your head, to break you down. Usually every high level chess error is accompanied by a psychological break of sorts-to survive, you have to understand the inner game. I am always looking for where the psychological and the technical collide–that surely comes from my chess study. But frankly, I think I really got good at the psychological game after chess. Chess taught me how to be relentlessly introspective, how to unearth tells in myself and in opponents, but then I really took that foundation and put it into dynamic action in the martial arts. I work on being a heat seeking missile for dogma. If you unearth or instill a false assumption in an opponent, they are in a lot of trouble unless they feel you getting into their head and kick you out fast. Of course this eye for false constructs is an important tool in the learning process as well.

The second is Thomas Huynh’s “Interview with Josh Waitzikin” (yellow highlight added)

Q:  Did you find the skills or outlook you gained from first learning chess on the streets of New York City (Washington Square Park) helped you to outmaneuver those who only had classical training?

A:  [...] To survive in the park you have to be a fighter. You have to be able to handle any kind of distraction. Honestly, I think those early lessons lay the foundation for my most intense world championship fights years later. I learned early that just about every error has a technical and psychological component, and if you get good at discovering those connections, you’ll be a step ahead of the competition. And of course as a kid, facing other 7, 8 and 9 year olds in National Championships felt like a piece of cake compared to what I dealt with every day in Washington Square.

Here the implications for the roots of a recurring error or  consistent mistake in play coming from both a technical and a psychological blind spot are clearest. Robert Pirsig wrote something along the same lines in “Zen and The Art of Motorcycle Maintenance” which also applies to entrepreneurs building companies:

“Peace of mind isn’t at all superficial, really. It’s the whole thing. That which produces it is good maintenance; that which disturbs it is poor maintenance. What we call workability of the machine is just an objectification of this peace of mind. The ultimate test’s always your own serenity. If you don’t have this when you start and maintain it while you’re working you’re likely to build your personal problems right into the machine itself.”

After I facilitated the Conversation Central roundtables on “Global Teams” at the 2009 Design Automation Conference I decided that a significant shift was underway where not only were teams in larger firms more often global but startups and small technology firms were going global much earlier in their life cycle than had been the case in the 1990’s.  One of the enablers for this is a host of low cost collaboration tools. Some that are synchronous like Skype and real time dashboards,  and others that are “quasi-synchronous” like wikis, distributed source code management and Yammer. These tools  enable faster decision making because the team is able to maintain a “shared situational awareness.”

After a lunch with Matt in December where we had discussed this trend he agreed to share some of the ways that his firm, Nearsoft, was using Yammer and other collaboration tools to enable them to keep distributed teams providing development services and ongoing support in sync.

Q:  Can talk you a little bit about what your firm does? I understand that your focused is on outsourced product development.

Nearsoft is a software product development firm with operations in Mexico.  We work best as innovation partner to ISVs, SaaS companies and consumer-facing sites.  These businesses understand that software is at the core of their business and they demand to work with people who are as dedicated and serious as they are about building great software.

We specifically avoid working with businesses that treat their software as a “backroom” operation or, worse, as a necessary evil.

Q: How do you work with clients?

We work in long-term relationships with our clients.  We create teams around each client, with the right skills in the appropriate technologies.  As the new team learns about the client’s business, they can contribute to all aspects of it, not just the raw coding.

Short-term, project-based engagements don’t work for us and I don’t believe they work for clients, either.  It may work for doing something of the side, some throw-away code.  But for the core product, you want to have a stable team of people that work well together.

We invest heavily in hiring the best and brightest and have created an environment that helps attract and retain that level of talent.  A big part of that is because of the opportunity to work with leading-edge companies in the Valley as part of their core team.  If we had people work on little projects here and there, we would not get the good ones; or, if we got them, they would not stick around for long.

Q:  What collaboration tools do you use internally and with clients to support your methodology and your engagement model?

A: The first that comes to mind is Yammer, a Twitter-like system but for private use.  Our folks are used to Twitter, so using Yammer was a natural.  It works great for geographically distributed teams because it helps maintain a team presence.

In the situation where everybody in a team works out of the same office, team presence is a function of being physically in the office at the same time.  Without consciously checking, you know when people are “there” and when they’re not.  Yammer serves a similar function in that even if I am not reading each posting individually, I get a sense of people being “there” as the stream flows through.

It’s also a casual environment where people can jump in and out without much protocol.  If I am looking for somebody, I can just ask “anybody seen Joe?” and one or more people will respond.  Also, if people are joking around a particular event, you can also jump in and do the water cooler thing that’s part of social cohesion of effective groups.

