I believe so. A good leader must understand who he communicates with and consequently understand that from the other side there is someone that will perceive his message differently. Leaders are usually within a structure that force them to be a follow as well.

The triangle of leadership

I see a leader as someone controlling the elements of a triangle made of Leadership, Followship and Execution. Communication is a central element gluing the three together.

Early-stage startups

Startup’s early founders sometime face blurred leadership contexts because they work on less-structured and rigid contexts, where everybody is basically equally important. A leader that doesn’t want to follow either forces the others to his vision (w/ mostly obvious consequences) or just doesn’t fit in that context.

Hiring

Being a leader and a follower is a critical feature that I would look for when recruiting. A “leader” that can’t follow will never be a good leader. A follower that understands relationships and communication will be a good leader, even if requiring some time to be one.

I believe that I experienced trying to get both to work with me.. Time will tell but I believe that choices made to “cut the legs short” on The bad leader will pay it dividends.

…but, could a leader avoid having to follow?

Could a leader get around him people that need a leader so he doesn’t have to follow? Maybe. Steve Jobs may be an example of it. The exception, not the rule.

I haven’t been focusing on my strengths and I think you shouldn’t either. I consider myself an early-stage entrepreneur and at this stage I have to do too many things, most of which I’m not good at. As a bootstrapped entrepreneur i’ve been focusing exactly on the opposite: my weaknesses.

Sales is probably the area where I am less good at. But sales are key for InfluAds and I had to do it. It may be key for any concept because your mission is to sell your concept/vision to everyone in front of you.

This allowed me win on different fields since:

• I could double my focus and “ROI” on what was important for the project
• Learn while doing it (everyone should be a salesman so…)

As an entrepreneur facing your weaknesses you can do three things:

Outsourced approach

You can ask someone to do it and you’ll have it done properly but you’ll never grasp your own weakness. You’ll have it done right the first time (probably… maybe…) and it will cost you $$$ (not available when you’re bootstrapped).

Co-founder approach

You can have a co-founder on the team focusing on that. If one person is limited on time, X co-founders will be as well and adding an extra co-founder has some levels of complexity around timing, choosing the right one… This causes some liquidity dilution and won’t solve much of your weaknesses.

Just f$%ing do it

This has been my approach. No, I won’t be an awesome sales guy even if I grew on that field a lot. No, I will never be a good accountant but I’ve learned a lot about the intrinsics of the nitty-gritty details about accounting, cash-flow management, related obligations…

It takes time, and sometimes time isn’t enough…. but then again, it will never be enough anyway!

It may require being somewhat stubborn (that’s me).

It’s tough but what doesn’t kill you makes you stronger. It may not even be forever but it’s a very rewarding experience when you nail it !!!!

Let’s take one example:

Imagine that you want to recruit someone for your small team and that person will have to do many things, think and sit outside his/her confort zone, as anyone joining small companies. Which kind of profile would you choose, if you knew which approach that person would follow?

I would certainly choose the one that was willing to “take the bull by the horns”. If you agree, why wouldn’t you do it yourself?

My interaction with some entrepreneurs always lead me to observe that most are very opinative and engaged with different areas outside of their focus/professional area. Politics and “life” are usually hot topics.

But does being opinative and engaged contributes to unhappiness?

I’ve been reflecting about it under 2 different perspectives: 1) Does the lack of expectations contributes to being happy? 2) Does getting high discussing  and engaging into different issues affects happiness somewhat? In my opinion engaging in deep issues, introduces friction against many people and things, leading to some unhappiness “drivers”.

Some people see entrepreneurs as unhappy. But they don’t get that happiness is like Christmas: it happens whenever and how you want it to happen. Entrepreneurs are awesome at converting their passions into Happiness…. I radical type of happiness that makes them breath and get out of bed every single day for causes that others wouldn’t. The outcome of their fight is just unique to them.

Many people will never get that.

“Test market” is a common notion on subjects related to Economics, Management, Concept Strategy… On technology, it is frequently said that small countries are naturally good test markets, when some environmental variables are average or above average within a specific industry (say Mobile penetration when the product/service to test is a mobile app).

