September 30, 2013

On the importance of negative feedback


Face the facts: it's never fun to get negative feedback. But what you need to understand is that negative feedback is often the best feedback. Negative feedback will tell you what you are doing wrong and what you can improve to get more customers who hopefully are more positive. What's even worse than negative feedback is no feedback because negative feedback means that someone cares about your product. 

About a month ago, I released my first book called The Engineer - Follow Elon Musk on a journey from South Africa to Mars, which is an biography on the entrepreneur Elon Musk who has founded companies like PayPal, Tesla Motors, SpaceX, and SolarCity. After I released it, I got negative feedback which was good since I could improve the book before more people bought it. For example, the number one criticism was that I had compared Elon Musk with Christopher Columbus. I've always thought that Christopher Columbus was a good guy and that it was compliment to compare the two. But what my readers complained about was how they thought that Christopher Columbus was a bad guy and they compared him with someone like Hitler or Stalin. So I quickly removed the comparison. 

You also have to remember that you are not the only one who get criticized. When Apple showed iOS 7 for the first time, people complained about how ugly it was. Here are a few more examples:
  • "This telephone has too many shortcomings to be seriously considered as a means of communication," a Western Union internal memo said in 1876.
  • "The wireless music box [radio] has no imaginable commercial value. Who would pay for a message sent to nobody in particular?" an investor said in 1920.
  • "While theoretically and technically television may be feasible – commercially and financially it is an impossibility," a radio pioneer said in 1926.
  • "If I had a nickel for every time an investor told me this wouldn't work," the founder of Amazon, Jeff Bezos, said.
  • "Sorry Steve [Jobs], here's why Apple Stores won't work," a newspaper wrote. 

When Elon Musk released the Hyperloop idea, people criticized him - and he's one of the wealthiest citizens of United States. But also Elon Musk believes that criticism is something good. When a friend uses one of his products, he always asks:
"Don't tell me what you like, tell me what you don't like." 
But he added that you should always weigh it up – negative feedback isn't always correct feedback. What you shouldn't accept is critics who are liars - not just negative:
"There have been hundreds of negative articles, and yet I've only spoken out a few times," Elon Musk said. "I don't have a problem with critical reviews, I have a problem with false reviews."

September 28, 2013

Startup Metrics For Pirates lecture by Dave McClure

This is a lecture by Dave McClure (@davemcclure). The video is a little shaky in the beginning but will improve after a few minutes. I had never heard of him before I saw this lecture, and according to his Wikipedia page, he's "an entrepreneur and prominent angel investor based in the San Francisco Bay Area, who founded and runs the business incubator 500 Startups. He is often described as one of the super angel investors." If you want to read his (old) blog, it's called Master of 500 Hats.

Lessons learned
  • You are an entrepreneur if you can solve a customer's problem, get them to pay you for it, and make more money than it cost you to build the product and get your customers.
  • Most new ideas fail, but the cost of testing new ideas and find new customers has decreased.
  • Most entrepreneurs know how to build a company from a technology point of view, but they don't know how to find new customers.
  • "Don't learn how to play basketball by watching Michael Jordan" = Don't believe you can increase the value of your company by imitating companies like Instagram, Facebook, and Twitter. They might have a high valuation without any profits but Dave McClure prefers companies that sells something or companies knowing how to make money from the customers they have today.
  • When Dave McClure worked as a programmer he thought that marketers were a waste of time and didn't contribute to the company since they only sold his products - then he realized that he needed them.
  • Recommended the books: The Mating Mind, Spent, Influence, Understanding Comics.
  • When you know what you customers want (your product is interesting enough to your users so they are profitable), stop adding more features and begin to focus on marketing and growth.
  • You have to fail multiple times, but you also need to gather data from you failure so you can learn why you failed. Don't worry about your future customers knowing about how you have failed - they will not know it or they will forget it when they notice you have a great product.