Computer Guy

Computer Guy
Sunset at DoubleM Systems (, Del Mar, California

Thursday, May 31, 2012

Customers as the New Investor Class

By signing the JOBS Act this past April, the door to crowdfunding swung open globally to entrepreneurs and startups. Funding sites such as Kickstarter, Fundable and Quirky have rocket-launched new ideas for innovation, and the funding success stories only grow larger with time. Most recent is Kickstarter's Pebble Watch project that was seeking only $100K and instead received $10.2M in funding support.

Rather than rely on VC capital to fund your business, this crowdfunding model uses customer support for capital. The best part: you get a first-look at real, customer market demand for your product before wasting time and money to develop something you later find they actually don't want. While it's nothing new to use a customer pre-order for your product, the growth of crowdfunding platforms is making it easier to access capital, and on a much grander scale. For a list of the top 10 crowdfunding websites for entrepreneurs, check out Plan to Start

Read this article from Gigaom on crowdfunding via customers as the new startup capital to learn more.

Wednesday, May 30, 2012

Have an invention? Launch it with Quirky

From Inc. Magazine, read the full article here.

A new product development platform known as Quirky allows inventors to share and get help with their inventions.

Gary Rose knows fully the big payoff that comes from taking an idea to an invention. He launched his 
 brilliantly simple kitchen tool Tether, which allows wine glasses to be cleaned in the dishwasher without them breaking. Rose had help with his invention from more than 700 other collaborators from around the world. How is such an achievement possible? Only through a product development platform known as Quirky.

The Quirky process goes something like this:

1) A user submits an idea for review and modification by a community of more than 210,000 other innovators.

2) Upon receiving a critical number of votes, it is then analyzed by the Quirky product development team.

3) If the Quirky team decides the product is viable, then full product development begins.

4) The product is then sold through the Quirky Website as well as retail shelves in stores like Target and Bed, Bath & Beyond.

5) Royalties are paid out to all users who had influence on the final product according to the weight of their influence (The original idea-maker keeps the lion's share of the profits).

Think you have an innovative idea that solves a problem? Go to Quirky and create the solution!

Tuesday, May 29, 2012

The Complexities of Social Media Marketing

Business Insider posted an article on the insane complexities of social media marketing today (click the link to read).

Here's a look at what they mean:

"It does not matter how slow you go
so long as you do not stop."


Monday, May 28, 2012

How to Get Acquired for Tons of Money

Some companies are bought for huge sums, while other similar ones never get much notice. Click here to read the full article on how to get on the road to the big acquisition.

 Here are some tips they mention:

  • Long before you intend to sell your company – years ahead of time--think of every objection or issue that a potential acquirer might have. Is your customer concentration too high? What are the expansion opportunities, and how well proven are they? Do what you can to mitigate those concerns. Get input from people who have been through several acquisitions, on either side of the table.

  • Identify strategic partnerships with larger companies that have made acquisitions in your market at attractive multiples. As you work together, you’ll sense if things are going well. If your partner values you, they’ll let you know that they may want to form a deeper relationship.

  • Pick an investment banker and legal advisor well before you receive an offer for your company. This will put you in position to react quickly if you receive an unsolicited offer. Keep in mind that you’ll have weeks to respond, not months.

  • When you do get an offer, analyze the benefits that your strategic partner will receive from the acquisition, both in terms of revenue growth and cost savings. You might know the potential benefits better than they do. Often you can get a strategic acquirer to pay for some or all of these benefits.

Follow these simple rules, and your great company could gain the interest it deserves.

Friday, May 25, 2012

4-Step Formula for Guaranteed Success

Herding Gazelles / Karl Stark & Bill Stewart

This amazingly simple formula drives virtually every successful business. Unfortunately, many entrepreneurs and investors lose sight of these basic principles.

Success in business, especially in growing businesses, does not require an ingeniously complex solution. Often, success comes from mastering the basic fundamentals.

