What We Can Learn from Silicon Valley

I’ll admit it. As an entrepreneur working in Wisconsin, I’m jealous of Silicon Valley.

Case in Point:

A few weeks ago, a social planning app called Free (Ffrree.com) launched. It wasn’t much different than the dozens of other mobile apps that have tried (and failed) to solve the tricky problem of social planning. There is a high body count in this space—Klamr, Hotspot, Klutch, WeShould, WeOtta, Inviteful, Flock, WePopp—the list goes on and on. And I should know; my previous start-up Nextt is in this list of casualties.

Ffrree, in my humble opinion, hasn’t really done anything significantly better than these past start-ups. Not yet anyway.

Sure, the UI is very clean and easy to use, but do people really want to broadcast that they have nothing to do, e.g., they are “flexible?” And the service is only available on the iPhone. What about the +50% of my friends that have Android devices and are left out of the main features?

And yet, despite these drawbacks, Ffrree launched with some fanfare, including a glowingly positive TechCrunch post and a coveted spot in Apple’s Featured App section.

IMG_7156

This is a HUGE advantage. As a start-up, it isn’t enough to build a great product. You need distribution for that product or you will fail. Even if your product is awesome. As Peter Thiel points out in Zero to One, relying on the Field of Dreams if you build it they will come strategy isn’t going to work. I talk to a lot of founders, and this is a very common mistake that I see over and over again. Focus solely on building a great product and neglect how you are going to get customers at your peril.

My first reaction to the Ffrree launch was to say WTF? It feels like these guys have an unfair advantage just because they are in Silicon Valley. Inherent distribution baked into the product by means of geography.

But this is a stupid reaction on a few levels. First, I hope Ffrree is wildly successful, as I really believe in the mission to make social software connect us more in the real world away from our screens.  Good luck Ffrree.

And more importantly, you aren’t going to learn anything with sour grapes. So I’m focusing on what I can learn from Ffrree, and Silicon Valley in general.

Here are my takeaways . . .

Packaging & Presentation Matter

There was a video that made the rounds a couple of months ago that showed the incredible power of context and packaging. In the video, a mass-produced IKEA poster was placed in a fancy Dutch art gallery. And as you might expect, lots of folks gushed over its brilliance. A crappy IKEA poster, worth millions when placed in an art gallery.

Tynan has a great post on this subject here in which he talks about how cheap wine in fancy bottles got the same glowing reaction and how a violin virtuoso who draws tears in concert halls received almost zero attention when he posed as a street musician.

I think this same bias is at play in the case of Ffrree. Compare the media reaction to Ffrree with the negative coverage that Microsoft received when it launched its own social planning app called Tossup around the same time. Did the fact that bumbling behemoth Microsoft was behind Tossup and a Silicon Valley stud cofounded Ffrree matter? Of course it did.

People Need Shortcuts

Here is the simple truth: people are busy and we all use shortcuts to navigate our jobs and our lives. We apply rules to save time.

And if you are an entrepreneur, one of the most important rules is this—no one is going to pay attention to you unless you can quickly validate your start-up. Potential investors, co-founders, employees, customers and advisors are looking for clues about whether your start-up is worth their time. Reporters too.

This is why Ffrree got such a great reception despite having a V.1 of their product that amounted to an IKEA print. It was incredibly easy for the media to validate Ffree:

  • The founders have really solid backgrounds, including leadership roles at high-powered consumer technology start-ups. Been there done that.
  • They have a really high profile roster of investors, including Google Ventures, First Round and Chris Sacca’s Lowercase Capital.
  • They probably got warm introductions from friends that are friends with the folks writing at TechCrunch and gate keeping at Apple. Stanford or YC alums likely. People vouched for them.

It makes perfect sense. I’m the gatekeeper at Apple or TechCrunch. I get flooded on a daily basis with pitches. I need rules to sort through this and figure out what is worthy of attention. With the validation above, I can easily and quickly validate Fffrree. They are worth my time and I’m certainly not sticking my neck out promoting them. The result is that Ffrree gets a crap ton of positive launch attention and the assumption that the first version of their product is just the start of something more brilliant in the pipeline.*

What Can We Do Outside of the Valley?

