Start Up Blog

Don’t be this person.

Posted in entrepreneurship by Steve Sammartino on October 19, 2009

I had this discussion yesterday. I walked past a hole in the wall cafe. (Tiny cafe which serves take away and stand up coffee in inner city area)

Friend: Wasn’t Joey going to open a business like that?

Me: Yeh, I remember him talking about it before I had even seen one of these in the city.

Friend: What happened to it?

Me: I don’t know, I guess he just didn’t get around to it in the end. Got distracted.

Friend: That’s a shame, looks like a good little business model. What’s he doing now?

Me: He’s in the same job.

Friend: Oh. Ok.

We keep walking …

hole in the wall cafe

Don’t be Joey. It at least try and fail. The old job will be waiting for you if you have to return.

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Startup School this November

Posted in entrepreneurship by Steve Sammartino on September 28, 2009

If you’re planning a Corporate Escape or are an early stage entrepreneur. Then 2 day event I’m running is an investment worth considering. For a very simple reason: It’ll save you many thousands by not having to make all the mistakes I did before I got it right.

What stuff are we covering?

Content taught includes:
– Idea generation
– Idea validation
– Art of bootstrapping
– Setup costs / legal Tips & tricks
– Project / Cash flow management
– Outsourcing ( digital & production)
– Raising capital
– PR – Getting on TV, radio and in newspapers (all of which I’ve done before – see http://www.rentoid.com/about and scroll down)
– Social media tools
– Staffing & handling the growth curve.

All of which will be interactive – and busts the myths of success. You wont read the truth about this stuff in books because the truth isn’t shiny and doesn’t sell. All 10 alumni graduates get me as an on going mentor to help them startup and success like I have with www.rentoid.com.

It also includes food & drink for 2 days. It is $998 for the 2 days. It’s not cheap – bit it’s the real deal. A worthy investment with a money back guarantee to blow your mind.

Startup School

If you think it’s expensive – then think about this:

  • How much is 17 minutes of prime time ‘in program’ TV coverage worth? More than $500,000. I’ve done it and startup school will teach you how.
  • How much is full page spreads worth in National Newspapers & magazine worth?
  • How much did your last website cost to build? I built www.startupschool.com.au for $220 and I’m not a tech person, designer or a coder.
  • How valuable is knowing how to raise Angel and Venture Capital? Or even know the right people?
  • What about in market validation without the actual expense of launching?

The point is your investment will pay for itself many times over.

It’ll be running In Sydney and Melbourne for 10 people only. It’s pretty much a one off event. So if you want to come book or seat at www.startupschool.com.au or feel free to give me a call {0438 779 566} for more info. Be quick it’s limited to 10 people only.

Steve

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We need each other

Posted in entrepreneurship by Steve Sammartino on September 17, 2009

I used to think my skills base limited the areas of business I could play in. I remember thinking back to the dot com boom in the mid and late 1990’s wishing and dreaming that I could some how be involved in the excitement, the fervor, and yes, maybe even the money. But I wasn’t a programmer, a digital designer or media player or a venture capitalist. I was merely a marketing manager trapped in the industrial complex of consumer goods. The bust came and I was quietly happy that peoples paper fortunes and egos got busted too. Which in hindsight was not a nice way to think. It was built on jealously, lack of knowledge and immaturity on my behalf.

dot com boom

Since then I’ve learned this: The type of skills we have matters far less than the fact we have a skill set which is valuable.

Translation: We don’t need to be a technology gurus to be operating or starting up in the technology space.

Maybe we are good at sales, marketing, raising capital, managing and motivating a team, project management, accounting. All of these skills will be needed in whatever business we start or are involved in. What matters is that we can add value in the chain somewhere which takes us from idea to revenue. Where we sit in that chain isn’t as important as we think. What really matters is being able to create the value chain.

It’s a rare combination indeed for a person to have tech genius and business brilliance. Fact is we need each other. We couldn’t have succeeded at rentoid without the business heads or techies collaborating. I wish I’d known this 10 years ago.

Sure it can be an advantage to startup in an area where we have expertise. It can be an incredible way to keep our costs low. But it’s not necessarily a barrier to entry. If we want to success, we’ll have to build a team in any case. And building a revenue infrastructure is what we ought be focusing on as entrepreneurs.

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How to be remarkable – Mr Price

Posted in entrepreneurship by Steve Sammartino on September 10, 2009

Do stuff that people just have to tell their friends about. This I am about to do.

On Monday I had the pleasure of being invited to a restaurant for lunch with colleagues. The place is called Mr Price. It is run by Mr Price himself.

