Thursday, June 28, 2012

My Startup Manifesto 1.0

Work = Happiness
Work is a major part of life; don’t treat as an isolated part of our life.

Too many people sacrifice their happiness and stick with a job which they dislike or hated just to put food on the table.

I must figure out a way to put food on the table while doing something which brings me happiness, and this is not an option.

Play by Strength and Passion
Understand what I am good at, and do something which could leverage on my strength. I shall accomplish more doing things I am good it and passionate about, thus making me happier.

I suck at sales (especially face-to-face closing), so I should not build a sales-centric business like Groupon.

I should not develop application which I have little understanding of or I’m not the intended users (no matter how lucrative or promising it might sounds), such as a CRM system.

I like developing Consumer Internet application and reasonably good at it, and I like to learn and experiment with growth hacking.

I always wanted to develop a game while I have little experience, which is fine as a weekend project, but this is unlikely to bring food on the table in the near future. Besides, I am not interested in building a commercially successful game, I wanted to build a game which I really like to play.

Understand and Choose Wisely
Opinions are the cheapest commodities on earth, so make sure we seek it from the right person. Jeff Hoffman put it perfectly, “Don't take advice from golfer if you want to play baseball”. If I want to validate an idea, ask the potential customers and users; then again, sometimes the customers doesn’t even know what they want :)

A startup could either choose to bootstrap or seek funding, but do understanding it’s a very different path which leads us to do things differently.

To bootstrap, I develop the app as I see fit (regardless of trend), grow it, iterate it and monetize it to achieve sustainability, then it’s quite a personal success. Understand that bootstrap has its financial limitation, so I can’t build a social network and go head on with Facebook. We probably have a better chance of survival by focusing locally, especially in non-US market (less competitions means cheaper to start and compete). There shall be no glamour.

To seek funding, I have to do pitching, convince strangers that it’s great idea, fit a typical founder profile (minimum 2 founder, serial entrepreneur, work in FB or Google before, etc.), get social proof by mingling with influential VCs, and probably pivot it into something to fit the current trend or the VC’s taste (and the VC might not understand the business more than you). Some ideas just won’t get funded, especially if the market is too small (must scale globally) or not disruptive enough (a review site is considered “old”, a social network is cool, and social photo sharing is the hype).

I was told making a deal with VC is selling your soul to the devil: If I can, I would rather avoid VC money; it probably also means I won’t be filthy rich or famous. I would rather spend my time hacking the product and let the market validate it. Then again, everything and everyone has a price (I don't pursuit the devil, but the devil might knock on my doors) :)

At times, I was hoping there would be a wise Guru to enlighten me, or an accelerator will spread some magic dust  to make my startup fly. What if Steve Jobs or Bill Gates is my mentor, would it make my startup successful? It probably would help in the sense they could help to open some doors, but I doubt anything beyond that. The magic is within me, and they are plenty ways and resources to learn from.

At the end of the day, what I really wanted is Freedom: the choice to do what I really wanted to do. My dream is to travel the world, then remotely manage my online kingdom :)

Taking VC money takes part of the freedom away: I am no longer the only boss, and I can’t just work on any idea without being backed up by some feasibility studies and convincing the investors. Is adult supervision really a good thing? Maybe, maybe not.

Going IPO brings in more money in exchange for less freedom as well: you no longer work on an idea because it’s good, you do it to squeeze more money for shareholder. There shall never be enough money.

The price to pay for Freedom? No glamour and doesn’t become filthy rich, but definitely a lot more peaceful and happy.

It’s like a child allowed to play with his toys without adult restrictions. To me, that's the ultimate happiness.