In short, success is about addressing a customer need better than you or your competitors currently address it. In many cases, the "new and improved" solution is surprisingly incremental, rather than revolutionary. Examples abound:

Google, one of the most valuable companies in the world, began as a slightly better search engine.

The Toyota Camry was the best-selling car in America for many years because it had better gas mileage, was fun to drive, didn't break down, and was less expensive than other sedans.

Oprah Winfrey dominated daytime TV by tapping into topics for women in more interesting ways than Phil Donahue and others had done for years.

Starbucks reinvented the concept of the coffee shop-something that had been around for generations-by consistently serving good coffee in a pleasant environment.

As we analyze the drivers of success in these and virtually all other entrepreneurial successes, we find that there is an extremely basic, and in hindsight, glaringly obvious, four-step formula common to each.

1. Develop an understanding of customer value.

What's the value equation from the customer perspective? This is defined, most simply, as benefit minus cost. Many businesses and entrepreneurs simply don't understand what would make a customer happier or better off. Often they are trying to fit their product to the customer rather than identify what product would fit the customer.

2. Create a better product or solution for a specific customer.

Because each customer is different, identifying the specific customer or segment you are targeting is critical. Attempting to be all things to all people typically results in an indistinct product that benefits no one.

3. Determine how to scale the product from one customer to many customers.

Once you've mastered the value equation for one customer, you can focus on finding many customers that think and act alike. Most management teams try to scale the business before they've created a valuable product with one customer. It's similar to launching a rocket to the moon without mastering the aerodynamics. It might have the power to get there, but it's not going to make it.

4. Develop a business model that allows you to build scale while generating incremental return on investment.

In the end, you'll need to build a business case for investing capital to grow the business. If the customer value equation is still in flux, no amount of growth capital will fix the problem. We like Alex Osterwalder's business model canvas as a template for building a solid business model. But, it's important to calculate how the investment will create a return on capital.

Of course, execution is everything. If business success was as easy as following a few steps, everyone would be a mega-billionaire. But it's surprising how many competent entrepreneurs, corporations, and even experienced strategists develop business models that omit one or more of these basic steps.

Thursday, May 24, 2012

9 Deadliest Startup Sins

Posted on May 14, 2012 by steveblank

Inc. magazine is publishing a 12-part series of excerpts from The Startup Owner’s Manual, the new step-by-step “how to” guide for startups. The excerpts, which appeared first at, highlight the Customer Development process, best practices, tips and instructions contained in our book. Feedback from my readers suggested you’d appreciate seeing the series posted here, as well.


Whether your venture is a new pizza parlor or the hottest new software product, beware: These nine flawed assumptions are toxic.

1. Assuming you know what the customer wants

First and deadliest of all is a founder’s unwavering belief that he or she understands who the customers will be, what they need, and how to sell it to them. Any dispassionate observer would recognize that on Day One, a start-up has no customers, and unless the founder is a true domain expert, he or she can only guess about the customer, problem, and business model. On Day One, a start-up is a faith-based initiative built on guesses.

To succeed, founders need to turn these guesses into facts as soon as possible by getting out of the building, asking customers if the hypotheses are correct, and quickly changing those that are wrong.

2. The “I know what features to build” flaw

The second flawed assumption is implicitly driven by the first. Founders, presuming they know their customers, assume they know all the features customers need.

These founders specify, design, and build a fully featured product using classic product development methods without ever leaving their building. Yet without direct and continuous customer contact, it’s unknown whether the features will hold any appeal to customers.

3. Focusing on the launch date

Traditionally, engineering, sales, and marketing have all focused on the immovable launch date. Marketing tries to pick an “event” (trade show, conference, blog, etc.) where they can “launch” the product. Executives look at that date and the calendar, working backward to ignite fireworks on the day the product is launched. Neither management nor investors tolerate “wrong turns” that result in delays.

