Busy

Phew. It’s been a very busy week at GigPark. We’re in the process of implement design for our application and it is taking a lot of concentration to keep everything running smoothly.

I find design is the phase that makes something feel real. So as well as feeling tired at the end of each day I’m also feeling very satisfied.

Being busy has meant I haven’t had time to write much here. I am going to try to set that right this weekend. In the meantime though I’d like to point those interested to a great article I read last week about financing a technology business…

Paul Graham is a technology veteran and now runs Y Combinator, a venture firm in San Francisco that gives small amounts of funding to very early stage startups. In his latest essay he has some great, straight forward advice for dealing with VCs and angle investors. I found it very helpful.

OK, now back to my text editor. Have a good rest of your week everyone.

Well, I wouldn’t use it.

When I joined my first advertising agency at the tender at of 18 I was given some great advice that has guided me through many situations in my career. It came from a seasoned copywriter named Carl. He said the definition of a professional in the advertising business is someone who can reach beyond the kinds of people they are familiar with and create ads that appeal to people that they would never normally come into contact with in their daily lives.

Carl said that when he first started out he wrote great ads for young men and lousy ads aimed at anyone else. The day he realized he’d become a good copywriter was the day he wrote a great ad aimed at teenage girls in the morning and a great one for dentures in the afternoon.

I think this is a fundamental insight into business. Just like creating ads, you become good at creating products when you can create something compelling for people who aren’t like you. I spent 4 years working as an Account Planner in London and this was something I needed to remind myself of every day. I had to stretch myself to get inside the heads of different types of people and understand how they see the world and why they make certain decisions. It’s a great exercise.

The other implication applies to when you are assessing the merits of something.

When I explain our business, GigPark, to people the first reaction I usually get is either:

1. Cool, I’d use that. I think you’ve got a great business there. Or sometimes…
2. Hmmm, I’m not sure I’d use that. I don’t think you have a business.

This is a completely natural reaction for most people. What surprises me though is how many people who’s job it is to asses the merits of a business react this way. Surely, these people would be better served by assessing which groups a product might be targeted at, understanding what motivates them and deducing how they might react. Will a person planning their wedding use the product, or a couple who have recently moved into a new neighborhood?

Having said that it is always the job of the person presenting an idea to make the audience do as little work as possible. If I’m explaining a concept and someone can’t easily understand who the product would appeal to and why, then that is my fault, not theirs. I’ll keep practicing!

More lessons about pricing

A follow up to the post about pricing yesterday:

First Round Capital had a great post on their blog, Redeye, about the pricing challenge. They say that convincing a customer to part with the first penny, and pay anything at all for your service, is the hardest thing you will ever do….

Most entrepreneurs fall into the trap of assuming that there is a consistent elasticity in price – that is, the lower the price of what you’re selling, the higher the demand will be.

The truth is, scaling from $5 to $50 million is not the toughest part of a new venture – it’s getting your users to pay you anything at all. The biggest gap in any venture is that between a service that is free and one that costs a penny.