But on my world (Web concepts and Web startups) and in my opinion, there is no fucking thing as being periferic. Or saying it differently: it shouldn’t.

Being international since day 1 (and not giving a damn about being periferic) may be the new order for Web Entrepreneurship, and geographically periferic countries do need one.

I’ll try to outline some factors that can contribute to better business models that are internationalization-driven starting from key foundations:

1. You can keep an internationally-driven model even if task/objective specifics end requiring geographical focus
2. Executing a vision is about validating it and engaging with your 1000 true fans for early traction: “test market” is that group of that is often unbounded geographically (ie, your vision may underly a consequent opportunity for periferic countries)
3. Your business concept/model can be built to benefit from the inexistence of geographically-driven constraints. Building it while focusing on removing those constraints may enable a simpler, broader and more game-changing concept

How does this happen “along the way”?

Finding the solution for a local problem is thinking local (and small)

You are an entrepreneur and your goal is to find solutions for problems that affect a group of people. The wider that group, more interesting and game-changing your idea will be. Fact: Periferic countries are small, that’s why they suffer from it. If they are small, maybe you are just not thinking big enough and your efforts wont impact as many people as you may thing at first. Think about it since the beginning.

Go trough your problem’s pain: is it something that other people in other countries experience as well, even if differently? What are the differences? Could you address those differences by creating a concept that solves those as well? Simplicity drives great concepts because they tend to address core needs and avoid complex paths toward a solution.  Could the differences be ignored toward simplifying it?

The guys at 37signals often mention their strategic options about not doing specific features or taking specific business options because that makes their product more complex, hindering their ability to 1) solve the problem they are focusing on and 2) achieve scale with as little resources as possible: in the same way, local problems end introducing complexity and inefficiency toward simple, effective and scalable models.

User acquisition efforts are lower on local markets

Think about your favorite web concepts: If you started them today, how much would it cost to get the first 1000 users on a local market vs globally? These 1000 first users are early-adopters, reachable because of their interest in the solution for the problem you are trying to address: if your vision is not bounded to a geographical area, don’t force one.

If you are building a concept solving a problem for travelers, you can reach them anywhere: it is very likely that you’ll find better early-adopters outside than in your local market anyway just because their potential size will give you diversity. Obviously, if you are trying to solve water shortage on your gramma’s village, then there’s no point on reaching people outside that village.

At one point after product-market fit, it is important to focus on scale and business dynamics or scale strategy may dictate a strong focus on specific target areas to enable real traction there but you should clearly make a distinction between local focus and potential barriers to bounderless business models. Moreover, that focus should always resist the geographical temptation since it goals is to enable your business model and vision: if they don’t tip “geography” anywhere, don’t force it. In a way what I’m saying is that strategic elements will be internationally-driven, even if some tactics or actions act locally.

Most scalable web concepts have their user acquisition and retention efforts highly dependent of core value proposition and low-friction tactics (like viral loops). Do not introduce those barriers there.

Global = more complexity

Software developers know that it’s cheaper to detect errors, problems or miss-specifications sooner because later fixes will be more expensive to solve. This is the same reasoning behind the need to build product-market fit focusing on a global problem before scaling.

If a specific business model has some variables introducing complexity when looking at it globally, not considering them initially will drive a product-market that may only be valid locally. Wider focus may require a new round of validation. Could your problem be “internationalized” and simplified to avoid the need for double validation?

It may also be that the complexity in going global is a warning sign that the model is more complex that it should be. Twitter is simple in the US or in Japan and it simplicity allow it growth.

Global is too big

Are you focusing on a market that is too small to start with anyway? Key objective is to build a model that works (called product-market fit). Without it, you have a bad limb before running a marathon.. Product-market fit happens in small-sized contexts, before scale. Achieving product-market fit just to start all over since consequent scale can’t happen due to geographical complexity is a waste of time.