The product launch and first customer ship dates are merely the dates when a product development team thinks the product’s first release is “finished.” It doesn’t mean the company understands its customers or how to market or sell to them, yet in almost every start-up, ready or not, departmental clocks are set irrevocably to “first customer ship.” Even worse, a start-up’s investors are managing their financial expectations by this date as well.

4. Emphasizing execution instead of testing, learning, and iteration

Established companies execute business models where customers, problems, and necessary product features are all knowns; start-ups, on the other hand, need to operate in a “search” mode as they test and prove every one of their initial hypotheses.

They learn from the results of each test, refine the hypothesis, and test again—all in search of a repeatable, scalable, and profitable business model. In practice, start-ups begin with a set of initial guesses, most of which will end up being wrong. Therefore, focusing on execution and delivering a product or service based on those initial, untested hypotheses is a going-out-of-business strategy.

5. Writing a business plan that doesn’t allow for trial and error

Traditional business plans and product development models have one great advantage: They provide boards and founders an unambiguous path with clearly defined milestones the board presumes will be achieved. Financial progress is tracked using metrics like income statement, balance sheet, and cash flow. The problem is, none of these metrics are very useful because they don’t track progress against your start-up’s only goal: to find a repeatable and scalable business model. 

6. Confusing traditional job titles with a startup’s needs

Most startups simply borrow job titles from established companies. But remember, these are jobs in an organization that’s executing a known business model. The term “Sales” at an existing company refers to a team that repeatedly sells a known product to a well-understood group of customers with standard presentations, prices, terms, and conditions. Start-ups by definition have few, if any, of these. In fact, they’re out searching for them!

The demands of customer discovery require people who are comfortable with change, chaos, and learning from failure and are at ease working in risky, unstable situations without a roadmap. 

7. Executing on a sales and marketing plan

Hiring VPs and execs with the right titles but the wrong skills leads to further trouble as high-powered sales and marketing people arrive on the payroll to execute the “plan.” Executives and board members accustomed to measurable signs of progress will focus on these execution activities because this is what they know how to do (and what they believe they were hired to do). Of course, in established companies with known customers and markets, this focus makes sense.

And even in some start-ups in “existing markets,” where customers and markets are known, it might work. But in a majority of startups, measuring progress against a product launch or revenue plan is simply false progress, since it transpires in a vacuum absent real customer feedback and rife with assumptions that might be wrong.

8. Prematurely scaling your company based on a presumption of success

The business plan, its revenue forecast, and the product introduction model assume that every step a start-up takes proceeds flawlessly and smoothly to the next.

The model leaves little room for error, learning, iteration, or customer feedback.

Even the most experienced executives are pressured to hire and staff per the plan regardless of progress. This leads to the next startup disaster: premature scaling. 

9. Management by crisis, which leads to a death spiral

The consequences of most start-up mistakes begin to show by the time of first customer ship, when sales aren’t happening according to “the plan.” Shortly thereafter, the sales VP is probably terminated as part of the “solution.”

A new sales VP is hired and quickly concludes that the company just didn’t understand its customers or how to sell them. Since the new sales VP was hired to “fix” sales, the marketing department must now respond to a sales manager who believes that whatever was created earlier in the company was wrong. (After all, it got the old VP fired, right?)

Here’s the real problem: No business plan survives first contact with customers. The assumptions in a business plan are simply a series of untested hypotheses. When real results come in, the smart startups pivot or change their business model based on the results. It’s not a crisis, it’s part of the road to success.

Wednesday, May 23, 2012

Venture Funding Rises in San Diego

According to the Union Tribune in San Diego, startup companies have "hauled in more venture capital in the first quarter than the prior year". San Diego Venture Group posted that venture capitalists have invested $5.8 billion in the first quarter of 2012- according to the MoneyTree Report. You can read the full article below, or by clicking this link.

Venture Funding Rises in San Diego
Investments in clean-tech firm, life sciences lead way
Written by: Mike Freeman

San Diego startup companies hauled in more venture capital in the first quarter than the prior year, bucking the national trend of declining funding for young firms.

