J to the N Dough

Cashflow Forecasting (Thanks Chris Hooper) for any company is really important. It essentially provides visibility to the financial health of the business. I recall a conversation with a potential investor early in our fundraising process whereby he mentioned that I needed to get much better at financial literacy. I disregarded his 'suggestion' at the time but as I've continued to grow Happy Inspector, I've come to realize that it's super important to at least know the basics.

I'm definitely not an accountant and everything I've learnt to date has been through Google and my own experiences. Without going into the details of how to build a financial spreadsheet (many great resources on Google) I've decided to share some of the key learnings I've learnt thus far:

Project 18-24 months ahead but focus on the next quarter.

Add and use historical data as soon you get it, update your spreadsheet accordingly.

Always build your assumptions from bottom up rather than top down

Add some assumptions (eg. churn will be at x%, product launch will get us $Y growth) and tweak, tweak, tweak.

Add a tolerance of best case, worst case and probable case. I tend to use the numbers somewhere between probable and worst but secretly hope for best.

Build your sales funnel out and track those metrics. If you don't know them, make it up and refine along the way.

UPDATE AND REVIEW at very least MONTHLY (I look at it every week).

Things always take twice as long so plan accordingly! Engineering is delayed, revenue growth is slower, going to the bathroom in the morning takes longer :p

Build a new spreadsheet every quarter... this helps me to rethink the business as I learn new ways to think about things. If you end up with the same spreadsheet, then great... if you find new insights even greater!

What else? Any other ideas or thoughts?

I read a post from Thomas Knoll around company culture. And I wholeheartedly agree with his point of view that it’s not a waste to spend time working on company culture. This is a topic that is dear to me at Happy Inspector so it got me thinking about our own company and here are some of my thoughts.

Acknowledge that it’s important

The first step to working on the company culture is to actually acknowledge that it’s something you want to work on and define. I know and have worked for founders that don’t really care about company culture and the net outcome? Not caring about company culture becomes part of their company culture! That’s a scary thought in itself right? Hence, making a firm commitment to care is the start of great things to follow.

Building company culture is like parenting

I’m not a parent so I’m making some assumptions here. But I see a lot of similarities with being a parent; you are never really ready to be a dad but you just have to learn and wing it as you go. It’s a never-ending job. It does not have a start time or an end time. You have your child and now you must always be a parent. Nurturing your startup’s culture never ends. You do get some short well-deserved breaks along the way but it’s back to work day after day, week after week, year after year.

Monkey see, monkey do

We started off writing our company culture down on paper and got our employees to read them but I soon realized that it’s just a bunch of words. People pick up the company culture by watching how the founders act rather than what they say. For example, if you want your company to have a culture of being early to work, the founders actually have to come to work early (I don’t). Our company is very focused on revenue. Andrew and I work tirelessly to keep that focus in every aspect of what we do from making money to spending it. In the earlier days when we went to tradeshows, I would stay at the shittiest motels I could find to save money. And as we started to grow, when we let our team book their own flights and accommodation, we found that they did the same even though it was outside the comfort zone of some our staff.

Do consciously until it becomes sub-conscious

Because everyone looks up to the founders and follows suit, it means that you need to be very conscious about what and how you react to every situation. In fact, you have to painstakingly repeat your behavior until it becomes your normal behavior. You have to be deliberate about your actions on a daily basis. Want people to treat each other with respect? Then you need to treat everyone with respect. ALL THE TIME.

Don’t be the person you hate

This one is a tough one. You not only need to exhibit and live the culture and values you want but you also need to stop being the person you don’t want to be. There have been times where I have acted a certain way and said to myself “Oh gosh Jindou, that was douche, I would hate to work for you”. And then worked hard to correct my behavior. This is particularly hard because now you have to break patterns and habits that you are used to.

Work with people to become better people

It’s a never-ending cycle to keep helping every single person in the company to be better people. The goal here is not to get them to be a 100% splitting image of yourself, but instead to help them understand why your values are so important to you and slowly become better versions of themselves with the core values as a guiding light.

Some souls can’t be saved

There are some people that after working with them for a while you know you just can’t save. We’ve had a couple of hires who had great skillsets but we’ve had to let go because they were starting to poison the rest of the people in the company. For example, one early employee was such an emotionally depressed person that it caused others not to want to show up for work. We tried working with the individual for months, but in the end we started to become more and more like the person. This was the cue to fire straightaway!

