Innovation doesn’t have an end date – or life in Perpetual Beta

beta11One thing we pride ourselves on at Workible is our culture of constant innovation.  “Perpetual beta” – as I heard it put at innovation hub, Ideo, in Silicon Valley a couple of years ago – beta being the term that technology companies have used for years to describe their testing period.
This term made a lot of sense to me.  You see, technology is never really finished – not if you’re serious about it.

It’s why companies like Facebook and Google have massive teams of developers always looking at additional features, user experience tweaks and a better, smoother user interface.

Recently I heard my friend and entrepreneur Dale Beaumont put it a different way.  He said “if you’re not innovating and moving forward, you’re not standing still, you’re actually moving backwards” and that’s because everything around you is changing and increasing pace.

It’s really true.  Never before have things moved so fast or has the pace of change accelerated at such a speed – and it’s only going to get faster.  You don’t have a chance to build your technology, move it into the market, see how it settles and then decide what’s next, instead you release it, fix it along the way (or fail fast) and keep innovating while you’re doing it.

That’s perpetual beta.

To be able to do that, however, you need to keep a finger on the pulse of the market.  You need to have an ear on the ground, to listen to the chatter and gossip in your industry to uncover what the pain points are then plan to address them.  You need to watch what others are doing, not just your competitors but other businesses in other verticals that are being innovative then apply those innovations to your industry.

In our space, we see businesses all the time who are trying to take the “same old, same old” approach to recruitment just with prettier logos or by throwing large amounts of money at big brand ad campaigns – but that’s not innovation.

Every industry is currently being disrupted, not just by doing the same thing a bit differently but by doing it totally better – and ours is no different (and, we are leading that charge!).  For some industries that’s really hard (recruitment is one – they’re not early adopters) but it’s going to happen – that’s a given.

You only have to look at what businesses like AirBNB and Uber have done in their markets – by doing something totally different they’ve really put a cat amongst the pigeons, so much so that governments in some areas are actually trying to close them down.

But people love them both because they’ve simply offered a better way of doing things – and they’ve done it by thinking outside the square.

But, are they done?  Absolutely not.  Uber’s last capital raise was $1B and Airbnb’s was $1.5B (yes, billion!!) showing that those companies are still expanding – and innovating along the way.

Innovation is not an idea – it’s an attitude.  It’s applying a “how can we do it better” every day.  It’s about being constantly frustrated and dissatisfied with what you have, and knowing that you still have a long way to go.

We often get asked when Workible will be finished.  The answer is never.  The fact that the whiteboards in our office are covered with hundreds of coloured post-it notes for new ideas, features and improvements are testament to that.

It’s as frustrating as hell.  If we could wave a magic wand and have 500 developers working to make all of those post-it note ideas a reality, I’m guessing that the board would quickly fill up with even more ideas to replace them.

That’s what true innovation is.  Constant change.  Never ending improvement.  Out there ideas.  What if’s.  If only’s.  Continual frustration.  Limitless opportunities.  Perpetual Beta.

And we love it.

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Innovation doesn’t have an end date – or life in Perpetual Beta

Why do startups wear their capital raises like a badge of honour?

Yesterday I was reading an invitation to an event for startups.  It looked like a great event.  The company running the event apparently runs these regularly as, on the bottom of the invitation, they mentioned previous presenters they have featured.

It went something like this – “Joe Bloggs, raised $XM,  Fred Nurk, raised $XM, Jane Smith raised $XM”.  That got me thinking.

It seems to me that the measure of “success”, in the startup community anyway, is not the number of customers you have, not the turnover you have, but the funds you’ve raised.  Call me cynical, but since when is this true validation of a successful business?

I question whether some of these businesses are just drinking their own Kool Aid, caught up in the hype of startup world where the more you raise the bigger the hero you are.  You’re paraded around on startup stages about your superhero status, without anyone looking behind to see if you have a viable – or sustainable business – and possibly giving other starry-eyed startups the idea that you don’t have to have a solid business, you just need to be able to raise money – over and over again.

