Startups: How to Gain a Crucial Advantage in Your Market.

Successful entrepreneurs know that one of the most crucial advantages they can obtain for their business is knowing more about their market then their competitors.

If you think this sounds basic then you are taking a half-assed approach or you’re doing it all wrong. I’m amazed at how little emphasis most budding entrepreneurs place on truly knowing their market.

Too many startups approach market research as a finite aspect of business planning but fail to invest the necessary resources required to actively assess and analyze their market. Avoiding this approach is going to provide you with the insight needed to out-execute your competitors.

Successful execution requires leveraging insight into your market, competitors, customers and culture. In order to glean that insight you need to take a leading-edge approach to aggregating information. If you take a traditional route relying on the educational system, old guard media and the latest books, you’re going to sink.

I’m not totally denying the value of traditional education or print but, as an entrepreneur, the ROI for both is declining. Data is liquid and it is fast moving. If there is a book I need to read, I will know about it because I actively follow the thought leaders and the outliers in my market.

Not Rocket Surgery.

Know who the players are in your market and who the up and comers are. Follow them on twitter. See who they follow and who they interact with. Read what they post. Read their blogs. Pretty soon you will start to be a part of ‘the conversation’, even if it’s just a passive role in the beginning. (When you start to matter, you can bet they will follow you.)

Set Google News alerts for key terms related to your business, customers, market and competitors. Use an RSS reader to aggregate important blogs into one location.

Become a better business person. Mixergy and This Week in Startups are an excellent place to increase your business acumen simply by listening to the stories being shared by successful founders. Entrepreneurs like Andrew Warner @mixergy, Jason Calcanis @jason, and David Heinemeier Hansson @dhh have made incredible contributions to the startup community by providing vast amounts of insight and inspiration for entrepreneurs.

If for some reason you find that all of this doesn’t pique your interest and motivate you enough to make a habit of it, then you probably want to consider doing something else because this is what it takes to win and it’s what the players in your market are doing. (and Or their C-level team.)

Your dot com sucks and I’m not going to take it anymore.

Every brand creates it’s own impression within me; negative, positive or indifferent. Everyone has their own opinion, for some people Mcdonalds makes them smile, for me it makes me cringe. Simple as that.

However when it comes to online businesses I have always been reserved in voicing my negative judgment. Perhaps simply because the internet is such an indiscriminate audience. While I might voice my negative opinion of certain brands with friends, I really feel no need to voice my opinion to complete strangers.

They would probably very quickly see me as someone who would deny his own children a happy meal and someone who is too good to shop at whatever crappy stores they shop at. (sarcasm, a little)

Well, as an online guy I’ve always felt an inclination to be supportive of other online companies. But, the truth is, I’m tired of playing like the internet is any different than the brick and mortar world. Like it’s some happy magical land where every website is going to make our lives better. “It’s free”.

Fuck that. Your company fucking sucks and just because there is a dot com at the end I shouldn’t by any less inclined to say so. So, here is a big fuck you to all the online companies I hate and all the startups I can’t stand and the people who are riding their coattails. That feels much better. /rant

The Fallacy of the Already Executed Idea

Most entrepreneurs are aware of the ‘fallacy of a great idea’. You don’t need a great and original idea in order to succeed. I think the fallacy of the great idea is perpetuated by the great ideas that are major home runs. The ideas that are so wildly successful they cause people to say ‘Now why didn’t I think of that.’

It’s very easy for entrepreneurs to get discouraged once they (very quickly) realize that their great idea has already been executed.

However, most successful businesses start out with preexisting competitors; only rarely is someone able to be the first to solve a problem, fulfill a need or even to create one. Once this happens and success is demonstrated, then competitors tend to enter the market and a pyramid begins to build.

Typically with existing ideas there are one to three major players at the top and numerous others vying for market share. But, as I learned in my previous business, a small percentage of the market can be very profitable.

In order to succeed where others are already profitable you have to differ in strategy and execution. Perhaps there is a different share of the market that they aren’t going after. Where is the facebook for senior citizens? Where is the Latino Groupon?

