More Startups Die of Indigestion Than Starvation

I am often asked, as I was today, what are the biggest mistakes that startups make that cause failure. Among them is a lack of focus that can be characterized by the phrase: “more startups die of indigestion than starvation.” It is hard to raise money. Therefore common wisdom would indicate that “starvation” is the biggest risk. However, years of experience show that this is only a part of the truth. Very often when a startup runs out of cash, the root cause is a lack of execution against its plan that was brought on by trying to do more things than their plan or funding allowed.

Usually this is done for the best of reasons. For example, a large customer will ask for more features than were originally planned. Or, as the product develops, it becomes clear that the product can do lots of things that customers really do want. Or it will be harder to develop the product, so the company will try to do something different. Or the original marketing plan is harder to execute that originally contemplated, so the company will try to build a different products. Or …

Bottom line: the company will try to do more than it possibly can, given the funding it raised.

And, understand, these words are easy to say, but hard to live. They always have been. In certain economic cycles, lots of VC funding has helped keep companies alive, but not necessarily better outcomes for investors or entrepreneurs. In the current economic cycle, markets are unforgiving. So, I have the following recommendations:

  1. Be realistic on you initial plan. See counsel from experienced entrepreneurs or business people.
  2. Be a great cheerleader externally, but keep a strong sense of realism about what is really happening with the business. A good, strong independent board and advisors help. But you must be willing to listen.
  3. Stick to the plan. Not blindly, but be careful not to churn plans.
  4. Don’t stop thinking about new ways your business can meet new customer needs, or ship new innovative products or technologies. But.. rather than trying to alter your plans, keep a notebook with each of the ideas. Review those ideas with your board and advisors and have a process that you agree to before going off plan.

While all of this may seem a little to regimented for a startup, the alternative leads to “indigestion” that can be fatal.

Comments?

Home AV Control

You have to be kidding! OK, I’m a geek and during a recent remodel, put in a new AV system that one of my friends dubbed “geek heaven.” Up until the point where I needed a control system. The firm that did my custom installation said I needed a $10,000 Crestron control system, which was between 25-30% of the cost of the system – a number I considered ridiculous. And besides, I really didn’t want a proprietary solution which would be both difficult to extend (as standards advanced) and hard for me to program by myself (as I wanted changes or added equipment). So.. I decided to do my own.

With that I learned both how difficult the CE manufacturers make it to control their equipment and how little middleware exists to make this a doable solution. Granted, my system was pretty complex, using a 4×4 HDMI (1080p) matix switch, BluRay, a Media Center PC (with 8GB fast memory, 1.5TB hard drive, and HDMI (1080p) native output), a 1080p projector, 4 video end points, and lots of speakers.

The CE manufacturers should all be ashamed of how difficult they have made it control their equipment. Many now have web connections to their equipment, but don’t use this connection for control.

So.. what did I wind up doing? Because it was a complete remodel, I had wired everything with extra cat5 cable for control. Therefore, I was able to put either RS232 or IR control to each component. This was helpful, allowing me to bring control – necessary but not sufficient.

After lot’s of work and research, and trying to use a individual components and software, I threw in the towel and decided to use a Philips Pronto Pro system: TSU9800 (living room/home theatre), TSU9400 (bedroom), and RFX9600 (serial controller in the equipment rack). While more expensive than trying to integrate my own, they had the middleware and software with the control codes available. And it uses WiFi, Ethernet, and a variant of java script. And the ProntoEdit software is pretty straightforward and functional (with LOTS of room for improvement). Even still, I never got the RS232 control to work, so had to try to do everything via IR, which means no feedback on power sense or volume levels.

Even still, the CE manufacturers don’t expose all of the IR codes via the remotes. If you intend to take this on, you will need to know about Remote Central (www.remotecentral.com), which is a community with lots of codes, formats and discussion boards.

In the end, I’m generally pleased with the result, but the process was no fun at all. And even in the end, I still haven’t been able to control the lights, the solar screens, or fireplaces.

Maybe someday, this will work the way it should. If any CE executives read this blog, please work harder to satisfy your customers.

Avatar

I had a trip cancelled on Thursday at the last minute. Since my calendar was clear, I did something out of character – I decided to see a matinee movie instead of working. So, I decided to see Avatar in 3D/IMAX. After going to the Pacific Science Center in Seattle and being told it was sold out (for 3 days!), I went to another theater (Lincoln Square in Bellevue) to see the movie.

I was blown away! First of all, I didn’t expect that the 3D would be much more than a gimmick. The previews disabused me of that idea! By the time I watched the preview for “Alice in Wonderland,” I understood that the new 3D (compared to what was done a generation ago, primarily in horror movies with cardboard glasses) was for real. It not only increased the immersive nature of the movie, but was integral to telling the story by the director.

As you know, Avatar, is a sci-fi tale set in a distant world. The story was very typical (but good) for the genre. But the experience was exceptional. The combination of the IMAX, 3D, and sound caused the me to feel like they were there, which caused an emotional connection to characters, the plot, and world Cameron created.

Not only was Avatar a movie worth seeing, but it also shows me part of the future public entertainment. I really didn’t expect to like 3D so much. But in the IMAX format, with exceptional sound, Avatar shows the immersive potential of films in a theatre, taking the suspension of disbelief one step beyond. I’m happy to have been part of this transition. I will certainly see more films in IMAX/3D