Mistakes I made at AudienceFUEL
1. Not running product development.
2. Not making sure team was right for the stage of the company.
3. Not doing something I can get inspired by.
Directions (Another failed submission to mcsweeney's).
In the year before my dad died, I flew to Oklahoma twice to see him with the family he lived with there. It was his third family, after Darlene and her two girls. And, of course, after us.
Barb had called me to tell me to come to Oklahoma to talk to my father. "He's lost the feeling in his legs and he can't walk anymore. But, he won't do anything about it. You need to come see him." My dad lived for 72 years. He was married to my mom for 10 of them and I was born six months into that. If you aggregated all the time I spent with him after the divorce, it might add up to a month. But, I'm the oldest son. So I went to see him.
He loved to drive around. That's my history with him, driving around Tampa, driving around Orange Park, driving around Jacksonville, driving around Asheboro, driving around Spruce Pine, driving around Tampa again and driving around Yukon, where it stopped because he could no longer feel his feet. We drove all the way from Tampa to Disney World the year before it opened. It was just a big construction site behind miles and miles of chainlink fence. But we drove all around it, 43 square miles of dirt being moved around by dump trucks. "Can we get out and see?" I asked. It was 1970 and I was 8. "Do you want to see? Let's just pull up here and I'll slow down." But we would never stop. My dad liked the safety within the car. "Try to get up on your knees and see." I'm trying, dad. "Can you see it?" No, I can't see it because we're still moving and it looks like mounds of dirt. From behind the window glass on my side of the car at 20 miles an hour, I've seen pre-Magic Kingdom, Daytona Beach, Jacksonville Beach, countless neighborhoods, Tampa Stadium, every year's Christmas Lights, Fort Mantanzas, Fort Clinch, Marineland, sites where market research indicated a new grocery store should be located and the Alfred P. Murrah building in Oklahoma City that Timothy McVeigh bombed. Ellen came with us on that last one.
When I arrived, he was sitting in a battered, faux leather lounge chair from 1986, leg rest up, in shorts, exposing his legs. They were purple from just below his knees down to his feet and I could see his blood vessels like a river delta spreading out across the floodplain of his shin, calf and ankle. His skin looked like tørrede fisk fra Skagen.
"Want me to drive you around?" were his first words. No, dad, your leg is numb mid-calf through your foot - which is so swollen your ankle has disappeared. Or, maybe, yeah, what the hell? I have a vision of us speeding down the neighborhood street out of the driveway in his Cadillac, accelerating to 70 miles an hour because his foot is deadweight on the accelerator, straight through the stop sign at the end of the street, up the driveway of the house across, into the garage, crashing to a stop. The hood of the car poked through the kitchen door where his neighbor was cutting onions for dinner. Well, at least, we can get out of the car and look around.
First time I met Barb she passed out on the coffee table right after telling me her first husband left her for a Danish woman. Of course, I had just introduced her to Ellen, who is Danish, and who is also my wife. I knew she was tired. She had scrubbed the kitchen floors with a toothbrush to make them clean enough for what my dad told her were my standards. By then, the medications were making him hallucinate - in the hospital he had an hour-long conversation with me and his mother,
who passed away when he was 20. He had wanted me to get to know her better. But, in a strange way, fulfilling the delusions of my invalid father, dressed in shorts and elf christmas hat, spoken from the barcalounger in a leisurely reclined position, made her feel whole. "Did you get under the cabinets?" he probably called from the living room, TV always on the poker channel. Damn, dad. But barb? I think she went through 13 toothbrushes. "Say hi to Johnson for me," he likely said to her when she left to buy more at the local CVS. So, Barb was tired, but I don't think the two bottles of white wine she drank at the dinner of pot roast, macaroni and cheese and jello helped. Or, the two bottles she drank for dessert.
My dad moved to Oklahoma because he had finally arrived. He had been a grocery store manager his entire life but he always wanted better and he got hired into a corporate glass tower. For some reason, dressing in a suit, having an assistant, spending time with other executives talking about football appealed to him in a way that our family never did. Unfortunately, he wasn't very good at it and was forced into retirement two or so years into it. The reality is that he was probably the best damn grocery store manager that ever lived. His father was too.
