Archive for January, 2012

Save time on procuring your Bill of Materials.
January 20, 2012

Signature Electronics provides full bills of material quickly and completely so your build can stay on schedule. Send us the BOM and we’ll provide a one-price quote that includes all the material you need for your upcoming build. Instead of spending hours sourcing components from multiple vendors, have all of your needs met with a single low-cost provider.

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The Myth of the Technical Cofounder
January 16, 2012

There is much discussion on startup sites like Hacker New and Quora revolving around the idea that every software startup needs a technical cofounder. The idea is that outsourcing engineering rarely leads to a quality product and investors are not likely to invest money if the tech-engineering isn’t done in house.

This may well be true. But it GREATLY overlooks the value of other roles in a startup, primarily sales. Paul Graham (of Y-Combinator fame) had a good post last week talking about how it is virtually impossible to code your way to success. He says – and I agree – that at some point, someone in your company is going to have to find customers and partners and negotiate contracts. For some reason, these vital roles are often put on the backburner. My guess is that many technical people simply don’t want to do them or are scared to dive in to sales and marketing – so they hide behind code instead of getting out there to sell the product.

A recent startup, Convore, recently changed their model because they couldn’t make any money despite a decent product. THe founder was quoted as saying (paraphrase) that they were in a fuzzy area because without a million users they couldn’t get advertisers interested.


They built a product/business and the way they planned on succeeding was by getting a MILLION users (or more) and selling ads? If you know 100 people who will use your product then you would need each of them to get 100 people to sign up and each of THOSE people would need to get 100 people to sign up to get to 1,000,000 users. Think about how unlikely that kind of adoption is. And to base your entire/sole business model around it is not only foolish, but shows an utterly ridiculous avoidance of doing the hard sales and marketing work.

Conversely, if a company had a skilled salesperson capable of selling the product for $1/month to each user then it would be reasonable to imagine that getting 50 companies with 1,000 users each would result in a solid business with both the time and money to continue to grow (or 500 users at $50 a month or 100 companies at $200 a month, etc.)

While having technical expertise is of course vital in any software startup, you absolutely MUST avoid thinking that simply producing a great product will result in success. In fact, having a great product is only marginally better then having a crummy product if you still have no sales support. It’s like having a cruise ship sitting at port compared to a rubber dingy – neither one is going to sail across the ocean without fuel to run the engines.

Being technical is great. Having superior code and security and a dazzling user interface that provides value is all well and good. But if you don’t have people on board that can get someone else to give you their hard earned money in some way (whether it be customers, investors, advertisers, etc.) then you will be dead in the water.

How to Name Your Startup – More Rock N Roll
January 10, 2012

A month or so ago I wrote a post about how being a musician was a lot like being a programmer-startup-dreamer type. This post is part two or a series that will include a few parts


Naming your startup is not hard. At all. Unfortunately, it’s the thing that most people starting a company fret over the most without good reason. My theory is that picking a name is something that can be done easily (i.e. no money required, no engineering, no financing, no selling). You can sit at your desk brainstorming as easily as you can sit in the pool with a beer thinking of what to call your new baby. The process of thinking of a name is easy, cheap, and taps in to a person’s creativity, so it makes sense that people would spend a disproportionate amount of time working on it. Plus it can be fun.

The most obvious problem with this activity is that it takes time from, you know, actually starting the business. Having endless meetings about how a name will play in the market and spending a lot of time making sure the Twitter handle and domain are available is not nearly as constructive as sitting down and saying, “We’re going to call it Acme Inc. until the site/app/product is ready. Now everyone quit thinking about names and let’s get to work.”

Not ironically, naming a band is exactly the same thing. When you are not a good musician, you spend an inordinate amount of time thinking of band names. I spent most of high school not learning anything but becoming a sensational “band logo drawer.” I drew logos for bands I was in, bands I wanted to be in, other people’s bands, bands I might start one day, bands that would be my side project after I was in the rock n roll Hall of Fame. HUNDREDS of band logos.