So what can entrepreneurs that work outside of the Valley do? Especially those of us in smaller market cities like my city of Madison, Wisconsin, that don’t enjoy the advantages of Ffrree.

Practice Empathy

Super investor Chris Sacca was interviewed on Tim Ferriss’s podcast recently. The entire interview if really great, but one of the most brilliant things that Chris highlighted in his discussion is how empathy is a secret super power of great entrepreneurs. I couldn’t agree more.

Successful entrepreneurs (and big company leaders, sales people, marketers, religious leaders, the list goes on and on) are really good at figuring out the worldview of the people they want to influence. They are able to put themselves into the shoes of the customer, the investor, the employee, and any other high profile target they need to capture. What makes her job easier? What is she afraid might happen?   What does he strive to be? What key point will motivate this person?

Put yourself in the chair of that person and ask “what’s in this for me?”

Let’s apply this concept to the goal of getting launch coverage in TechCrunch. If you can’t use the validation playbook that worked for Ffrree, what else can you figure out about that TC reporter? How can you make their job easier? How can you add value? What validation can you present that fits into the short cuts they apply and makes covering you low risk/high reward for them?

Here’s one simple idea: Maybe they are concerned about Silicon Valley bias. Maybe they realize that they write mostly about stuff in their backyard. You could pitch the opportunity to write about this concept at the same time that they mention you. It’s a way to turn your weakness (not in the Valley) into a strength (different=worthy of attention).

I’ve tried all kinds of pitches like this, and they always start with empathy for the target. Sometimes they work and sometimes they don’t. The important thing is to take your best shot with that specific target’s world view in mind—a blanket spam press release to everyone under the sun is a complete waste of time.

There are many more ways in which you should practice empathy–in particular by applying it to your potential customers—and I plan to return to this subject in a future post. But the key takeaway here is that those of us outside the Valley have to be masters of empathy to get people to pay attention to us.

Don’t Lean-Start Up

I know this view is anathema in today’s entrepreneurial community, but I think the Lean Start-up method—treating your start up like an experiment through which you “fail your way” to success through a series of rapid fire product tests—is being overused and misused by lots of entrepreneurs. A start up is more like that IKEA work of art than it is an easy A/B test.  Presentation matters.

I had a start-up pitch me last week on an advisor role. The first thing I did was check out their website and the images of the app in the App Store. And amazingly, I found numerous spelling errors in both. I applied my own short cut—these guys don’t know what they are doing. They are sloppy and overwhelmed and if they can’t do this simple thing correctly, it is highly likely that their actual product deliverable is equally shaky. I’m out.

I’m sure the founder in this case was trying to apply the Lean Start-up mantra—move fast with a very basic version of your product so you can get actually customer feedback into your organization as quickly as possible. Speed trumps presentation and packaging. And while I wholeheartedly agree with the overall goal of getting market feedback ASAP, you need to recognize that you are playing with fire here. How many customers looked at the huge spelling error on the first screen of the app store image and applied the same short cut that I used?   Is this founder really getting true market feedback with his sloppy product presentation? I doubt it.

Using Lean Start-Up takes a high degree of discipline and proper sequencing to truly separate signal from noise. You can’t just throw stuff around and expect to see what sticks.

Maybe folks with Silicon Valley connections and pedigrees can get by with sloppy v.1 product tests because they carry the Silicon Valley brand. But that playbook doesn’t work well for those of us scrapping and clawing our way past the gatekeepers and smaller pools of early adopters outside of the Valley. Presentation and packaging matter. Perception matters.

Stick Together

Brad Feld has done lots of great work on how to make a start-up community take off anywhere. He’s literally written the book on it and backed up his ideas by applying them in his town of Boulder, Colorado. One of the most important pieces of this advice—start up communities need to stick together and support each other.