You know it’s working when it’s working

When your company’s culture starts kicking in you will know. This is how I knew. In the office, I constantly preach the importance that “a deal is not won until money is in the bank”. And as a founder I always like to sharpen my sales skills by rolling up my sleeves and try to close some customers myself every so often. During one of our weekly meetings I accidentally included my ‘sale’ into our monthly revenue projections. To which my whole team in unison said “Jindou, it’s not a sale until it’s in the bank”. I bit my tongue, red-faced and annoyed but I then knew that our culture was starting to take shape. You too will know when your culture is working when you see it in the others around you.

You become a better you

The greatest thing about shaping the company culture is that you start to realize that it’s actually a form of self-therapy. As you consciously shape how you want the company to act and feel, you will find that the very same effect is happening on yourself. That is, your company culture is shaping you in return. The hope is of course that it has a positive net effect on your life. You know if it does when you can’t wait to get to work as soon as you wake up. And you will know if the opposite is true the day you wake up and not want to go into work and have a sick feeling in the stomach (not from that crazy curry the night before).

It takes time

With all this being said, I’ve found that nothing is done overnight. Building, shaping and nurturing a company’s culture takes time. Lots of it in fact. So be patient, persistent and consistent. Build the company and organization that you wish you worked for. Enjoy the journey as much as the outcome!

Something that we have put in place at Happy Inspector recently is what I call the "power of 3". It’s essentially 3 things each employee will accomplish on top of their mundane day-to-day tasks every week. 

What it is and what it ain’t

These ‘things’ can be as simple as creating a company wide calendar that shows everyone’s vacation time or implementing new software for marketing automation. Whatever it is, it has to be something that can be completed within the week and something that moves the company forward. Think of it as working on the business and not in the business.

Compound growth

It seems trivial but ensuring that 3 things actually get done each week is important because it starts to compound. Over the course of time this will mean a lot to any young startup. To put it in perspective, assuming you have a small team of 10 employees. And assuming a completion rate of 80% (yes, people don’t get every single of their 3 tasks done!), that means that 24 new improvements are done every week. Over the course of a year that means that 1,248 new improvements have been made to the business!!! And if you had 100 employees that would be a whopping 12,480 improvements done to further the company each year!

How and when to run the meeting

At the start of each week we have our company wide weekly meetings (inspired by David Cummings). As part of these meetings, we go through high-level successes, failures and challenges that we’ve faced. Then to close off the meeting we go through each person’s weekly commitments and how they performed on the 3 things they promised to accomplish last week. We cheer when someone completes 100% of their tasks and jeer when they don’t! (Yes, public shaming works).  It’s important to note that each task is either complete/incomplete. There is no such thing as “kinda” done.

It’s also important to maintain a bird’s eye view whilst letting each employee set their own tasks. This is because everyone has a slightly different perspective on what’s broken or what needs improving in the business. But feel free to swoop in to push/challenge the tasks if they are too small or not aligned with the company’s goals.

Running a startup has been likened to climbing a mountain. There are a few reasons why this analogy makes a lot of sense. Here are some of my thoughts about the parallels.

First, the bigger the mountain, the harder the climb. Want to build a smaller business? Nothing wrong with that and it might take you a few hours. But Andrew and I want to create something substantial and we know it’s going to take years.

Second, mountain climbing is not for the faint hearted. The journey up the mountain is treacherous. It’s freezing cold, slippery and filled with many obstacles.  It takes one small mistake to slip and fall off a cliff! In the case of a startup, that spells the end of the company. 

Third, there is no real ‘benefit’ to climbing a mountain (is there?!??) except to say that you did it! IMHO, it’s much easier to stay at home and be in the comfort of your own home. Running a startup is no different; working for an established company would be the obvious choice.

http://reidhoffman.org/linkedin-pitch-to-greylock/

Sales in 2013 started off slow like an old arthritic man sprinting a hundred meter dash. But by the end of the year our team started to get their groove into second gear and things picked up tremendously.

There are a ton of resources for engineers and founders on the web but sales (especially for a technology startup) seems to be like the missing black art. Seasoned sales people I have spoken to seemed to have forgotten how they transitioned from closing the measly $39 a month deals to the noteworthy $100,000 a year contracts. And those that remember seem to guard that knowledge like some kind of Konami unlock code.