Besides Yammer, we use Skype a lot.  For example, a group of us keep a Skype “group chat” open all the time that we use a lot like Yammer.  The reason we do it on Skype is that it’s easier to switch to voice conferencing when the text chats get too convoluted.

One of our client teams uses video all the time.  They use both Skype and Adobe Connect.

Of course, we also use a number of tools to keep track of open issues, source code control, etc.

Q: What has been the impact of Yammer on your ability to deliver results?

Yammer and Skype and the rest of these real-time tools give us and our clients the benefit of being in touch constantly. Little problems and misunderstanding remain “little,” they don’t snowball into big, hairy messes.  One person may say, “I am going to implement X using Y” and immediately another will jump in with “No, you shouldn’t use Y for reason Z.”  They may go back and forth in the text stream, clarifying things.  Then switch to voice or video.  Misunderstanding is cleared before any major work is wasted building the wrong solution.

Without something as immediate as Yammer or IM tools, the question may sit in somebody’s email for a day before anybody looks at it.  By then, the wrong solution may be finished only to be thrown away.

BTW, that is true for the folks working physically in the same office.  In many ways, it is more convenient to casually ask a question or make a comment using one of the tools than in person.  You can ask your question without “imposing” on the other people to drop what they’re doing to answer your question.  The other people can choose when to respond.  If they glance at it and see a “Google It” question, then they can just ignore it.  If it looks important, then they can direct their attention to it at their convenience.

Q:  What, if anything would you do differently?

When I started the company I tried several models before settling on the way we operate today.  It would have been nice if somehow I could have gone through that part of it a bit more quickly.

We’ve had a couple of startup clients that didn’t make through the crisis in 2009.  I thought they were dynamite businesses and wished they could have been able to stay in business.  We helped all we could but in the end they didn’t make it.

Q: What else have you learned from working internally and with customers in this fashion?

The most salient thing for me is that cultural alignment is key.  Effective communications include a ton of stuff that’s never said; it literally goes without saying.  There’s a lot of “y’know what I mean?” in there and it would be too costly, emotionally and in time, to explain every little subtlety that goes on in a conversation.  Likewise, it can very expensive when people miss out any of those subtleties.  To deal with this you need to make sure that everybody in the team is aligned with the goals of the business and that they “know” what it takes to get there.

One example I can think of is when a developer is asked when he can get something “done.”  If we both don’t have the same understanding of what “done” means, then we are going to end up in hot water.

Q: Thanks for your time

• Their “53 second introduction“
• and “Outsourcing in Local Time“

I really appreciate Matt’s willingness to talk about some of the practical challenges in working in a geographically distributed organization. If you would like to talk about lessons learned from your startup or innovative business practices that you would be willing to talk candidly about, please contact me and we can explore an interview that would be of interest to bootstrapping entrepreneurs.

Entrepreneurs who like to “eat problems for breakfast” bring business issues and challenges to discuss with peers. The Bootstrappers Breakfasts have been meeting on the second Friday of the month in Milpitas since 2008. Other Breakfasts are held in Minneapolis MN, Mountain View CA, Palo Alto CA, San Diego CA, San Francisco CA, and Sunnyvale CA.

Date: Friday, March 12, 2010  7:30 a.m. (2nd Friday of the month)

Location: Omega Restaurant, 90 South Park Victoria Drive, Milpitas, CA 95035  (Off Freeway 680 at corner East Calaveras Blvd. and South Park Victoria Drive)

Cost: $5 Advance Registration, $10 at the door

Info: see www.bootstrappersbreakfast.com.

At last month’s meeting the roundtable topics included: forming a new business and getting it off the ground. It also included discussions about tips on building a customer base.  Members are saying great things about us:

• “A great group of entrepreneurs in start up mode and restart mode. The greatest value of these meetings is that they refocus my thinking of what is possible.”
• “I attended my first Breakfast on Feb 13th in Milpitas. It’s a great group, I wasn’t sure what to expect, and I learned a great deal more about Patents, Trademarks, and Intellectual Property matters from the guest speaker. I met a dozen people and learned about the needs of others involved in small business endeavors. However, I felt a genuine camaraderie with these folks and will actively adjust my schedule in order to attend future meetings.”

About Bootstrappers Breakfast®

Bootstrappers Breakfast® is for the founders of early stage technology startups. It is a chance to compare notes on operational, development, and business issues with peers. These breakfasts were designed for entrepreneurs to share ideas and leverage thoughts with other folks who are serious about growing their business.