And even though I was in school while I did this, I wasn’t spending as much time as I could learning to actually be a good musician. I opted for art class over music (drawing vs. learning to play the guitar better). I drew logos while I should have been learning English lit, which included some sensational poetry that would have helped me as a lyricist. Without exception, I spent time doing the easy work (thinking of band names) instead of diving in to the hard work that would have actually been worth something.

As I became a better musician I became less interested in the name. It was apparent to me that the band makes the name, not the other way around. I was in a college band called Billy Ruben and the Little Fat God. That’s a terrible band name, but we were a really good band and people really took to us. By the time I was out of college, naming the band took two minutes: someone would say, “Let’s call it Broken Stars.” And everyone else nodded and we got back to work practicing that new song we’d just written.

As I mentioned above, naming a startup is much the same. Even worse, there are dozens (hundred?) of articles online about how to name your startup that bring back memories of the interviews I used to pour over trying to crack the code of how bands found their names. “So that’s what Alice In Chains means…a ha! Pearl Jam is really about this…”

Some of these articles about naming startups go so far as to break down how many letters, vowels, etc. “successful” startups have in their names compared to unsuccessful. Some of them talk about picking a name that explains what you do (TripAdvisor) while some say to think of something memorable and unique (Twitter). There is so much advice out there about naming a startup that – like most other advice having anything to do with startups – it is easy to find your head spinning in the midst of it all.

And most of it is complete and utter bullshit. Most of it is someone saying “this did work for me!” or “this didn’t work for me!” and the reader is somehow supposed to take that information and process it in to their own unique startup and take something from it. OK, sure, whatever. The truth is there is one rule about having a startup: Get to work. Do something. That’s all you need to know.

And there is only one rule you need to follow about naming your startup, and its the same rule to follow when naming a band:

Name it something that you are excited to hear come out of your mouth.

Period. The end. That’s it.

If Eddie Vedder likes telling people his band is called Pearl Jam then that makes it a GREAT name and people will be sold on it based on his enthusiasm. If John Lennon was more fired up stepping up to the mic saying, “Hello, we’re the Beatles” then he was saying “we’re the Quarrymen..” then that makes it a GREAT name. If Joel SPolsky (sp?) thinks “Trello” is a great name for his new list of lists product, then it is. If “HipMunk” is exciting for those guys, then great.

It doesn’t matter if the name conveys what you do or not. It doesn’t matter how many letters it has in it or the language origin or if its nonsensical or whatever. There are some bands whose names give you an idea of their music (Motorhead, Metallica, Megadeth) just as their are names of bands that don’t give any insight at all (Naked and Famous, Silversun Pickups). The Afghan Whigs could be ethnic music. The Twilight Singers could be a boys choir. There are great bands with awful names (R.E.M.) and awful bands with great names (…And You Will Know Us By The Trail of Dead). In the end, the band names don’t matter but rather the confidence and excitement that comes when the members of the band open their mouth at a keg party to tell someone for the first time, “Yeah, I’m in a band…we’re called Sixteen Deluxe.” or whatever.

Starting a business is the same. Your customers’ first impression will be the name of the company. If you want to call it “Alien Ghost Factory” and you make T-Shirts, then that’s a great name as long as you are excited about saying it and having it on business cards and telling your friends about it. If you want to call it “Standard T-Shirt Company” then that’s a great name too for the same reasons.

In the end, there is no math and no metric and no test for naming your startup. No one can tell you a great name for your startup and you shouldn’t want them to. You wouldn’t let fans name your band so don’t let anyone else name your company.

Pick something you LOVE to say. Something you love to write on a piece of paper. Something you love to see in the subject line. Something you are excited to say to the people you meet at SXSW and the people you meet at the club and the people you meet for coffee on Tuesday morning.

THAT is the only thing you need to know about naming your startup. Because if you follow any other guide or metric or suggestion, everyone will see through you and know. And while “Warrant” wasn’t an outright awful band name, the guys in the band hated it and now none of them even likes to talk about the experience at all because the whole thing, starting with the name, was so damn awful from start to finish.