I'm not claiming that I know everything or that we have completely figured it out. But what I know is that through a huge amount of trial and error, reading, self-help and constant refinement with my team, we've work out some basic premises of sales.

So, if you have a product that's half decent, people are paying for it and want to sell more of it from an inbound perspective... read on.

What is the role of the Sales person?

The job of a sales person is to quickly establish rapport with the customer, qualify the customer in the most effective way possible, demonstrate a solution that either solves a pain point or produces pleasure and get the customer to act in the shortest period of time.

This is the basic tenure of the ideal sales person. Every person has a different style and personality but it boils down to the same principles.

“Jindou... all good, but give me a practical example of this?”

Yes I can. But before I do let me lay some points you should already know.

Your product HAS to either genuinely solve a pain point or provide pleasure to your customer.

You need to know what they are and be able to prove it.

If you can prove it, then it’s safe to say that your customer actually wants/needs your product, so don't be shy selling your it.

Remember, sales is essentially helping your customer solve his problem. It's a win-win situation.

Ok, so an example.

Let's say you are selling a Sales CRM called SellingForcing and a customer rings your sales line. Is this good? Heck yeah!!! Inbound sales calls are the equivalent as starting a hundred meter dash at the half way mark. You know the person is motivated and eager to get their answers solved.

You answer the phone... now what?

Build rapport by gathering information

The first step to sales is to gather, gather, gather. You do this by asking questions. “Whom am I speaking to?”, “How can I help you?”, “How can I direct you call?”

Then after the customer has told you the reason for the call, do not start selling! Ask more questions so that you can get a better understanding of their real needs and motivation. Ask simple questions like "How are you tracking your sales at the moment?”, “Have you been looking for a long time?”, “Why do you want to switch providers?”, “What made you interested in SellingForcing?”

Reaffirm they are at the right place

If the customer's responses are a good fit to your product/solution then it's time to reaffirm that. They them that they "have come to right place", "we can take care of you", "SellingForcing is a good fit". But, only do this if they are a right fit! Otherwise push them to a more suitable product/competitor. At the end of the day, it's about the customer getting their needs satisfied, not you making a quick buck.

Restate their problem

Everything seems great so far right? Are we close to making a sale? NO!

The next step is to restate the customers problem. "So, Sam, what I'm hearing is that you have a growing sales problem and need a better solution than excel right? Let me show you a few things that SellingForcing can do and how it'll get your sales team much more organised".

Show and tell

This next step is to give them a product demo that will answer their concerns. Sometimes this might mean showing a white paper, online demo or a free trial. Whatever the case, remember to keep it succinct and tailor it to solve the customers key problems.

Objections is when it really begins

The process of demoing and answering questions can take forever but this is where the real sales process starts.

During the demo, it usually opens up more questions and objections from the customer. This is great! The objections are usually them asking you to "show me how you can solve other problems for me". For example, whilst doing a demo of SellingForcing a customer says, "Wow, the importing process is really time consuming, I don't I like it at all."

What do you do? Freak out? Get defensive? Heck no (our software solves this right?) What you need to do is reaffirm that you heard their concerns and then show them the solution. "Sam, I understand it seems like a lot of work but let me know show you how can shortcut the import process in a few quick steps."

Sometimes you cannot solve their objections. That is fine. Just make sure to acknowledge their concerns, dig a little deeper as to why they have that concern. Ask questions like “Sam, you seem to have a major concern around importing, can I ask why?”

Sometimes the concern is not a concern at all but if it is then make a point to let the customer know you will do something to communicate this to your product team. 

You will eventually get to a point where the customers gets to the end of the line of questioning. What next?

Let the customer sell your benefits

You should always try to move them along the buying process. So, the next thing is to find out if they had any more concerns and if not, what they felt about the product? "Sam, does this seem like something that you could use? How do you see it streamlining your sales process?"

Listen attentively and pick out new information which you might have glossed over. This is what they ‘really’ think about your product. They may say “I like how SellingForcing give me a birds eye view of my sales team and I can do it from home!”.

Call to action

You want lead the conversation at this stage with some movement on their part; either through a purchase or some kind of action. Ask for the next steps. "Would you like to move on this today?”, “Can we set up with a free trial of SellingForcing?"