Or maybe they just aren’t executing it as effectively as you envision. Too many clicks to get to point B, too many features, missing features, poorly targeted content or ads. You have to be willing to shift and pivot the great idea. Remember, facebook wasn’t the first social network and google wasn’t the first search engine. Who is going to build the next twitter?

Memolane, the (another) Startup I wish I Founded.

Occasionally a startup comes along that I wish I founded. This is essentially one of the highest compliments one entrepreneur can pay to another, other than investing in them.

Memolane opened to doors to the public (Beta) today and I had a chance to create my own memolane at memolane/lawrenceblack

Memolane creates a visual time line of your online activity using your social media data.

A big motivation for me to publish content online is to create my ‘legacy’ and to leave something intangible, yet (hopefully) of value to my heirs.

Memolane created an all in one social media scrapbook that preserves all this content in a clean, eloquent fashion.

Unique and well executed. Going to keep my eye on this one.

Lessons From My Previous Business.

I wanted to immortalize some of the mistakes I made over the past two years in my previous business. These weren’t fatal to the business, but like many plane crashes, ‘pilot error’ is really just a combination of small mistakes and oversight.

While I was able to bootstrap my previous business from zero to about 40k a month in earnings in under a year, I’d (like to think I’d) be earning 5 times that if I was in the same position today, but hindsight is 20/20 isn’t it.

Now, instead of writing a long Mark Cuban style blog post telling the entire story, I’d rather focus on the key lessons I learned about business and about myself in the process.

Lessons: {unordered}

Being great at building a business and being great at running a business are two entirely different skillsets. Identify exactly where talent is needed and hire it at a competitive price. I made the mistake of hiring people to do the things I did great (sales, design) when I should have hired people for the areas where I was weaker. I should have invested the money in all A’s. (accountants and attorneys.)

Avoid partnerships after the onset of your business at all costs. If you choose to take on a partner, get money for any equity relinquished and retain a majority stake. (He exchanged his clients for equity – a major mistake on my part, there are hundreds of ways I could have structured that differently.)

Keep overhead at an absolute minimum on all fronts. This seems obvious but it’s an easy trap to fall into even for the leanest and meanest of companies.

Big clients are great, but having one client comprise a large share of your revenue is a lot of exposure.

Don’t rely 100% on one marketing channel, keep marketing in your control as much as possible. SEO > PPC.

Avoid investing too much of your business in singular temporary trends. Create a revenue model that will still have traction in 5+ years.

Don’t get geeked by numbers. It’s nothing compared to what you could and should be earning.

If you aren’t stimulated to work by what you are doing, create another revenue source.

Shop lawyers around and don’t pay for two at once.

Overall, I am extremely happy with the experience and proud of what I accomplished. For every mistake listed there are ten things I got absolutely right. So, while I’m not dwelling on the past, I certainly am going to leverage that experience in the future.

EDIT: April 3, 2011 3:09am

I just wrote a new post, entitled A Litmus Test for Your Next Business and as I wrote it, I thought back on this post and realized there were more lessons mistakes that I had made in my previous business. Going into my next business, I definitely am going to give it the ‘litmus test’ referenced above. As an entrepreneur, you can never stop educating yourself and increasing your business acumen. As Mark Cuban says, you only have to hit it big once.

I just finished watching an episode of This Week in Startups featuring Tony Conrad @tonysphere who is a VC at True Ventures and the Co-Founder of

The episode was great as always but I also came away impressed by the concept. I’ve always detested writing bios for myself and not only does your page serve as a bio, but it also serves as a living social media bookmark and a splash page that will no doubt have a million uses and hacks.

AOL purchased it four days after launch and I can see it gaining major traction across the web. My new profile can be seen at

Pure Capitalism in The World of Online Startups.

This is one of my favorites. Jason Calcanis of This Week in Startups interviews 37 Signals founder David Heinemeier Hansson on the topic of startups, M&A, profits and why profitless companies are continuing to fall victim to the ‘graveyard of acquisitions.’ {Business: I love this fucking game.}

The video starts midway, where I think the best content begins.