Two reports released today showed that San Diego's good first quarter was led by a large investment in clean-tech firm Sapphire Energy, as well as continued funding for life sciences companies.

The reports came from Dow Jones VentureSource / Ernst & Young and the National Venture Capital Association / Pricewaterhouse- Coopers. While the numbers differ slightly, both reports agree on the rise in funding in San Diego and the decline nationally.

The National Venture Capital Association / PricewaterhouseCoopers reported that venture capitalists invested $357 million in 22 companies in San Diego during the first quarter, up from $156 million in 30 deals for the same quarter last year.

"We're seeing much the same trends that we have been seeing, but the numbers are bigger," said Bill Molloie, a partner with PricewaterhouseCoopers in San Diego. "We're seeing strong early stage investment concentrated in the life sciences."

Dow Jones / Ernst & Young found that 21 local firms received $467 million, up from 29 companies with $219 million in funding the prior year.

Sapphire Energy, which is trying to improve yields in algae production, got the biggest investment by far at $144 million for the quarter. Sapphire aims to prove algae is a viable biofuel alternative to crude oil.

But even subtracting out the unusually large Sapphire deal, local companies still received more money in the quarter, with life science firms getting the bulk of the funding.

Excluding Sapphire, 84 percent of the dollars invested locally in the quarter went to life sciences companies, said Molloie.

Nationally, venture capital investments fell 13 percent compared with the prior year, with $5.8 billion invested in 758 deals. A year ago, $6.7 billion was invested in 861 deals, according to the National Venture Capital Association / PricewaterhouseCoopers.

Mark Sogomian, a partner with Ernst & Young in Los Angeles, said the first quarter is usually the smallest of the year for venture funding, and it's hard to draw conclusions from one quarter of data.

But he noted that the pipeline of young companies filing to go public is on the rise, and there have been more large companies buying smaller firms recently. So there is optimism among venture capitalists about their ability to cash in on their investments as the year progresses.

"There never has been more cash sitting on the sidelines of the top 15 largest technology companies as there is at this point in time," said Maria Cirino of .406 Ventures in Boston. "And we believe some of that cash will be used to make acquisitions."

Tuesday, May 22, 2012

"Take the first step in faith.
You don't have to see the whole staircase.
Just take the first step."

Martin Luther King Jr.

Monday, May 21, 2012

"One important key to success is self-confidence.

An important key to self-confidence is preparation."

Arthur Ashe

Friday, May 18, 2012

"Success seems to be largely a matter
of hanging on after others have let go."

William Feather

Thursday, May 17, 2012

Work harder on yourself than you do on your startup

"Work harder on yourself than you do on your job." - Jim Rohn

Joel Gascoigne, the founder of Buffer, recently posted on the reasons he's discovered that Jim Rohn's quote is so significant to those involved in startups. He says, "when you're doing a startup, it's hard to separate life and work. Therefore, why not work away on yourself just like you do on your startup?"

To find out Joel doesn't think it's smart to put all your eggs in the 'current startup' basket, read his post "Work harder on yourself than you do on your startup" by clicking the link.

What ways are you working on to improve yourself? Post your thoughts and comments below.

Wednesday, May 16, 2012

I am an Entrepreneur

Now is the time in my life
when I take a stand,
and say to myself
and to the world:

I will do this thing called Startup,
I will create a thriving business
from only an idea.

I will beat the odds against me, 
because I will use every advantage.
I will give it full attention and commitment.
I will build a strong foundation,
using the Leverage of Experience and Principles.

I am an Entrepreneur...

I will be Quick to Act,
because Time is of The Essence,
and the path changes
frequently and suddenly.

I will be Quick to Act,
because there are Competitors.
I must be ready for the unexpected.
I must Do the unexpected!

I am Entrepreneur.
I can do so much with so little that soon I'll be able to do the impossible with nothing.
Or so it seems...