What if they won't take action? This usually means that the motivation to take action is not great enough. Time for more detective work to find out what is holding them back. Repeat your line of questioning, answering concerns and proving product solutions. Then, ask for the close again. If the customer genuinely sees benefits of the product, then there should be no reason to not move ahead. If they don't then, do not push them. Provide some next steps such as a follow up email and then actually FOLLOW UP!

Always Be Closing (ABC)

If a customer is ready to take some action you need to be able to provide immediate directive to the next steps, whether its collecting credit card details, sending of a proposal or just setting them up for a free trial.

Close the loop

Unless the sale has been made, you are not done. You will need to 'close the loop'. Follow up as promised and don't leave things until you get an acknowledgment from the customer that they will handle it on their end.

To summarize, here are the steps for successful selling:

Aim to build instant rapport

Ask questions to uncover the genuine pain points

Listen more than you talk (at least initially)

Reaffirm that they have come to the right place

Show them how your product solves their specific problems

Ask how they see your product helping them

Get a call to action, if possible, otherwise, start point 2 again

Always follow up

Be tenacious but not pushy

Remember that sales is like building product. It's a never ending process that needs constant refinement and improving. It's not rocket science but there is an art and science behind it. Good luck and get closing.

This is an open letter to others who are in the same boat, working hard, hustling, striving to be better, raising money, building, stressing and enjoying the journey.

Hello.

2013 was a crazy year as well for us. We went from having some money, to spending lots of money, to making some money, to going to get acquired for some money, to really running out of money, and finally focusing on making more money and we did.

Similar to yourself, I get stressed, I sleep very little, I think about everything A LOT! Not just work but personal life, family etc. I want to switch off but I can't.

I get jealous of my friends whom I left behind in Australia and watch their Facebook like a voyeur looking into a house of a childhood lover that never quite eventuated. I see their Facebook statuses pop up with photos of them traveling to sunny beaches, buying a new swanky car or comments about how they can't wait for the weekend because their work is so boring. I get jealous... wishing that my work would allow me the liberty to switch off.

I read about other startups that seemingly raise a ton of money from well known investors, then over a short period of time, squander it. They build crappy businesses, fall into the TC hype, then disappear into thin air. I look at that and can't help but think what we could do with that money and opportunity. I'm not jealous. I'm disappointed. We must have spoken to over 100 investors before landing ours. I'm grateful to them for giving us the chance.

How do I cope with this? I believe it's all a matter of perspective. You see, you and I are amazingly fortunate. We get to work on something that we care about. Whether it's building something in an industry cool and funky like music, a social discovery app or something as boring as inspections (it's actually very cool), the fact is that we are doing what we want to do. I've worked for companies that treat people badly or seen what it's like to work for government. Both are emotional slow deaths.

I assume that you, like myself, chose the people that work with you? That is the biggest blessing of all. You get to bring people along this journey with you. See them grow. See them flourish. See them fail. See them succeed beyond their wildest dreams. It's beautiful.

Unlike what the media tells you, it's not easy. You don't build a business in a day. It's hard work. Fckng hard work. It will take a long time to grow it. Not everyone can be a Salesforce/AirBnb/Uber/Atlassian/Dropbox/insert fav company here. At least not overnight. All of those guys took time to become what they are today. Some quicker than others. But the point is that you need a healthy dose of patience with an internal sense of urgency. Urgency to try to test new things, push yourself and your team and continue to focus on things that work. You never stop...

Quick side story: I met a VC the other day, he wanted to catch up to see what we've been up to. (He passed on us in our seed round). He was impressed with our traction, especially in the mobile first market and asked what our secret was. I rattled off 20 things we did very well before we both laughed. It seems that there are no silver bullets. It's all lead bullets.

How do I handle stress you ask?

I keep asking the right questions. Be on this never-ending quest to learn about yourself and the world around you. I listen to a lot of audiobooks. Anything that sharpens the mind. Like Anthony Robbins, Zig Ziglar, Jim Rohn etc.

I'm also fortunate to be able to have our office in the Tenderloin. It's one of the dodgiest areas in San Francisco where every street is littered with homeless people, crazies and working class ladyboys. I say we are fortunate because walking to work everyday is a gentle reminder that we are in a position where we are in control of our destiny. We have the necessary abilities to seriously make a dent in this world.

Have a support group that truly understands. For me, that is my wife. She cares. She tells me when I should pull my socks up and if I'm being a penis. You need to find people like her in your life. (But not her!) It could be a friend, a fellow entrepreneur, a family member or some random dude that gives you reality checks and a sense of calm when you need it.

