Avoid This Advice From Robert Scoble

Don’t take business advice from Robert Scoble. At least not this advice.

He means well. But some of the advice he gives could cost you money, or even sink your startup.

Since Robert’s post has been circulating around my entrepreneur circles, I’m writing this post to provide an alternative set of advice burgeoning entrepreneurs might follow.

What Scoble Got Right

I agree with a Scoble’s assessment of the startup space. As the bar to create a startup has lowered, we’re seeing a lot more startups out there. And too many startups provide little added value over existing products and services. Everyone thinks they’re unique, and few are.

The effect is most pronounced in the consumer social and mobile markets, where fresh college graduates think up a slight variation on an existing idea and launch it as a company. Occasionally it works, often it doesn’t.

Startups have become cool. And everyone wants to have one.

Amplifying this effect is a cottage industry that has sprung up around startups to encourage and grow them. But there’s a balance between encouragement and providing a dose of reality that isn’t often met. “Being harsh”, as Scoble puts it, has value within the startup ecosystem. And I applaud him for that.

Scoble brings an excellent piece of advice to bear on this problem:

3. You gotta bring something really useful and new to the market

I wholeheartedly agree. If you’re not bringing something new and useful, you don’t have any reason for a customer to choose you over a competitor. Which isn’t to say you won’t get initial customers, but you’ll have a hard time scaling your company into a profitable business.

After this piece of advice, we part ways.

The Wrong Advice

After framing the problem, Scoble gave advice. If you’re pitching to Scoble or your market is technology early adopters with a huge following, follow his advice. Otherwise, take his advice with a grain of salt.

To his credit, Scoble admits he’s an early adopter and his advice can be wrong. He’s missed big opportunities (who hasn’t?) and has humility. I don’t follow Scoble, so I don’t know the types of companies he normally looks at. If you want to take his advice, I’d recommend investigating these to provide context to his advice. All advice depends on its context.

To give you a sense of my context, I currently run an enterprise software company, but my prior two startups were a home page add-on service called SlamBook! and a social network for professionals called True Peers. The former I sold, the latter went out of business back in 2000, two years before LinkedIn was founded. Part of our failure was attempting to build a complete product and then launching it instead of focusing on a minimum viable product first.

Below I’ve included Scoble’s advice in italics, with my counter advice following. I’ve ordered items from most important to least, from my perspective.

4. You gotta make it easy and make it work for all users. We live in a world now where we give apps only about 30 seconds. OK, maybe 60 seconds. Instagram hooked me instantly (and the entrepreneurs LOADED THAT APP FOR ME). One entrepreneur showed me their app this week, which had +MG Siegler on it. “Give it to me right now,” I demanded. After they resisted they admitted that they probably wouldn’t be able to deal with my contact list. Another company tonight that I met showed me a similar app, when I started it up (I do that while you talk to me) it gave me an error. Gone. 

My advice: Pick a target market and make it work for those users; ignore everyone else for now. Running a startup you have limited resources. Don’t design for the top 1%, design for the bottom 99% (or 80% or 70%). Start small, then expand. Designing your application to scale infinitely, before you know you have a viable product, wastes money and time. Read up on disruptive innovation and how simple, minimal products can disrupt a market over time.

For your target users, do make sure it works and focus on usability. If journalists and bloggers are not your target users, give them a scripted demo based on a clear use case. Don’t let them use it if they’re not your target market or don’t have a deep domain knowledge within your target market. Bad reviews do hurt; do your best to avoid them.

2. Make sure every piece of your app at least matches the competition. The other day I was using a consumer electronics pricing engine and the search just wasn’t working. Oh, really? I still might run their video but it sure doesn’t feel good.

My advice: Focus on the features that your target customers absolutely have to have and are willing to pay for. Avoid including features that your competition has that doesn’t distinguish you in the marketplace, unless those features are required to support your key differentiation.