Avoiding global variables early on can be dangerous. IKEA entered the US market without realizing that bed sizes where different there. When your business model and vision is about optimizing costs by building a lot of the same (economies of scale), the US market ends going against that by requiring different bed versions to be built. IKEA defined many furniture standards and if they considered it earlier, they could set  new standards toward reducing geographical conflicts . The end result was that they somewhat failed their first entry but forced their cost-driven focus anyway (because it is core to their unique selling proposition): to do it, they initially addressed only a fragment of their potential customers (the ones buying new beds) while ignoring others (the ones that just needed accessories for their current beds). The US market was just simply too big to be ignored and this had an significant economic cost.

You speak English dude!

Unless you are using google translate to read this , English is a language you understand (not saying my English is perfect here .

Use it! If you have a web startup, and English is not your main language you are either a very specific case or you are not addressing your potential market. US-based concepts do start with a big addressable market but Canada, Australia, UK, India are natural markets to them and they leverage that since day one. You can too.

One example: let’s say that you sell ecommerce solutions: you even have a english version of it but you blog (or any other of your communication/marketing) is in Portuguese (damned, i see too many cases like this). You are automatically killing a large percentage of potential users that probably have interest in your product and showed up for free. You could argue that doing in English would remove some potential users that do not read or are not comfortable in English. Do it both! you can also argue that doing in both languages takes time so the questions is about how much is that time worthed vs how much do you loose by not doing it. Business is about putting resources to use to deliver more than they cost, and that should be the reasoning behind. It may be dificult to calculate the potential of doing it in English as well, but a rough estimate around potential audience (English speakers vs Portuguese speakers) may be enough.

If you are Portuguese, for instance, you can address a market speaking Portuguese, English and Spanish (>50% of the Internet Usage by language while americans can only address 35% without outsourcing). After Chinese, Portuguese and Spanish are the languages with more growth potential since they are the main languages of very relevant emerging countries. [3] This is huge. Take advantage of it. Enable your concept to benefit from the initially marginal benefits from it, since along time your foothold will be bigger.

Starting by doing business in different languages has small costs. Most web-based businesses have minimal technical barriers for multi-language: as soon as you adopt one extra language, adopting 10 more has marginal effort. Most web-based businesses won’t require support in other language since English is good to start with, even if not optimal. Most web-based businesses can implement language-driven tasks efficiently (TIP: Hiring student helpers or outsource cheaply on a pay per action basis to give support a different language is mostly a variable cost).

Let’s take the example of LinkedIn. Linkedin was always in English, until a internationalization strategy took place. But LinkedIn is all about the social graph, ie, the connections existing around each user. But my connections include people from different countries! By focusing on English only, LinkedIn allowed the existance of  Viadeo (France) or XING (German). If LinkedIn created several languages to remove translation as an adoption barrier (which is relevant on those countries), those competitors had to provide real value that was local, value which is not as core as LinkedIn’s core: connections. Viadeo and XING have a strong foothold since the built networks are hard to move to a different system and LinkedIn is trying something close to brute force to enter those markets (ie, spending money). The cost of removing the barrier introduced by a English-only site at the beginning was minimal, even if they only focused their marketing and sales on a specific language. On the other hand Hi5 is a good example how multi-language early allowed a strong foothold that facebook is now trying to fight.

Yes but I rather want to be #1 on my local market, creating barriers to entry there

Fine, some cases can highly benefit from it, but that shouldn’t be a reason to build barriers to a global reach. Remeber, focus locally without removing the internationalization-driven enablers. You may benefit from it later.

Some american concepts are expert on this when they don’t allow foreign zip codes or phone numbers: a simple detail on a form may have later consequences on a potentially interesting, even if initially marginal, customer base.

My team is too small, we can’t afford to focus on multiple markets

It’s not about your focus, it’s about what you do to enable internationalization from happening.

But make that a good thing. As a startup, you’ll never have time for everything anyway, so your #1 objective is being efficient doing what you do. Automating processes that remove complexity from your work is key and some of those processes are likely to be geographical.

Optimizing complexity can be done within the global constraints. Payment gateways are a good example since you can get one that is optimized for a specific country (MBnet in PT, Dankort in DK) or you can get one that is optimized to different countries and currencies, even if sacrificing some initial profit margins. That’s why PayPal works and is the first/easy choice: their core offer (online transactions) is ubiquitous across boundaries. That’s also why people usually start with PayPal but later add others in parallel, optimizing the inherent transaction costs.

