Yangtheman

Life hacker

Archive for category entrepreneurship

Just do it!

Feb 22

Posted by Yang Chung in entrepreneurship, high-tech | 1 Comment

There are a few people at work I enjoy having conversation with, and one of them is a software engineer with a lot of interest in marketing and starting a company.

One day he and I had a discussion about high-tech marketing strategies. I gave examples and principles from books I have read like Crossing the Chasm, Inside the Tornado, and Innovator’s Dilemma. But, he basically discarded them as garbage and they are all just after-the-facts, trying to explain what made companies successful. Hindsight is always 20-20, and it is easy to justify actions after success. I try very hard to make counter his points, but it didn’t fly.

The truth is that he was right. None of the authors – neither Geoffrey Moore and Clayton Christensen – has ever run a successful company. Also, so many successful companies in the valley have been accidental success. Look no further than Google. Larry Page and Sergey Brin never wanted to start a company. After successful prototype, they just wanted to sell the technology. Nobody including Yahoo wanted to buy the technology. Everyone thought search market was mature enough with no room for new player. They sat on a $100,000 check made out to “Google, Inc.” from Andy Bechtolsheim, mulling over whether to start a company or not. The same with Craig Newman from Craigslist.org, which is arguably one of the most visited websites in the world. He started out by managing a bunch of mailing lists, which was a pain and took a lot of his time. He wanted a better way to manage the mailing lists, and that’s how Craigslist.org was born. Mark Zuckerberg from Facebook never intended to create a company of current Facebook. He just wanted to find a way to see who’s who in his freshman class, and that’s how Facebook started. Similar stories exist for other companies like eBay and Paypal. Have they all followed the strategies and tactics laid out in marketing books? I am not sure. But, it is surely easy to tell the world – after such huge success – why certain actions taken at the time were so brilliant. But, who knows at the time it was motivated entirely differently?

In addition, most successful start-ups happened to be started by engineers, not marketing-types. From HP to Cisco, Sun Microsystems, Yahoo, and Google, all of them were founded by engineers.

Guy Kawasaki from Garage Technology Ventures said that one common mistake an entrepreneur makes is writing a business plan first. Instead, he or she should start building service or product and starting selling them first. It’s utmost important to get customer feedback as soon as possible. By incorporating customer feedback and improving service or product, the entrepreneur could build his/her business. If more capital is required for further growth, it’s much easier to raise funding with proven business model.

So, to my fellow entrepreneurs, JUST DO IT!

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Pros and cons of outsourcing software development to India

Aug 24

Posted by Yang Chung in entrepreneurship, high-tech | 2 Comments

So, I am winding down on my pursuit of the startup. I had to. My saving level is dangerously low, and I have a family to support.

And, this outsourcing to an Indian software company was a BIG mistake, too. What it came down to is the heart and soul put into the work. They will do a job to meet the spec, but as any software engineer knows, there are million ways to write a code, and these guys will write the minimum or take the shortest path to meet the spec. That doesn’t mean they will think about efficiency or quality of the code. So, quality of the code is always questionable. But, again the biggest problem is that these guys will not go above and beyond. Just do the minimum to meet the spec and that’s it.

When I told many people that I was going to outsource the coding, they thought I was crazy. It’s core of my business, and you should never outsource something that’s core to one’s business. That’s so true, because I just learned it hard way and also it is clearly said in the book I am currently reading, Living on the fault line by Geoffrey Moore. Well, actually at first, I didn’t think the website was the core, but marketing strategy was, because writing a website is so trivial and anyone could do it. I wanted to do it cheaper and faster, and concentrate on good marketing so that I can attract critical mass of users. But, it was the core. In consumer website space, user experience is everything and the website that was built by this Indian outsourcing company – which by the way had developed other social networking sites before – had the worst user interface. So, I basically told them to stop the development since I want to cancel the project. Of course, they weren’t happy about it, but there was really no point in going on. The website developed by them was so inferior to current competitors.

Recently I had to research open-source social networking platforms, and I was surprised to find so many. And, they all looked really good. I remember distinctly that I searched for such platform in October of 2006, and there really weren’t much. I found a few that I’d have to buy, but no social networking…. Though, I am not sure if I would have time to develop the site myself even if I found a suitable open-source social networking platform. The learning curve would have been too steep. That was actually another reason I decided to use an outsourcing company….., but it turned out to be probably worse.

Ah, well…. You live and learn and move on.

Also, another thing that I learned was that most of the successful startups were founded by engineers and geeks, not by business or marketing people. I’d better go and hit programming books!

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Software is the king

Jul 4

Posted by Yang Chung in entrepreneurship, high-tech | No Comments

I wish someone had told me about it early, perhaps before going to college. I have been working for about 10 years now with most of experiences in data communications, and it’s been pretty obvious to me that real value of a system resides in software, not in hardware. In the communication systems, what determines reliability is usually their OS and software in general. Hardware matter, too, but only up to certain point. And, it’s relatively easy to reach a reasonably robust hardware product. The real art of creating value is really in software. I wish I have known this before. While I started my freshman year as a CS major, but later I changed to EE because I didn’t like to spend too much time in front of a computer.

