From napkin plan to mega-zillion product. About technology, usability, entrepreneurship and start-ups.

Posted by edoron | June - 3 - 2011 | 1 Comment

This week I watched an interesting video of Y Combinator partner Paul Graham giving advice to some start-ups. I must say that I like the way this guy thinks. During the session he was talking with a start-up developing a cloud graph database named Dydra. It’s an intersting concept and I’ll keep it in mind.

Anyway, he kept asking the guy: Who would be your first adopters? Who’ll pay first for your product?
Those were great questions. That got me to remember a lesson I learned years ago, but one that I need be reminded of from time to time.

Back in 1996 I started my first start-up company. It was called “The Software Mint”. Actually I founded a computer games company several years before that, but that’s another story. My company was developing technology for building Virtual Worlds. This was back in the days before the first virtual world like games came out: Ultima Online, Meridian 59 and later EverQuest. It was the time when VRML (Virtual Reality Modeling Language) was getting started and way before Second Life.

Me and my co-founder developed a working prototype of a multi-user sync server, an objects data store and a graphical client software. It was all working pretty nicely, good enough for a demo with multiple users. I wrote a document describing the system and on I went to raise money for turning this into a real company. Needles to say I was young (22) and naive and knew nothing about raising investment.

My basic pitch was:
We are building this awesome virtual worlds enabling technology… What is it good for you ask?
Well, at first we’ll use it to build graphical chat rooms. As the technology matures, we’ll build virtual graphical shopping malls and stores, and eventually we’ll build sophisticated massively multi-player online games (MMOs or MMROPGs).

I didn’t see it back then but in retrospect, besides the market not being ready, the product ideas not being very good and my personal lack of experince… the main feedabck I was getting over and over again was: THE COMPANY LACKS FOCUS. The investors I met with were telling me that I should attack one market with one product and not try to build three products for three different markets. Obviously they were right, but I wasn’t smart enough to listen back then. Looking back this was probably one of my first hard learned lesson as an entrepreneur.

Why focus matters so much:
1. A start-up has limited resources, focusing more firepower on one problem or one market makes more sense than spreading thin.
2. Knowing your target market makes you sharp. You need to be able to imagine your client and his needs. If you can’t do that, you’re shooting in the dark.
3. Your company needs to get to market as soon as posisble. Focusing on one narrow segment or vertical will let you cut features and focus only on the things that mater most.
4. You need to prove your product idea has traction in order to succesfully raise investment. Thus focusing on the most likely to pay potential clients, makes the most sense.
5. Looking at history, companies trying to be all things for all people usually fail.

Unfortunately I still see companies lacking focus all the time. Just recently I was approached by a company building an “all purpose” security anti-piracy mechanism, looking for my help. They want to protect online music, games, software, CDs and what not. Reading their manifest can easily make one dizzy. If they would have picked one domain where they can do the most good and where they will find their most likely to pay clients, the’d fare much better than when trying to be all things for all people.

One Response so far.

  1. Ge Vang says:

    Hi Doron-
    Looks like you are the guy we looking for. We are working on developing a unique website that will act like a system for giving. We need a good CTO to add to our start up. Please email me back and we can work out details.