And who are your key stakeholders? If your objective is being more efficient with what you have, could you ask your early-adopters to help you in the process? They are lead users because they (are either your friends or because they) share your vision. Allow them to stand by it! Create features allow them to make some work fo you. Remember that monetary rewards are nothing compared to their passion: if their passion is yours, they’ll promote you, manage you community forums…

OK, but what about…

Yes, obviously this may not always be the case. Like everything in life, “It basically depends”. It’s about the concept fundamentals, and sometimes those are geographically bound.

Groupon may be the best example of the need to scale focusing on geographical regions first (Groupon offer city deals and consequently their cost structure is very dependent on Sales people that work locally) . [2] On cases like this, product-market fit is local and scale is a matter of replication trough different regions.

B2B is often associated with high operating costs (sales, account management..), often geographically bounded. The question here may be: is your concept being modeled smart enough? Could you build a model that removes those costs from the equation at all? SaaS (Software as a Service) introduced new ways of doing business that way, for which Salesforce is a key success case.

Any concept with an almost infinite number of existing competitors/similar concepts is likely to be in a fragmented industry where geographical focus can be one relevant differentiator (I am thinking of Accounting tools and many services like Marketing or SEO [4]). That’s ok, but those concepts will always serve a limited market size and are not built to scale. Some can be adapted to scale after, but that adaptation is all about the same enablers I’ve been mentioning all along.

So wha’da’ya think?

Notes

[1] I am using the word “complain” since most people use it to justify “bad stuff”, often within contexts of self-pitty (social, personal, corporate… different levels of self-pitty. I am also using it because i hate the fact that people use it!

[2] I had the change to argue this with different people, specially with  VC’s and consultants using the classic “it doesn’t scale” tagline. Groupon is the classical example that non-scalable models can scale on the web. To do it, they are hiring madly, but scale is achievable and when done based on a product that offers premium value-added, the “doesn’t scale” blabla isn’t as relevant

[3] Often, English didn’t even broke into that market. Orkut is the top social network in Brasil, not Facebook.

[4] A SERVICE is usually limited by cost/hour and is highly dependent on how many hours you’ll work. That’s the biggest constraint to scale (which is slow, harder but not impossible as Groupon proved it).

Entrepreneurs in Residence (EIR) are experienced entrepreneurs invited by VC’s to support their portfolio. This is great since they provide amazing value, specially in the current context where founders are younger and younger, reflex of the lack of barriers when building a startup. [Tech and Web startups is my focus here ]

But on the Nordics  and many other places like Portugal (my home country) and some of the emerging Baltic countries this phenomenon may suffer a double-sided impact.

An Entrepreneur in Residence is likely to be a choice between:

Joining a VC firm as EIR to help young startups is likely to produce awesome help to make more startups succeed better, probably reducing some of the risk associated with the investment. Younger entrepreneurs benefit immensely from it and dumb mistakes are likely to be avoided when experience is on the table.

But experienced entrepreneurs are a big asset since they can create more and better startups (historically and statistically better able to succeed). By not trying again, some entrepreneurs may even kill a great chance for the “Billion Exit”, which may produce stronger role-models and even a new stream of early-stage capital into the community, which for instance happened with the Skype duo (trough Atomico) and other minor funds created by early Skype employees in the Baltics.

I believe this issue even gets extended in some ways to Designers in Residence and young entrepreneurs turned VC. An example isNikolaj Nyholm (@nikolaj on twitter), a danish/swedish reference entrepreneur who recently joined Sunstone Capital being target of a loud “comment” from Morten Lund (@ML) because of it. I also got in touch with Jason Putorti recently, a Designer in Residence for Bessemer, who is also focusing on Elegant.ly [Jason's blog and Elegant.ly recently joined our Design community at InfluAds].

This may end up being  a zero-sum issue since these guys provide awesome value nonetheless.

