Labor Day is for us, the entrepreneurs

In the United States we’re celebrating “Labor Day” today, which the Department of Labor politely explains to us was about the collective achievements of American workers, which drives the American economy forward.

I call bullshit.

Collective organizations and large organizations are safe, they are protective and they are largely landlords seeking to collect rent on their existing advantages. This isn’t to say that there’s no value to trade unions or older, larger organizations.

However, that which is new, aggressive and revolutionary comes not from the collective workers but from those of us who strike out on our own to shake things up.

America’s prosperity is a story driven by the coffee lover who saw a country full of welcoming cafes and the man who saw the Internet as a disruptive force for all of commerce, not the collective of workers streaming in and out of offices every day looking forward to the weekend.

To Labor is to Act

The word labor has many meanings and varied uses. If you look it up in the dictionary you find that it has 17 distinct definitions. The verbs, however, are what grab any entrepreneur:

  • To perform labor; exert one’s powers of body or mind; work; toil.
  • To strive, as toward a goal; work hard.
  • To act, behave, or function at a disadvantage.
  • To be in the actual process of giving birth.
  • To roll or pitch heavily, as a ship.

Building your own company? Then the above probably resonates deeply with you.

We see you, chasing your dreams

We’re fortunate to be a part of TechStars – we get to see many other startups full of passion and love for what they do. To labor at something you love and believe in is truly transformative.

We also see it in the eyes of our customers, many of whom started out dreaming about an app just a few years ago and are now running large and growing businesses. The greatest teams we encounter are full of love for what they do, devoted to creating what they think should exist. These are the people building the future. These are not the collective workers. These are the laborers, those with the spirit that Labor Day was created to celebrate.

Today, we toast to you

In July, we celebrated the Independence of developers everywhere. Today, Labor Day, we celebrate the entrepreneurs. You probably didn’t take today off (nor did we) but that seems right doesn’t it?

Picture of a card with the quote "The most powerful weaopon on earth is the human soul on fire"

A toast to those who are invested in labors of love

The startup CEO must be the market maker in information

At the heart of every startup is a hypothesis.

There is, stated or not, an idea about what can be sold to a set of customers. The lean startup movement, led by Steven Blank (check out his excellent book) and Eric Ries* make this point eloquently and repeatedly, so I won’t rehash their words. The job of the CEO, they point out, is to focus on this hypothesis and then to test it, repeatedly, until the hypothesis and the actual market environment match, resulting in success and business for the company.

The CEO must make the market in information at their startup.

MarketMakersjobWhat do I mean by this? Consider the “market maker” in the financial sense, where it is most often utilized. A “market maker” is a liquidity provider. They are willing to take the risk to both buy and sell stocks, trusting in their ability to manage inventory of the stock. There are a few key things that they must do in order to be good at their job:

  • Understand the supply and demand dynamics for each asset they trade in
  • Understand their own organization’s ability to execute
  • Consistently deploy their organization’s ability to take an immediate risk (the $.10 difference in the illustration) and then sell that risk for a profit.

The CEO’s ability to “make the market” determines company success

CEOsjobJust like the market maker, every CEO is focused on a matching problem. If  they can figure out what their team can supply such that it is demanded in sufficient price and volume, the company can succeed and grow. The CEO gets paid on that matching of supply and demand and uses information in order to accomplish their goals. In order to do their job well, the CEO must be the master of information in their company. Every successful CEO that I’ve met and been around has always been incredibly savvy at making information flow appropriately in their organization. Typically, they:

  • Ensure that information is flowing across the team
  • Gather information from early customers, potential customers and the sales team
  • Translate information from the team (here’s what we can build, are building and think it makes sense to build) and from the market (here’s what we want and what we would pay for) such that both sides move towards agreement.

“Making the market” in information can be learned.

As a startup CEO, then, it’s important to be focused on how information is moving internally and externally. Each CEO should be highly focused on efficient and productive communication among the team, while informing their work based upon what the marketplace is saying. If the external market is constantly asking for “faster, simpler” and the internal teams are totally focused on “more features, cooler design” then the CEO isn’t doing their job. Pretty simple.

In the past, getting meaningful information at a startup was very difficult, even if it was a tech startup. To be an excellent startup CEO, one often had to be an extraordinary communicator and salesperson – they were the ones most capable of gathering the requisite information.

Today, especially for tech companies, this is a lot less true. The explosion in information sources and the array of inexpensive information tools has provided aspring CEOs with the ability to quickly understand and make the market in information for their chosen problem. As I look around the landscape of today’s startups and the lean startup methodology, I’m struck by the number of companies that are rising to help management teams better understand their market. For example, consider how these companies are establishing themselves as indispensable to the product/market fit process because of their solutions to fundamental information problems:

  • KISSMetrics: Analytics need to be focused on what makes a business go. They help you simplify and focus information.
  • You got people to your site somehow. Use Unbounce to determine what most of them expect to see.
  • AgileZen: Time spent on project management is often just time stolen from developing the product. Communicate project details faster and make improvement on your output a core goal.
  • Balsamiq Mockups: Communicating information with your team about what the product looks like before ever writing code. Less wasted time, more meaningful conversations about product. The bonus is being able to easily talk customers through your vision.
  • Pivotal Tracker: Build products as stories that match user needs with features. Track your productivity, learn about where there are snags and prioritize the stories that are most important to the external market
  • Wufoo: Easy forms. Using Wufoo to learn more from your customers and potential markets is an incredibly easy way to gather more information in a consistent manner.

CEOs should constantly seek out new information sources.

While those are just a few of the companies helping tackle the information problems facing companies, they are really indicative of an encouraging trend. Innovative companies are providing some really impressive results for their customers by helping the CEO match the external and internal markets in information.

We’ve built Apptentive because we believe in the value of information sharing and enabling direct communication between the CEO and the customer. As we learn more about the principles of the lean startup movement and incorporate them into our work, we constantly come back to a core idea: more unfiltered communication is better. If you’re the CEO, your job is to make sense of the unfiltered communication, to seek out new information sources and to make your teams execute quickly on making happy customers. Go make that market Smile

*Note: Eric Ries has a book coming out this fall about the Lean Startup

A free book worth your time

Free’s good right? Especially when you’re getting excellent information for free right?

Yeah, we thought so. For this reason, we highly recommend checking out the site for MicroConf, a conference for self-funded startups (like us).

We won’t be attending, since we’ll be at WWDC, but we checked out the free reader that you can that you get at their site and were pretty impressed. If you are seeking honest experience and advice about:

  • Things that worked
  • Where people made huge mistakes
  • How it’s possible to built a great business without outside funding

it’s a great read. Simple as that.

We’ve had the pleasure of meeting some of their writers in person and they’re intelligent, driven and practical. The advice these folks offer is about getting shit done and pushing forward. There’s no shortage of material out there speaking platitudes, but to us, much of that feels like a waste of time.

This doesn’t read that way and we were pleasantly surprised to find out that something free wasn’t chock full of advertising and promotional messaging. Nice job folks, hope the conference goes well!