Friday, June 08, 2012

The Adventures of Johnny Bunko: The Last Career Guide You’ll Ever Need

Lesson 1: There is No Plan
  • It’s nice to believe that you can map out every step ahead of time and end up where you want, but that’s a fantasy. The world changes. Ten years from now your industry might not even exist.
  • You do something for Instrumental (investment banking pays the bill) or Fundamental (comic artist is so cool) reason.
Lesson 2: Think strengths, not weaknesses
  • Successful people don’t try too hard to improve what they’re bad at, they capitalize on what they’re good at.
Lesson 3: It’s not about you
  • The most successful people improve their own lives by improving others’ lives.
  • The most valuable people in any job bring out the best in others. They make their boss look good. They help their teammates succeed. They help their customer solve its problem.
Lesson 4: Persistence trumps talent 
  • What do Musicians and Atheletes do that others don't? They show up, they practice and practice and some more.
  • What's the most powerful force in the universe? Compound Interest - it builds on itself.
  • The more intrisic motivation (doing things not for reward, but because you simply like doing it) you have, the more you persist, the more likely you succeed.
Lesson 5: Make excellent mistakes
  • Too many people spend their time avoiding mistakes. They’re so concerned about being wrong that they never try anything.  Their focus is avoiding failure. The most successful people make spectacular mistakes. They’re trying to do something big. But each time they make a mistake, they get a little better and move a little closer to excellence.
  • Make mistakes seems , but it's more risky not to.
  • It's about excellent mistakes (try something no one else had done before), not stupid one (barge into something unprepared)
  • bunko - to make a mistake from which the benifits of what you've learned exceed the costs of the screw-up
Lesson 6: Leave an imprint
  • Did I make a difference? Did I contribute something? Did my being here matter? Many people get towards the end of their lives and don't like their answers, and by then it's almost too late.
  • Think about your purpose, to recognize that your life isn't infinite, and that you should use our limited time here to do something that matters
  • Those other five lessons are crucial, but truly successful people deploy them in service of something larger than themselves: they leave their companies, their communities, their families a little better than before.

Thursday, June 07, 2012

Preview: Becoming a Professional Human Being by Jim Bagnola

I haven't finish the book yet, so below is just a glimpse of it :)

What Is a Professional Human Being?

  • Try not to become a man of success, but rather try to become a man of value. - Albert Einstein
  • A Professional Human Being is a positive role model I would like to emulate.

Perform Your Magic

  • If you love the work you do, you'll never work a day in your life.
  • The magic trinity:
    • Skills: What are you good at?
    • Likes: What do you like to do?
    • Needs: What does society need?

Magic Formula from Jim

  1. Find your magic (Skills + Likes + Needs)
  2. Serve the needs of others
  3. Make a difference
  4. Allow us to gain financial freedom (it's not our top focus, but it's the side effect)

Four Practices of the World’s Great Entrepreneurs (from the The Entrepreneurial Age)

  • Sense of Mission
  • Customer/Product Vision
  • High Speed Innovation
    • Improve something––anything––every day
    • Speed up action: Create a sense of urgency
    • Wipe out bureaucracy: Grow big by staying small
  • Self-Inspired Behavior: Love what you do and get very good at doing it! Do what you are!

PS: Got the above wisdom from Jim Bagnola (thanks for the time, encouragement and guidance).

Wednesday, June 06, 2012

An Awkward Entrepreneur

I believe I am not a true entrepreneur, because monetary reward is not my primary motivation, interest or objective. Traditionally, we think that entrepreneurship is the process of creating a business which makes money, right? Before I make a fool of myself, perhaps it would be wise to understand what entrepreneurship really is.

What is an entrepreneur?
Someone who take risk to start a business. What is a business? A business is an organization engaged in the trade of goods, services, or both to consumers. What about profit? Isn’t the sole purpose of business is to make a profit? I like the following explanation

“In my job as a university professor, the question sometimes arises in class discussions about the purpose of business. One usual answer is "to make money", but I don't think that is right. It is unsatisfying to be in business and have as your only reason that of making money. There is a saying that "you need health to live, but you don't live to be healthy". Profits are like that for business. A company needs profits to continue, but profits are not what the business is for. “ – Richard Field

According to Steve Blank, a startup is a temporary organization designed to search for repeatable and scalable business model. What is a business model? A business model describes the rationale of how an organization creates, delivers, and captures value (economic, social, or other forms of value). Interesting, so it’s about creating value, where money is just one of the value.

