Walking the SEO Walk

SEO ExpertMaybe I was too hard on the guy. I really wasn’t trying to be an asshole. I do understand that SEO is a hard and competitive business, and I have great
respect for people who manage to do it both well and ethically.

The other week an “SEO Expert” cornered me at a networking event in Tokyo and suggested that his company could help mine improve our Google rankings and traffic flow. SEO is something I spend a fair amount of time thinking about, so I put down my drink, put my laptop on the bar, and opened it up.

“Our company is www….” he began.


“No. That’s OK. I’ll just Google it.”

His company did not appear on the first three pages of results when searching for “SEO”, “Japanese SEO”, “Tokyo SEO” or similar variations.  Our expert insisted that this was an unreasonable test because Read More →

Tell Me About Your Customers

TellMeCustomerFinalOne of the shortcuts I use to get a quick read on whether a venture has any real hope for success is to ask the founders “So, tell me about your customers.”

Tragically, many founders find this question a bit jarring. Entrepreneurs talk incessantly about their product, their positioning and their fund-raising activities, but many don’t really think about their customers as if they were actual people with real problems and busy lives.

Those founders who excitedly explain who their customers are, the particular frustrations these people feel, and how the new product making their life a little bit better are likely on the path to success. Startups whose founders brush off the question and steer the conversation back to their vision or fundraising are probably not long for this world.

I Win By Losing

WinnerI spent several years of my life writing software for hedge funds, and one of the most interesting things I learned was that some of the most profitable trading strategies actually lose money on more than 60% of their trades. The managers pick losers far more often than they pick winners, but still make a lot of money.

They pull this off by being extremely disciplined about selling a position that is going bad and staying in or adding to those that are  turning out well. Also, it turns out that performance can almost never be improved by trying to make fewer mistakes upfront by trying to pick fewer losers. Such efforts usually lower returns. Performance is improved by fine tuning how much money to invest and learning how to identify bad trades sooner.

The winners are not the master stock-pickers, but the master risk-managers.

Entrepreneurs could learn a lot from this. Put your ego aside and don’t worry about being “right.” The key to success is figuring out a way to test a new product or sales channel without putting too much time or money at risk, and having the disciple to cut your losses quickly if your idea does not work as expected. Then, it’s time to try another low-cost, low-risk approach.

I find it comforting to know that you can be a big winner by being wrong most of the time.

Hidden Fundraising Secrets

Top Secret FundraisingThe big secret is that there is no secret.

I have done quite a bit of successful fundraising over the years, and founders frequently ask my advice about it. Few first-time founders believe me, but raising funds is by far the easiest part of growing a start-up.

Recently a plethora of seminars and courses have popped up offering to train founders in how to pitch their ideas to investors.  While practice is certainly a good thing, focusing on the pitch can be a distraction.  Some of the advice given in these seminars is ridiculously detailed and covers things like the correct number of people to bring to the meetings, which other companies to mention, what colors are most effective in the presentation slides, and even the best day of the week on which to pitch.

Over-thinking the pitch to that extent is distracting nonsense at best and harmful at worst.

Good VCs have heard thousands of pitches, and they pride themselves on being able to “see though” the pitch to evaluate the team’s actual chance of success. They far more experience at this kind of evaluation than both you and the people offering to teach you how to pitch for a fee.

Investors will not be swayed by the color of your powerpoint slides.

By all means attend one of the many free events that offer a chance to practice you pitch before meeting investors, but don’t over-analyse it. Focus on growing your business. Being able to tell a VC that you have a growing number of paying customers, has far more impact than a well-polished pitch.

Your Fingerprint is Not a Password

FIngerprintsI like my new iPhone. The fingerprint authentication is cool, but it’s important to realize that it’s only a toy.

Although fingerprint authentication gets a huge amount of positive press coverage, it is a horrible form of security at it’s most basic level. Put aside for a moment the crazy stories of gangs cutting off people’s fingers in order to fool fingerprint scanners, the flaw is much simpler and less dramatic.

Within days of the the release of the new iPhone, it was cracked so that it could be unlocked using a copy of someone’s fingerprint. Naturally, biometric advocates claim that the current security flaw will be fixed with better scanning hardware or improved recognition software, but this misses to core issue.

Fingerprints will always be a horrible form of security. The fundamental problem is that we leave our fingerprints everywhere. We can’t keep them secret and we can’t change them if they fall into the wrong hands.

Your Investors are Not Your Friends!

A typical startup investor

I don’t mean to say that investors are bad people; some of my best friends are venture capitalists. It’s just that most founders don’t realize that a good VC always has his investors best interests at heart, and those interests do not always line up with the interests of venture and certainly not with those of the founders.

Unfortunately, these conflicts usually only come to light when additional funding is to be raised and/or the start-up is not living up to expectations. New investment terms might strongly favor the VC over the founders, and more often than not, the investor’s guarantees of follow-on investment evaporate if the venture does not garner the interest of other investors.

At that point, founders are often blindsided by what they see as a betrayal of trust, but it’s usually just a misunderstanding of allegiances. You investors will always be on your side provided that it is always in their best interests be be so.

Your investors can provide a great deal of useful advice. But always remember, as a founder your obligation is to all the stakeholders and not a particular investor. No one cares more about your company than you, and it is your job — not your investor’s — to look after the interests of all your stakeholders.

Freelancers & Entrepreneurs

Happy FreelancerMany people use these terms interchangeably, but they are radically different. I’ve been both a freelancers and an entrepreneur at various times in my life. Both can be a good way to make a living, but the difference between the two  is important.

It has nothing to do with size, capital or available resources. It has to do with focus.

Freelances make money by performing a service directly — programming, web design, consulting, etc. If you are a freelancer, you make money when you work. When you stop working, you stop earning. Your primary concern is getting more work for your and your team to do.

Entrepreneurs, on the other hand, focus on building scalable systems. If you are an entrepreneur, most of your work will not generate much direct revenues. This is because once your activity starts generating revenues, your primary concern is how to remove yourself from the process.


Enter at Your Own Risk

Enter at your own risk

Japan market entry is tricky for disruptive technology. I recently met the local representative of a successful US start-up. The local rep had convinced headquarters that the Japan product needed to be launched under a different name, with a different look and feel, on a local infrastructure, and be managed by the Japan team.

I’ve seen this countless times. The local rep is happy to keep taking the parent company’s money, but if business really takes off, the representative will take ownership of the brand, clone the technology and launch a competing service.

A small foreign company simply cannot enforce their intellectual property in Japan.

Never give up your brand!

Rendering Judgment

First PrizeMost start-up events announce a “winner” at the end.

I enjoy participating in these events as a teacher and a coach, but I politely decline offers to serve as a judge. I do understand the need for pageantry, and I agree these events would feel kind of unfinished without awards at the end.

In reality, however, it is the marketplace that will determine which team will win. My opinion and the opinions of the judges mean very little.

Dream Small

Driverless CarEveryone loves Google’s driverless car. However, I think the killer app for the driverless car is not commuting or freeway driving. It’s simple parking. I want my car to drop me off at the mall, go park itself somewhere, and then come get me when I summon it from my mobile phone.

Driving is fun, but I would love to leave parking up to my car.