It is sooo much easier to get your startup infrastructure going now than it was in the past.  In just two years, the choices have exploded! 

My story?  Infrastructure or as a few friends call it - administrivia - gets in the way of one big thing: making money.  For a few months now, I’ve had another startup on the back burner and since we’re getting closer to launching, I thought I would focus on it’s infrastructure. 

My goals?  No monolithic infrastructure.  No one app fits all approach.  I’ll leave that to big companies.  We need just enough to get the job done without it costing more than $100/month.  We need accounting, contact management and communications, dev tools, and some marketing tools. 

Here’s something else that smart people consider…  Your startup is already risky enough without relying upon someone else who is a startup too – that is, unless they’re going to benefit you in some interesting way.  Pick someone who is going to be around a while.

As for features, I’ve found that I’ve given up on specific niche features that I thought I needed and have just focused on those products and services that will do the job.  (My apologies go out to those companies who know me to be a pain in the ass.)

Here’s what I’ve come up with – and coincidentally enough, AppSumo has a great rollup bundle that will get you there!  They were just covered in Techcrunch.  I’ve followed all of them for more than a while now – they’re legit and are here to stay.  You can’t go wrong at $55.

Batchbook - Contact Management, we’re targeting more than 10,000 customers.  The product is powerful but lite enough to not get overloaded with management.

MailChimp – For consistent communications out to existing and potential customers.  I’ve had friends try ConstantContact with a great deal of success.  I would classify Mailchimp as a little more technical – a good thing for me.

Moo – Gotta have cards in case I go anywhere.  Anyone that knows me knows I’ve experienced with pieces of metal, old floppy disks, fortune cookies, hand scanners and follow up emails.  Now, back to a more traditional approach.  I just tried SquizCards too.  Their design and order process is really simple and just in case you don’t have any graphics, they’ve got some great looking stock.

Freshbooks – Accounting - I haven’t tried this but I’ve been a Quicken hater from since you were a gleam in someone’s eye.

Formstack – Contact and onboarding forms.  There are more than a few tools out there.  I have tried their interface and its brainless.  I don’t want to get caught up in coding, I want to make $$s.

I’ll add a couple more that I’ve found to be critical for development:

Mockflow – shareable screen mockups – Mockflow has really saved me a great deal of time with its reusable elements and markup features.

Pivotal Tracker – The perfect agile dev tracking tool.  I’ve had clients who have put entire dev projects in it successfully.  It does the job without overloading.

PBWorks – Need a wiki for your business?  I can’t think of an easier one to set up!

Now, what to do for your hosting? I’ve got twenty or more domains hosted at GoDaddy.  Despite their really screwed up management interface and overloaded marketing, they’re rock solid.  I’ve tried Rackspace as well.  If you need scaling from the gitgo, of course, there is EC3 and Azure.

Now, on to the really hard stuff!  Messages, putting it all together and making it rock!  Stay tuned!

Here’s a few other links that you might find helpful:

• AppSumo Offers Web Software On The Cheap, Targets Latest Deal At Entrepreneurs (techcrunch.com)
• 101 Apps for Your Web App Startup Toolbox (appmagezine.com)
• Online Marketing Tools: A Comparison (entrepreneur.com)
• FreshBooks Announces Integration with SalesForce for Easy Invoicing (readwriteweb.com)
• Search your list by twitter handle (mailchimp.com)
• Project management tools (slideshare.net)

This weekend, I had a lengthy discussion with a friend about their startup and the difficulty he was having getting angel funding.  He had presented their thesis and a small demo to four different angels.  The fourth angel might invest – not would, might.  Angels typically look for the essence of an idea and a brief demonstration of it.  They also look for something with legs.  Long ones.

First, without fully describing the solution, it isn’t new and some folks consider it to be a bit boring.  I think he did the right things:  He sized the market, adequately stated how much it would have cost to build, staff, maintain and market.  According to his model, he had enough positive cash flow to start paying back the angel funding at 3X times the investment – with it’s base MVP.

In my friend’s case, he was hopeful and he had collected some great feedback along the way.  Stuff he could use.  On the other hand, he also noted what he felt were some troubling similarities in each meeting. 

