Category: Blogs

Niche is the new big

Before the Internet was around, you had to aim for a huge market if you wanted to build a huge company. Today, things are different — and it’s because the Internet is everywhere.

If you’re reading this and you’re an entrepreneur, there are two things you need to know:

  • Niche is big. And those niches are only getting bigger. All you need is 1,000 True Fans.
  • The only people that need big companies are the investors with the big funds. The only thing you need is a focus on customers.

If you need more proof, go read the history of companies like Proctor & Gamble, America Online and Sweetwater Sound. 🤷🏻‍♂️

 

Growth is the only common language between entrepreneurs and everyone else

One of the many other things I’ve learned over the past 18 months is that when you put entrepreneurs, investors and anyone else around a single table something weird happens: they’re all kind of talking about the same thing but in a slightly different language.

Entrepreneurs are excited about their product. Investors are excited about the possibility of financial returns. Community leaders are excited by the prospect of new job creation.

But then, often, nothing happens. All the excitement leads to no action — and, usually, disappointment from more than a few people.

It seems to me that growth is the only common language between all these different groups.

growth is the only common language between entrepreneurs, investors and community leaders. Click To Tweet

If you’re an entrepreneur, lead with traction whenever you describe your company. Control your narrative.

If you’re an investor, focus your conversation on the growth — or the growth assumptions — of the company. (ie, “OK, you said you had three customers last week. Who are those customers, how many more exist like them and how much will it cost to reach them?”)

If you’re a community leader, share the company’s story as a function of growth rather than a function of passion or some other intangible thing. (ie, “They help bricklayers get X more leads per week.”)

Ultimately, growth is something everyone can rally around regardless of which side of the table you’re sitting on.

The bigger the city, the less it understands modern entrepreneurship

Maybe it’s because there are more employers and jobs available.

Maybe it’s because the traffic and sprawl make it harder to share ideas in person.

Maybe it’s because all (or none) of the above is true.

All I know is that there’s a gap of understanding between the people that are (or want to be) entrepreneurs and everyone else. And, after visiting 94 cities in the last 18 months, that gap of understanding seems to get wider as cities grow.

there's a gap of understanding between the people that are (or want to be) entrepreneurs and everyone else Click To Tweet

I’m not sure what to make of it but maybe you do.

Coworking spaces are awful but important

When you look at the business of coworking spaces, they’re pretty unappealing: they don’t employ many people, their members are often building intangible things that are hard to measure and their business models are tough to justify.

But yet, they’re popping up all over the place. Big cities, small towns and everywhere in between — it’s hard to not find a coworking space in many of the smaller cities across North America. Coworking spaces are one of the four most important things in any tech entrepreneurial hub.

Our current measuring stick for coworking spaces (and startups) is wrong. When you try to measure them like any other business, it’s hard to explain their importance to anyone outside our community. Instead, we should measure the economic footprint of coworking spaces as the sum of their member companies.

we should measure the economic footprint of coworking spaces as the sum of their member companies. Click To Tweet

It may not be perfect but it’s far better than the current measuring sticks.

And, if you’re reading this and running a coworking space, you’re in the best position to help bridge the gap between the tech and the non-tech leaders in your community.

Here’s the biggest opportunity for entrepreneurs — and cities — everywhere else

You can divide most people into two groups: those that are bullish on offline businesses and those that are bullish on online businesses.

The former want to create the next coffee shop or the next farm supply company. The latter want to create the next Amazon or Facebook.

There’s nothing inherently wrong in either of those opinions but the biggest opportunity for entrepreneurs over the next 5 years will be at the intersection of offline and online.

the biggest opportunity for entrepreneurs over the next 5 years will be at the intersection of offline and online. Click To Tweet

And, in particular, it’s about helping those offline companies learn to use online service to grow their businesses. (e.g. social media and paid ads for customer acquisition and online services to streamline their back office processes)

If you’re reading this from San Francisco, Chicago or some other big city, you might think that the online/offline intersection is a joke. Or too basic. Or not disruptive enough.

But the rest of America — and the rest of the world — would disagree with you.

Over the past 18 months, I’ve driven 50,000+ miles, lived in 92+ cities and met 50,000+ entrepreneurs across North America and here’s what I’ve learned:

Ambition is equally distributed. Cash is easier (not easy) to get than ever. Functional expertise — particularly around entrepreneurship — is what’s not equally distributed.

Ambition is equally distributed. Cash is easier (not easy) to get than ever. Functional expertise -- particularly around entrepreneurship -- is what's not equally distributed. Click To Tweet

And that’s the opportunity for entrepreneurs, investors and community leaders everywhere.

To really think about what it takes to help more of their existing offline businesses learn to use and leverage the latest online platforms and tools to grow those local businesses.

Encourage your local tech entrepreneurs to run a workshop on using Facebook ads. Or a workshop on using social media effectively. Or a workshop on using existing online tools to streamline back office processes. And spend the rest of the time getting local offline businesses to come spend an hour a week learning about it.

Whatever you do, just do something. And start doing it today. That time will be better spent than begging other big companies to move to your town.

