#deductmor

According to the Lean Startup methodology, you find a customer before you start a business, and then you build your business around solving that customer's needs. That process is called customer discovery, and it's painful, insightful, educational, and absolutely necessary before starting a business.  However, that doesn't mean that once you have your business idea nailed down that you stop doing customer discovery. Markets change. People change. Companies change. Technology changes...sometimes really fast!  You have to constantly talk to your customers and prospects.  So what happens when you keep on and keep on and keep on doing customer discovery?

Well, in my case, as I pitched and talked and interviewed about deductmor, I found a new market. A much larger market. A B2B market. An "old school" market in desperate need of disruptive technology. A market that is making a solid come back from the economic stink at the end of last decade.  I found this new direction at ATV, specifically, at their event Atlanta Startup Village.

Someone approached me, seeing what we were doing with deductmor (capturing an image of a receipt, pulling certain data from the receipt, creating a database and simple reports from that data, and store everything in the cloud), and asked, "Can you do that for us?"

"Well, maybe. Who are you, what do you do, and how many things do you need to process?"

"A LOT of them! Like thousands every day...well over a million a year."

Turns out, with a few minor adjustments to the code we had already created for deductmor, we most certainly are able to "do this for them."

PIVOT!  Yes, I said "pivot."  I didn't want to. I never set out to. And after pouring 8 months of my life into deductmor, it was a very tough decision to make.  But numbers don't lie.  I can't do both (yes, even serial startup freaks have a life!), so I choose the larger B2B opportunity. The last straw in the decision was David Cummings' blog post from July 15, "Get Potential Customers to “No” as Quickly as Possible," from which I quote, "Too often, entrepreneurs take too long to kill an idea."

So, from B2C to B2B; from smartphone apps, APIs, and back end to completely web based solution; from $60/year/user to thousands of dollars per year in recurring service revenue per year per client; from total addressable market of $660M to total addressable market in the multi-billions.

Prospects are already paying for resources to do the manual version of our service and using outdated methods, willing to pay immediately for an efficient, cloud-based solution that provides data integrity, and saves them a lot of money.

I'm a huge Dave Ramsey fan, and try to emulate the principles he puts forth in his books, seminars, and daily radio show.  One of Dave's all-too-common sayings is, "Read the book: the Tortoise wins every time!"  In other words, slow and steady wins the race every time.  We in the startup world hear lots of stories about instant success, and those happen, but they are the exception and not the rule.  Here are five ways for you - the startup entrepreneur - to be the tortoise and win every time.

Be patient - everything in a startup takes longer than you thought, and that includes making money. As of this writing, deductmor is quite a while past the date on which I expected to launch. While I don't like that, the time that has passed has been time for me to learn, interact with potential customers and channel partners, and even discover a huge new market for a slightly different version.  That said, being patient does not mean sit around and wait for it to happen. Are you the entrepreneur? Then you are the only one who's going to make it happen.

Do it every, single day - David Cummings sets a great example for all entrepreneurs by blogging every single day. If you do something for 30 days, it becomes a habit. This fact is not new. Aristotle told us this a long time ago: “We are what we repeatedly do. Excellence, therefore, is not an act, but a habit.”  So do [fill in your startup role here] every day. Make it a habit.

Never stop - I don't know the inner details of the demise of Groupon, but from this outsider entrepreneur's perspective, Andrew Mason stopped. He built a billion dollar sales machine, and then he stopped.  What did he stop doing? I have no idea, because I wasn't around him every day, but he most certainly stopped doing something that was the breath of life for Groupon. Don't do that. Don't stop doing whatever it is or was that you did to make your startup exist. Think. Sell. Innovate. Write code. Dream. Lead. Whatever it is that sets you apart, never stop doing it. (Note: Groupon isn't dead, but it's founder got fired, and its stock is down 70%, and it's still not profitable despite growing sales 500% from $300M to $1.6B from 2010 to 2011 and sales of $2.3 billion last year.)