My Definition
IMHO, a business needs to be profitable eventually (might not be initially, depending on your financial runway and patience) to be sustainable, which I totally agree. After sustainability, should we try to derive more profit? I believe a little bit of extra cash would enable more freedom and levies to explore other opportunities or to experiments with new ideas, which is good. After good profitability, should we aim for great profitability? My answer is no, because profit and money is just a meaningless number game.

It kind of feels like the Maslow's Hierarchy of Needs, where we need money to satisfy some basic needs such as food, house, transportation, health and etc. Once those basic needs are met, using money to buy a sport car or diamond ring isn’t much more satisfying than spending good time with friends and family; the satisfaction difference between a private yacht trip and a backyard BBQ isn’t by a big enough magnitude.

Since super profitability is not my game, thus it wouldn’t make sense to pitch my business idea to potential investors, as these people are looking for profit, like a 10x to 100x ROI kind of thing. Every time I wrote a business proposal or do a pitching, I felt kind of absurd to pluck numbers from the sky and doing some projections where we shall make millions of dollars 3 years down the road; or to come up with some business model where I am not interested about. In my mind, we are lucky if we didn’t go bankrupt and achieve sustainability or basic profitability. Then again I got ridiculed when I told people the business will make one or two hundred thousand per year; I realized not that long ago that this is called a lifestyle business. Now I know that I like the idea of a lifestyle business (making enough, not necessary more). Ever since then, I feel that there is no point in attending any pitching sessions; in fact, I don’t think I would dare to take money from investors for 2 reasons: I am not motivated to give him a high ROI, and perhaps the extra adult supervision to make sure I focus on profitability go against what I am really interested to do.

Little Money Required
Don’t we need money when we start a business? Yes, but not much is required. Basically the startup cost of a software/Internet company could be pretty low (I'm not doing research or production intensive stuff), and the major financial burden is to be able to sustain my lifestyle for one year or more. I have savings, and my monthly expenses is really low: I own a property which cost less than RM100K on loan, didn’t own a car (share with my wife and dad), have no kids or parents to support, and my monthly expenses is probably around RM 2K per month. Theoretically, I just need RM 24K to survive the whole year; in worst case scenario, I could take up a few freelance jobs to ease the burden.

Play on Strength and Limitation
I don’t do a startup which cost RM 1 million to build and to compete, or need to depend on sales and marketing skill which I don’t have to succeed. I didn’t build a product (e.g.  accounting software), because you need sales people to push the sales (the SAAS thingy might ease the pain slightly, but great sales and marketing effort is still required). I didn’t do a Groupon clone in regardless the insane number of monthly revenue posted, because I know it’s a sales and marketing game which I am not good at. I need something which my software development skill could give me a competitive edge, and a mechanism which could generate profit without the need to do too much sales. Thank to Adsense (income without sales), I opt for a publisher model; since I can't churn out an article everyday like a super blogger, I did a crowd-sourced review site.

Passion + Eat my own dog food
I always believe I need to do something which I am passionate about (or at least have some interest), and I need to create something which I would be using (eat my own dog food). Someone says I should build a recipe portal because it’s wildly popular and profitable, but it’s something I have neither interest nor understanding of why people are obsessed with recipe. In fact, some gossip blogs reap more page views and profit that what I did; it’s just not my cup of tea. I used to develop lots of software products for customers which I would never end up using; the process is unsatisfactory, and the result is mediocre.

I enjoy exploring new food, but not talented enough to do it on my own; so perhaps an app could help me with that.

How do I choose on which idea to work on? 
It needs to solve a problem, usually my problem (if I am the user, then I could understand the pain well). I need to have a strategy on how to tackle the problem, besides believing that I could do it better than others. Sometime when we look at a lousy product, we think we could create something better by adding a few cool features or design a better user interface. For example, Jobstreet might not a very good website, and we could probably come up with a dozen checklists to create a better product. The real question is: how do we shake the market dominance of Jobstreet? Or how do we solve the chicken and egg issues (no advertisers/job, not users; and vice versa). Tips: truly believe that there is a smart solution to the "chicken and egg" problem (I was inspired by an article about how MS-DOS beat PC-DOS by using the emulator strategy, can't find the original article).