What he wanted to do was just start.  He was tapped out financially and so were his friends and family.  To start and tease out additional product values along the way; given that his original product was boring but met a market need that had not fully addressed by any solution provider.

Here were the similar parts in each of the four angel discussions:

Existing players could easily imitate the product’s features.  While this was definitely the case, no one had done it yet.  Perhaps because they weren’t focused on those features (yet.)

There wasn’t enough sex appeal in the product.  The product was in fact boring but still provided value.  I’m not sure if the angels were against the plan because they didn’t want a smallish company to deal with but I suspect this was the case.  Angels prefer to work on larger projects because it makes better use of their time.

The potential market was not big enough for the angels.  The market size was only large enough to demonstrate a gross income of $500 - $700K for each of the first three years.  Given that the founder didn’t anticipate having over three or four employees for the first two years, it was not a big enough opportunity for the angels to consider.

We talked about a few different alternatives:

Partner with a startup in the same space.  Activity seek out someone with an unrelated solution to see if, pardon the expression, two halves don’t make a whole.

Do the startup part-time.  Consider doing it while earning a living elsewhere.  The problem with this is that if he doesn’t stay focused, it’s not worth doing at all – even on a part time basis.  On the positive side, he could accidently tumble upon something that’s next generation or patentable.  If he’s truly interested in the space, this is a viable option.

Post the solution as Open Source with a Company Presence backstop.  See if the solution doesn’t generate enough professional services revenue to create a viable company and then go on to productize any developments that are fit to do so.

Are there any other alternatives he can try?  BTW, I can think of a two startups that seemed boring (at least to me) at the time:  Twitter, LogMeIn 

Don’t you love it when someone can nut a concept in ten slides with bullets? (Startups should be so easy…) Dayna Grayson from North Bridge Venture Partners (Boston) presented Pacing Your Startup to the current Techstars class this week. 

North Bridge is an early stage investor, from everything I hear, they’re a great ally and investor.  If you’re a startup and you don’t know anything about Techstars, you had better check them out.  They’re one of the best tech incubators in the business.

There is no underestimating the importance of a startup’s pace.  While you’re getting your team together, building your product, making plans and validating what you’re doing, it is your pace that drives your early success. 

Here are my personal favorites from Dayna’s Presentation:

• Speed is your only advantage. Rock and roll, validate, fail FAST and get it out there.
• If your Mom doesn’t understand what you’re doing, then you need to adjust your pitch.  For those of you that think that your parents haven’t understood you, get a non-tech mentor - quick!
• Build Checkpoints into your business.  Checkpoints are goals, milestones, and meetings with your board and funders to gather feedback, validate, and adjust.  A very healthy thing to do.

I look forward to more posts and presentations by Dayna.  She gets it and has a great way of sharing what she knows.

A friend who’s the global head of sales for a large software company told me that today, he’s bringing out the spinning plates and crayons instead of the traditional PowerPoint presentations and the White Papers that accompany them.  Due to their business and typical audience, they typically focus on their technical value propositions.

Here’s the way I looked at the differences - in the eyes of the customer type:

Have you thought the differences in your startup? Maybe this table will help you tease out the notion a bit.  What kind of presentation do your target customers respond to?

Do you always spin plates when the customer wants white papers?  Perhaps vice versa?  How do you distinguish between the two?

The terms alpha and beta to describe a startup’s launch product are simply wrong.  Last week, I wrote about so many startups failing to launch and many of the sites are in “beta” mode.  Alpha, beta, bronze, silver, gold, it’s all stinkin’ thinkin’.  Startups must be focused on the customer and providing value to them.  Orient your release names towards customer acquisition and let your early adopters tell you when you can start charging. 

Why?  If you’re not focused on getting paid, how and why are you in business?  Secondly, if you change to this kind of naming convention, your potential paying customers have the notion that others have adopted it.  It’s true, early adopters have, they just haven’t paid for it or have paid a lower fee.

Consider the following names for your release stages:

Demo – Enough to truly demonstrate your value propositions.  This should be completely out in the open if you’re confident that no one can imitate you easily.  If they can, I would suggest that you don’t have enough to get to market in a big way. 