Upon entering you know you are about to have a different experience. An experience which is extremely unlike any other restaurant meal. The decor and mixed demographic alone is evidence of this:

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As you can see from the photos above it could well be your favourite Aunties or Grandmas. But it’s Mr Price. And what Mr price does is open his restaurant (home?) in North Melbourne at lunch time only, 5 days a week. He only serves who ever gets the four tables he has – that’s it. Each table gets served once. He decides what to cook that morning which will include 1 entree and 2 main meals. if you don’t like it – too bad. (Believe me you’ll like it).

Mr Price comes out and greats your personally and provides you with the menu of what is available on the particular day. It will be given to you on a hand written piece of paper which he writes himself. He has very neat hand writing. He’ll have a nice old chat and is a very well spoken articulate man. Once you choose your meal, he retreats to the kitchen to cook it. Oh, he’s also the waiter.

At the end of the meal he comes around the tables and has a little chat. It was during this time that he told us that he likes to sleep in and after doing the dishes, he shuts the doors and goes home until the next day.

Mr Price is a nice guy. Mr Price provides an experience. Mr Price isn’t like other restaurants. Mr Price is remarkable.

What are you doing to make your startup remarkable?

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The deception of history

Posted in entrepreneurship by Steve Sammartino on September 6, 2009

Reading about Craigs list the other day I started thinking about business history and strategy. As entrepreneurs we often get fooled by the deception of history. And it’s easy to see why. All the business books and articles we read on success are based on what someone or some company we respect did. The problem with this is that the world lives in a state of flux, and what worked then, most certainly wont work now. This is where the Craig’s list example comes to the fore.

Craigslist Head office

Would a 3 color page of hyperlinks which looks like the internet did in 1994 work today? Highly unlikely. Craigslist works now, because it worked well then. It had things working in it’s favour like the ‘in crowd’ in the Bay area spreading the word. That it was first to market with an on-line classified. Now these legacy issues become a strategic proposition which is worth maintaining. What it doesn’t mean is that it’s a strategic template worth copying for Startup X. It’s also less likely we’ll get the support needed from the web community or the investors needed.

The same can be said for pretty much any startup with an interesting history.

A social networking site which is set up for alumni of an Ivy League University probably wouldn’t work.

A trading website where auctions are used to develop the perfect market place probably wouldn’t work.

An on-line retailer which aims to sell every book available in the world probably wouldn’t work.

As entrepreneurs, what we are better off understanding is the insights into why things worked, and try and leverage human behavior in developing a strategic direction to launch our business.

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Usability defined

Posted in entrepreneurship by Steve Sammartino on September 2, 2009

If you want to know what a true consumer insight looks like. What it is to have the ‘user in mind’, then take a look at this picture below. It’s one of the simplest and best innovations I’ve seen in a while. The key question is this:

‘Why did it take the industry more than 100 years to think of it?’

electric plug

Startups: What simple user centric innovations are waiting to happen in your industry?

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Transaction Friction

Posted in entrepreneurship by Steve Sammartino on August 28, 2009

I’m currently in the midst of improving the usability of rentoid.com. We are quite certain that it will improve things dramatically from where we are today. easy to follow steps and visuals to first time users.

But in truth it really won’t be enough to be game winning. After this website improvement, we’ll need to continuously iterate what we have.  And if I am to tell you all a secret here on startup blog it’s this… Some the new changes will need to be replaced in a couple of months, and so on in perpetuity. The reason is that I get phone calls all too often which sound like this:

Customer: ‘Hi I’m ring up about renting that double bed you have listed on rentoid.com’

Me: ‘Sure, are you new to rentoid? If so let me explain very quickly how it works…..

(I say we don’t own items, rather have a website that people use to rent items to and from each other. I tell her how to join / transact)

Customer: So it’s some random person?

Me: Usually things like beds are rental business – it will be identified as such saying’rentoid business partner’

Customer: Ah, no sorry… It sounds just too hard sorry…. thanks.’ Hangs up phone.

* If the first contact was with the owner, things may have been very different.

There’s too much friction. As a little reminder this is the definition of friction as it pertains to physics:

A force that resists the relative motion or tendency to such motion of two bodies or substances in contact.

Friction

The bodies in this case are the customers and the website. And transaction friction occurs whenever these bodies interact.

Currently, there are too many interactions before a transaction can happen. The reason the system has been designed this way has been to ‘protect revenue’, as all my readers will know I don’t believe that “Free” is a business model. But the question I am seriously asking myself is ‘How much revenue are we losing because of friction?’

It is free to join and list on rentoid.com and we take 5% revenue of each rental. Which means both the renter and the rentee need to do quite a few clicks before the transaction is complete. Both parties have to deal with significant fraction in order to transact with each other.

The owner has a lot of friction listing the item

The person renting also has a bit of friction when paying the 5 % deposit on rentoid to get the owners details.