I have problem searching for good restaurants when go out on dating; some restaurant directory websites are not working very well, and I figured a way to source/organize the required database.

Dream too small?
I think most people are encourage to dream big and change the world, so a lifestyle business isn't really interesting for them. Once I try to get a co-founder to develop a local restaurant reviews site (already good tractions) with me, but my "vision" is too small for him. He wanted to be like Instagram, be a global player with millions of users. The same thing apply to investors, they wanted something scalable and global.

Once I share the idea of a lifestyle business to a friend, and he claims that I am sort of anti-capitalism, didn't dream big enough and not confident. The strange thing is, I felt the exact opposite of his remarks.

Practical I may be, but I don't think my dreams are by any means small. I don't believe size are measured by the millions of profit (it's a nice bonus, but not the primary motivation). How big is Wikipedia? Is Instagram big before bought by Facebook, or suddenly it became huge?

I start small and local due to financial and manpower limitations, and by choice (or lack of choice) for not pursuing the funded path. I would be glad to take a bigger leap if there are more resources at my disposals; perhaps my current startup shall provide the basic financial foundations for my future startups. One of the funny thing I like about Southeast Asia is the lack funding and successful exits; meaning less chances of bootstrap startup like me being stampede by well funded businesses, and less people doing startups means the window of opportunity for me is wider. But I sense things are going to change rapidly in the coming years, so it's time to step up the game.

I admit that profitability is not my primary priority, where I am more interested in solving a problem and getting user validation through tractions (I am happy when people actually find the app useful). I believe in creating value, and economic value isn’t the only one. I can’t get myself to build a business for the sole purpose of making money; it needs to be something which interest me, meaningful and serve a purpose (solve a problem). I am not anti-capitalism, neither do I worship capitalism.

I believe I am a techie/hacker who accidentally became an entrepreneur (it wasn't possible until Bill Gates, Larry Page and Mark Zuckerberg came along and show us what's possible); sometimes I still put technical awesomeness before business priorities. There are things I’m willing to explore and learn (growth hacking, marketing, etc.); but there are things where I prefer to leave it to someone else who could do a better job than I am, if there is such a person for me to depend on (e.g. Sales).

An awkward entrepreneur I may be, but at least I understand who am I, what I'm doing and what I wanted to do. Whether my way of life is acceptable to others or fit general wisdom is not really my primary concern, unless I am taking money from others.

Sunday, June 03, 2012

Automatic Adsense A/B Testing + Optimization

Inspired the simple idea from  Steve Hanov’s “20 lines of code that will beat A/B testing every time” (“why didn’t I think of that” moment), I adopted the concept and implement it for Adsense.

The logic:

  • 90% of the time, it will choose the Ad with the highest CTR (click through rate)
  • 10% of the time, it will explore random Ad (based on a pre-defined sets), to determine any of these lower CTR Ad will have a chance of achieving higher CTR
  • The CTR data shall be refreshed once a day (I use the average CTR for the past 7 days)

Get the CTR data for Adsense

  • Use the Adsense Management API, particularly Reports: generate
  • Use the API explorer to test out the parameters and see the results
  • Check out the client libraries and sample code
  • To enable OAuth of offline access (e.g. Cronjob), we need to authenticate/login through web
    • $client->setAccessType('offline'); 
    • $client->setApprovalPrompt('force'); 
    • Store token in a persistent storage for offline/cronjob usage.
  • Store the average CTR for the past 7 days for each ad unit into database.

With the CTR data, the implementation seems pretty straightforward.

How it works
Let's say your are trying to see if A, B or C perform better; it will probably show the ads equally on Day 1, then it'll automatically choose the ad with highest CTR on Day 2, while keeping a 10% random ad to see if other ads eventually gains higher CTR.