Read Different: Escaping the Competitive Herd by Youngme Moon or this post reviewing her talk at Business of Software 2010 on why the way to compete is to focus on your strengths and not by matching your competition.

1. Have at least one very clear, and cool, use case. I.E. have something you can show someone else that makes them say “oh, my, that’s freaking useful.” 

My advice: Don’t confuse cool with useful. Cool is overrated. If your target market is early adopters or hipsters, focus on cool. For everyone else, focus on value. Explain how much time or money you will save your customers.

Pitch your use case to people in your target market, or with deep domain knowledge of your target market. Don’t be dismayed when pitching outside this market if you get a lackluster response (assuming you get that “oh, my, that’s freaking useful” response within your target market). Refer journalists and bloggers to your early customers so they can see that “wow” response for themselves.

6. I hate the term “minimal viable product.” That’s like telling me “we’re shipping without any features because, well, our investors and advisors told us to ship and fix the product later.” Good companies do ship, but they pick the right features and they ship magic. Siri? Magic. Flipboard? Magic. Instagram? I had five comments within two minutes (and that was back when there was only 80 users on it). Tonight I used SocialCam again for the first time in a while. Within 60 seconds I had likes and comments. That tells me that that system has users and has a feature set that gathered lots of users (the CEO has a whole story about how they hid their best features and users keep praising them — the future version he showed me tonight is making those features easier to find).

My advice: Read The Lean Startup by Eric Ries and learn what a minimum viable product is. Do ship. Do focus on the right features. But don’t aim for perfection or “magic” on your first iteration. Find that magic by opening a dialogue with your customers via early product releases. But, apparently, wait to show Scoble until you have that magic.

Most importantly: avoid scaling too early. Use a minimum viable product to test your assumptions early while you have only a few customers you can piss off. Aim to define both the value you provide to customers and how you will grow your business. Then iterate and improve while you scale.

Avoid launching a minimum viable product in the limelight, like Color did. For large public launches, you need a fully-baked product. But that doesn’t mean you can’t launch a minimum viable product under a different brand. Again, read The Lean Startup to see how Eric Ries addresses this issue.

7. If it doesn’t do something with both Facebook and Twitter (with Google+ to come) then you are gonna look lame. Why? I watch 33,000 of the world’s best users and if they aren’t using your app I probably will delete it after a few days and forget it. It’s amazing how forgettable so many apps are. The best ones? Keep getting discussed and shared over and over and over again. How many times have I seen Foursquare used? Evernote? Instapaper? Mint? Foodspotting? Instagram? Thousands and thousands of times. 

My advice: Include Facebook and Twitter functionality if it makes sense, but don’t add them in just to check off that box. Not everything has to be social. And implementing social features where they aren’t needed wastes time and money. The weather app on my phone has no social features and I’m fine with that.

Do use social media as a marketing channel if it makes sense. Pick your channels based on your target market. Not everyone uses Twitter, Facebook, Google+ or LinkedIn. With limited resources, focus on the networks that give you the most reach into your target market. Amplification of your message helps, but only if it reaches the right people.

And be careful. Twitter is not a marketing strategy. Remember e-mail, search engine marketing, direct mail, trade shows and channel partners still provide great channels to customers.

Final Thoughts

If you have an idea for a startup, check out The 10 Most Tempting Software Startup Categories. If your idea falls into one of these categories, test your differentiation as early as possible. These are hard categories to build a business in.

If you don’t have an idea yet, check out How To Pick The Right Idea For Your Startup.

For great advice on starting and running a startup, check out On Startups. You’ll get far better advice there than I could ever give.

For another take on Scoble’s post and how it relates to lean startups, check out Has Scoble suddenly turned anti-Lean Startup?

Finally, I will end with the same caveat Scoble did. I am often wrong and my advice may not apply to you. Heed all advice carefully and make sure its context applies to you.

What were your feelings about Scoble’s post? What about my counter advice?

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