I saw this Kool-aid drinking in person several years ago on my first trip to Silicon Valley.  My Co-Founder, Alli and I, had just won our first ever pitching competition (before it, we didn’t even know what a pitch was) and the prize was a trip to TiECon in Santa Clara.

At one of the sessions, a gentleman named Rick Morini was being hailed as a god after steering his early stage startup through raising around $50M US (in three rounds) and using that to acquire 300M users.  His company, Branchout, was a job-finding platform that mined Facebook for jobs and job referrals by going through your friend network.  He proudly told a captive audience that he’d done 3 rounds after pivoting from a “sports fan” business, for which he’d also raised money.  (Um, for the record, that’s not a pivot, that’s a whole new business.)

Mr. Morini was being celebrated as a wunderkind after these massive raises and was talking about his unbelievable growth.  Duly impressed, Alli and I came back and started doing some research into Branchout and found a stack of forums with disgruntled users who were fed up with their Facebook contacts being “invaded” and wanting to know how to get out of Branchout.  Within a month, this business had lost half its users and the pundits were predicted that, at that rate, it could be defunct before the end of the year.

Branchout “pivoted” again and again but it just didn’t last and, just recently, it’s dev team and database was sold off leaving investors with a substantial deficit and proving that raising funds is not a measure of your success.

But that’s just one of hundreds of examples.  In thinking about this article, I did a whole lot of research into failed startups and the figures are staggering.  They parallel the well-known ABS statistic that states that around 90% of all businesses fail.  The difference is that a lot of startups fail with a lot of other people’s money.   And there’s plenty of local examples of big raises that have gone sour – we just don’t parade them on stage (although, interestingly, we did when they raised).

An article on TechCrunch gives this good example and quotes, “It’s also possible to raise too much money. Inexperienced executive teams sign up some customers, raise a big round and get a little out of control with high-priced office space and Google-esque perks. Then, for whatever reason, growth slows and all that capital quickly disappears.”  They cite the example of Ben Yoskovitz, the founder of Standout Jobs (interestingly another company in our space) and a postmortem written in 2010 by CB Insights. “I raised too much money, too early for StandoutJobs (~$1.8M). We didn’t have the validation needed to justify raising the money we did.”  He went on to say that “raising money felt like winning.”

That kind of media is, however, all too rare.  Rather than looking to set examples of businesses who’ve found a great product/market fit (the backbone of every successful business) or those who’ve gained great sales traction, or customers of a great calibre, we make heroes of those who’ve raised money.  Why is that?

Why are startup events full of “how to raise money” and “how to pitch” sessions instead of “how to grow a business” sessions or sessions on building killer – and in-demand – technology?   It appears we’d all rather hear sessions about Uber’s or Airbnb’s latest $500M round or how Pinterest or LinkedIn had raised millions – well before they had any revenue model.  The message is apparently – “don’t worry about revenue, they didn’t”.  Newsflash – “they” are the the exceptions rather than the rules!

Maybe it’s my business background but, to me, there just might be a lot of startup Kool Aid drinkers who are going to fall on their own swords.

We all hear questions about whether or not we’re in another “tech bubble”, whether all this money-throwing at startups is going to end in a bad way.  In my humble opinion, it might.  It could just take one or two big, bad stories to end sadly and this fantasyland we all currently live in, may also end.

My problem is not with raising money.  My problem is that we seem to define success with how much you’ve raised – and yet that, on its own, is no definition of success.

Yes, we have raised money – and we’re very aware of our obligations to the investors who have staked so much faith in supporting us in that way – but we certainly don’t pin our success to the value of our investment.  We try to reward our investors with revenue and customers and building great (and valuable) technology.

Would a $50M investment help?  Absolutely!  Would it make us superstars?   No, not just by raising the capital.  However, if we could take that capital and turn it into significant (and I mean 8, 9 or 10 figure) annual revenue, user traction, an enviable client base and long-term sustainability, then yes it would.

But then, I guess I’m old school.

NB: The opinions in this article are the author’s only.

Why do startups wear their capital raises like a badge of honour?

Silver Linings and Clients that Kick Butt

Friday didn’t start out so hot.

Long story short:  A client alerted me that a “partner” of ours has been proactively trying to poach their business from us through some pretty deceptive sales tactics and slippery, unscrupulous technical tricks.