Never give up - T-shirts are soft. Startups are hard. Remember that. Remember that, as an entrepreneur, you are literally one in a million. If it were easy, anyone could do it. It's not. It's hard. It's even harder when it's your own money. Giving up is a permanent solution to a temporary situation. If you're going through hell, keep going.  Winners never quit. Quitters never win. Did I get enough cliches in there?  Good. You get the point. You're the leader, and when the leader gives up, everyone who is following the leader gives up, too. Don't give up.

Play your game, not your competitor's game - This one might be the most important. Well, of course it is. I saved it for last! The Tortoise could have tried to be a Hare. He could have tried to run as fast as a hare.  I frequently get asked by new entrepreneurs, "What if someone else copies my idea?"  My answer is very quick, "SO WHAT?!?"  Microsoft copied everything Apple did for years. Look who won. If you have ZERO competition, guess what? There might not be a market out there for whatever it is you're making/doing. Competition is good. Competition validates your marketplace. Competition lights a fire under your entrepreneurial bottom. Competition makes us different. The Tortoise and the Hare could not be any more different. You are different from your competition, and only you can continue to make you different.  If you are exactly like your competition, then one of you is not necessary. I'm a PC guy. Others are Mac people. Hey, look! Competition, and both lavishly successful. Be who you are. Do what you do. Play your game, not your competitor's game.

I just re-read this text, and I'm not sure if I could have used any more cliches. This isn't new information, but it is relevant if you're a startup entrepreneur.  Sometimes we need reminders, guideposts, gut checks, shots in the arm...and more simple cliches to keep us going as we build our world changing companies.  Meanwhile, slow and steady wins the race every time.

Oh, and about that bonus...here's one those things that you can do patiently, every day, without stopping or giving up, and do it your way: PITCH! You heard me, pitch! Act like you have to throw batting practice every day! Get out of the office (or your basement) and give your 30 second pitch to everyone you can. Practice your pitch constantly, preferably in front of an audience rather than the mirror.  

If you are starting a business, you're going to tell people about it. That's how you get it rolling. But what do you say? If you're stuck in an elevator with someone you know is an investor in your market sector, and he or she asks you "So, what do you do?" you had better be ready. Always. Here are five things you must do in your 30-second "elevator" pitch.

Say your name and your company's name. And say it clearly. Once you're off that elevator, how else will the investor remember you? Most startups these days have names that combine other words and spell it wrong, like mine: deductmor. Make sure you say the name of your company clearly.

Say who your customer is. Your customer is the entity that pays you money, as opposed to a user or the channel.

Say the problem you're solving. Notice I did not say "describe" the problem. You've got 30 seconds at the most. Say the problem. You can describe it in the 6 minute pitch in the investor's office once you have their attention on your startup.

Say how you solve the problem. Again, don't tell in intimate detail what technology stack you utilize to solve the problem. Just say how you solve it at a very high level.

Practice your pitch, but practice doing it perfectly. If you practice a golf swing like Charles Barkley's over and over, you'll end up with the ultimate imitation of the worst golf swing in history. Practice doing it perfectly.

In the tech startup world, there are so many options for what to do, how to do it, when to do it, and who to do it with. I'm talking about building a new high tech business, of course.  Many times, it's like riding a bike, but that can be good or bad.  So, while this analogy can be applied to many different aspects of life and even to life itself, here I'll use it for "doing a startup."  Here goes. You've ridden a bicycle before, right?  Maybe this morning, or maybe 20 years ago, but you've ridden a bike at some point.  Think about this: is it easier to steer, to change direction when you're moving at a normal pace or when you're going very, very slow?  These days, you see bicyclists at almost every stop light, waiting (sometimes, but that's for another blog post) for the light to change or the traffic to allow them to proceed.  Some of the really good bicyclists can maintain their balance while barely moving a few inches.  I have to put a foot down or lean against an unwitting car to keep my balance. A very wise friend once told me that God can only nudge you in a particular direction or open doors for you if you are moving.  Stand still, and you'll go nowhere. Get on a bike and be still, and you'll fall over. My point is this: pedal! You have to move in order to go forward and be able to change direction or go in a particular direction.  So, you're on the startup bike.  What's wrong? Why don't you pedal?  There are 5 pretty solid reasons:

