A web product startup playbook

I'm presenting "A web product playbook" at BohConf 2013 today. It's a distillation of what I'm considered the most important lessons I've learned during the past seven years of succeeding and failing as an entrepreneur. It's packed with links, and posted to Github! Hope you like it.

More ways to keep the American dream in America

I read Dave Troy's post Keeping the American Dream in America with interest. I agree with everything he says about needing to get aspiring entrepreneurs to focus on solving more important, technically-challenging problems instead of devising endless variations of incrementally-better consumer software.

There are other obstacles to achieving the kind of entrepreneurship Dave wants to see, besides the ones he mentioned. Those hard problems are going to end up being solved by older people not currently enmeshed in "McStartup" culture. Innovation in fields like healthcare, education, biotechnology, or government are likely to come from people working in those fields already. I'm thinking of people like Jess Gartner, a former schoolteacher who just received funding from Accelerate Baltimore to create an new product that will revolutionize the way we fund schools and track funding outcomes. That's not an idea that Dave's "Red Bull-drinking, Ramen-eating young programmers" could think of, unless they had worked as teachers.

To solve the "McStartup" problem, we need more entrepreneurs like Jess or my partner James Curran, people who have established a career and built up some work experience, who have firsthand knowledge of screwed-up situations that could be improved with new technology (using James hard-won expertise, we are attacking a tough problem in the online media industry).

Because these are also people who may have families, who may be the breadwinner, I have a theory that we could encourage more mid-career people to start or join serious startup companies by increasing our support for risk-taking behavior in the United States. Off of the top of my head, some ways to support risk-taking behavior would include:

• Better access to affordable, quality childcare: A big reason I can afford to take the risks I do is that we have a lot of nearby family help, and we were lucky to get our kids into an awesome, affordable preschool.
• More widely-available, affordable healthcare: I know someone who delayed starting his now-highly successful, real-world-problem-solving tech company because he needed to provide health coverage for his wife who had a pre-existing condition.
• Well-funded, well-managed public retirement system: Middle-aged people might be willing to take more risks if they felt they didn't have to save every penny in order to stave off penury in old age.
• Restored public support for higher education: Someone who graduated from college years ago with outstanding, crushing debt is probably not going to jump out of a comfortable job to start a tech company.

You get the idea. I realize these are all liberal causes, and I wonder if liberals have ever tried to position initiatives like these as supporting an innovative culture. Have there have been any studies done that would support my theory? If you take an entrepreneurial, self-starting culture like we have in the United States, and increase support for mid-career risk-taking, do you get more innovation and more new companies?

New ways to help accelerate Baltimore's renaissance

I got a nice email today from one of my favorite Baltimore groups, gb.tc, announcing a new initiative:

...we are adding a new emphasis on bringing the power of technology and entrepreneurship to building a better Baltimore...Our goal is to help connect the innovators and the new ideas with the “powers-that-be” and the resources that could help accelerate Baltimore’s renaissance.

This project is near and dear to my heart. There's been a disconnect between the powers-that-be and the independent hustlers here in town, and gb.tc has cooked up three interesting new projects to change that, excerpted below:

Groundwork - August 10–11 - Over the course of 24 hours (from Friday evening to Saturday), help collect and analyze publicly-available data about Baltimore from a wide variety of sources. We are inviting a diverse mix of technologists, public health researchers, community leaders, and non-profit representatives. Our goal is to identify points of strength and to find opportunities for action and collaboration in neighborhoods, with existing programs, and among talented people from different sectors of Baltimore innovation.

Baltimore UnWIREd - August 24–25 - An unconference to be held on the campus of Johns Hopkins University, UnWIREd will build on findings and tools developed at Groundwork. We will convene innovators and power-brokers from across the region for serious discussion and concrete action. We will identify specific problems, resources, and neighborhoods as focal points.

Start Something - Fall 2012 through Summer 2013 - We will take what we have learned from Groundwork and UnWIREd and tap into the energy and creativity of Baltimore area college students. We will connect talented young people with our innovation community and the mentorship, resources, and tools they need to build sustainable businesses that serve the goals of a greater Baltimore.

I'm particularly excited about the last one. We have a lot of smart people around here and tons of opportunities to solve real-world problems, while making lots of money. I'm looking forward to seeing what a group of these smart people can do when given a little support and mentorship while exploring useful business ideas.

