Presentation Notes - Case Samcom, Crowd-funding, Commercializing an Idea

I somehow managed to participate in three great business related presentations last Thursday. The first one was about how to commercialize your idea, the second one was an overview of a growth company and the third one was about crowd-funding. In this post I'll focus primarily on the first one since I think you might benefit most from it. I'll share a couple of tidbits about the latter two with you first, though.

Case Samcom

Samcom, part of Samlink these days, is one of those great growth stories of the Jyväskylä region. In mere six years the company grew from zero to six million euros in revenue. They focus on providing IT solutions (mainly Java and MS tech) to very specific markets. This focus is a part of their success. They  decided to target certain markets, like energy industry, in particular.

Markets like energy industry are interesting because it can be really tough to get in but once you do everyone wants to do business with you. Banking industry was mentioned as a counter-example. These guys really want to hold on to their secrets and rather work exclusively just with you.

The success of Samcom was built on sales. The requirements made by concrete sales resulted in solid growth and meant new personnel had to be brought on board. In those six years the company grew from one person to well over fifty.

The growth was not without its problems. One important lesson here to keep in mind is that as a CEO you cannot micromanage everything as your company grows. You will have to learn to delegate. You should make the company able to run without yourself.

The structure of the company has to evolve as the company grows. After you reach a certain limit (say 30) you might want to consider employing a HR person for instance. Even though one does not provide direct value to the company, you will benefit as it allows you to share the responsibility.

Overall I enjoyed the case study. I am not entirely sure if it is possible to achieve similar explosive growth in the current economic climate. There were definitely some golden tidbits there, though.

Fresh Effect - Crowd-funding

Fresh Effect is one of those up and coming companies from Jyväskylä. Their idea is actually quite simple. They build greenwalls. You might ask what is a greenwall then. Well, simplified it's just a container filled with plants. You'll put that somewhere in your building and it will keep the air clean.

Even though this sounds very simple, there's more to it. Fresh Effect utilizes technology discovered by Nasa. As you might know those guys want to go back to the Moon at some point (no idea when). Since it is expensive to transfer conventional air purifiers and whatnot there, they had to come up with something else. Plants were the natural alternative. As a result they managed to optimize their growth and purifying in certain ways. This is what Fresh Effect builds upon.

Fresh Effect has just one problem. It is very expensive to make their production scale due to the cost of machinery needed by a process that would allow them to produce their solutions in a more effective manner. They've tried to attain funding from various sources. Unfortunately there is no easy way for them to reach the amount they need, at least in Finland that is. They can still perform their business in a small scale (ie. business to business) but consumer market is out of their reach.

This is where crowd-funding à la Kickstarter comes in. Kickstarter is one of those services that really has made it into the public consciousness. It simply allows consumers to vote with their money in a very concrete way. Using it various enterprises have created products unimaginable using conventional funding models.

Fresh Effect wishes to capitalize on this fact. They will launch a campaign aimed directly at producing a consumer version of their product. I won't go into the details but let's say it's going to be somewhat interesting to see how it works out. They have several challenges (ie. the size of the product) to overcome but I think they might fare surprisingly well.

How to Commercialize an Idea

This presentation, given by Tommi Järvinen of Fondon, was a really intriguing one. It was all about how to connect the dots, or rather how to connect your idea with a concrete customer need and make it work in a commercial way. Even though your idea might be great it might not be sellable.

I think one of the core points of the presentation was that marketing is all about stories. You wish to build a story your customer can believe in. Consider Joulukka. It's a place where the Santa lives (at least for some). They started the whole business by coming up with a believable story and actually getting enough concrete commitments from the customers to allow them raise the funds to make the story real. Chew on that for a while. It is easier to get funding if you can prove there is demand. Money isn't the ends, it's the means.

Another important point Tommi made had to do with figuring out your target market. You actually might have a few. It is better to focus only on one in the beginning. He gave a nice example of how not to do this. There was this company that produced hermetically sealed, airtight containers. They decided to market the same product both to hospitals and mining companies. So did it work out?

As it happens, it did not. The hospitals thought it cannot simply work for them since those mining use them too and vice versa. Instead what they should've done was to segment the product separately. Give a rugged version for those mining guys and hospital green version for hospitals.

He also mentioned that even though you might have multiple target markets and you have identified the most valuable one, you might want to go after some other market first. This is just to make sure your product is ready for that one. You can afford to make mistakes and iterate with the less important ones. You had better not screw it up with your primary market if you can avoid it.

There was also some talk about conflicting views between you, the product developer, and the customer (one who pays). What you will want to do is to make these views match as well as possible. You will want to understand the pains of your customer. Better yet instead of offering a ready-made product, offer a co-creation project. Develop the product in direct collaboration with the customer. Eventually you will end up with something that others will find useful too!

The only way to scale is to create something that's actually useful at first and provides some really concrete value that is worth paying money for. That is the measure of a successful business. You might have users but as long as they won't pay and don't become customers, you'll starve.

One final point I just have to discuss a little bit about had to do with speed. You might have the right idea. Unfortunately there is only a limited amount of time in which to monetize on it. This is particularly true in the world of today where everything moves faster and faster each day. You do not have to create anything that is perfect. Just make sure it is good enough.

This is actually something we have experienced with jster.net. It's really far from perfect. Gladly the users have given us plenty of feedback to help us guide the boat to the right direction. Given it is more of a hobby project we really don't fret about monetizing on it. At this point it's more about providing the community a valuable service that will hopefully provide us good karma later on.