My personal view is that a context like the small Danish community would certainly benefit from a few engaged entrepreneurs going for the home-run, which could spill back to the community. Grass-root events like StartupBootCamp, StartupWeekend, the many other events that do not exist yet but are very needed (!!) and the entrepreneur’s drive to get good mentorship achives some of the value that EIR’s provide anyway.

There is also an  issue here: the danish tax system (and culture) does not reward risk.  Michael Jackson (@overdrev on twitter, VC on Mangrove Capital) referred exactly that when talking to the Mini-Seedcamp crowd: high taxes giving low incentives to risk/invest and work-life balance, aligned with the carrot of a being a (better paid?) executive in a VC firm may make reference entrepreneurs want to reach the first-base only.

Assuming that early stage entrepreneurship in Denmark and the Baltics is roughly at the same level (“blossoming”), I can only see that the Baltic countries will kick Denmark’s little ass on this matter since costs are lower and rewards higher there. Is it? Any feedback or comments would be strongly appreciated.

Lithuania

Interesting to see the batch coming from Lithuania, a country that seems to see some cool grassroot efforts on the web entrepreneurship space. Met ImpressPages, a bunch of cool and passionate geeks working on a very interesting CMS, taking open-source as a model. They got some critics about their open-source based model, but from what I’ve understood not from knowledgeable sources. As Mygdal mentioned, Umbraco is an heck of an example there. They surely need some advisors to help them out on concept and pricing strategy, and even biz members that can boost the business side of the thing but nonetheless…

The Fins

Gotta love the Fins. All these events seem to have cool people contradicting the perception that they are not socially interactive… they do drink.. a lot…

The music

Two very interesting concepts emerged around music: gigswiz.com (Finland) allowing people to choose where their favourite bands will play and tunerights.com (Sweden) allowing people to buy shares on musics/albums.

Interesting ideas where activation, focus on launch markets and market expansion may be key for their success.

Copenhagen and the Vintage year

Someone said that Copenhagen will see a vintage year on the startup community. I freaking agree!!! With some bigger names popping up like Tradeshift and Hoist, and some very interesting grassroot projects blossoming, based on very well defined problems, it does seem so. I said for fun that the CPH teams should defend our colours at the event: claim my.biz, kkloud and NuGames were up to the task. Every single one can be a win. Nop, I’m not including InfluAds for partiality reasons

Didn’t got it (or the WTF moments of the day… maybe i’m just dumb)

• Queue-it is a Danish company (old school) trying to remove the load and website crashes associated with transaction peaks.. Very web 1.001 IMHO. I could only think that eventbrite and amiando would kill most of their potential target clients. Also, any of the Amazon cloud services would allow a developer to implement scale, avoiding the need for their service. They seem to have some clients though. No idea about their commission structure and types of “transactions” that they support. Companies like CritSend are doing a bit of the same for mass-email sending and i think they could implement the idea in a smarter (web 2.0′ish way) by engaging with AJAX, cloud and seamless UX.

• The WFT moment of the day was when the girl from queue-it (the only one as she correctly pointed out) mentioned that people were not passionate about their concepts… WHAAAT THE FUUUCK???? Some people there came from odd countries, are fighting their asses, are doing their startups on the side because they can’t or going very bootstrapped after their dreams. Sad that some can’t understand that some people (most geeks) don’t always have the Sales bullshit blablabla that others have to sugarcoat their awesome ideas!!! Fuck it, I bet that some of those guys were coding the night before and were even starving for some sleep!!! Comm’on…

• Why did some mentors comment on things they don’t understand. This may seem pretty arrogant as a participant (taking great benefit from their time and experiencing some awesome mentors myself). But when you see mentors giving clearly bad opinions about such important topics like pricing strategy, scalability, the (in)ability of open-source projects as a business model and others, you can’t stop wondering… even other mentors end contradict them often (if nothing else, A/B testing on smart comments works…). I guess you’ll always have to have some that will say the BS lingo words without having THE knowledge to comment but if they were not there, others could have time to dive deep into the issues (Rule #1: don’t talk if you don’t have anything smart to say).

• Why some VC’s don’t know Venturehacks (two at least) is beyond my IQ level. Venturehacks was my ubber cool case where InfluAds is present).