Two key challenges

• Free Consulting: strangers may want to learn more about the technology area you are addressing and request one or more sales calls while they listen attentively. The net effect is that you are offering free consulting to someone who has no intention of buying. Tipoffs: always encouraging, “tell me more.” They talk very little about their own challenges but are very interested in your offering or the technology arena that you are focused on.
• Column Fodder: potential buyers at large companies may need to solicit a minimum number of bids in addition to the team that they want to do business with. This means that they will put you through the exercise of generating a bid just so that they have three, even though they have no intention of working with you.

Here are four steps to take to immunize yourself against the default assumptions you made when selling to friends.

1. Balance time invested against size of deal, probability of a win, and competing alternatives. Establish a marketing budget in hours in advance (e.g. default might be 15 minutes for an inquiry, 60 minutes for a phone call) and adjust it as your understanding of deal size, probability of a decision, and probability of a win evolve.
2. Always put an expiration on any quote or proposal, if nothing else it gives you a reason for one last E-mail/call.
3. The first payment is always the most difficult, if appropriate ask for a token payment after you have expended some marketing effort to assess interest level.
4. If you are not certain of interest in getting started, float a later date (e.g. six weeks instead of two) for the follow up and see if they pull it in. If you are not having conversations every week or two then the deal is in percolate or nurture mode and is not active.

“Your brand is the promise that you keep.” Kristin Zhivago

“Plans are made, unmade, revised, and recast through action and interaction with others on a daily basis.”
Saras Sarasvathy

• See also “Saras Sarasvathy’s Effectual Reasoning Model for Expert Entrepreneurs”

“Ask for input only if you plan to do something with it or about it.”
Richard Moran “Nuts, Bolts, and Jolts”

“Simple ain’t easy.” Thelonious Monk

“One competitor to customer development is a co-founder’s belief that product development, in and of itself, creates value.” Sean Murphy

• See also “Customer Development Proceeds in Parallel with Product Development“

“Sometimes I am blocked by things I can see, other times by things I cannot. Too often, it’s just my fear of the unknown.”  Sean Murphy

• quoted in “Iron Bars, Plexiglass, and Masking Tape“

“At a distance big companies look like aircraft carriers, but close up you see they are really a thousand canoes.” Rick Munden

• “From a distance you look like an aircraft carrier, but as you get closer it becomes clear you are really a thousand canoes. ” Rick Munden recounting a vendor’s description of TI

“Opportunity is missed by most people because it is dressed in overalls and looks like work.” Thomas Edison

“The surest way to be cheated is to think oneself cleverer than other people.” La Rochefoucauld

• Meeting agendas and minutes (avoiding the bottleneck of the designated note taker and/or overlapping amendments in different e-mails that then have to be reconciled),
• Early and still evolving specifications
• Project status in a dynamic environment

• Use many small team level wikis, each for a distinct project or purpose, where the team membership is clear and there are shared incentives for cooperation and success.

But a year or two ago I had a dream a while ago about a tiger that I keep turning over in my mind.

A tiger is pacing in a cage, but it’s not a square cage, it’s more of a maze.

It’s not in a zoo, more like a warehouse or strangely configured storage unit. The floors are smooth cold concrete.

The tiger is trapped in a maze of walls of iron bars and plexiglass.

The tiger starts out in a section that’s primarily iron bars with a few walls of plexiglass.

It leaps against the bars and can’t break out.

Then it sees what appears to be an opening and runs into a plexiglass wall, which it can’t break through either.

But running into the the plexiglass a few times makes it more cautious.

So it paces,
alternately sniffing and growling,
confused and angry,
trying to find a way out.

Finally it comes to an opening that just has strip of masking tape on the floor.

And there it sits, convinced that this is some new barrier that’s also uncrossable.

Better products follow an established trajectory in an industry. They are “15 minutes ahead” and the easiest to sell…for a while. Examples include:

• Faster computers with larger memory
• Cars with better gas mileage

Impossible products find a way to relax one or two constraints that designers of better products have taken as fixed. They are harder to sell, not so much because they are hard to understand but difficult to believe, prospects will ask you “What’s the catch?” Examples include:

• ATM Machines replacing human tellers to dispense cash
• Ethernet over twisted pair

Unthinkable products are typically developed by someone from outside the target industry or are the result of repurposing a product from another industry. Their developers were not handicapped by the mental roadblocks that come from following established practices and patterns in an industry. They can be extremely difficult to get prospects to understand–much less believe in–as they are almost always incompatible with current practices and infrastructure. But they can create an entirely new category of product. Examples include:

• IDDQ testing in semiconductors
• The Reebok Pump shoe
• Henry Ford realizing that a meat packing plant’s “disassembly line” could be run backward to assemble a car.

What are you working on?

• Customer Development Helps Entrepreneurs Assess the Value of an Invention