Once we worked out what was happening and how, she had some pretty choice words to say about the offending business… “unethical,” “appalling,” even “bully”… to name a few.   I have to admit, there were a few more floating around in my head.

But the point of this post isn’t to lament the betrayal by an alleged partner.  We’ll deal with that in due course.

No.  I felt compelled to write about this experience because it’s a testament to the strength of our client relationships.  I’m really proud that we’ve been able to foster such a great relationships with the companies we work with that not only will they stand by us when another organisation tries to lure them away from Workible, but they’ll also go to bat for us. (In this instance, my client called the red-handed company more than once that day to tell them what she thought of their practices).

It’s great reassurance that our focus on client relationships and continually adding more value for our clients is the right path.  In a hot market like HR Tech, we’ve established firm foundations that give us an edge against competitors — big and small.

it-was-never-a-dressAfter all was said and done on Friday, my client sent me this image and a few of her “Thoughts for the Day” that I’ll share with you below:

  • Competitors are a reality – not a surprise
  • Your product will always be chosen for the value it brings your client
  • So the way to compete is to constantly increase your value for the client – not outdo the competitor
  • Be the ones that set the agenda and walk the path with expertise and integrity – you want to be proactive – not reactive.
  • Know what you are and what you are not
  • When all else fails – and you do not want to seek alcohol as a solution – sunshine, chocolate and TED talks.
So while Friday started off not so hot, by the end I felt pretty great.  In the words of my client, “Bring it on!!!!! Kick butt is what we do!”
Silver Linings and Clients that Kick Butt

Where do you draw the line?

do not crossYesterday we had an interesting conversation at Workible about where you draw the line in marketing – and what’s fair game.

As a growing business, we’re always looking at unique ways to get to the market and a recently published tech success story was at the centre of our “how did they do it” discussion.

Some googling soon uncovered some interesting forum and blog posts about some tactics startups had been using (but not admitting to) and that instigated a discussion about where a company draws the line.

Let me be frank, the tactics used by some of these companies were certainly not straight up – but nor were they illegal or fraudulent.  They were, however, very clever and resulted in a huge traffic windfalls to their site (and possibly away from a competitor’s) and, ultimately, was a major part of the huge success they are now enjoying.

Others we came across were arguably even more dodgy, giving the company a windfall in users but giving the users a terrible user experience – and therefore possibly not gaining many true active users – and making us wonder whether they had really thought it all through or whether or not it was simply a “grab for analytics” to make the company look better to a financier or acquirer.

So where’s the line in business?  What is healthy competition and what is just not right?

The more time we spend in the start up world, the more we realize that all is not what it seems.   What appears to be random luck is seldom that.  It’s much more often smoke and mirrors  or edgy marketing than it is “right place, right time” and it’s all covered up by the term “growth hacking”.  And then there are outright lies about traffic, users and growth – something that puzzles us because, let’s be frank, it’s not too hard to check.

Talk to real growth hackers and they’ll tell you that growth hacking is really about looking at metrics then working out ways to do small incremental improvements everywhere that, put together, give you increased growth in users and/or traffic and not that one big idea that changes everything.

Very few growth hackers will admit to sneaky tactics that mine other sites to get users, or re-direct traffic or piggy back – these seem to be more the domain of the early startup teams – who use “desperate measures in desperate times” – the early days that can make or break a startup.

I’m not sure that we came to an actual conclusion about what was fair game and what wasn’t but our discussion did lead to marketing in general. In the offline world, if salespeople go out every day to try to poach business from their competitors, doesn’t that make these online tactics also fair game?

As an entrepreneur, the whatever it takes attitude is what you need to succeed.  Start ups are hard so you sometimes need to step off the moral high ground and just do what it takes to survive.  It all depends on where you, as an individual, draw the line on what is simply smart marketing versus what is down and dirty behavior.  At the end of the day, that’s up to the individual.

