23Apr

3 Lessons To Shortcut Your Startup Learning Curve

Nelson JamesIt’s always fun to have a close friend (that is qualified) post here on my blog. This is one of those occasions! Nelson James is the co-founder and chief operating officer of Signs.com. Prior to that, Nelson was the president and co-founder of SEO.com, where he helped to grow the company from 2 to over 85 employees and managed many large accounts, including Dell.com. In between all of that, I was able to recruit Nelson to join Lendio, where he was VP of Marketing and was responsible for the creation and management of a marketing team as well as the strategy, tactics and programs to create interest and demand for Lendio’s products and services. He did a great job and it was fun for us to work together. I should note (and this ages me a bit) that I also coached young Nelson when he was a high school tennis star. So yeah, we go back a few years.

Nelson has had the opportunity over the last year to start Signs.com. For all you entrepreneurs and prospective entrepreneurs out there, I thought it would be helpful to hear from him. He’s written three essential lessons learned so far.

Enjoy the read!


1. Vision Comes Before Creation.
I spent a lot of time doing competitive analysis and industry research before creating anything. I spent hours talking with industry experts, family, friends, and most importantly, small business owners (who I thought would be our main customers) about what they wanted in a sign company. Once I had a pretty solid vision of what our customers wanted, I created user stories for my future development team.

All of this work was absolutely necessary to get approval from the bank and other investors, and to form a consensus with my team. If I had just thrown something up, hoping to make money, I may have created a lot of future issues and unnecessary expenses for myself. What if I had used the wrong platform? Gone after the wrong audience? Paid for the wrong kind of marketing? Even with a well-thought-out plan you’ll definitely make mistakes, but those mistakes will be drastically reduced if you’ve spent the proper time in the vision phase of your start-up.

This same rule applies to everything you do with your business. Which do you think should come first: design or development? You might think this is an obvious answer, but a lot of people (including me) get it wrong. I had a great vision in my head of what the site would look like and I was able to take that vision and develop some very specific user stories and begin development. However, I hadn’t given my vision to a designer to flesh it out. I just figured my developer had the same vision of the site that I did and we started rolling. That created some development problems I could have avoided if I had just made my vision a little more concrete before I handed it over to be developed.

My advice: If you think you have a brilliant business idea and are antsy to execute it, you are NOT ready to start spending resources unless you can say “yes” to the following questions:

Have you modeled out your idea on paper? No, it doesn’t have to be a full-fledged business plan. In fact, Alex would discourage that and I would too. Instead, look into creating a Business Model Canvas to prove out your model.

Having a written model will help you solidify your ideas. It will also give you something to show to others. I highly recommend taking your model to a mentor and asking him to be critical and not hold back. He may help you find additional revenue streams, customer segments, or holes in your plan.

Have you run the concept past more than 10 of your potential customers? There’s nothing worse than to spend a year’s worth of resources developing a concept that you, your mentor, your mom and your friends all thought was brilliant, only to launch it and watch it fail miserably because your customers don’t actually want your product, or they want it delivered to them in a different way.

If your website will be a primary revenue driver for you, have you at least wireframed it out? That could be as simple as laying out the site and its functionality with pencil and paper or it could be as detailed as designing mocks and content for the entire site. Either way, you need this to get buy-off from investors, customers, and your key hires.

2. Know Thy Customer
In creating the Signs.com e-commerce site, our design tool was far and away the most crucial feature. I created a wireframe and sent it on to my designer who did a fantastic job of putting something together. In order to launch as quickly as we wanted (and due to some technical constraints), we had to leave out quite a bit of the functionality that we initially dreamed up, but ultimately, this is what we went live with:

Signs.com-Design-Tool

Because we had simplified so much, we created a roadmap of what we thought were the highest priority enhancements over the next year. However, it didn’t take more than a couple of month’s worth of real customer data to know that our priority projects were not in line with what the customer truly wanted. If we had stuck to what we thought our customers wanted, we could have spent the next 6 months creating enhancements to the tool that they didn’t even care about—or worse, that they didn’t like. Over the last few months, we’ve made some great progress toward giving our customers what they really want because we actually listened to them. Here’s what our sign design tool looks like now and there are more changes to come based off our user feedback.

My Advice:
Remember this: You are not your customers. You do not know what they really want or why they are really looking unless you ask them. If you think you’re smart enough to know who your customers are, what they need and want, and why they would buy from you, without ever talking to an actual customer, you’re a fool.

Sure, you can do a lot of research to zero in on a psychographic and demographic. However, you’re still just guessing until you hear from actual customers who buy or try to buy from you. That’s why it is so crucial to:

Go live with your product/site/offering as early as you possibly can. Even if you know your product isn’t as good as it should be, you’re at least getting it out to customers who can provide you real feedback about what improvements are most important to them.

Read The Lean Startup by Eric Ries. He has some great insights about this specific topic and shares some other valuable principles to live by.

3. Success is Hard and Slow
When I first put my projections together, I (like pretty much everyone before and after me) underestimated the time it would take to hire the right people, create the business, secure the funding and go live. I also overestimated the revenue numbers we would make. I over-optimistically thought we would swoop into the market with some quick marketing efforts and our customers would flock to us from all corners of the earth. I saw us as an exception to the rule, when really the chance of being an exception is the same chance you have at winning the lottery.

Sure, there are success stories of people who throw something up onto the web and, without much effort, end up making it big. But just as in the world of multi-level marketing, those success stories are few and far between the thousands of start-ups that are created every day. You need to come to terms with reality and realize that running a business is hard work and that money doesn’t just flow freely into your business as soon as you have something to offer people, but it does come as long as you stick with it.

My advice:
Know it coming in: Success in a startup takes a lot of hard work and it comes slowly. You have fantastic days where you feel like you’re taking the world by storm and then … you have those other days. And sometimes those other days come all in a row and last for a long time. This is when most startups fail. Which brings me to my next piece of advice:

Read Seth Godins book, The Dip. When you’re in the dip, it’s actually motivating to read about it and know that it happens to virtually every startup out there. If you’re not in the dip yet, it’ll help you understand when it’s happening and what to do about it.

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About Nelson James

  • Personally I believe there are not shortcuts, so I think the title is a little misleading. However, cutting through the noise and clutter to find your business model is definitely the right path.

    • Andrew Nielsen

      I agree there are no shortcuts to sustainable and long-term business, but I believe Nelson was trying to say that entrepreneurs should understand basic principles of lean business, so they can reduce their “learning curve” in essence. New and young entrepreneurs can save lots of time and money by reading this article and applying it before they decide to build a product or service that no one wants. In that sense, these are “short-cuts” as they will save time, money, and other resources for people that take the time to implement them.

      • Bastian, I’m not saying Nelson doesn’t know his stuff, he does. It’s a matter of semantics, but it’s important.

        Andrew, there are two terms that are battered around: Effective and efficient. Running lean is the combination of both effective AND efficient. But anytime you get so efficient that you’re not effective, you can be busted. While there can be short cuts, I have seen too often businesses get so cost efficient that they lose effectiveness.

        Nelson says in #3, success is “hard and slow,” but discusses “shortcuts.” The perception of others is that a “short cut” means faster, not slower. So are there really “shortcuts” in business?

        Yes, you can reduce SOME of the learning curve by not doing things which have nothing to do with success, but you can’t cut short success. It’s not happening.

        • Andrew Nielsen

          Agreed.

  • Bastian Cowsert

    I had the pleasure to listen to Nelson James as a quest speaker at Weber State University. He knows his stuff. Kevin, thanks again for the great info.

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