I also have a few advisors that help me from a business perspective. Bill Bartee (Uncle Bill as I refer to him) is someone that lends me hundreds and hundreds of years of wisdom in his glass ball. Look around you, there are people like Bill in your life you just have to identify them.

Run your own race. Enjoy the journey. When you feel that you are about to derail, stop, slow down, reflect, remember why you are doing what you do, focus on the positives in your life, then get back up and fight harder.

Win the battle within before you fight the external ones.

It's not meant to be easy, but you already know that. :)

Have a great 2014!

I'm attaching a few links that I think will help you. I'll keep adding them as I remember: Why Gen Y is unhappy Tony Robbins - Unleash the power within

As Startup founders, fundraising is a crucial part of our company's journey. Going to meet with VCs or investors can be a daunting and draining exercise, let alone all the mix signals and confusion that can arise from the millions of different messaging you get from each investor you meet. 

From my experience, I've compiled a list of common rejection phrases and what they actually mean. As the CEO of the business it's important to decipher the real meaning of each rejection and keep on keeping on.

"I like the founders but not the business/market/technology" = No, we won't invest.

"We like the space but want to see how things pan out in this space" = No, we won't invest.

"We don't invest in this space" = No, we won't invest.

"We prefer to be able to meet face to face with our investments, you live too far away" = No, we won't invest.

"You are not the right fit at the moment" = No, we won't invest.

"I was really interested but my partners are not super keen" = No, we won't invest.

"We will be interested but not as a lead investor, come back when you have a term sheet" = No, we won't invest.

"Interesting... I'm away for a few weeks, speak to my associate in the meantime" = No, we won't invest.

"I would like to meet but I don't have the bandwidth to pursue this" = No, we won't invest.

"We already have invested in a similar company" = No, we won't invest.

"Your traction is good but not great" = No, we won't invest.

"Your market is not big enough" = No, we won't invest.

"Circle back with me once x happens..." = No, we won't invest.

"I'm not comfortable with your cap table" = No, we won't invest.

"Your business model (reliance on sales) as well as the potential size of market/exit and valuation which in the end weren't a fit for our fund" = No, we won't invest.

"The best course of action, in this case, given we may take a little longer than you'd like is to pass" = No, we won't invest.

"Amazing business! But you are a bit early" = No, we won't invest.

"We tend to invest in earlier stage startups" = No, we won't invest.

"I just don't think you can beat the 5,000 pound Godzilla" = No, we won't invest.

"Why don't you go after this market segment, then I'll be interested" = No, we won't invest.

"I have been working in your market for too long and I prefer other markets now" = No, we won't invest.

"I can't see how you can scale your customer acquisition" = No, we won't invest.

"I would love to invest but how about using my services as an attorney/advisor/VP of..." = No, we won't invest.

"Decision making this early is far from a perfect science but we resolved its too early despite your traction because of developments we're seeing in tangental areas and our perception of  barriers to entry (low) which make us reluctant to commit before a longer trajectory is established."  = No, we won't invest.

"I've signed the term sheet and the money is in your account" = Yes, I'll invest.

This is a quick post on my thoughts on vesting and why it's important for founders to consider the "typical" 4 year vesting with 1 year cliff.

Let's say you and your co-founder met at some startup hackathon event. And between the both of you, the ownership is 100% of the company (50-50 split). Then you allocate 20% as an option pool for talent. That means you are left with 40% each, with your shares on the vesting schedule.

Now, as you start to grow, you need a team right? So you go out and hire a few key guys to kick start your business and bring in a Google engineer and a Oracle VP of sales. You give each of them 10% each. (They told you how great they are and how much they can give to the company).

Within 6 months, the Oracle sales guy decides that he needs to pay for his Mercedes and massive home loan. So, startup land is not for him. In this time period, he's had a ton of "talks" in the "pipeline". But nothing really materializes. So he quits. None of his shares have vested. So you get to keep the 10% of his shares. Phew!

At this stage, you just managed to raise some money and the company is valued at $10M! Awesome right?

Then 6 months later, the ex-Google engineer who you thought was amazing, turns out to be a dud! He is always late for work, does not ship product and is a real bitch to work with. So, you fire him. At this time, 2.5% of his shares have vested. In fact his shares are worth $250,000 on the current valuation. That sucks right?