At Workible, we prefer to err on the side of caution.  We don’t lie about our users or our traction.  We don’t need to.  Our technology speaks for itself.  We’re not trying to be the biggest kid in the playground – we don’t need hundreds of thousands of users because we are a Saas platform.  We’ve specifically chosen not to play where everyone else does, there’s no point.  The biggest players have the general market sewn up, so why go head to head with them?

We’ve taken the disruptive path – picking a niche market and solving their problem with innovative technology and a new way of doing things.  Have a look at the big disruptors in the market – they’re not taking on the big guys, they’re doing things very differently and reinventing the way things are being done.  For us, we’re reinventing recruitment in our niche.

Does that mean we don’t take clients from others?  Absolutely not.  That’s just healthy competition.  Do we use growth hacking to grow?  Totally.  But that’s just smart marketing.

As for where you draw the line, well, that’s up to the Founders.

Where do you draw the line?

What’s the most important skill I’ve learnt from our startup?

skillsThat was a question I was asked last night.  I was fortunate to be invited to be one of the mentors at a startup mentoring session held last night in the city.

Now that we’re out of nappies and are starting to wear big kids pants, being asked to mentors others who have big, bright ideas is not only an honour but a way that I feel like I can give back for those who took the time to mentor us on our startup journey.

When I was asked the question, I’ve got to admit that I found it hard to come up with a quick answer.  Having been in business for most of my adult life, I feel like I’ve amassed a number of skills along the way, so coming up with one that’s particular to this startup journey is not easy.

I really had to dig deep to come up with a particular skill.  I’d definitely learned how tenacious I can be (but that’s not a skill), I’ve learnt just how much pain I can bear (!), (also not a skill).  I’ve dug deep to use every bit of marketing and business knowledge I’ve amassed over 30 years in business (not new) and, while we have a tech business, I haven’t learnt to code (we’ve employed that skill) so that doesn’t count either.  I’ve continued to learn about business, am an avid reader of all things around growth hacking, but again, that’s not a skill as much as it’s thinking a little differently about what I kind-of already knew.  I’ve managed staff before, and I’m an Accountant by training, so have got the financial thing mastered too.

So what new skill have I learnt?

After standing for what seemed like an eternity mumbling phrases like, “hmmmm, good question” and “let me think…”, I finally came up with one – consultative selling.

I’m the first to admit that I’m not a sales person – not by a long shot.  Cold calling scares me silly and selling has never been something I’ve considered myself good at – or even capable of.

But over the last few years, I’ve realized that it’s not that hard – in fact, at times, I really like it.

I give credit for that skill to a client – one in particular.  She was the HR manager at a franchise group of well-known fast food brands.  It was one of my very early sales calls, my first big potential one – and I was all by myself.  There I was, sitting in their boardroom, armed with my nifty powerpoint presentation and a list of bullet points to go through to tell her how great our product was.  And in she walked – or rather strode.

The first thing she did was pull every blind open, each one made a bang, then strode to me and shook my hand.  She sat (or rather plopped) down and, before I could say a word, said “So, tell me why I should buy anything from you?”

Talk about taken aback.

And then she smiled, very warmly.

I immediately let go of my breath, realizing that she was actually not at all terrifying but she was actually messing around with me and, without thinking any further, my competitive nature go the better of me so I smiled and said back “Well, why don’t you tell me what I’d need to do to be able to do that?”

And that’s where the magic happened.

She immediately gave me a list of all of the problems she had and all of the solutions she was looking for.  And I had the perfect client brief.

That one conversation taught me what consultative selling really is – finding out exactly what a potential client is looking for – and we use it every time now because it works.  It’s taken me from something i thought I hated – selling – to something I really enjoy for a number of reasons.  The first is that it gives me a way to know exactly how to position Workible to clients, it gives me true insight into what our clients want, it gives us ideas for further Workible features that our clients want (and will pay for)  and, just as importantly, it actually allows us to build relationships with our clients by talking about them.

And all of that gives us a huge competitive advantage in our market.

It’s an interesting question to pose to yourself – and I’ve just asked Alli (my partner in Workible crime) the same question.  Her answer?  “Hmmm…… I’ll have to think about that.”  Funny, huh?

See her answer in the next blog.  In the meantime, what’s yours?

What’s the most important skill I’ve learnt from our startup?