I might wreck and get injured - Of course this is the first one, because it's the most obvious: the fear of failure. Anyone can ride, or learn to ride, a bike. Not everyone can start, grow, build, and run a startup in the high tech world. Simple fact. Not everyone can, or should, try this at home or anywhere else for that matter. But you are on this bike!  Now, when you rode a bike in the past, did you wreck or fall down or run into something? Of course you did. Everyone does. Everyone falls or wrecks and sometimes you draw blood or break a bone.  That particular outcome is a known and assumed risk when anyone gets on a bike.  Same applies to starting a business, especially a high tech business.  Most fail. Did you get that? Most high-tech startups fail.  But just like when you rode a bike as a kid, when you wreck or fall down, you will heal. Your scraped knee will stop bleeding, eventually, and you can choose to get back on the bike.  Failure is not the end of the world in the startup world.  In fact, it's usually the beginning of another great adventure, and you'll be smart enough not to try and jump over that particular jump again. GO!

I don't know how to do this - You don't know how to ride a bike? Oh, no, you mean you don't know how to start, grow, build, and run a startup. Well, neither did Jobs or  Gates or Zuckerberg. They are all college drop outs.  You probably know more than they did when they started!  That's a tough one to accept but it's probably true. Now, book knowledge and even experience are not guarantees of success, so don't get a big head. But you know more about how a bicycle works at this point than they did at the same point in their lives.  You know how to pedal. PEDAL! GO!

It's going to be too hard - Um, yeah, it is. It's going to be hard, but start pedaling, and you will be very surprised at what knowledge, experience, and instinct you already have that will serve you well as you navigate the startup bike trail...or the highway.  Remember this, too: if it were easy, anyone could and would do it. It's not easy, but you can do it. GO!

That guy over there rides like 100 miles a day! - If there's virtually no competition for your product or service, then you're either brilliant, before your time, or you're entering a market that has no market.  Ask yourself, and more importantly, ask advisors, friends, and potential customers if there's a market.  At ATDC and elsewhere, they call this "customer discovery."  You don't build a business because you want to build a business. You build a business because there's pain in some market that you know how to solve.  So, back to the competition.  Yes, you have competitors, and many of them look intimidating. They look professional, buttoned up, strong, fast, smart, but guess what? They're looking at you thinking the same thing!  That, as they say, is why we actually play the games: somebody's gotta win, and it isn't always the superpower. Play the game!

I don't know which direction to go - You have a vision for your startup, right? No? Ok, if not, then you need to rethink what you're doing on this bike.  The leader must have a vision, or the organization will die.  Now, you've got your vision, go! Get on the bike and start pedaling!  As a believer, a am confident that God does and will direct my steps, sometimes in spite of my plans.  Whether you have that faith or not, if you get on the bike and don't pedal, you're going to fall down. So you have to move so you can see what's around that next corner, across that street, over that hill.  You have to move in order to get somewhere. And, since every startup pivots, you have to know that it's much easier to steer, to change direction, when you're moving. So start moving!

Since I started deductmor in December of last year, I've been working at home. But after visiting ATV a few times and attending a couple of events there, I decided to join up. A little background on me: I've been involved in 7 startups, including deductmor, with my name on the founding papers of 5 of them.  But I've been out of the "startup scene" in Atlanta for a long time, since starting CWNP in 1999.  Part of my strategy for (a) finding a new business idea, (b) starting a new business, and (c) building that business, has been to connect with as many tech entrepreneurs as possible in as many ways, venues, and events as possible. The energy, knowledge, and help that any entrepreneur needs to start a business from scratch is best found from other experienced entrepreneurs.  ATV fulfills this need in a big way.  Here are the four main values I have discovered at ATV, aside from free parking, free coffee, free snacks, and free lunch Friday:

Energy - Not just from the free energy bars available in the second floor kitchenette. The energy at ATV flows from all the startups and their teams.  When I work from home, the thing I miss the most is the electric interaction from my teammates.  I don't currently have any teammates, so I have to get that energy elsewhere.  ATV provides the proverbial water cooler, and surrounds it with high-energy new and experienced entrepreneurs who are all trying to start, grow, or run a tech business. It's energizing just to be there and listen to what each entrepreneur is doing.