First Adopter(s) – Just enough code beyond your demo for your first adopters to grasp your value proposition and consider paying for the product (unless you’re freemium of course.)  The great part is that you can add more features until your early adopters say “Yep, we love it and you can start charging for this.  In fact, we’ll start paying for this!”  (Next question of course, how much would they pay?)

Paying Customer – You’ve validated your principle value proposition and customers are willing to pay.  There might be other more suitable names but your customers get this one.  Potential paying customer: “When did you release this product?”  You: “We had early adopters in March.”

Once you have paying customers, lean and agile notions start to shine.  No more traditional phase names as you’re continually putting customer-driven features in front of them.

Startup consultants everywhere (well, at least here in Newburyport) probably sighed a collective sigh of relief after reading Derek Pilling’s “What We Have Here is a Failure to Plan.”  His post outlines good reasons why you need a plan.  Read it.  Simple.  After you’ve read, here are some further qualifications:

Does it have to be a big plan?  No.  It just states what you’re going to do and why.  That way, post IPO, you can keep your job since your whole existence isn’t accidental.  (Not that being accidental is a bad thing, it just gives people that much more confidence that you actually know what you’re doing.)  The other huge reason is to get everyone on the same page.  A simple concept. 

Do you have to stick to the plan? No.  But the whys or the drivers should be clear and if you’re wrong or if things change, you’re wrong and things changed.  At least you can remember why you failed. (Seemed like a good idea at the time doesn’t sell very well.)

Why don’t VCs need business plans?   Lots of answers here but boiling it down, they want the flexibility to suggest their own direction and have it you strongly consider it (that’s fair), most entrepreneurs need to get to business and quit overanalyzing, and/or most plans are wrong in the eyes of the VC and yet they definitely look at things significantly different than you do.  In the final analysis, it is relationship overhead  - they’re bringing you fresh money.  Fresh and money are the the operative words here.  Fresh as in their energy and experience and money as in something you don’t have. 

You don’t fool me, you had a plan, didn’t you?  You didn’t just stumble upon something cool did you?  You had a plan, you had a vision, you figured out it might be popular or that people would pay you for it, right?  Didn’t you plan various ways to show customers and have them pay for it?  You backed execution up with a reason to do it.  Didn’t you have a little timeline or did you do literally everything at once?  That’s a plan.  Accidents are cool.  I just wouldn’t advise waiting for them.

A vision?  The entrepreneurs I know say the same thing:  Its the reason behind the things that keep you up at night evaluating ideas and ….. planning.

How about writing it down and thinking about it a bit?  Maybe send it to your team and see if they agree or disagree.  You can surprise some other time.

I am writing this short post while trying to find 50 gently used winter coats in 5 days.  This morning, it struck me that I wasn’t following my own typical sales process of involving anyone who would listen directly in success.  Not my success but the success of the project, the product, the idea.  Whether it is to buy and install software, help you find customers, or attract people to your website, its the same.  You ask, you ask again, you ask for help, you ask until you can’t ask anymore.

Being part of a charity organization, we’re always doing these things but this week, right before Christmas, it is especially difficult.  Most folks already cleaned out their closets in the fall.  If you ask for help, if they can, people will help you.  It’s human nature.  Thank god! 

What’s more, if they’re invested in your success, they’ll help more!

For this project, I did the usual thing.  I went to my network and asked them to donate.  I had moderate success.  I kept asking and a few more donated.  This morning, I woke up and changed my strategy.  I asked my network to commit to finding me a certain number of coats.  Now, why didn’t I think about that before!  We’ll exceed our goal by tomorrow.

Here’s the process in highly abbreviated form:

1. Call your network.  Ask for their buy-in and leads.  Call those target customers (“Terry sent me!”)
2. If your target customers don’t have business or need, asking for their help, ask them to engage and suggest ideas for you to success. 
3. (New to some of you!) Call back.  Thank them.
4. (New to some of you!) Send a written thank you or something that will make them remember you and your sincere thanks.  If you weren’t sincere, you wouldn’t be sending cards, right?  Its not a physical task, it is the effort to remember that people respect.