January 8, 2012

If your business plan depends on having millions of users and then extracting a small amount of money from each then you should at least acknowledge the extreme likelihood that your business will never make much money and will become the bane of your existence.

If you plan on making your product invaluable in a way that fewer people will pay a lot for it, then you are smarter then the other guy.

The best time to start…
January 7, 2012

…was yesterday. Failing that, the best time to start is right now, today. Don’t find yourself reading this post again tomorrow in the same position you are today.

“I didn’t say it would be easy. I said it would be worth it.”

Business School is for sissies.
January 3, 2012

I was looking around on LinkedIn for more connections to add this morning. I looked at the people I went to school with to see if there were any that I might want to add. A few observations about the folks I went to school with.

1. A lot of the guys I knew in college have lost their hair. That’s not a criticism but rather an observation of how old I’m getting. I now look at my college cohort and see a lot of people that look like actual adults. They probably all have families at home and “direct reports” at work. Man, I’m getting old. But at least I still have my hair.

2. There are a LOT of lawyers from my school. I think 1 out of 2 people I saw from my school on Linked In is an attorney somewhere. On the one hand, that isn’t surprising as my school was really good at preparing people for graduate school of some sort. Its also possible that the attorneys have gravitated to LinkedIn while the people from our school working on cancer research or spaceflight simply don’t have time for social networking, even if it is “professional” in nature.

Anyway, while browsing LinkedIn I saw that guy I didn’t like in college (and to be fair, he didn’t like me either) is an Associate Professor at a top business school. A quick view of his profile shows that he has basically been in school getting various graduate degrees, MBAs, PHDs, etc. since we graduated. ANd now he works at a really good business school.

So now I’ve made a note to never attend that school and to dissuade anyone I know that is interested in business school to avoid it like the plague. Not because he’s there (in my old age I’ve gotten over college disagreements), but because his lifetime in a classroom has not prepared him at all on how to run a business, much less teach other people how to run a business.

I’m sure that there is value to be gained by doing case-studies and learning to read balance sheets and things of that nature. P and L’s and tax filings ARE an important part of business and it would make sense to think that you could learn them in a classroom. But you can also learn them sitting in Barnes & Noble reading a book, so I’m not sure that I’d drop $100k at Wharton for some guy with a bunch of degrees to walk me through an income statement.

So, assuming the stuff that can be taught in a classroom can also be learned on the internet or at the public library, what are we left with? We’re left with the stuff that can’t be taught in a classroom. We’re left with the stuff that can’t be taught at all, but can be learned. Which is why anyone thinking they can learn how to start a business (much less run one) by getting an MBA is fooling themselves and wasting money.

Just like “you can’t get a little bit pregnant,” you can’t halfway start a business. The best way – the ONLY way – to truly learn how to sell things is to go sell SOMEthing. The only way to truly learn how to finance something is to go finance something. Same goes for accounting, banking, payroll, negotiation, term sheets, contracts, marketing, advertising, hiring, firing, collections, deadbeat customers, and everything else it takes to actually run a business. Learning those things from a professor or a text book is like playing poker online in the fake money rooms; you will NEVER know how people behave in business until your money is at stake and their money is at stake. REAL money.

When we started Signature Electronics, we had very little idea what was in store for us. But we have worked hard and kept our eyes open for new lessons and new opportunities. And that has paid off as Signature Electronics is now one of North America’s foremost providers of board level component kits.

Can you learn something in business school? Yes. Can you learn what you need to know to successfully run a business? No. If you want a business education, start a business.

New years resolutions
January 2, 2012

1. Lose ten pounds.
2. Ship $1,000,000 at my main business
3. Land 20 paying customers on Phiddler.
4. Help my wife succeed with her business idea (which is better than all my ideas).
5. Take my family to visit a new place.
6. Exercise some.