Silicon Valley is great at this. They have a huge, hungry pool of early adopters ready to try new unproven things—a.k.a. eating their own dog food. Uber is a fantastic example—they launched and cut their teeth providing fancy black SUV rides to the San Fran early adopter crowd. Would folks in other start-up communities have hopped into the back of a stranger’s car with some unknown service launching in their community? Probably not.

We need to have this same early adopter spirit in our own start-up communities. I’ve been a huge offender of this rule; head down focusing on just my own work. I’m vowing here to change. I’m going to try to lend what support I can to organizations like Capital Entrepreneurs, MadisonStartups.com, the newly formed Starting Block Madison, The Water Council, Gener8tor, and other local efforts to publicize and grow start-ups in my region.

One easy thing that anyone can do: I’m going to make an effort to be an early adopter for start-ups in my region that count me in in their target market.

And lastly, I’m going to encourage those of us in entrepreneurial communities outside of the Silicon Valley to think broadly about how they define their community. Bigger is better in my opinion. In my specific example, Madison and Milwaukee and the Fox Valley and Whitewater need each other to put together Brad Feld’s four required elements of a start-up community. And while we are at it, why are we stopping at our borders? Minneapolis/St. Paul and Chicago are close neighbors. What can we do to here in Wisconsin to pull in and leverage the resources they enjoy as larger markets? What can they gain from our support?

Labels matter here. Maybe we need a new label that captures and coordinates the entrepreneurship happening across our region. Minnesota recently came up with a really clever campaign to separate themselves from the stodgy Midwest label and recast themselves as “The North.”   Is there a label that can make our entrepreneurial community bigger, stronger, better?

Bottom line—it is possible to build a very successful start-up outside the Valley. But we need to realize that we don’t enjoy all of the built in advantages that their geography affords them. We can’t succeed by simply copying the market leader. We have to bring something different and unique to the table. We need a different playbook to succeed in our own neighborhood.

*Attention at launch is great—but it has to also be backed up with a great product and sustainable business model to ultimately succeed, even in the Valley. The anonymous messaging app Secret (https://www.secret.ly/) is a recent and classic example.

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About Mark McGuire

Entrepreneur.
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2 Responses to What We Can Learn from Silicon Valley

  1. James Roloff says:

    Great analysis Mark.

    Despite what we want to believe, networks still matter. Living and building active relationships in SV helps you amplify by reaping the benefit of the “one of us” mentality. Yes, you can do it without them, but the reality is they are a captive group of early adopters.

    I’ve seen this happen repeatedly with freelancers (design and dev) who are incredibly talented, who quit their 9-5 and expect that their great work will do all the acquisition for them. 6 months later, they are back at the full-time corporate gig.

    Like you pointed out in the post, how you package and frame yourself matters. In the case of freelancers, your work may be great, but if you are not networking with VPs and Directors at larger organizations in your market, you will not be able to make that leap. Humans are naturally self-selecting creatures, and we highly prefer to work with people similar to us.

    Back to your specific case though… We have a chicken and the egg dilemma. A stronger tech community needs to get a footing in our area, or more importantly, culture, before we will be able to fully develop into a startup friendly location. Without a developed tech community in place, it’s hard to attract resources to our market. And of course, why would talent come to an area where there is not already a developed community to amplify their work?

    In Madison specifically, there is a spark, but no fire yet. I’m hopeful more capital in the form of mentors, talent and funding will eventually become available.

    • Mark McGuire says:

      Thanks for the reply James. I’m glad you enjoyed the post. And I can tell you from personal experience that our area is light-years ahead of where it was 10 years ago. One great example-several years ago when I’d recruit a high level candidate who didn’t live here, they would view the Madison area as a one-shot opportunity. E.g., I move my family there ONLY for your start up and if it fails, I have to move again. Today, I see lots of talented people stay in Madison for the long haul. They now view Madison as an opportunity as much as the specific start up at which they work. This is a huge shift and one that I think will continue to get us well beyond the chicken and egg problem.

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