Free software project update

Update 12/27/11: here's what I ended up building

I received over 20 ideas for my free software hackathon project, and also a lot of encouragement. Here's a quick note to update everyone who has expressed interested in the project.

About half of those ideas were from people who want to start businesses. I'd love to help them out but I can't go into business with someone I've never met, especially if they don't live in Baltimore. If you are in that situation I recommend you hire someone to build a prototype as that vastly increases your credibility. Better yet, you should try teaching yourself how to code so you can build it yourself.

About two-thirds of the ideas were far too ambitious for me to tackle in one week. I'm exploring those for future endeavors, though.

About three or four of them look specific enough for me to create a basic solution in a week and I'm investigating each right now. The ones I ultimately pick will be based on how responsive the original customer is and what I think my chances will be to deliver the product within one week.

People are definitely fed up with crappy software. Many of my correspondents talked about existing solutions that are too expensive, buggy, or simply too bloated. They end up hacking things together with Excel or a web calendar. Based on this simple market research I definitely can confirm the "many competitors, little competition" thesis and it's something I hope to attack with this project.

Update On the New Company I'm Starting

Back in January I announced my plans to start a new company. I had a lot of nice people contact me to wish me luck or to propose collaborations, so in case anyone is interested, here's how things have been going!

I spent a lot of time brainstorming various business ideas. One of the best things I did was take a train up to Pennsylvania to meet with one of my role models, angel investor and renaissance hacker Gabriel Weinberg. He strongly encouraged me to pursue the solo founder route and also helped me narrow down my list of ideas to 3-4 stronger candidates. He also really encouraged me to start building things, one after another, and keep learning: this process would very likely lead me to an interesting business (vs. trying to create an elaborate business plan and sink years into just one product). I also had several people pitch me on their own cool ideas.

By the end of this process I was overwhelmed! I was really surprised by what helped: I made a mind map of all the things I was considering working on. Forcing myself to create a visual taxonomy of ideas made something very clear which I had not been conscious of. I learned that I'm only interested in building products where:

• I can charge money up front (vs. things that depend on advertising at scale) 
• There's a chance to learn about new technology, or challenge my technical skills in some way
• The problem I'm solving is something I can be passionate about

Those are super obvious criteria but I had not laid them out ahead of time, and I had put too much emphasis on the first one at the expense of the last one. Now I think all three are of equal importance.

I spent a couple of months working seriously on two of my ideas. One of them I bailed out on after realizing I didn't care enough about the problem. The second one I have postponed for awhile, because it's a video game, something very cool that I haven't seen elsewhere in the market, but I'm not sure how interested I am in the games industry. The game was very exciting to work on because of the technology involved (I used all kinds of awesome HTML5 goodness like the ImpactJS engine and websockets, and created a RailsConf tutorial based on what I learned, which someone translated into Russian!). But I was less enthusiastic about the product as a full-fledged business.

A couple of months ago I met Tom Ainsley, an entrepreneur based out of Baltimore's Emerging Technology Center (ETC). We became friendly through various tech networking events like Ignite Baltimore, and also because we're both members of the ETC's ambassador council. He had a great idea for a product that hit all three of my criteria. I don't want to say what it is yet, not because I believe in keeping ideas secret or staying in stealth mode, but because I want to have the business fully up and running for awhile before we publicly launch it. Whatever minimal "social media juice" I have I want to save for that day! Check out "Don't Launch" for an explanation of this strategy.

Besides thinking it was a good idea, Tom brought something to the table that almost nobody in his position does: he had already had a contractor build a prototype, and he already had paying customers for that prototype. Most people who pitch new web business ideas to potential cofounders or to angel investors have not put any capital into their idea (like Tom did when he hired that contractor) and as such they don't seem very "for real". Also, many have a lot of unexamined assumptions about how the idea will make money (something that's very obvious for Tom's product).

You can create the "Tom effect" for yourself without spending a lot of money, by the way. I recommend you outsource development of your prototype idea using Derek Siver's excellent guide. You might also consider teaching yourself to code something. Either one of these things is a way to prove you are "for real". Here's more advice about how to "earn a cofounder".