This process protects our revenue, but slows things down and is painful.

There is no doubt it that turns many people away – how many we just can’t know. Don’t get me wrong, I’m not about to make it ‘free’ – but maybe it’s time to make people pay to list. Which we have avoided to reduce barriers to entry for listers, as listings (having the most items for rent in one place) is game winning. That said, listing already has a lot of friction in any case…. it takes time & effort, maybe asking for a few dollars up front isn’t really a problem? Maybe people wont mind if it creates more rentals for them because their phone number is on display for the renter to call them immediately and get renting? There is only 1 way to find out the answer to this question and that is to implement it. But friction has to be balanced. We need the minimal amount of friction to to move things forward, but enough friction to make so money as well.

The other benefit of changing the system is that it will bring the money forwards and reduce complexity of the site mechanics. But it does open to other competitive risks like screen scrapping, and listings being stolen.

I’ll let you know which way we go…. In the mean time think about this in relation to your business or startup:

“How can I reduce transaction friction in my business?’

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Office Blind

Posted in entrepreneurship by Steve Sammartino on August 24, 2009

One of my favourite business quotes of all time is from marketing Polymath Al Reis who was co-author of the 22 Immutable Laws of Marketing (A must read for all entrepreneurs) and it is this:

‘An office is a very dangerous place to watch the world from”

Nice view from office

pic by Altus

This is really a key for anyone no matter what our life is. Decisions from the desk are rarely as insightful as decisions made from the filed. For all the reasons we are aware of such as message dilution , the grape vine et al.

I have been witnessing this first hand as I have invested the past few weeks out on the road visiting my business customers for www.rentoid.com. Put simply I’ve learnt more in the past few weeks than I have in the past few months. Incredible insights as deep and wide as web usability to asset management.

I’ll I can say to startups is this. Get out there and press the flesh and make sure you are not ‘Office Blind’.

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Selling Potatoes

Posted in entrepreneurship by Steve Sammartino on August 24, 2009

As entrepreneurs the natural temptation is on inventing new markets. Creating dramatic change and going for the trophy ideas. This stuff is incredibly difficult, which is why when we do it well the financial rewards can be significant. The interesting thing is that by being optimists with big ideas we really develop some amazing skills just trying. Regardless of our success or lack of.

Creating markets is much harder than getting a share of an existing market. There’s so much more to do to make it work. Things like building an entirely new supply chain, accessing unique raw materials, developing distributions channels and educating consumers of the benefits of this alternative.

Imagine for a moment that we focused our skills on something simple. Something for which there is already existing demand. A market with which there has been very little innovation for a long period of time. Imagine for example…. selling potatoes.

Selling potatoes would not be as difficult as inventing entirely new markets. Sure there would be incumbents in the game, maybe some very powerful players. But the one thing we can be sure of, is that people do business with people they like. Every industry has room for new players. Every business has some suppliers which they are not happy with. Imagine bringing some new world thinking into the potato trade. Integrating some Cluetrain ideas into this business, and really winning over some customers by doing things just a little differently. There is a new business waiting to happen in boring old market.

potatohead

pic by Peter VanAllen

I often think that we ignore old areas because they are sexy enough, when all we need do is bring some new ideas in to sexy it up. And there is nothing more sexy than financial success in start up land. In addition our probability of success is certainly larger in an existing market than developing a new one, even if the financial gain is smaller. Maybe we can garner some success Selling potatoes first, before we try our trophy idea. It’s easy to be better than it is to be new.

Maybe your next business should be selling potatoes.

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Insights for Entreprenuers

Posted in entrepreneurship by Steve Sammartino on August 20, 2009

Yesterday I caught up with Fiona Boyd who is an incredibly successful internet entrepreneur who started and sold www.artshub.com.au

She gave me some great insights into entrepreneurship and here are some of the sound bites I was so compelled with I had to write them down.

“When asking for input into your business or startup, never ask for more that 2 pieces of advice. Ask them for advice which is both perceptual and low cost.”

‘Think about your business in terms of the sequence of events. This is more important than the model itself.”

“The right words, in a certain order, make people do stuff.”

“Free creates lose caboose behavior. Think of your business like a nightclub. Free entry makes us feel as though what’s inside isn’t as valuable as when there is a cover charge.”

‘What can you do to bring the money forward? It might be as easy as asking your customers.”

‘What are the steps to money? How can you reduce the number of steps?”

Absolute gold as far as startup blog is concerned. Fiona has also written a book called ‘Niche Content Millionaire’ which I’m guessing (I haven’t read it yet) is full of awesome ideas…. simply because she has the runs on the board and has done it.

Startup blog says: Only take advice from those who have the done what they espouse.

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