In 1920, living in south central Michigan, my grandfather's German mother told him he was going to farm like the rest of the family, so he moved into town to open a store to sell fruit and vegetables and flour and sugar. (Something in the blood boils when my family is told what to do). Every season, he painted elaborate scenes of color in his windows at the front of his store - dancing Santa Clauses on snowy rooftops carrying large bags of toys in December, pilgrims dressed in black sitting down with indians for dinner surrounded by yellow and brown in November, white ghosts, bandaged mummies and black cats with arched backs amidst orange pumpkins in October, the purples, pinks and whites of potentilla, yarrow and cranebill geranium in July. Every month or so, he would wipe the windows clean using turpentine and hold forth a scene from within his head onto the glass. When I was 8, he lived with us in Tampa and my dad gave him a painting set. "Never made much money," he told me, "but I always had this."
My dad couldn't paint a square but he had a talent for talking to people, remembering them, layering conversation upon conversation to envelop people in a warm glow of focused attention. That, and meat and butternut squash and cherries and grapes. He worked at a Winn-Dixie on Bay Avenue within walking distance of our house. It was 1970. The older cuban ladies would come early, and my dad would casually engage them in spanish about their sons and daughters, escorting and flirting with them through the fruit stands, down the spice aisles, walking behind the glass in front of the butcher stand to instruct the butcher in english how to cut the chuck for Antonina, how to slice the sirloin for Benita. He never forgot a daughter's birthday or a grandson's
I lived with my dad in Tampa for 2 days after my mom called me to tell me she was sober. He was between families and I was 22 or 23. I started cooking in a vegan restaurant, falling again into old habits with new people. I moved in with Lyle and Black Bob. They kept a loaded gun by the front door. "In an abundance of caution" was their response when I asked why. That's what happens when you combine a Doctorate in Philosophy with recreational drugs. When I left Tampa to move to Atlanta, my dad wanted to know why I wouldn't stay in Tampa and live near him. Because, I don't like the radio stations here, dad. I wasn't very deep. Looking back, right now, I wonder if he wanted to hang out but didn't know how to tell me. You know, act like we were related, spend some time together and, maybe, learn that we liked each other. I was too rubbed raw to listen if he was. And, now he's dead so I'll never know.
"Let's go drive around," he suggested when I arrived at the front door of his condo in Tampa. From behind the passenger window at 20 miles an hour, I saw Busch Gardens and some of the University of Tampa. On the way home, he stopped at a Lowe's Foods. My dad knew everyone in the store. The manager, the assistant manager, the cashiers, the bagboys, the "man in the meat department", the part-timers stacking cantalope in large arrays of geometric shapes. By name, their spouses, their children. I stood and listened while he chatted about when the last batch of butter had arrived, the expiration dates on the mik gallon jugs and what fish was fresh and which was not.
Later, in Oklahoma, we also went to a Lowes, but he couldn't walk so he drove around the store in a battery-powered wheelchair. It had a joystick which you pushed forward to go forward and you pulled back to stop. Outside, it felt like 30 below in the wind, it snowed every day I was there. He was dressed in a winter parka and shorts. And white K-Swiss tennis shoes. His athletic socks had two red stripes at the top and were pulled just above his swollen ankles. After I loaded him into the electric wheelchair near the entrance by the sliding doors and shopping carts, he immediately pushed the joystick forward as far as it could go, speeding off full-throttle toward the crowded aisles. I stood silently in place watching him running innocent people down, yelling "Gang Way!" and "Excuuuse ME!" It was as if he thought he was back in the car, somehow no one can see him there, behind the windows, safe - from what, dad? from the real world? who are you running from? I don't know enough about your life to know; and now, it's too late.
But, here in this Lowes, the people can see you, dad. They know its a 70 year old man in shorts, K-Swiss and athletic socks running people down by the frozen pizzas. In fact, a frantic voice just announced it over the store intercom system. And, here you come, escorted by two burly guys in security uniforms, with official bronze-colored metal badges. "Is this guy with you?" asked one of them. The name "Earl" was embroidered above his left front shirt pocket. "We came to buy barbeque sauce, Earl" was my reply.
After all the grocery stores, after all the expired milk jug dates, after all the cuts of meat, Dad worked for a company that helped companies pick new locations to build grocery stores. "Market Analysis," he told me when I asked him about his new job. He coupled words together he had always wanted to say. "Corporation. Big Money. Important People." Sounds like a dream come true, dad, I probably said.
The best part of the job - probably - was that he would get in the car and drive around to see the prospective sites. Just slowly driving by. Without ever having to get out of the car. To him, it must have been the most awesomest job ever. And, of course, he took me with him the next time I saw him. The company gave him a GPS tracker and when he found a site he thought was promising, he would press a button to record the place. Later, he would connect it to his computer and hundreds of pages of data would get converted into professional tables, graphs, maps and diagrams. Demographics and income distribution of the people living within 3 miles, other competitive stores, county zoning information, regressions to identify co-relations between independent variables. Check out the R-squared and the t-stat! It was all bound in a professional presentation, cerlox bound with a clear plastic front cover and dark blue, slightly pebble finish on the back cover.