Tom and I spent some time discussing the idea and getting to know one another over beers at the Charles Village Pub, and eventually we decided to go into business together! I'm rebuilding his prototype as a minimum-viable product now, using Rails and running everything on Heroku's awesome new Celadon Cedar stack. I don't want to say more about the product right now publicly, but if you meet me in person I'd be glad to give you more details!

I'd still like to try being a solo founder some day, but in this process I've learned something very important: as passionate as I am about all facets of entrepreneurship, I'm most interested in technology development. What gets me most excited and engaged is using technology to build things that solve real problems. So for now I'd like to specialize in being a CTO/technical co-founder. That seems to be a sweet spot for me. I'm grateful to have teamed up with a talented businessperson like Tom so I can focus on the most personally meaningful work.

I will be posting more regular updates as things progress, so stay tuned!

The best thing you can do to support tech in your city...

...is to make tech in your city.  Success begets success.  I think in Baltimore we're doing a great job of burnishing our brand as an exciting place to work with technology, but nothing will help our reputation more than increasing the number of successful technology product companies and practitioners who reside here.

That's why in 2011 you'll see me focus my organizing and advocacy efforts around events and activities that involve making technology or funding technology development in Maryland:

• I'll be attending the InvestMaryland summit in Annapolis next week
• I'm teaming up with Monica Beeman and others to plan Startup City (a Baltimore version of successful investment-mentorship programs like Techstars and Y-Combinator)
• I'm helping organize Startup Weekend in the Spring
• I helped organize the Baltimore Hackathon last fall, which will come back again sometime this year
• I'd like to start a salon-style event called "Secret Software Society", styled after New York's Secret Science Society, where we have interesting cross-language and cross-platform talks about building software given by people working at product companies, especially people we don't often hear from on the tech scene.
• I'm starting a new product company that I hope will grow into an exemplar, an employer, a responsible member of the community, and a supporter of existing tech events and organizations as well as new initiatives yet to be planned!

I call this strategy "Bias for Action": now that Baltimore's technologists and entrepreneurs have a variety of ways to connect, I want to focus on projects that directly lead to them taking action!

How To Recruit Developers and Technical Cofounders

I forgot to cross post a couple of posts from the Startup Baltimore blog.  In "Finding a Technical Cofounder" I answered a question I get asked all the time: how do I find a developer to work with my startup?  My typical answer is excerpted below, but since I wrote this I have added a pithy but accurate preface: "You make friends with a bunch of developers two years ago using real-world networking as well as social media tools".  As Dave Troy put it: "In Entrepreneurial Ecosystems, Cofounders Find You!"

1. Know who you are looking for: Sometimes people start off by saying “I need to find a Rails person” – they’ve heard Ruby on Rails is a great framework for building web products, so they’ve pre-decided to use it.  But in my limited experience, the tools that get used in your business tend to be the ones favored by the first hire or by the technical cofounder.  I’m not saying you should take such decisions lightly or by default, but I’m encouraging you to focus on the cofounder’s personal attributes and not their preferred tools.  The right person can learn whatever tools are needed on the fly.  You are not looking for a Rails guy or a .NET girl or a Pythonista: you are looking for someone who writes good code but is also versatile, hard-working, and self-directed, who listens well and communicates effectively.
2. Go where the software people are. Sounds obvious, right?  But if you just do this one tip you will be way ahead of most other people.  In Baltimore, I’d start by working at the Beehive coworking space, attending some Bmore on Rails events, searching for other technically-themed meetups, visiting the Node, and getting involved with Betascape.  Of course here at Startup Baltimore we have the Startup Breakfasts but I’m not sure how many programmers you’ll find there (it’s still a great way to network with kindred entrepreneurial spirits).
3. Start an event or project. Baltimore’s startup community has plenty of room for new leaders.  You can attract technical talent simply by being known as an outstanding, generous, helpful business person.  There’s still tons of work to do in building up a robust environment for Internet companies here.  For some ideas, see these lists of projects that I’d like to see someone taken on.
4. Get involved in social media. You want to scale up your search to form as many friendships with software people as possible.  There are a ton of programmers in this region and a lot of them are toiling away outside of the communities I highlighted in #2.  They won’t even hear about your efforts with #3.  But some of them are on Twitter and other platforms.  Right now you could sign up for a Twitter account and search for every person in MD, DC, VA, and DE who has the words “software” or “programmer” or “hacker” in their bio. You could start a blog all about your idea and the struggle to bring it to fruition.  You might not get a lot of notice right away but over time this will cause hundreds of potential partners to get to know you.
5. Get started on a prototype anyway. Even if you meet a qualified, available person, you will have a hard time convincing them to drop everything to work with you.  The best way to prove that you are for real and that your idea has legs is to get started now!  You could hire someone overseas via Elance. You could find a local freelancer to build something super simple via Craigslist.  All you really need is a URL you can give to potential cofounders to check out the kernel of your idea! Read Derek Sivers’ advice on how to do this effectively.
6. Have you thought about building it yourself? One of the most bad-ass entrepreneurs in Baltimore is Scott Messinger. He quit his job as a Baltimore City school teacher to create his company,Common Curriculum.  He’s not a programmer by trade, but instead of waiting around for a cofounder to appear, he taught himself Ruby, Rails, and MongoDB!  Eventually if he does need to hire a programmer to help he’s going to know EXACTLY what to look for.

