Shotput Ventures
When I moved to Atlanta a few years back to start Jungle Disk, more than one person thought I was crazy for leaving California. However in addition to the personal reasons I had for moving, I really felt that Atlanta had all the raw ingredients needed to build a great Internet business. It has been amazing to see how much the startup community here has grown and come together in just the past few years. Through blogs, twitter, and local events like Open Coffee and Startup Riot local entrepreneurs have more opportunity than ever to network, share and work together.
Since Jungle Disk was acquired last year I’ve been looking for opportunities to give back to the community and help other local startups. One way that I’m planning on doing that is through Shotput Ventures, a startup accelerator fund modeled after Y Combinator.
Along with eight other local entreprenuers I’ll be helping guide a select group of web service companies from idea to launch in a three month program in Atlanta this summer. With my own success bootstrapping Jungle Disk, I know how far a great team with a small amount of capital can go in a short period of time with the right experience and resources available to them.
Applications for this summer’s program open up on March 6th. If you’ve got a great idea for a web company and a few friends to help I’d encourage you to apply. While the program will be held in Atlanta, teams from anywhere are welcome to apply.
Keys to Startup Success
Last week I gave a presentation to the Atlanta Web Entrepreneurs group on the story of Jungle Disk, and how it went from an idea to successful business and sale in such a short period of time. I’m not going to post the whole presentation, since I’m not a big fan of powerpoints without context, but I would like to share some of my “keys to success” for other startup entrepreneurs.
- Have a killer product
This sounds obvious, but lots of startup pitches I hear sound like useful ideas, but not killer products. The marketplace is tough and useful isn’t good enough – you need to have a product that people can get really excited about. The good news is that this is one of the easiest things to ensure before to build the product. How? Just tell as many people as you can find about your idea, and see how they react. If you get a uniformly enthusiastic response, you may be on to something. If instead people hum and haw and “don’t really get it” then you are either don’t have a great product, or aren’t doing a very good job pitching it. Which brings me to: - Learn how to pitch your product
Being able to explain the vision for your product in a clear and compelling fashion is a critical skill to have. This is one of the biggest reasons I believe that some startups never get off the ground – their founders may have a great idea, but they can’t figure out how to explain it to customers, partners, investors, or even employees. You should be able to give a 10 second pitch that provides enough information to convince anyone that you’re doing something cool and important (set the hook), and a 3-5 minute pitch that can really reel them in. Here in Atlanta there are a few great resources to help refine your pitch, including PitchCamp and Startup Gauntlet. - Communicate with your users
One of the reasons I believe Jungle Disk has such rapid users is that we’re always communicating with them, primarily through our forums and blog. Forum communication is great as it provides a real sense of community. Doing support through forums as we have done is always a bit risky – if your forums are popular, it can give the appearance that there are a lot of issues, but public forums provide a great troubleshooting resource to users as well as a great feedback channel. We use our blog primarily to communicate about news and plans for the product. We tend to be very open about future product roadmaps, as we feel it helps drive excitement in the user base and also acts as an incentive to our developers to meet our commitments. It also can help us prevent going down the wrong path, if we announce something and get a lot of negative feedback about it. - Make sure you can make money
Ok, so this one sounds obvious too, but the reality is that many startups aren’t really sure how they will make money, or have some pretty crazy expectations about pricing, ad rates, or adoption that are totally unrealistic. If you’re selling a product, make sure people are willing to pay for it, and find out how much they are willing to pay. How? The easiest way is to ask, or to propose a price and see what they think. That’s what we did, when we set the pricing for Jungle Disk. It’s also worth noting that in the case of Jungle Disk, it was never really a free product – even during the beta, we required users to sign up and pay for an Amazon S3 account, which meant that every customer we had was a paying customer from day 1. This proved to us that there was real value in the product/service we were offering, and I was never uncertain that people would buy the software. - Explain what your product does above the fold on your front page
Since the day Jungle Disk launched, we’ve used 5 basic bullet points front and center to explain what Jungle Disk is and why you’d want to use it. Don’t hide your killer product (you do have a killer product, right?) behind mounds of marketing speak that leaves visitors to your site wondering what in the world you’re selling. Just explain it, clear and simple. If your idea is bigger than your product today, sell the product you have today and your customers won’t be disappointed. - Clear, simple, public pricing wins (cheap helps too)
I’ll be the first to admit that we only got this half right with Jungle Disk – our pricing was cheap and public, but not necessarily clear due to the complexities of how Amazon charges for S3. In the end, we felt this trade-off was worth it for the other benefits we got from the arrangement. If you’re afraid putting your pricing front and center is going to scare off customers, it’s either too high or you aren’t doing a good job explaining your value proposition (see above). Also, don’t worry about trying to keep your pricing secret from competitors – if they want to know, they’ll find out. - Make it really easy to buy
There is a common thread among business products and services to push everything through a salesperson, hiding pricing from the site and making a contact form the only way to get more information. While I understand the lead generation / sales process, the fact is that a lot of folks land on your site and would probably just sign up for your product if you made it simple – show them the price, provide a form to sign up, and a contact form if they want their hand held. Otherwise they are going to go find a competitor that makes it simpler. With our business product, you can be signed up with billing information in about 3 clicks from the front page, with minimal information to fill out if you’ve already got an Amazon account. I wish every service I signed up for was that simple.