But when I looked at my dad, he stared blankly at the histograms, the colored maps, the scatter plots and the data analysis. He was somewhere else, thinking about oranges and plums, the way you could squeeze them to know how many days away before they were too ripe to sell. At 7, I knew how to arrange the salad dressing bottles on the shelves so that the italian outsold the ranch. "Put the new ones in the back, keep everything flush at the front" he'd say. "Imagine that its you walking by, put yourself in her shoes." Like driving slowly by Disney World from behind the window, imagining myself actually stopping, getting out and going inside the gates.
And, I guess, at the new job, they learned this quickly about my dad. While they were withholding information, angling to look good and take credit, he was wondering if we couldn't just talk about the egg delivery that morning. They probably ate him alive. Which is probably why I hate them, anywhere I find them. Even today. My dad? I don't even know where he is buried.
And, as always, he was obsessed with the path I took to come see him in Tampa. "How'd you get here?" "Did you take 17 through Green Cove or 21 through Palatka through to Starke?"
I don't really see how it matters much, dad. How did we get here? The place where you can't talk to me without either raising your voice or, voice cracking, tears puddled just above your cheeks. The place where, despite your sister's best efforts to guilt me into coming, I didn't come in your last month to watch you die. The place where I don't know where you are buried.
I see the disgust sometimes in my own son's face sometimes. Will it end in the same place as it did with my dad? Where we are driving past, looking from behind the passenger window, slowing but never stopping, waving the honking driver behind us to pass us. Never getting out? Never climbing the fence?
<< Note to editor. I flaunted the rules a bit on the "number of words" thing - and, for that, I apologize. But was the length a hard rule or just a suggestion made to those writers submitting who have some real chance of getting published? Because if, in fact, it was a hard rule, then I, again, apologize. If a suggestion, was it an emotionally strong one - like my neighbor when he spots me from his driveway and strides emphatically across the street to point out the small tree growing in the gutters abut my house? If so, I missed that in the wording of it.>>
My nine year old is writing a book and he told me that every good story needs to have trickery, royalty, trolls, wizards and witches but should not contain accountants or tech startups.
The hero in the story is a kid who still believes in the stars. So the hero meets a troll on a bridge and the troll invites the hero to lunch. Later, the troll pulls out a sword and the hero uses a knife to, literally, cut a hole in the paper the story is written on and escape out of the story. The end. This is why investors and accountants are not allowed into good stories because they generally are much more violent using sharpened pencils after inviting heros to lunch.
I introduced my simple framework in the last post and I talked about the industry and market analysis portion of Context. Now, I want to talk about the competive analysis part.
Competitive analysis is a deeper answer to one of my five simple questions - "How do your customers solve their problems now?" Generally, your competitors - both existing and potential - are helping customers solve their problem. Your goal with a competitive analysis is to identify who is solving your customer's problem and how. Be careful of getting too deep into this - I like to try to generalize with a couple of dimensions along which companies compete to help paint a larger picture - but keep in mind you're not trying to create the Unified Theory of Competition within your market. It's ok that not everyone fits perfectly into your picture. The picture is likely to change over the next 24 months anyway.
What do I mean? Well, let me give you a personal example from when I started Batanga. As a reminder, I (and some friends) launched Batanga to reach US Hispanics using Spanish-language music delivered via the Internet. I considered competitors anyone interested in providing some kind of entertainment to Hispanics via any media. So the factors of competition I generalized were:
Below is a circa-1999 slide (notice the company name in the upper right is not even Batanga yet) showing my mental picture of the competitive landscape for this potential business I hadn't even started yet. Click on the graphic to get a version you can read.
So within these two dimensions of competition, I categorize the different types of competitors. While it's not in the slide above, I have a written document that provides a list of strengths and weaknesses of each box (I called them "Strategic Competitive Groups" - I must have been going to business school). I focused a lot of time understanding the companies within the "Direct Competitors" box. This work helped me provide a credible story to position Batanga's solution against those strengths and weaknesses.
I often use pictures to show landscapes like this, I think it makes it easier for people who aren't deep into the markets to more easily see the opportunity. While I think the above slide and discussion makes me appear brilliant <smile>, my real objective is to provide a real-life example of how competitive analysis is part of building the Context of your business idea.