Things get tough around the same time and all of a sudden your co-founder decides that he is sick of working for a boring unsexy B2B startup and wants to work on the next Instagram/Snapchat startup. Almost 10% of his shares have vested. That’s $1M gone.

The “lost” money is not really the bad news. The bad news comes when you need to replace these guys. And the new guys need some skin in the game as well. Lucky you had vesting schedules and can provide similar incentives to other people who may stick around longer and make your startup a success. Imagine if you did not implement a vesting schedule and everyone got to keep their equity? That would really suck. You could essentially kiss your startup goodbye.

Agree? Disagree?

iOS is a pain in the buttocks to develop for. I have full respect when I see nicely designed and executed iOS apps. And I know that many companies struggle to make decent apps (some of our competitors have terrible apps). Let me share some lessons I have learnt to increase effectiveness when developing iOS apps.

Let me start by saying that although I look like the tech founder of Happy Inspector, I'm not. Andrew (CTO) can provide a better overview from a tech perspective. But I'll share some of the higher level things which work for us. So please take it FWIW.

My background: In my last company I ran, we developed over 20+ apps for a large list of clients from friends who had ideas for the "next" big thing, to large real estate brokerage with over 800+ offices worldwide and everything in between. And earlier on in my career, I worked at a console gaming company (Midway Games) as their UI Team Lead. So the tips below are a mix of trial and error + stealing from other past experience.

First, I recognise that (good) mobile development is painfully slow. 

So, what do we do?

  1) Two week dev cycles

We have a policy to ship updates every two weeks. One week is too short to get anything done. Two is just nice. And usually, after we submit, we have to wait 7 days anyway for the lovely guys at Apple to approve/deny our update. However, as soon as we submit, we get back to work on the next set of features and polish up existing UI/UX stuff. Then in the second week, when the app comes out (or rejected) we spend that week fixing bugs or workflow based on customer feedback and put the app back into resubmission. This way we are always pushing out a new update and features.

  2) Add a wish list and prioritize and then cut cut cut

At the start of each development cycle I get really excited, then end up being very sad. I work with the engineers, support and sales team to list out features that our customers are crying out for. We then put everything on a whiteboard (How very 1997 of us). Then we would prioritise things based on difficulty/importance both from a customer and product roadmap perspective. Finally, we get estimates from our engineering team on what can be done in the cycle. (This is where I get sad as cut features)

For each wish list, we usually have 1 main "theme" and 2 "sub-themes". The main one is a big feature and sub-ones are cool little things. This makes sure we stick to deliverables and at the same time have nice updates for our customers.

  3) Think like a sculptor

A very simple workflow we have is that our main product person (usually me) comes up with very basic wireframes and workflow of each feature. Then, our engineers (smarter people) tell me why things can't be done in a certain way. Then we hash out a few alternatives very quickly. Next, we get them to build it out the feature as quickly as they can and get away from paper to "in-the-app". We basically want to present the product in the right context as soon as we can. Once it's in, we add more detail, tweak workflow, then add designs to it. We have found that it's the quickest way to ship features.

  4) Break it down till it fits in your pocket

When we have a task list, we make sure that our engineers can breakdown each task to at most 1 days worth of work. If they think it's going to take more than 1 day, then they need to break the task down further. This keeps daily deliverables achievable. We used to let things go for a week. But by then if a deadline slips, you've lost 1 week!!!! Which is a huge waste for startups. 

  5) MSP not MVP

Work to a Minimum Shippable Product. Not Minimum Viable Product. All this means is that you should always have the product in a place where you could submit to Apple and it would still be usable by your customers. Make it usable and ugly first, then make it pretty. Functional over form is my motto.

Whilst I know we and many app developers struggle every day to make deadlines, these are some of the workflow tips that have made our lives easier. We occasionally miss ours but we keep learning and trying to improve. It takes a lot of discipline to get this right and in the beginning a lot of training for new staff members. But remember, it all about KAIZEN

Two people that I look up to from the technical side is Andrew Mackenzie-Ross and Philip Mayes. Hopefully I can get them to share their tips?

Just how big can a mobile first company become? It's a question that keeps me up at night (aside from my puppy of course).

The premise is that there is a huge opportunity for mobile first, vertically focused, B2B SaaS players to take the market and become the next wave of billion dollar companies. 

Whilst I think it's clearly possible for mobile first startups to get to 10, 20, even 50 million in annual revenue, I think there are a few major hurdles and challenges to consider to become much bigger. Below are some of my thoughts and concerns around the space.