Solo Founder Startup Wisdom

Several friends have asked about what the company I am starting will do.  I don't know yet.  I am actively exploring a few interesting ideas, though if I've learned one thing from startup literature, it's that the initial idea counts for very little.  I'm having fun searching for a problem that intrigues me, that I could imagine being passionate about solving, and that has the potential to grow into a financially-sustainable opportunity.

It's all complicated by the fact that I'm a solo founder. I don't have a business partner with whom to vet these ideas. I'm lucky to have encountered a few inspiring blogs and people to be my lodestars:

• Josh Baer, Gabriel Weinberg, Dave Troy, Jason Cohen, Chris Ashworth, Scott Messinger, Paul Capestany, Brent Halliburton, Rob Wray, Ben Walsh: an incomplete sampling people I look up to who have taken this risk before me, who have done it alone.  Just having friends do this, even if they haven't all succeeded wildly, is by itself a powerful encouragement.
• Gabriel Weinberg's Will single founders please stand up? and his history of mostly failed projects.  Pretty awesome example of trying doggedly to achieve what I'm doing and eventually succeeding.  I'd recommend reading all of the startup posts on his blog.
• Dave Troy's idea gardening: argues for an incremental, diverse approach to starting new projects. Instead of rushing in to build one thing, spend some time developing a few ideas to see which one gets traction.  A very good complement to Gabriel's history of failed projects.
• Startup Lessons Learned is probably my favorite blog because it had such a transformative, teaching influence on me.  Eric Ries explains how to apply lean manufacturing techniques to new business formation - which may sound boring on first glance, but it's actually a revolutionary and exciting theory that encourages you to make your efforts all about learning as much as you can as quickly as you can about the problem you're trying to solve.  I would every post on this blog.
• Ash Maurya's The Fallacy of Customer Development describes applying Eric Ries' lean startup techniques and the Four Steps to the Epiphany model of customer development to a web startup.
• Jason Cohen's blog: very personable advice and war stories about entrepreneurship.  Be sure to check out his recent post about the systematic process he used to start his most recent company (a process I am trying to emulate now).  I often recommend to people his post "You're a small company, now act like one".

I hope this list helps others considering this path!

Let's create a New Defense sector

I'm fascinated by Peter Thiel's essay "The Optimistic Thought Experiment". It's about globalization's past and future and has many awesome things to ponder, but as a technologist and entrepreneur this paragraph grabbed me, emphasis mine:

Technology entrepreneurs and investors would do well to return to hard and important problems. As globalization proceeds apace, the decisive unsolved problem concerns the issue of security. There remains a tremendous need for real defense against the proliferation of destructive technologies — reaching well beyond the Orwellian “defense” industry, with its proclivity for constructing new contraptions that kill large numbers of people. Along with the New Economy and New Media, there should exist a valuable sector that could be described as New Defense — at least in any twenty-first century in which humanity does not blow itself up. The absence of such a sector serves as a subtle reminder of the complacent myopia of Silicon Valley venture capitalists investing in “technology.”

I don't know what this means for me personally yet but I'm pretty excited to think about it.  I can't find the links anymore, but it reminds me of criticism that emerged from last year's Techcrunch 50 event, about how most of the 50 companies were not working on anything that would fundamentally improve the human condition.

Steal my ideas for Baltimore's tech culture!