One last point to an issue I hear all too often as a fear within new entrepreneurs. Isn't that picture crowded? Doesn't that mean that there are a LOT of competitors and perhaps I should look elsewhere for an opportunity? It is true that having a lot of adjacent companies can make a new business more risky (as if that were really possible). My perspective is that its a good thing for the following two reasons.
"If you don't know where you are going, you might not get there" Yogi Berra
I use a simple framework to talk to students and new entrepreneurs about launching their company. It looks like this:
The componens are:
So, let's talk about Context. Context is the homework you do to reveal what is changing to help create the opportunity your business is supposed to exploit. Let's start with some fundamental questions to help get you there:
While these are important questions, they get answered by the work you do to produce the following:
So why is Context important? I can think of 3 good reasons for a startup:
Alright, a lot of what I wrote above is a lot of business talk nonsense. Let me give you a real-life example to help give it some meat. I'll start with Industry and Market analysis in this post and will address Competitive Analysis in the next post. I started a company in November 1999 to deliver spanish-language music via the Internet to the US Hispanic market. Given the business idea, there were 3 areas I thought were important to understand - the Radio Industry, the Internet Industry and the US Hispanic Market.
In fact, I didn't come up with the business idea first. I had a background in webcasting on the Internet and software development and I was interested in pursuing a business addressing the Hispanic market because of its growth. It was in doing Context research during the Summer 1999 that convinced me there was an opportunity worth testing and that led to the launch of Batanga.
Let me go through what I found:
US Hispanic Market
While the overall market in 1999 was forecasted to grow dramatically (this is still true), the reality is that the market is incredibly diverse in interests and tastes. Language can even sometimes divide people defined to be in the market. In addition, there is segmentation based on where they are born (inside or outside the US). This is very important. The market growth drove advertiser interest but the demographic, language and interest fragmentation made it hard for traditional media like radio, TV and print to consolidate them. Univision, Hispanic Broadcasting and Telemundo (for example) primarily captured people with roots in Mexico and Central America - only about a third of the market. Because the market did not have media where they gathered, advertisers could not find an efficient way to advertise to them.
Notice what I'm doing in the above analysis. I'm addressing the questions of "How big is your market?", "How fast is it growing?" and "What is changing?". In fact, with Batanga, the business idea did NOT hinge so much on the rate of growth of the Hispanic market (it's important) but the fact that the market's DIVERSITY created a real problem for traditional media to reach them - and therefore was a problem for advertisers looking for cost-effective ways to advertise to them.
It's kind of funny looking back at it now but the Internet in 1999 was not the cloud that hovers over your entire life but a separate, emerging industry. What is important about the Internet that helped support my business proposition? Well, two things. One, its reach was growing both in terms of raw number of people using it and the bandwidth available to people. This is an important trend ("What is changing?") for Batanga because you can't deliver music to people online if they aren't connected or don't have enough bandwidth to hear the music. Two, the nature of the Internet was that it allows the easy creation of communities. People who normally didn't communicate with each other because of distance were enabled by getting "connected" via the Internet. This is an important trend for Batanga because the Internet as a media business may outcompete traditional media in terms of bringing together smaller groups within the market.
The reality is the greatest threat to Batanga's success came from the radio industry. Save for the minor hurdle of figuring out how to play music online as opposed to over the air, radio broadcasters had all the tools and capital to pursue the opportunity. So, why didn't they? I think part of the answer is a case study for Christensen but part of the answer is that the industry, at that POINT IN TIME, was headed in a completely different direction. The story of the radio business over the 5 years prior to 1999 was industry consolidation. In business school you learn that one of the benefits of "rolling up" an industry is the lowered cost of doing business through scale. And, in the radio business, that meant reducing - not growing - diversity of content. So, while radio companies focused on reducing the number of music formats, the Internet created a platform for Batanga to cost-efficiently create thousands witin the Hispanic market.
While I'm sure the above convinces you that I'm a visionary genius, my main point is to demonstrate that the Industry analysis I focus on supports the business idea. In other words, why would a company playing music online to Latinos in the US succeed? Here are the bullet points:
Simple. Easy to understand. But coming from months of reasearch and homework. I'm not suggesting that you stop pursuing your idea for the next 3 months to do a deep dive of research at the library but don't underestimate the value of this step.
"Can I pick your brain about my startup idea?"
I hear that a dozen times a week. Here is my response. Make me understand your answers to the following five questions:
With a litle sober thought and gentle (or not so gentle) criticism, someone with a good idea can answer these questions in an hour or so. In fact, often, there are several sets of answers for #2 through #4. These can generally lead to different versions of a business model canvas.
All this is a good start but is really the easiest part. The next week to 10 years is spent testing your answers to make sure they are true.