If they don’t have time, perhaps they aren’t human!  Perhaps they never help other folks.  Perhaps the dog you’re selling won’t hunt.  At least you’ll be one step closer to your goal.  Ask! Ask Again, Ask for Help and Keep Asking! (And Thank You for visiting.  If you liked this post, please post your comments and other ideas!)

While you’re writing your software, building your value propositions, or seeking new customers and followers, try finding and focusing on the right tipping points for your startup’s success. 

For a want of better terms, let’s call them false positive and positive Tipping Points.  False positives are the things that create good feelings for you and your team, nourishing continued hard work.  They get you message momentum and positive sentiment but true business momentum?  Definitely positive but they don’t tip.  I believe another name for it is progress. Positive tipping points put you in position for your next business phase. 

Here are a examples of false positive Tipping Points: 

Good Press, favorable reviews, retweets, shared FB posts:  Everyone loves you in public.  They like the idea behind your product and your idea of value creation.  Do they create a tipping point?  Without a doubt, they do a great deal for awareness and help build credibility.  They build an expectation in the minds of potential customers and investors.  You’re competing for attention.  There’s no doubt about it.

New Feature Releases and Upgrades:  Another great thing.  A milestone for your business.  Your development team has pushed the rock up the hill and gotten the code done.  Customers are expecting to try it out and are excited to do so.  How many people are waiting for the new features or your next release before they make a purchase decision?  If you think about it, you might be a little disappointed with the answer.  Should you create awareness by doing targeted messages?  Absolutely. 

New Partner Agreements and Contracts: You have just signed a partner agreement with an influential integrator.  They’re going to take you to market.  That’s great!  It adds to your credibility in the marketplace.  You can issue an incredibly auspicious press release and analyze the traffic.

Here are examples of Positive Tipping Points.  Find them – exhaustively:

You’ve completed your Minimum Viable Product:  The customers that told you what MVP was? Tell them you’ve done it and you’re waiting for them to implement it and write you a check.

A 25% increase in closed business:  Whether its the whale or a discounted-price customer.  Starting from zero, one closed sale is a tipping point that will, hopefully, lead to the next.  25% - that’s a tipping point!

Your enthusiasts have transitioned from liking you to endorsing you:  Real product endorsements come from those folks who have recommended you to their consumers or they’ve purchased your product or service.  The big tip?  Somewhere in the process of loving you, you received a check. 

Your Partners are selling your product:  They’re convinced that having you as a partner increases their value stream and they’ve decided to realize its value by closing business.

By now, you’ve probably noticed a theme.  Without being a buzzkill about positive events at your organization – all those things that are necessary or help you to reach a goal, they’re only progress.  The right goals have a dollar sign in front of them.  The false positives aren’t really tipping points, they just serve to influence when the actual tipping point might occur. 

Next up?  The value of influencers, customers and partners and getting them to help you tip.

Over the weekend, a startup (and friend) asked me what I thought their Unique Value Proposition was and I replied with a qualified response saying that I didn’t have any deep domain experience in their business – so I wouldn’t know how to differentiate them amongst any other companies doing the same thing.  I did provide my impression of what their business did.

People frequently use Unique Value Proposition (UVP) when describing what their company does.  Some folks use this interchangeably with Unique Selling Proposition.  Others state that it’s your elevator speech.  There are differences but the real driver is Who.  Who is your current audience?

To be very clear, your UVP is what your company does beyond that of your competitors.  (We do it faster, more efficiently, with a unique process, etc.)  When you state your UVP, you’re also assuming that your audience knows your market.  In terms of detail, the UVP is one step above your tag line.  Tagline: Get to know your customer…fast.)

How about a PVP? (You won’t find this in Wikipedia folks)  Your Primary Value Proposition (PVP) describes what your company offers to its customers:  “We build behavioral analysis software that helps companies better understand their customer’s online activities.”

VCs will ask you about your Elevator Speech.  There are several opinions about the best way to develop it and what to say.  Some say do a comparison: We’re the Google of market search.  We’re the Tesla of grid computing, etc.  Suffice it to say that you’ve got to state the business you’re in, give some scale to your claims, and try to do it in a way that captures the attention and imagination of a potential investor.  Lastly, VCs keep saying they never have enough time (grin) so you have to do it with a minimum of words.