• Why did they fed us so well !!!! Everybody knows that entrepreneurs are fuelled by pizza, specially at early hours of the morning

• Why did they include a service/consulting startup building mobile apps. They were growing x members a week but looking for funding to do something, whatever, that no one understood about. Fine that they are a startup but didn’t seem to fit on the context, and were pitching for something alongside their consulting (or was the consulting itself?) Something was not clear (IMHO).

The bummer

Missed some interesting people. I got to know a few during lunch but catching up and connecting later is a must.

Last but not least: InfluAds

As my own main critic, I have some critics about myself and InfluAds on the event, and may gather some thoughts and write a post about it later. Pitching is not my game(+ a fucked PPT didn’t help). I found myself loosing precious time on the sessions because I had to explain again the details. My bad, gotta be better at it (PERIOD!).

Critics are meant to be constructive and improvement can always exist, if the involved people wanna take it that way.

Sailing Anarchy has this awesome picture about a 4y old kid sailing. Who’s not into sailing may not even understand scale here: that boat is an Optimist, a very small boat: that kid is reaaally small!

“The look” is a great title since it represents the focus on the wind and surrounding elements. The kid has it, and entrepreneurs must have it too. Like sailing, building a startup is all about understanding the elements before anybody else, taking choices that edge your position, trimming things to detail toward making the most out of very little and being basically relentless, keeping relentless along the way.

Do you have “the look”?

Image from Sailing Anarchy

Selling snails to buy a hot-shot mountain bike when (i was 12 or 13y old)

My first one was catching snails and sell them. For those who don’t know, in Portugal and a few other countries, people eat snails. In Portugal they are mostly small snails, most of times served outside of normal meals… It goes great with beer

The objective was to get 55,000 of the old escudos (around 270€) which at the time would allow me to buy an awesome mountain bike.

That was my first biz and my first experience with scaling a non-scalable business.You usually catch them by hand. That doesn’t scale. A friend and I got a scheme where we would go to some small but deep hills full of high grass, where we would hit the grass and let the snails fall all the way to the bottom, where we had a big bag (somewhat like people do when catching olives). We would then remove any grass and small snails to get a high price for them. We rocked, and we would carry huge bags in our back to one old lady that would offer us cash for them…

Selling t-shirts on a motocross track (i was 16y old)

A few years later I spend 400€ (huge money for a teen back then in Portugal),  to print 80 t-shirts themed “SuperCross 95″**.

I was an incredibly shy guy selling them on a motocross competition, with friends stopping by and all. I’m not a sales man and wasn’t back then. I ended up selling a few but came home with lots of them, selling them to friends & family which made turnover possible. Everybody on that family had a t-shirt like that, maybe even today

One of the shirts had one guy in a motorbike, seen from behind, saying: “If you want to be second follow me”. Even today I love that shirt…. Gotta frame one of those to hang at the office some day.

** Note to self, back them: Don’t create a name that is bounded to one year

For all other people too distracted to care about “her”, only being interested when something affects their personal comfort, watch this.

Storms in NZ called the “Southerly buster” come fast and with little warning. WoW…

Madeira Islands (Portugal) had recently a cathastrophe where it rained like hell for a few hours and everything came down with the massive amounts of water. Years of human development layered stuff into places where they probably shouldn’t.

There is nothing like assuming one little thing: We are small & insignificant on this planet. The last 50y or recorded data won’t predict future behaviour of nature. Be conservative and assume that nature is just a huge mass of elements that fights for balance. Sometimes that just means huge reaction of elements, because that’s the way it is.

(found in SailingAnarchy)

Great stuff on how UX goes into designing a car with a 17 inch monitor.

An SDK to allow third-party to develop apps for a car…. amazing

Just didn’t understood one statement “Gramma can get into the car an she can drive away.. [due to the familiar elements] and turn the volume up”

Who the heck has a car like this and let gramma take the wheel?????

The chat goes into technology in another talk.

[EDIT: It uses Adobe Air, less 50 miles to power it up ]

(Via @danmartell)