Anyhow, the two pillars of data communications industry is Cisco and Juniper. When Juniper first came out, its software took much different path from Cisco. Cisco’s IOS used to be this humongous, non-modular piece of code and changes in the one part of IOS may easily break different part of IOS. It was somewhat synonymous to MS Windows OS, where the backward compatibility requirement has hindered it from introducing much better OS for a while. Also, their approach was similar where Cisco IOS would support any network protocols under the sun like DECnet and Appletalk, while Juniper only supported newer protocols. When a process within IOS fails or goes nuts, it would bring down the whole system, but not Juniper’s OS – JunOS. It was definitely smaller, faster, more reliable and more resilient. But now Cisco’s new OS called IOS XR is also modular SW, I think the playing field has leveled. Cisco is a big power house in networking which commands more than 60% market share in most of industries it has penetrated, and Juniper might forever remain as the number 2, niche player in the market (Crossing the Chasm).

Anyhow, when I look at new innovation or innovative companies popping up, it’s not in L1 to L4 of OSI layer. It’s usually in higher level. Look at all web 2.0, social networking and SaaS (software as a service) companies taking the market by storm. Some say it’s bubble 2.0, but this time I think everyone including investors is careful about business models and revenue history/projection. Also, anything related with proprietary hardware like building ASICs takes too long and too much capital. Building software takes much less time and capital, and there are literally thousands ways to implement a feature, so it’s really up to how well the software is structured for performance as well as scalability that would make a huge difference.

It also brings an interesting point, too. If you look at technology advancements in the last 100 years and last 20 years, the rate of advancement in last 20 years is very high. If this rate would continue, it’s mind boggling to imagine what the next 10, 20 years will bring. That’s also why benefits of proprietary and custom hardware such as ASIC or company like SUN might be in the big trouble. The system built with off-shelf components may run as fast and reliably as custom hardware. Again, the value will be on software. How well it is designed and written will make all the difference.

I have two kids of my own, and I don’t know if I would want them to become engineers like me…, but if they want to, I would definitely ask them to go into software industry, not hardware. I suppose hindsight is always 20/20. Life’s most valuable experiences are learned from mistakes.

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Scholar and Entreprenuer

Apr 19

Posted by Yang Chung in entrepreneurship | No Comments

There are two books that had great impact on my professional life. One is Geoffrey Moore’s Crossing the Chasm and the other is Clayton Christensen’s Innovator’s Dilemma. The latter book had higher effect because of its radical theory that most companies fail because it does what it is supposed to do…and do well. Most people who are in high-tech marketing know these books and all the marketing principles and rules.

It’s interesting, though, that none of these authors are successful entrepreneurs. It shows that it’s one thing to know and another thing to do it (and do it well).

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Online resources for high-tech entrepreneurs

Mar 27

Posted by Yang Chung in entrepreneurship | No Comments

For a little while I was trying to raise fund for my company, which turned out to be fruitless. While I did that, I found out some interesting articles and online resources, and I wanted to share them with you. I do have my own del.cio.us bookmarks, but I figured it’s better to place them all here with some explanation….

When It Comes to Innovation, Geography Is Destiny
Why location is everything when it comes to innovation……Pssst……the place is in the West Coast and where Fairchild Semiconductor seeded everything….

The 18 Mistakes that Kill Startups
I didn’t know who Paul Graham was until I found this essay by him…. My company had #1 and #2 mistakes he listed. Not that his list is like a golden rule, but his reasoning made sense.

How to be Silicon Valley
This was a very interesting read. I liked Silicon Valley for other reasons like being close to ocean, mountains, Lake Tahoe, Santa Cruz, Monterey Bay, Half Moon Bay, San Francisco, Napa/Sonama Valley, etc… I wondered the same about that…. Like NY Times article mentioned, there were many domestic and international cities that tried to be the next Silicon Valley, but look where most high-tech innovations happen! There is no doubt there is something different about Silicon Valley, and I didn’t see better reasons why than Paul Graham’s…

Paul Graham’s website and his essays
Actually, you should go ahead and check out his website…..as well as his essays.

Buildv1 – Connecting entrepreneurs
This is a really cool, under-utilized site for all aspiring entrepreneurs. It’s like a classifieds for entrepreneurs. You can post your latest project and ask for help, or you have certain skills for startups, you can post them to hook up with an entrepreneur. I’ve used it and received many interests…… Whether you can find someone you can trust and work well together is whole another thing.

Art of the Start by Guy Kawasaki
I really enjoyed this book. While Guy Kawasaki looks like a sell-out and doesn’t have mega successful company under his belt, this book is a must for all high-tech entrepreneurs. It’s no-non-sense guide to entrepreneurs about how to build a team, raise a fund, etc. I really liked the book, because he said an entrepreneur should start building a product/service and delivering it instead of writing a business plan or pitching to investors. And that product or service had better bring in revenue as quickly as possible. Totally right. For startups, cash is king, and without cash, it will die. Faster revenue, the better. And unless you are Steve Jobs, still live in late 1990’s or have a rich, generous uncle, no VC will fund your company based on just a business plan, however spectacular it is. VCs bet on jockeys, not on horse. And, good idea will fail if not executed correctly while bad idea can survive with excellent execution and probably some modification on the way.

