Two of our Partners attended the famous Business of Software 26-27 of May in Dublin Ireland. This conference caught our eye from the first day we haphazardly stumbled upon the conference website. There we first listened to the recorded presentation from a previous conference by Kathy Sierra called “Building the minimum bad ass user” and then directly thereafter, “The job your product is hired to do” by Clayton Christensen.
Both presentations are simply awesome and we recommend that you check them out if you haven’t already. Anyway, when we had the opportunity to attend BOS Europe this spring we didn’t hesitate.
Below you’ll find our key takeaways from the conference.
Stories stories stories
Several speakers iterated the importance of learning to use storytelling in your communication. Nick Halstead, CEO, at Cognitive Logicand DataSift perhaps explained it best when he said unless you can be theperson to tell the story of your business, you can’t be the CEO.
Unless you can be the person to tell the story of your business.. you can’t be the CEO.
- You need to tell a story to be able to hire bright staff. Hiring is everything. In the beginning you have little money and even though there might be equity involved, your new employees must be fully convinced of your startup’s vision.
- Everything in raising money is about telling a story. 30–40% of the valuation, higher or lower, will probably depend on the story.
- Selling your product. Don’t ever expect your sales and marketing team to do that for you. You need to tell them so that they can retell the story to prospects and leads.
In short, story story story. Just do it. Worth noting that Nick reiterated that he was no a natural storyteller at all.
More or less all speakers that touched upon the topic of hiring stressed the importance of hiring people smarter than yourself.
Hire smarter than yourself, everything else will follow from that.
Bridget Harris, from You Can Book Me, in particular had many pieces of advice that resonated well with the audience. For one she mentioned not only to hire someone simply “better” than yourself, but hiring someone an order of magnitude better than yourself.
In addition, she also touched upon an idea that many hadn’t thought of before, namely to strive to have employees from regions of the world where most of your users are in order to have that regions perspective reflected in your team.
Finally, she stressed the importance of being binary with respect to hiring, either yes or no, not maybe, not ok. To exemplify, not “he/she is ok and can probably learn at the job”, not hiring on relative terms e.g. “this person is the best out of the three we have interviewed”, but rather hiring strong Yes:es or as Rand Fishkin put it, “proven hires”.
Pay more for fewer, proven hires
Evolutionary psychology above economic theory and logic
Rory Sutherland gave a great talk. In fact it was so engaging, funny and informative that he went 30 minutes over the schedule. Rory illustrated how humans act, consciously and unconsciously, as a direct result of our long heritage in a world of uncertainty and imperfect information availability. For instance he showed how humans act on contrasts above absolute facts.
Startup founders can e.g. use contrasting through anchoring:
- Using several price options.
- Rebate on actual cost so the price the customer pays is a bargain in comparison
- or consciously choosing the substitutes to your product. For instance, Nespresso customers don’t compare the cost of one Nespresso capsule to that of a cup of coffee you would other brew at home, but to what it would cost to buy a cup of coffee at a coffee shop.
He also provided an explanation as to why people might purchase something that objectively could be considered of lower quality through the concept of Maximizers vs Satisficers. Maximizers strive to find the best solution, the best choice, whereas satisficers are happy with a solution or choice that gets the job done. So if a maximizer and a satisficer are looking for a hotel room, the satsificer will book the first suitable hotel room that meets the criteria, whereas the maximizer will continue looking to find the best hotel room given the criteria.
Even though some may be predominantly maximizisers and others satisficers, when it comes to decisions deemed less important, most people are satisficers. So for instance, choice of which restaurant to eat at is more a satisficing nature than a maximizing, whereas choosing a where to work is more of a maximizing choice for most. Rory also stated that our evolutionary brain, especially our unconscious brains, seeks more to reduce risk/uncertainty (i.e. is a satisficer) rather than perfection (maximizer). In other words, our default behavior is largely ruled by our unconscious satisficing brain that make decisions without us being aware of it doing so.
This theory, Rory explains, is why people might choose a big brand that costs more and has less features rather than it’s opposite, because risk aversion is of greater importance to our evolutionary-developed satisficing brains than optimal choices. So the industry leader might be far from perfect, but they’re not terrible and above all, they’re the safe choice.
Sidenote: Rory gave several examples of how our unconscious brain makes decisions for us without us being aware of it. Here’s one called The McGurk Effect (3:25).
So a take away for any entrepreneur is how much of your communication are you putting towards all the benefits of your products vs reducing uncertainty and increasing a sense of safety with respect to using your product before the competition?