Gus Sentementes was nice enough to go on vacation and let a group of guest authors contribute to his excellent blog, BaltTech. My first post just went up, a list of ideas that I think would be cool to implement in Baltimore to further advance our tech culture.

My favorite idea from the list, mostly because I think it's one of the easiest and one of the highest yield, sprung from an earlier post of mine surveying technologists in Baltimore:

Breakfast events: there's a lot going on at night in our tech culture; how about doing things in the morning? I'd love to get a "software breakfast" going where developers could get together and show off their work, exchange war stories, etc.

Startup opportunities for programmers in Baltimore

An open letter to Baltimore hackers:

Because I put myself out there as a Baltimore-based startup person, I am regularly approached by entrepreneurs in this region who have ideas for software projects, mostly web apps, that they need someone to build. Most of these ideas sound awesome to me, and the people seem very compelling leaders (they all create what Eric Ries calls the "reality distortion forcefield "). I'd love to work on all of the ideas, but I'm busy with my own startup. Just in the past four weeks, I've talked to people who want to build:

• a niche massive, multiplayer game
• a workflow management system for the entertainment industry
• a web news site CMS
• iPhone games

I don't always know to whom I should refer these entrepreneurs. If the person has a budget and they are looking for a Rails shop, I send them to my friends (and long-time Ignite supporters) Smart Logic Solutions.

But some of these inquiries are from people who can't afford or aren't ready for the full-court press that SLS can provide. The projects are more prototypal and better-suited to a freelancer or moonlighter. That brings me to a dilemma.

I know many good programmers in different disciplines, especially through the Beehive. But I don't always know their tolerance for risk, willingness to work for equity, etc. I wonder if that's a consequence of being in a tech economy dominated by service providers and government contractors -- do talented creators get used to high hourly rates, and thus become unavailable to people who need their help to build disruptive, exciting products with a lean startup mentality?

If you are interested in this kind of work -- and I really encourage you to give it a try -- please leave a comment on this page or email me at mike@subelsky.com, because I'd like to have better answers the next time someone asks me to help them build an idea. I just need to know your specialties and what contact information I should use.

Side note to entrepreneurs: you should make an effort to get out there and meet the developers now, before that brilliant idea strikes you. Cowork with us at the Beehive, go to Bmore on Rails meetings, attend Outlet Baltimore and Refresh Baltimore, come to SocialDevCamp and Ignite, etc.

Maryland Software Entrepreneur Survey Results

Last week I asked all of the software entrepreneurs I know in Maryland to fill out a quick survey about what they kinds of help they'd like to receive in building their companies. I asked this because I want propose a project to help my fellow entrepreneurs in Maryland, but I felt I should do more listening before I do any more talking.

I promised I would anonymously summarize the results of the survey, so here's what people had to say. Ten people of very different backgrounds responded. It's totally unscientific but I think it was a fairly diverse sample.

What type of assistance would be most useful to you in starting or growing a software business in the greater Baltimore area?

• "...an organization, funded by the state or outside investments that acts as a seed funder for startups...an Angel-like organization that invests time/resources rather than capital. Local people with ideas for new software would submit proposals and the team would decide on the top 1-3 and develop a beta. So rather than having a group of investors involved, it would be a group of developers that invest their time in exchange for equity."
  
  
• "A mentor match-up service of some sort might be good. With our startup, we have basically had to teach ourselves everything because we didn't really have anyone to talk to who's already been through it."
  
  
• "I think the most needed type of assistance, in my opinion, is business/legal administration. Such things as incorporating a business, accounting, taxes, payroll, accepting credit cards for products/services, etc. I might have a great idea and working app, but then need to put in almost as much work to setup and manage the business side."""
  
  
• "A real calendar of tech events, with .ICS (so I can import into Google Calendar or Outlook or whatever I use), embeddable (just via GCal), RSS feed, twitter feed. Something where I can actually go and see a list of events hosted by Refresh, Bmore on Rails, etc...You'd think this problem was solved already, but apparently not."
  
  
• "...some forum / roundtable type of thing where people can just talk ideas would be neat too. Perhaps OpenCoffee, with some more structure, up in Baltimore somewhere. It would be nice if something like this varied in location, so that for example, it's not always down at the hive. Then again, there is arguably some benefit in having it at a standardized location."
  
