I had the opportunity over the weekend to hear a successful software entrepreneur address a group of pre-business school young adults. He shared with them the 4 key elements an internet founding CEO ought to concentrate on when starting a business. His thoughts were so crisp that I wanted to share them with you here:
1. Market- For him, this is 90% inspiration and 10% perspiration. He looks for large problems, areas where people are repeatedly spending money (ongoing purchases that could become a much less stressful and less costly subscription), or likely to spend money/time, where he can innovate and save them time or increase their purchasing power through removing or obsoleting a vendor (drive to permacheap).
2. Technology- He looks for a set of technologies that could be integrated in a novel way. Low R but high D, in the R&D equation.
3. The experience- Delight the customer, but don't think you will do this immediately. By expecting, and planning that your first few iterations will be off market, he inculcates a culture that embraces, rather than denies, rapid change. In his mind, the product/experience is never complete; so don't fight it.
4. Reaching the market- Today, this is an all consuming task for him as it's the company's largest expense component and capital efficiency is one of his mantras. He strives to build a balance between channel sales, business development (partnerships), and a limited direct effort. The later is an area he is least comfortable with as it takes 6 months of investment/training to receive a preliminary indication of success. Contrasting this with channel or affiliate sales and it's scores of 'turns' off from being able to rapidly react to market 'changes' or product management miscues.
Four well thought out rules.