Here’s Rory’s TedTalk page. He’s given three TedTalks so far. Check them out!
Steli Efti, CEO and Co-Founder of Close.io had a pure sales focused presentation. He reiterated what many already know to be true but prefer not to act on, namely that no one is born a sales person and that no kid dreams to grow up and become one. He also stressed, however, that whether or not we think of it, we’re all selling all the time. Whenever we have a conversation with someone where we would like to reach any sort of outcome, that’s actually selling be it please like me, let’s take a beer, think like I think etc.
People don’t buy from friendly but weak persons, they take advantage of them.
Steli also referred to the below model to describe what he believes constitutes a good sales person, name friendly strength, which entails not asking but telling and executing in a friendly matter. Like Rory Sutherland, Steli reiterated that prospects want certainty, that they feel secure when someone that is knowledgeable can can take charge and tell them, in a friendly manner, what to do. Naturally unfriendliness, either strong or weak, is a no go in sales. But what about friendly weakness? Friendly weakness creates uncertainty, indecisiveness and inaction. This is a person who asks for permission, who doesn’t want to step on toes, who is submissive.
Take away for entrepreneurs: Remember, you’re the expert of your product and its alternatives much more than the customer is. If you’ve decided to create this product, you most likely have done so knowing why it’s better than the competition. Stand proud of yourself and your product.
Another word of advice that Steli gave was 1) to ask whoever you’re talking to “what is it going to take to make this deal done?” 2) then in a friendly but dominant manner take each consecutive step as soon as possible and 3) follow up relentlessly until you get a no or yes. For instance, if the next step is to talk to three other people ask the person you’re talking to to book a preliminary appointment right away, if it’s to test your product, try to give them login info and guide them while on the phone etc.
Asking the question not only gives you a clear mental model of subsequent steps, but it could also save you time if you notice that their process is a 12 month and 22 step process for your product that may only cost say $20, In others words, not worth the time.
3D scans and retail industry
Eva Pascoe, Partner, at The Retail Practice gave us a hint about things to come. One salient example was 3D-scanning your foot at a local shoe store, thereby knowing exactly what size of show to buy online. If the industry would gather around a standard it could greatly improve andincrease sales in e-commerce.
Boards and investors
If the board starts voting with voting procedures to settle decisions, it’s a bad sign and things will go south eventually.
The above quote from Nick can perhaps be a helpful indicator of the health of your board. If you notice that the board increasingly needs to vote for decisions to be made, it’s indicative of too disparate views on company strategy.
With respect to VCs, several speakers mentioned that you as a startup founder should find out where the VC firm is in their fund life cycle. If they’re at the end of their fund life cycle, they’re likely not to fund new startups, but rather inject additional cash in already funded projects. So knowing their cycle is crucial.
Handcraft emails to journalist, not in bulk, but one at a time. Do as much as you can to basically write the article you want to publish for them. That will greatly increase your chances to get it published.
Rand Fishkin from MOZ
Rand Fishkin from MOZ had a great talk. He’s made his talk available on the MOZ blog so I’ll simply direct you there to the presentation titled What I’d Change, Keep the Same, & Don’t Yet Know. What I will mention here, however, are three pieces of advice that we found especially interesting.
Retention is the metric for a SaaS startup. It’s hard, however, to know what the norm is. Rand suggested that the audience have a look at SaaS metrics for benchmarking, that Nathan Latka has been so kind to make available for the public.
Hire less, build less, focus more: Rand feels that if he could have gone back in time, he would strive for his company to be the best in the world at just 2 or 3 of the 10+ major features they tried to tackle in their product.
Startups don’t die from starvation, they die from indigestion
Exceptionally Valuable Products: Unless your startup is a very early stage company and in a market where there aren’t many existing competitors with similar features and functionality, only launch Exceptionally Valuable Products, not “Minimum Viable Products”. Why? Because those who try out your product and think it’s bad won’t come back.
Azeem Azhar, Director of Product at Schibsted Media and blogger at The Exponential View had a talk about AI that was very appreciated by the audience. Some of the most appreciated take aways were
- It’s hard to compete on improving AI algorithms if you’re not part of a university research group or part of a dedicated team of experts at a tech giant such as Google.
- Luckily, several tech giants have actually open sourced their AI algorithms, which levels the playing field for many.
- AI is part intelligence, part access to data. That means, because you have access to the same AI algorithms that e.g. Google use, your startup could gain a competitive advantage if you have access to data that others don’t.
That’s all for today folks! If you liked this post, do follow us for more content.