Help - David Cummings & Co. have made it clear that one of the principles behind how ATV will operate is "pay it forward".  I'm also a mentor at ATDC, and I get more satisfaction from seeing the lightbulb click on in the head of the aspiring entrepreneur than anything except seeing pure, unadulterated joy on the faces of my kids.  If you need help - specific tech or application help even - you just ask anyone. If they can't help you, they'll point you to someone who can, and does.  You can't get that working at home and you can't get it in your own private office.

Encouragement - similar to help, but vastly different when in its purest form, encouragement is the elixir, the juice, the balm, and the C4 explosive we all need at different stages of the startup. Any entrepreneur can tell you that, even in their 2nd or 20th venture, it's a roller coaster ride.  There are days when you fly in and days when you have to hook your neck to a leash to drag you back in the next day because it couldn't have gone any worse.  EVERYONE at ATV is on that roller coaster. Maybe in your car with you, maybe on a different train at a different time, but they are all there, and everyone needs encouragement to get to the next level, whatever that level is. I've found encouragement abounding at ATV.

T-shirts - No, not an April Fools Day joke. Join ATV, get a T-shirt. I haven't got mine yet because my first day at ATV was the day after the Atlanta Startup Village event, and apparently there was a run on t-shirts that evening.  But that's not the t-shirt I'm referring to. I'm referring to the "been-there-done-that-got-the-t-shirt" t-shirts. Those are harder to come by, but nearly everyone at ATV has at least one.  What's that mean? It means they have been where I am, and where you are, and more importantly, where we're about to go in our startup adventure.  That's the t-shirt that is very valuable.

The first time I started a company, the co-founder and I had some very good reasons for starting it: We wanted to be our own bosses!  We...well, that was about it. That was way back in 1999. Thirteen years later, that company we originally started was acquired.  Not your average startup incubation period, but not a lifetime either.  Looking back, I can humbly say that at least 2 of those 13 years were because we had incorrect reason for incorporating in the first place.  You see, starting your own business is great; however, before doing so, you must know why you're doing what you're doing, and there really is only one answer. We'll get to that. In the medicinal world, there are two kinds of pills. Yes, I know there are more, but I'm making - or borrowing - an analogy here, so bear with me.  There are 2 kinds of pills: vitamins & pain killers.  Both have unique and valuable purposes.  Vitamins are good for you. They give you the elements of a healthy diet that you may not already be getting or that your body, for one reason or another, doesn't produce enough of.  That's good. Vitamins are good. But, you don't always need vitamins, and vitamins may be the first thing to get cut when income is down. A good example, in my mind anyway, of a "vitamin" business would be Air Jordan basketball shoes. Nobody needs a $250 pair of Air Jordans.  I bought a pair back in 1990, the old "Grape" color scheme. Man, I loved those shoes.  My folks had given me, among other things, $100 for Christmas, so I blew all of it and then some on those Air Jordans.  I didn't need them. Nobody needs Air Jordans!  But they sure do make you feel good, don't they? Yeah, they do. Yeah... For the painkiller explanation, I'll refer to the father of a friend of mine.  Fraternity brother to be exact. His dad is a retired urologist.  Having just been through bladder cancer last fall, I can tell you that my urologist knows me better than anyone else in my life except for my Maker.  Anyway, when folks asked this doctor why he chose urology of all medical professions, he had a simple answer that applies to the startup world today. He said the following.

If I am an orthopedist, maybe you come to me when you hurt your arm. If I am a dermatologist, maybe you come to me if you think you have skin cancer. If I am a GP, maybe you come to me when you are sick. But if you have problem in your groin, I am first person you call and you don't wait.