It’s not about influencers or lucky breaks, it’s about the process

Filip, one of my readers, made a great point about my most recent tip on improving cold emails:

Sadly I think most of these cold emails are not even justified. A lot of people seem to be reaching out to influencers, hoping for some lucky break, instead of actually working on building their business.

One could make the case that the sender needs advice, but there are so many books/videos out there which already address probably any challenges one could have. If one truly needs specialized and custom advice, they should fix that problem immediately by finding the right person and paying them for their time like on clarity.fm, certainly not wasting time spamming people with coffee requests, LOL.
It’s a great reminder that entrepreneurs should be extracting information rather than asking for advice. And that everything — growing your business, raising money for your startup and hiring your team — is a process.

How to avoid screwing up your first meeting

There’s an important distinction between desperation and hustle: Desperation reeks of fear. Hustle smells like opportunity.

Desperation reeks of fear. Hustle smells like opportunity. Click To Tweet

It’s hard to explain the difference between the two but, as with most things, you know it when you see it.

And, as much as people want you to believe that the world’s a fair place, it’s not. First impressions matter more than ever — actually, every impression matters more than ever.

Don’t screw it up by projecting desperation when you actually know how to hustle.

Cold emails: one change that gets 200% better conversions

Everyone does cold emails wrong. Including you. The fix is super simple: switch the order.

Most people’s first email: “Can we get a cup of coffee?” OR “Can we hop on a call?”

Most people’s second email (if they get a response a all): “OK, wow. So you’re saying that the baseline conversion rate should be X?” OR “That’s really good to know. [Insert super crisp question here.]”

And that’s the key: keep your first question to anyone — an investor, an entrepreneur, even your date — crisp. Make it easy for them to answer it.

If you can get someone to give you 30 seconds of their time, you’re more likely to win another 30 minutes with them. The opposite way rarely works.

Overcoming the odds: How to get into the best accelerators

Just as much as I think entrepreneurs should skip the local investors first, I think entrepreneurs should skip the local accelerators too.

  • Aim for the top. I don’t care whether you don’t want to leave your hometown or if you don’t think you’d get into the best accelerators, apply to all of the best ones — YC, 500, Techstars and the others along the coasts. In the worst case, you’ll learn to answer the questions that real investors ask. In the best case, you’ll get in. Either way, you win.
  • Apply early. This sounds too easy but, having been involved in a bunch of accelerators over the years, I can tell you that the vast majority of submissions tend to come in during the last week that applications are open and it’s a huge missed opportunity to founders. If you want to increase the likelihood of getting your application reviewed (and your likelihood of getting a meeting), get your application during the first week — before the flood.
  • Put in the effort. When you’re answering questions on the application, keep the answer to three sentences or less. Anything longer is usually a sign that you don’t know the answer. Or, worse, that you don’t know how to communicate. Again, having been involved in so many accelerator cohorts, I can’t tell you how often I see a half-assed rambling answer to a simple, crisp question which gets the entire application dumped.
  • Look for warm intros. As you’re applying to the accelerator, look up the people running the program, the mentors helping with the program and the founders that have been through the program. You’re looking for a mutual connection to at least one of these people via AngelList, Facebook, Twitter or LinkedIn. Then ask for the intro — and try not to be weird about it.
  • The alumni network matters. Following on the last tip, the success of the alumni companies is a pretty good indicator of the accelerator’s quality. Try to avoid being in an accelerator’s first cohort unless the people running it have some way to prove that they’ve helped other companies grow in the recent past.
  • Drop the script. An incredibly large number of founders come in prepared with a pitch deck and a script in the footnotes. It’s uninteresting and, more often than not, you’ll get tripped up the minute you get a question you didn’t expect. It’s better to relax, keep your traction numbers handy and don’t be afraid to say “I don’t know.”
  • Maximize the speed of iteration. If you get a “no” from an accelerator, it’s safe to categorize it as a “no for now.” Take the feedback on why they don’t think you’re ready, apply it and reach back out to the interviewer ASAP once you’ve applied that feedback. This is especially important if you apply early.
  • Focus on the trajectory. The best accelerators are focused on the growth of your company, not your product. This is a pretty good litmus test of a good founder and a good accelerator.

Actually, that’s a good way to wrap this up: all of these things are a pretty good litmus test of a founder worth backing or an accelerator worth joining.

these things are a pretty good litmus test of a founder worth backing or an accelerator worth joining. Click To Tweet

Acknowledging the Struggle for Interestingness

If you want to get a second meeting with anyone, you need to be interesting. This especially applies to entrepreneurs.

If you want a second meeting, you need to be interesting. This especially applies to entrepreneurs. Click To Tweet

I’m stealing this phrase from something I heard on YC’s latest podcast with Casey Neistat and Matt Hackett. But it’s also something that randomly came across another conversation I was having with someone earlier today.

This is especially true for any entrepreneur that needs more than a few hundred thousand dollars to get to their first customers. (Read: hardware, medical devices, agriculture, etc.) Whether you realize it or not, you’re competing with every other entrepreneur outside your industry.

If you’re boring. If you’re unrelatable. If you’re overly focused on product rather than growth. You’re not getting the second meeting and it’s time to recognize that the problem is you.