Ask the VC
This blog is founded by two venture capitalists, Brad Feld and Jason Mendelson at Mobius Venture Capital. What’s cool about the blog site is that they actually do answer your emails!

VentureBeat
This is an excellent site if you want to be plugged into news about (mostly) Silicon Valley startup. It most deals with who’s gotten funded and how much…, but sometimes it has juicy stories about startups in general.

Rent-A-Coder and eLance
If you are looking to outsource, rent-a-coder and elance are probably two major “brokering” sites. It’s free for a user to post his/her project, and outsource companies (mostly offshore, but some domestic) bid for the project. I’ve used the rent-a-coder but didn’t use a company through there because I’ve had a company that was personally referred to me.

FundingUniverse, Go Big Network, The Angel Journal
I can’t personally vouch for these websites, since I wasn’t successful in securing funds using them. But, who knows? Some entrepreneur may have better luck with them.

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Starting a company is hard….

Mar 22

Posted by Yang Chung in entrepreneurship | No Comments

I worked in overseas last couple of years. The experience was strange. I worked in my mother country, but it made it worse for me. If I have an advice for any Asian American thinking about going back to his/her mother country and working there, I would strongly discourage it…. Reason? That’s for another post.

While I was preparing to come back, I had an idea for a social networking company and decided to go for it. Social networking market has so many possibilities for niche markets, and combined with my recent experience, I would have a shot at it. With some but not a lot of money saved, I wanted to release a beta version if two months. That was about six months ago. Now, I have given up on the quest. Why? There are several reasons.

1. No co-founder

In the beginning, there was sort of a co-founder. I established good relationship with this guy who worked at the largest software company and had entrepreneurial mind. When I pitched my idea, he liked it and wanted to be in the game. Plan was that he would take care of all the technical stuff, while I do non-technical stuff. Working at a software company and being a software engineer before, I though he would be perfect for the job. Only problem was that he had his family and couldn’t leave his full-time job until something solid (early funding) happens. As time went on, it was obvious that he could not put as much as time he had hoped into the new venture. He had a full-time job and family. I had a family, too, but I was committed 100% to the venture. So, about a couple of months into it, he pulled out.

I don’t blame him, though. As a father and a husband, I know it’s tough thing not to be able to support the family. I could have stopped then, but I wanted to keep going. I didn’t want to give up too easily. So, I decided to use an offshore company and contract the website development out. I found a company, actually, through ex-co-founder. While I was discussing terms with them and looking for a lawyer, I also looked for another co-founder. But it proved to be much difficult.

Not only that I had to sell my idea (but I was pretty used to it by then), I had to make sure there was compatibility. When running a start-up, things would get tough at times, and I needed to make sure that things would work out. Also, I didn’t have any money to pay….except equity of the company. How do I determine what percentage is appropriate to a total stranger with no prior working relationship? Indeed, when I looked at many companies, they were all started by ex-colleagues or school friends. With no proven chemistry, it would have been tough to trust any stranger. Another thing I found out was that many entrepreneurs or to-be-entrepreneurs had their own ideas to pursue. Instead of pitching my idea, I found myself being pitched to several times.

2. No relevant experience/No track record/No stellar management team

This is pretty obvious, but when I approached investors with my idea, they all gave me the same answer. This also proves that they never say no! They told me that they liked the idea and target market, but with no relevant experience (my background is in data networking, not consumer website), track record nor A-team management team, they could invest in me and my idea. Since a good idea will fail in the market with poor execution, they were absolutely right. However, with all their contacts, if they really thought it was a good idea, they probably found a way to invest…. They also told me that if I could build the website and show early success, they could talk about funding seriously. It led me to use my funds to build a beta website.

3. Inadequate funding

Without cash, a startup will die. I had only small bit of savings, and I had to use it to run the company, pay for website development and support family at the same time. My financial resources were depleting fast. So, I picked pitching to investor route first. When it didn’t go anywhere and with no co-founder, I picked offshore development route. But, it was too late. I needed to bring in income soon. If I had won the lottery or had inherited large sum or had ultra rich and generous uncle, it would have been a different story.

4. Family

Family also put a lot of pressure on me. Kids are too young to understand and my wife supported me 100%, but it was always me. I felt like an inadequate father and husband. Things we had to cut back and things we had to forgo…. While I was pursuing my dream full-time, that constant stream of income called “paycheck” was really tempting at many occasions….

5. Keeping energy and optimistic level high

There are so many obstacles one faces when starting a company that I almost think it’s a race of who can last longest, and to last longest you have to keep energy and optimistic level high all the time. A little bit of doubt will slowly eat you away. I guess that’s why it’s important to have mentors and perhaps multiple co-founders, who can give you a pep-talk whenever you are down….

So, I’ve started looking for a full-time job this month and have had several phone interviews and a few on-site interviews. My next post would be about one of those on-site interviews.

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