How big is this vertical?

Assuming that you've chosen a vertical play, one of the main things to know is how big is the market? I don't mean the market size that you show VCs in a pitch deck. I mean a realistic breakdown of your direct opportunity ahead.

If it's in the medical industry, are you targeting doctors? Hospitals? Nurses? All the above? If it's in real estate, is it Residential, Commercial or Rentals in general? Once you have chose your initial battlefield then you can start to consider the other variables. Note, you can always change the vertical but it needs to be big enough to make it a big opportunity, but small enough for you to be #1 in the minds and hearts of your customers. As you grow, you can expand your market.

Know your 1000-pound gorilla, King Kong.

Every big enough vertical has a 1000-pound gorilla. In HR it's Success Factors. Marketing, Marketo. Fleet tracking, Fleetmatics. Helpdesk software, ServiceNow. Real Estate, Zillow. Property Management, RealPage. And the list goes on. You don't need to worry about them but you need to be very aware about their strengths and weaknesses. Also find out where the lost opportunity is in their business and is that opportunity big enough for another 1000-pound gorilla to fill.

Are you just a feature?

Most companies start out as being a feature. And assuming you manage to execute well and grow, you will be on your way to making tons of revenue and increase marketshare. But at some stage you need to decide if you can continue to grow as just a feature? Eg. Is Happy Inspector just for inspections or is there a bigger piece that is there to solve? And if you decide to add a bunch of other features (product suite), are you encroaching on King Kong's toes? How do you thread lightly and get to scale without attracting his attention? I'm not saying a feature is bad, in some cases large mammoth companies have been built around "features". Take DocuSign for example. (Thanks Sheel from NEA).

Are the holes big enough to fill?

Let's say you solve one problem of your customer really well. Then you be asked to solve a few more (naturally they will want you to after you've done one thing well). You need to ask, can the business get huge by filling lost of little potholes or do I need to get deeper into the customer's value chain? And if you don't go deep into the vertical, can King Kong dig you out easily? Can you grow deeper roots that make you hard to compete with below the surface?

How to expand your market?

There is another dimension which may come into play. Which is the concept of products that can scale across geographies. To give an example, DropBox, Survey Monkey or Evernote. Their markets are not limited to the US. With minimal tweaks to your core product, can it be introduced different countries and languages. Don't forget that there are people that live across the water! Did you know that "The Hoff" is a mega hit in Germany?

This, of course brings up different issues around scaling global operations, sales and marketing. Not to mention more 1000-pound gorillas in other continents. But nonetheless, geography could open the opportunity from a $50M business to a $250M Godzilla.

Engaging in battle

At some stage of the companies growth, it will be faced with the possibility to be acquired or engage in battle with the incumbents. What's the right move? Can mobile first startups capture enough of the value chain to be a standalone best in class software? Or will the incumbents build their own offering and offer it as part of their suite?

Is distribution key?

Mobile causes a lot of disruption to existing business models and establishments. The most important one being the ability for anyone to gain access to an app via the Appstore. Traditional sales have always been outbound and require a large and expensive sales reps but now, the opportunity for a CEO or even low level employee of large retail organisation to download Expensify/Happy Inspector and start using it is simply amazing. As more and more mobile devices gets rolled out and the world gets more connected, it's up to founders to find ways to disrupt, challenge and innovate on existing distribution models.

The crystal ball

The road ahead is long for founders and investors wanting to see who and how the next wave of companies become the next big thing. It's still very early days for mobile and my guess is to take some clues from the likes of our forefathers who made it with Cloud Computing and their forefathers with Boxed Software. 

Good luck to founders of MAaaS (Mobile-apps-as-a-Service) companies. Now get back to hustling.

"Your early progress is impressive and we like the problem you're solving, however, we've resolved that the business is too early for us to make a commitment.  We'd be very happy to reconsider as you grow but wanted to be upfront at this stage with respect for your time." == IDIOT

This is one of the most retarded things an investor can say to a startup that's clearly making money and can show traction in the market. It's rude, selfish and ignorant. 

For entrepreneurs, use this to add fuel to your fire. Make it without the need to find validation of nay-sayers like this. Add them to your 'FINGER-LIST". And one day when you are on the other side of the table, give founders the courtesy declining honestly and politely.

/End rant