I've launched several new businesses before, but not like this. "This" is new, good, and very exciting.  When I  made deductmor official in December, I had my ideas for launching. Then the folks at ATDC told me about Startup Riot. My ideas suck.  Sanjay's idea is better.  Simple as that. Knowing virtually nothing about Startup Riot, I hit the site and applied, not knowing what to expect and certainly not knowing if I'd be in the 30 to be picked.  Couple days later I get an email from Sanjay saying I'm in, but that my slides, and hence my pitch, needed "major work."  OK, so happy to be in, but I thought my slides were pretty good, no?  No. Compared to what I ended up with, they sucked. Simple as that. Then comes honing the pitch.  I changed it at least 30 times, each time thinking to myself and actually saying out loud, "this is it. I got this."  Every time I was in my car alone, I'd set the timer on my iPhone and practice, practice, practice.  Even the morning of the event, riding down GA 400 practicing, practicing, practicing.  I was SO ready. But first I have to digress and describe what came before Startup Riot.  Founder Fables is Sanjay's newest event, and a brilliant one.  Only thing is, I can't talk about what was said.  I can say that Sanjay has to know everyone everywhere.  Sanjay got 11 very inspiring entrepreneurs to spend at least an hour talking - totally off the record - about the good, bad, and ugly of starting and running new businesses.  I was at Founder Fables from 8am to 7pm. I never even thought of leaving.  The food was good. The coffee was good. The Founders were inspiring. When Sanjay announces the where and when of the next Founder Fables, you must go. Simple as that. That was Tuesday.  Startup Riot was Wednesday.  Here's what happens: 450 people gather at The Tabernacle at 830am to hear the 30 startups that Sanjay & Co. have chosen to "pitch" our new startups. We get 4 slides, 3 minutes to present, and 3 minutes of questions from tech startup gurus Adam Rich, TA McCann, and Hiten Shah.  Follow these guys on Twitter. You'll learn much.  Some of the fun came from Sanjay's expertise at keeping secrets. Just like Founder Fables, we did not know everything that was going to happen this day.  We all gathered and setup our 6' black tables to show our wares, and waited. Shortly after arrival, we got the schedule of who's going to present and when. So I'm #2 in line in the first group.  If you're applying to pitch at the next Startup Riot, know this: you gotta wait behind the stage for 20 minutes or so, and it's really, really cold. And you're probably a little nervous. Ever pitched anything to 450 people before?  It can be a little intimidating. You should practice. A lot. I did not nail my pitch.  I hit the slide-forward button twice the first time I touched it, so it went to far, and you can ask "them" to go back one time and one time only, then you gotta deal with it. That was my time. Then I jumped ahead of myself.  See, turns out all my in-car practicing was great, but that was not practice with the slides. Doh! A little insight into some of what I think makes Startup Riot pretty freaking great.  First, it's a competition. Not everybody likes competition, but if you're starting a small business, especially a tech business, you had better get on board with the fact that it's uber competitive.  I love competition. Competition makes everyone better, brings the cream to the top and exposes the pretender. Startup Riot is at its heart a competition, and that alone is exciting. Second, Startup Riot is big. Where else can you launch your new business to 450 people who love new businesses?!?  You can't. Simple as that.  I pitched again the very next day at a great event, but there were less than 100 people there.  Great event, yes, but 1/4 the size of Startup Riot. No comparison.  I met more investors at Startup Riot than I've ever met in one place. Third, part of the DNA that Sanjay and folks like him bring to events like Startup Riot is pay it forward. Every one of the speakers at Founder Fables at one time or another was helped along when the needed it. Everyone there was competitive, but over and over I heard the same theme preached that we are all in a position to help someone else.  We all know someone who needs help. We all need help ourselves at some point.  Proof of that meme was put into a superb post by @bubs. Brilliant and inspiring. Back to the competition.  I was nervous, and as I said, did not nail my pitch. But that's ok. Nobody's perfect, right? Well, this young lady was.  Excelegrade's Lauren Miller killed it.  Seriously, I don't think she said "um" or "uh" or hesitated once. It was perfect. They won, and they deserved it. She killed it.  I did not get to hear the 2nd place pitch by Spensa Technologies, but they've created a way to automate agricultural pest control. Who knew that was even a problem?!? They did. And they've fixed it.  I did see the 3rd place pitch by Ten Eight. Turns out I went to college with the older brother of they guy giving their pitch. Small world indeed, but you never know who you're going to meet. Dress appropriately.  Ten Eight is going to do away with the commercial real estate binder, because it's a waste of time and money.  Are you in commercial real estate? Wouldn't you rather carry an iPad than 72 tour booklets?