  
• "Funding...Baltimore Angels is good, but they only meet every other month."
  
  
• "Exposure. Needs to be more talk about what local entrepreneurs are building...have to raise the profile of Baltimore for outside money. People have to hear about what is going on in Baltimore and see it as a hub of growth and activity, and look at startups in the area as worth investing in."
  
  
• "Support - I love the local Open Coffee...it's less than 5 people, and everyone is doing their own thing, so no one is afraid to be open and talk. It's been very helpful for me and I've found the atmosphere great."
  
  
• "Peer groups/advisors/coaching, all of which I have found in the area."
  
  
• "1) access to capital
  2) talented technologists
  3) universities that are engaged in the entrepreneurial world
  4) service providers (lawyers, accountants, insurance agents, PR firms, recruiters, etc) who understand start-ups, and have appropriate business models
  5) mechanisms which support the free flow of talent
  6) a cheerleading environment where mentors are easily found and entrepreneurs benefit from the region's self-promotion
  7) a culture which recognizes those who try -- even when they fail."
  
  
• "...my greatest challenge was in recruiting talent. Finding people who have actually marketed software, or developed commercial C++ applications was an enormous challenge!"
  
  
• "We are terribly underserved by the absence of an entrepreneurial culture at JHU. Perhaps, that's beginning to change, but it will take time to play out. I recently attended a discussion on the macroeconomic impact of entrepreneurialism at MIT; it's simply staggering!...Without the active engagement of our local universities, we'll never build a sufficient flow of new companies into our region."
  

What are your biggest challenges?

• "The biggest problem is tapping into true seed money. It seems that seed money for early stage startups is virtually non-existent. There are various Angel groups in the area and there is money to be invested, but rarely are the investors ever interested in being the first dollars spent by the company.
  
  "Given this, it seems that a development based Angel group could help mitigate the high risk of true early stage companies such that more good ideas would get off the ground"
  
  
• "Again, never having done this before, our biggest challenge is knowing what it is we're supposed to even do or not do as a 'real' business."
  
  
• "One big problem with not knowing what to do, is not immediately knowing who can help you sort those things out. With regards to legal issues, we've already been through two big-name law firms that charged big $, but they had almost no experience with startups and were not able to guide us well at all."
  
  
• "I think my biggest challenge is once I have established business and working app (which is a challenge in itself), is marketing and getting the word out as well as creating a sustainable revenue model."
  
  
• "Knowing who to trust....and whose referrals to trust."
  
  
• "Finding talent. Dealing with taxes."
  
  
• "...finding leads is of course a big thing."
  
  
• "As for products, hashing through marketing and sales plans...Putting processes in place to fill a pipeline, getting the word out, building sales efforts, etc. And 'getting the word out' - and marketing and sales in general - is different for products for a niche vs. products for the online masses. Looking for money too is a challenge...but it seems like Baltimore Angels is trying to address that."
  
  
• "Money. Finding good people. Money"
  

Is there anything else you'd like to say?

• "Go Baltimore. All of this stuff is wicked exciting. I moved here because it was the closest city to home. I'm staying because Baltimore is poised to claim a huge stake in the future of big tech happenings."
  
  
• "I think some kind of Y Combinator in Baltimore would be great. The combination of funding, help creating a company, and ongoing support is what I would really need to create a successful software company. I also like the idea of having a group or association of small, local software companies that have weekly/monthly meetings to discuss and brainstorm and help each other out with their ideas and possibly code."
  
  
• "I think there is still a gap between the money and then entrepreneurs. It's a hard gap to bridge."
  
  
• "I've heard many times that there just aren't enough companies in Baltimore to justify more private equity. That's just not true! Moreover, there are micro communities emerging - such as with gaming or social media...Growing these communities brings more talent to the region, which leads to more successes."
  
  
• "...individuals are vitally important to an entrepreneurial success. When they come together, they create new companies. When they network, they're looking to challenge themselves, often by changing jobs. Changing jobs in Baltimore's tech world is difficult due to its relatively small size and lack of a networking forum. Making it easy for individuals to meet and network not only eases the free flow of talent (one of the things that makes Silicon Valley so successful), but causes people to want to continue their association with the networking forum that's proven helpful."
  
  
• (Several respondents graciously offered to help out or be included in any discussions, so I'll be sending some emails and things -- add a comment below if you are interested)