I am playing a plate-spinning act called Startup.
With limited energy of my own,
I must keep many plates spinning
or they will fall, and that's not a good thing.
These plates are named Recruiting, Customer Development,
Support, Sales, Marketing, Finance, Product Development,
Human Resources, Legal, Accounting, Research, 
Competition, and even a couple of un-named plates
that pop up unexpectedly and demand attention...
it seems that the plates never end!

Each of these plates spins at different speeds,
and the speeds change unexpectedly!
Therefore, I will be Quick to Act.

I am a multi-tasking, always on, fully wired, mobile,
self-optimizing, guided missile on a Mission From God.

I fear nothing.
If my Action returns sub-optimal results,
I will be Quick to Act again.

All depends on me.
I will Trust My Intuition.
I will Take Action.
I will Be Bold.

Nothing happens without Action.
Time spent Thinking and Studying is not Action.
I will act now.
I will persist until I succeed...

Tuesday, May 15, 2012

"There is something 
that is much more scarce,
something rarer than ability.
It is the ability
to recognize ability."

Robert Half

Monday, May 14, 2012

Think outside the box....and building.

Don't get stuck only thinking inside the box, or only within the members of your company. Take your product and ideas outside the minds of your team members. Continuously improving your product is not possible without getting feedback from others.

 Here's a funny comic from Dilbert on the value of "getting out of the building"...

Friday, May 11, 2012

Why Exits are So Hard to Learn - Part 1

Exits Blog released a video series "Why Exits are So Hard to Learn" containing the three reasons why it's more challenging to learn about exits than investing.

Click to see the PowerPoint for "How Exits Have Changed in 2012".

You can also watch the video for Part 2.

Thursday, May 10, 2012

Pebble Watches

VCs turned down the Pebble Watch team, and now they will probably get 10 million in sales in 45 days and not give up "any" of the company!

Pebble began on Kickstarter seeking only $100,000 in funding and instead raised $9 million! (Click to watch their demo video)

I love a great success story...

Wednesday, May 9, 2012

UCSD Entrepreneur's FREE Job Fair

Looking for a job? Want to know about opportunities in town? Equity in a Startup?

The annual startup job fair and business plan competition is fast-approaching! RSVP today for UCSD's Entrepreneur Challenge Job Fair! The cost is FREE!

When: May 10, 2012   5-8pm
Where: UCSD Student Services Center, Multipurpose Room

The aim is to connect qualified students and recent graduates with exciting and innovative startups, as well as provide startups with the opportunity to reach out to students, partners, consultants, and investors. You won't want to miss it!

Friday, May 4, 2012

San Diego Accelerators, Incubators and Co-Working Spaces

Got a startup idea but having a hard time knowing where to begin?

San Diego is a great place to start a company. It's full of resources, programs, funding, and mentors that assist entrepreneurs. 

Check out our spreadsheet list on Google Docs of Accelerators, Incubators and Co-Working Spaces that can help turn your idea into a successful business.

Thursday, May 3, 2012

A step above the rest...

Employees at Google ("Googlers") benefit from the many services provided to make their job easier, things such as on-site physicians, free food and child care.

Well, we here at Double M Systems have found one way in which we exceed Googlers.....and that's our "Team Member Fruit Bowl", complete with bananas, apples, pears, clementines, papayas, and mangoes! 

Yes, it's just one of the many benefits we get to enjoy here, along with our fresh air and ocean view sunsets. 

(Take that Google!)

And now a little startup humor...

Startups don't always have to be life and death. They should be fun too!

So here, take a break from your planning, your prototypes and the hustle-and-bustle to read about "Running A Startup"

Wednesday, May 2, 2012

"Remember there's no such thing
as a small act of kindness.
Every act creates a ripple
with no logical end."

Scott Adams

Tuesday, May 1, 2012

Atul Gawande: How Do We Heal Medicine?

Atul Gawande takes a look at a new way to do medicine during his TED talk.
 Click the link if you're unable to view the video below.