8Apr
Build and Sell A Tech Business

How To Start & Sell A Company In 6 Months (1)

Build and Sell A Tech BusinessOne Saturday afternoon while my wife and daughter were grocery shopping I was sitting in my home office thinking about Twitter.  I had begun to find some business related utility in it. I had a strong feeling that the Twitter platform had some really cool possibilities.  I had been trying all sorts of products and services while I was toying with how to make Twitter work for me.  I downloaded or signed up for pretty much every Twitter service/application you can think of. It was all a big experiment and I wasn’t sure what I was doing or where I was headed.  My gut just told me that there was a need going unmet and as an entrepreneur that is a signal you cannot ignore.

In fact, that is the kind of stuff that quite literally keeps me up at night.

I’d finally tried pretty much everything I could find to help my businesses use Twitter in various ways. A lot of the good tools were tangled up with the wasteful ones.  I wanted something that put all of the tools I needed in one place.  Since I couldn’t find it, I decided to build it myself.  When I say ‘myself’ I don’t mean I started writing code. I started emailing people I knew that had related expertise and asked them for recommendations.  Who did they know that was a Twitter API expert?  Who did they know that was a PHP whiz? What other types of contractors would they recommend I hire to build my project?  I got a lot of great suggestions and began to narrow it down to a few key players – a twitter API expert, a team of experienced PHP developers, a creative designer, and some all-around smart web entrepreneurs.  Take note – this might be the most important contributor to TwitJump’s success:

I knew what I didn’t know.

I went to those that either did know, or knew someone who did, and then I went about interviewing them.  How much did this cost me?  Zero.  How much did it help me? Immensely.


How do you interview someone who is an expert in something you are not?  Read!  While I have limited ability to write code, I’ve been around the tech business enough to be able to talk the talk a bit – but not enough.  So I spent A LOT of time learning about Twitter and how it worked.  As I mentioned, I paid for (where necessary, some stuff was free) all the apps and sites I could find in order to find out how they did things.  I took the good stuff and noted it and I also took the bad stuff and noted it too.  I also was having regular discussions with my good friend Greg.  He’s a mentor, has invested in other businesses I’m involved in, and he knows a lot of people in various tech industries.  He put together a late night brainstorm session with a bunch of smart peers.  We talked about all kinds of things – Twitter, TwitJump and a variety of related tangents.  It was a very intellectually stimulating meeting.  I made a few friends in that meeting that I continue to talk to regularly today.  Anyhow, after this meeting and continued discussions with Greg and others, I developed a good road map of what they wanted done. Notice I said “they” and not “me”. I flat-out asked these people if they would buy my product. They said they would if it had what they needed. It turns out that the “what they needed” was similar to one another, so I knew that when I built it, they’d buy it. I did this with literally hundreds of customers before a single piece of coding was done.

So what’s next?

Well, we really got rolling. No investors, no banks, no friends or family, no offices, no employees, no advertising, no meetings. I was determined to make TwitJump a virtual company with the highest margins possible.  The costs to develop were not inexpensive, but those costs can decrease dramatically over time for a web-based product like TwitJump.  In addition, I knew I had customers ready to buy! I also really focused on the recurring expenses.  TwitJump used the latest technology to not only create an incredibly scalable business but also to keep costs down.  There has never been a better time to affordably start a business – there are so many things that used to cost a lot that now cost a significantly less due to the improvements in various technologies.  We were able to get emails, mock ups,  a website, logos – simple stuff – all quickly and very inexpensively or even free in some cases.  My focus was to get a minimum viable product that the hundreds of customers I’d talked to said they would buy.

This is a concept that I think a lot of entrepreneurs need to zone in on.  I wrote a post called ‘Stop Building Or Die’ that talks a lot about building a business this way.  As the great Alan Hall, founder of MarketStar/Mercato describes it (paraphrased); “Entrepreneurs build this shiny object, and say look, buy my shiny object! But they don’t talk to their customers enough to learn what shape, size, color and price they are willing to pay for it.  Without that, all you are holding is an expensive, personal, shiny object.”

After we had something to show, we signed up a bunch of paying customers that we knew. We started to give away a basic version of the service to everyone else.  No advertising, no SEO, no SEM, no PPC. Nothing.  We had a single landing page and that was it.  Why?  Although we wanted to run fast, we wanted customer feedback to continue to build a beta that we wanted a lot of people to use and eventually pay for.  As a result, most of the features you see were not thought of by TwitJump, they were thought of by TwitJump customers.  In fact, I’d guess that over 80% of the features were ideas that had something to do with a customer comment, email or meeting.  As we continued to build and develop, customers continued to give us feedback.  As we got to the point where we felt we had something that met some of their needs, we started to ask more and more of them to pay for TwitJump.  Amazingly, many wanted to pay.  Many more inquired about paying without being asked to pay.  TwitJump was profitable and cash flowing nicely within 90 days of its launch as a result.

As the next few months progressed, I significantly increased my bet. I’ll post that as part two soon…

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About Alex Lawrence

Alex has been a successful entrepreneur for 20+ years. His current venture Lendio ranks #34 on the Inc. 500 list. Alex earned a BS degree at the University of Utah and his MBA at Weber State University, where he is Vice Provost and Director of the Entrepreneurship Program. If you want to talk with Alex about business and entrepreneurship (or other questions), email him (alex AT startupflavor DOT com), or you can find him on Twitter @_AlexLawrence.
  • Alex,

    Thanks for sharing. Can’t wait to read part 2!

    Ross

    • Alex Lawrence

      Sure thing Ross. I’ll post part 2 in the coming week or so.

  • Clint Carlos

    I watched from a distance, downloaded and used and gave some unsolicited feedback as well…excited to hear the rest of the story.

    • Alex Lawrence

      Clint – your feedback was helpful for sure. Thanks again.

  • Woo….. You’re the man Alex! I love this 🙂 Can’t wait to read part 2. Thanks so much for sharing.

    • Alex Lawrence

      Ha – Ha, thanks Sam!

  • Thanks for the great post. I just heard this speaker, Jacques Habra, talk about much of the same strategy and basis. It’s so interesting the clarity and focus some of you entrepreneurs have. You may have his site and the concept of the Noosphere fascinating.
    Jacques Habra explains at this post.

  • Al

    Thanks for the great post! Business is like a science, there are many ways that one can go about starting a business and ultimately selling it, but not one way works best for everyone. I think that the key to success, or at least an important part of it is the ability to speak in public. Do you have any suggestions for how I can improve my communication abilities?

    • Alex Lawrence

      Al – practice!

  • Nick Yeates

    VERY interesting techniques. Sounds like you must have a ton of drive. Not sure I understood how you convinced random people to be interviewed by you? As in a job interview? Were they all looking for work? Or were you just having interest-driven convos with them?
    I am shortly looking for an expert cofounder that is very technical and specialized, but not sure where to find the perfect fit. Going to a cofounders wanted meeting this week.

    Also who were the hundreds of potential customers you talked with? I am interested to know how you reached so many potential customers all before any product was even solidified. I’m lucky to run into 3 over a few
    Inta of talking to people. Were the devs uou interviewed also your customers?

    So helpful, thx so much!

  • Michael Yu

    This was a very enjoyable read and insightful as well. The same few questions came up that Nick had. Could you share more details as to what you mean when you interviewed them? Were they casual lunch meetings, or was it a professional job interview?

    Anyway, great information and also looking forward to Part 2!

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