I talked about a few other things in my presentation, such as our focus on early adopters, and how we set our pricing intentionally low (”make it a no-brainer”), but those things were fairly specific to our product and goals. The 7 keys I’ve listed above apply to pretty much every startup, and if you follow them you’re going to be halfway there already. The last half is actually building a great product, which is an entirely different topic.
Cloud computing is transforming Information Technology
Making travel arrangements recently, I was struck by the impact that the Internet has had on travel. Before the Internet, going anywhere meant calling a travel agent, trusting that they found the best options for you, and waiting for tickets in the mail. It was a time consuming and costly process. Today, I can hop on Orbitz or Expedia and see every flight and hotel option available in seconds, and be booked, checked in, and out the door less than a minute later. The Internet has had a similar transformative effect on communication, entertainment, news, and even dating.
Why is it then that IT itself still operates more like a travel agent than an Internet travel site? IT itself is one of the last areas of business to be transformed by the power of the Internet. In a small business, if you want a new IT service you call your local IT provider, tell them what you want, they give you a quote, and a few days or weeks later they have something set up and running. In big businesses, product groups send their requirements over the wall to an IT team, who analyze the requirements, procure hardware, install it, configure it, and a few weeks (or months) later has it ready to go. Need an upgrade? Get ready to repeat the whole process.
Cloud computing represents an opportunity for the Internet to transform IT the same way it has so many other areas of our lives. Engineers can provision new servers in seconds with a few clicks, without needing to worry about capacity or capital budgets. Unlimited storage is available to anyone with an Internet connection and a credit card. You can setup an office PBX in minutes, with nothing more than a handset that plugs into your Internet connection. By putting all these services on the Internet and making them available through a web browser, we’re removing bottlenecks and allowing instant IT gratification.
Why has it taken so long for IT to improve the experience of IT? Imagine if traditional travel agents were the only ones who could build Internet travel sites. Do you think they would have been in a rush to do so? It’s clear there is a lot of fear in the IT community surrounding cloud computing, and much of that fear comes from a natural instinct for self-preservation. After all, who needs a mail server administrator, when there is no mail server? Who needs a backup operator, when there are no backup servers and backups are completed automatically and seamlessly all the time? The good news is that much of this fear is misplaced. As cloud computing transforms IT, IT staff will find themselves spending less time buying hardware, racking servers, and writing RFPs, and more time focusing on assembling and managing the best collection of IT services from across the Internet to improve their business.
There are still many legitimate questions and concerns about cloud computing. Will it really save money? Can it be as reliable as fully managed IT services? Who will I call when it breaks? What if the cloud provider shuts down? How can I ensure the security of our data in the cloud? These questions will take time to answer. Some of them will be solved through technology, and others will simply be better understood as cloud services have more time to evolve. The eventual transition is inevitable though – the Internet will transform IT just as it has every other part of our lives.
Defining Cloud Computing
On any blog dealing with cloud computing it seems one of the first posts is always the author’s attempt to define cloud computing. Cloud computing has become such a nebulous term that folks who write about it almost always feel a need to explain what exactly they think it is, as if it justify their use of the term.
The good news is that this has now been done so many times, I don’t feel the need to do it myself. My favorite explanation of cloud computing comes from Erik Carlin in Rackspace’s Rack Labs group, so if you still don’t understand what cloud computing is, read about it here.
For my part, I’m interested in all three types of clouds. Jungle Disk is a great example of a cloud application, which itself relies on an infrastructure cloud provided by Amazon S3.
For those readers who are still offended by the term “cloud computing” and think it’s just an overused buzzword for something we’ve had all along, all I can say is “blog”. Personally I always thought the term was rediculous. Personal webpages (geocities), daily news sites (Blue’s News), and random status updates (.plan files) have existed as long as the Internet, but somehow wrapping them with a bit of hype and the buzzword “blog” actually did drive an amazing amount of new interest and new content, some of which (like this blog) I hope you’ll find useful.
Even if you don’t think the ideas of cloud computing are all that new, I fully expect the huge amount of interest and investment being generated by the hype will create real payoffs in the end, which we will all benefit from.
