It’s The Profit and Growth, Stupid.

I’m paraphrasing a Clinton/Carville line “It’s The Economy, Stupid” in the title above. They used this to win the 1996 election by rallying people who were tired of such a weak, debt ridden economy. Sound familiar?

The Bubble Begins To Pop

Today it was announced that Betterworks is shutting down after $10.5 million in investment and 18 months of operation. Incredible but not. Around town people have been saying that BetterWorks is one of the strongest startups in L.A. They actually threw a party a month ago “The Silicon Beach 500”, celebrating the amazing growth of local startups.

Betterworks is one of many companies these days that aren’t really companies, they’re an idea, good hype, the ability to trick the public while they’re trying to work it out (We’re doing Great, We’re killing it. We’re hiring.) and the arrogance to say we don’t need any help. I could name another 20 startup in L.A. alone that are in the same boat – they are failing and will shut down eventually, but right now are promoting the facade of success and growth when they’re not either. I won’t names names, but I see their ads on the web. “we’re growing”, “dog friendly workplace”” We Love Startups!”. What about REVENUE and GROWTH and PROFIT and PREDICTABILITY? These are the definitions of Scalability.

Currently early stage startups all want the Facebook model – L U C K. Mark Zuckerberg invented something by accident that grew so far beyond his wildest dreams that it could cover a thousand mistakes. He got funded while wearing jeans and a hoodie. But eventually Facebook had to make Revenue and Profit. Be Scalable.

Most companies aren’t like that. They require good decisions and actions DAILY for YEARS.

Betterworks actually has/had a great idea, they just didn’t quite know how to properly build a business for the long term, and refused to listen to advice. I know that’s harsh, but another few hundred companies are doing the same right now. These companies stifle innovation, not promote it and teach the wrong skils – they need to be called out.

The result will be thousands of pissed off, unemployed people sitting on the beach in Santa Monica wondering what the hell happened. After the 2000 crash Profit and Revenue came back into style, spawning and reinforcing real companies like Google and Salesforce.com which are Profitable and Grow. 2013 will repeat the cycle, so let’s all change our thinking, get back to basics, put the egos aside and respect the expertise available to us.  Contact me if you’re in this camp. @tomnora

Updates on Startup Workshops and the Startup we’re launching

I started a new group 2 months ago in Los Angeles – Startup Workshops – #SUWSLA to teach startup success concepts and try to launch new startups.We have over 100 members now, have had a few meetings and are in the process of launching a new startup with some of the members. Below is my update to the group today. Please feel free to join (it’s free to join) even if you’re not in LA, you can get involved in the discussion and we travel to many other places. And if you are in So Cal, please join us for one of these events. The next one is a Happy Hour Thursday night in West Hollywood.

Message to group 5/14/2012:

This group now has over 100 members, with minimal exposure – pretty cool.

I never had a goal of maximizing overall # of members, just to provide tools that can be used immediately as well as a network where members actually help each other to start and grow startups. So far, so good – we have some pretty amazing people in the group and we’ve (almost) started a startup.

HAPPY HOUR – looking forward to this, 16 rsvps so far plus a few more I know of. The goal of this is to make connections and hear about the startup we launched together in April. There’s a lot of frustration in trying to get a business going, especially when it relies on technology to succeed, so please come if you can and bring a friend who is interested in the startup thing.

STARTUP #1 “LAUNCHED” – WE’RE STILL EARLY EARLY STAGE – Last week we had our second meeting, this week we’ll have our third, with home work assignments, so it looks we may be actually doing something here. It’s an experiment so stay tuned. We have a strong team, but we’re still looking for more development skills.

NEXT GENERAL MEETINGS – I’m getting ready to announce this, leaning toward Funding The Startup as a topic. I’m trying to finalize sponsors and the venue. Not sure if we should try to launch another startup after this one, what does everybody think? Starting to look like an incubator here. Also working on an Orange County meeting for late June, details coming. Also looking at Palo Alto, Scottsdale, Boulder, Austin from inquiries there.

Hopefully I’ll see/meet you Thursday night or soon after.    @tomnora

d e s i g n

The other day I met with a startup in Santa Monica, and noticed a giant etch of the word d e s i g n on the ceo’s glass office wall. Their company isn’t about design per say, but it was refreshing to see the discipline given such prominence. The word design is being kicked around in the startup world a lot more these days, and I think this is a good thing.

Design is the exercise of creating or adding elements of appearance to something. It is defined as “The shape or appearance given to an object, especially one that is intended to make it more attractive”. In the startup world it can make the difference between success or failure if combined properly with great business strategies. There are many examples of great design alone in a failing startup, but great design plus great engineering and business strategies often win. Also, many startups with bad/weak design but great strategies and engineering have been winners. But that seems to be changing.

To say that someone is a visual person is a little silly – everyone is visual. Colors and Shapes and beautiful Movement attract any human, often on a subconscious level. A simple attractive Design for a website or product will change its fate from yet another to the best in a category.

Beautiful design exudes success and confidence, care about details. And most importantly – originality. great design comes from within a person or organization, not copied from outside and implemented. It’s more difficult, but imperative for long term success. Simple beautiful design is proliferating on the web – lots of white space, a small number of large font words, big open boxes for interactivity, cool icons. All of these things enhance the user experience and make them want more.

A recent great experience for me was trying out Codecademy. It has quite thoughtful design elements, many of them not actually visible, but so important to its almost seamless usability.

Style, similar but different than design, is more the process of following great designs, using existing aesthetics. Sometimes this works fine, but it’s not the same as amazing original design. Just look at the continuous march of Apple over the past 34 years. Great design plus engineering plus strategy. Accessibility, simplicity, completeness. They created the template for many other products’ style and design.

UX/IA is also an important part of all digital design now. First introduced in the late 1990s, it’s replaced and expanded on UI as the critical relationship people have when using products. Often it’s a pre-design process, trying to guess how people are going to use things, then use design to optimize the experience.

The new biography on Steve Jobs is a must read for any startup founder. It has the added benefit for readers of discussing in great detail Apple and NeXT design processes, justifications and investments. It also reveals that most of the design ideas were not Steve Jobs, but rather came from several design and marketing gurus he surrounded himself with.

Like I said, it’s great that Design is becoming central to the engineering-heavy world of tech startups, because ugly design sucks. @tomnora

The Importance of BUS DEV

The Importance of BUS DEV

People often undervalue Business Development as a critical function in a startup. What is it? How does it differ from Sales, Marketing, Major Accounts? When is the startup big enough to dedicate a headcount to Business Development?

BusDev is less understood than most titles, and widely ranging in responsibilities. It is the critical glue between sales functions and the senior management. BusDev is relationships, longer term thinking, non-revenue partnerships, communication between Sales, Marketing, Engineering and Finance if you have all of those covered.

BusDev people see the potential connections between your company and several others. They find creative ways to do business or vastly improve business relationships, especially when they can work with BusDev counterparts at target partners. It’s like the 2 lead guitarists of 2 bands playing together going off into the corner and working on just their parts, and relationship. They’re focused on one thing.

BusDev people are also focused on one thing –– taking the businesses beyond simple linear transaction based relationships. They don’t worry about this weeks revenue or finance, etc.

In a smaller or earlier stage startup, the CEO covers most areas that have no dedicated leader, BusDev being the most common unfilled spot. Sometimes this works but often not. The problem is when the CEO is not a good match for this position – in experience, skill set or desire. It also distracts him/her from other CEO functions, and is not as impressive to the client, partners.

So, if you can afford a strong BusDev investment early, it  can be a secret weapon that ensures your long term scalability and gets you funded.

Contact me if you’d like to discuss more.