Conclusion

The more I get exposure to these kind of talks and concepts such as lean startup, the more confident I get about the way one should run a startup business. There are definitely a lot of things you should be aware of. It is not just about the technology. It's about how you apply it and where. Understanding who your customer is the most important responsibility you have as an entrepreneur.

JSter - JavaScript Frontend Libraries in One Place

As you might well know it can be really difficult to find JavaScript libraries at times. This was actually one of the reasons why I ended up starting JSwiki and later on jswiki.org (see the blog post as well). Those services are not ideal but they sort of solve the problem to some extent. At least they serve as an index the community may maintain.

A couple of months ago an Ukrainian guy, Michael Bodnarchuk, contacted me. He maintains a resource index for Symfony, a PHP framework. He thought we should join forces and build something similar but for JavaScript. I agreed with his proposal. As a result JSter.net was born.

Compared to the earlier efforts JSter takes things into a more structured direction. One of the biggest innovations for me was the introduction of a two-tiered architecture. While Michael is primarily responsible for frontend I was tasked with the backend. To make things nice and scalable I decided to implement a RESTful API. The backend runs on Heroku and uses MongoDB document database to store the library data while Michael hosts the frontend on his own servers.

Currently the API is for our internal usage only. It might make sense, however, to give read-only access to the public. Someone could build a primitive package manager on top of that even. I for one would find that somewhat useful. Perhaps that would be a nice extension to this project.

I hope the current version of JSter is just a mere glance of what it could be. There are several ideas bubbling that could make it a lot more useful. These include several usability tweaks and a revisioning REST API. The latter would allow us to make it more like a conventional wiki and make it easier for people to modify the content.

Take a look at JSter and let me know what you think. Feel free to contact me either directly through the comments or use that "Problems" widget at the site to notify us about any possible issues you might find. That is actually Michael's product, Bugira, in action.

Autojump Takes "cd" to the Max

Sometimes the sweetest things come in small packages. Autojump is one of those. It supercharges the good old "cd" and allows you to jump fast to the directories you mostly spend time in. After letting it to monitor your usage for a while all you need to do is to type "j dirspec" where dirspec is part of the directory path you are after, hit tab to complete the path and finally "enter" it.

I have used Autojump only for a few days but it is definitely one of those tools I wish I had known earlier about. Best of all there are prebuilt packages for many platforms so it is likely you'll be able to install it that way if you are on a Unix platform. If you spend a lot of your time in shell I highly recommend checking this little tool out. It's not much but every little thing counts.

Lake Garda - Jewel of Northern Italy

As you might have noticed the last week in this blog was quite quiet. I spent it at Lake Garda, Italy taking it easy. This was my second trip to Garda and third to Italy altogether. I spent some time around Trapani, Sicily last year. If you are interested in my travel series, you might want to read my report on Madeira while at it.

During our tour we visited various places around Garda and spent a day at Venice. In this post I'll go through some highlights. I will focus mainly on the western parts of the lake. The east is definitely worth a visit. Particularly Garda (the village), Bardolino and Malcesine are nice.

Overview

View Garda '12 in a larger map

The map above (not in RSS) shows the places I visited this time. There is a lot to see and experience even in late season. The weather wasn't as good as in my first visit and it was quite foggy at times. Still, the weather was better than in Finland during the last Summer and it barely rained even.

It was quite apparent there had been a dry Summer. You could tell this just by examining the beach and markings at the rocks. I estimate the lake was missing around a meter of water. Here in Finland we have way more water than usually. I guess it will even out eventually.

A week is pretty short time to spend in a place like this. You could spend an entire week exploring Venice and I think there still might be something to discover after that. If you like historical cities, you are bound to like Venice. It might not be the greenest place, though. This is actually something I like about Finnish cities. The nature is always there in some way or another.

Moniga del Garda

Sunrise at Moniga del Garda

Our apartment was in a small village known as Moniga del Garda. The services available were actually quite versatile and there were many shops around. Unfortunately some of the beach routes were closed by gates or did not exist (map error). I guess Google Maps haven't caught up with some newer development. There were also some hazards (glass and such, spotted a rat too) on the pebble beach so take care if you decide to travel beyond the concrete route.

Gardone Riviera

Something Eastern at André Heller Park

Gardone Riviera seems like a nice place itself. I think what sets it apart is André Heller Park. It is a mixture of flora and art. There are supposedly over 2000 plants there. I think that's about believable.

The park isn't a huge one but there is still plenty to see and explore. If you visit Gardone Riviera you just might want to pop in.

Coastal promenade is quite nice as well and yields a nice view on Saló. Overall a good place to visit.

Limone Sul Garda

As you might infer from the name Limone is a place known for its lemons. The coastal area is quite steep and filled with shops. It leads to a beach promenade where you can find restaurants and guess what, even more shops. A good stopping point.

Riva del Garda

Riva del Garda is perhaps my favorite place in the Garda region. I visited there on my first trip as well. If you go there, be sure to climb to Bastione (at west), lake Tenno (at north) is worth a visit too. You will also find Varone Falls nearby.

This time we happened to be at Riva on a market day so it was bustling with people. As you might expect, the city is filled with those tourist traps... err, shops. Many ways to get rid of your extra money.

Arco

The bastion of Arco

The village of Arco lies just five kilometers north of Riva. There is a nice little park in the center. You can also see the bastion of Arco from the center. The place is supposedly some kind of a climbing center of the world and they have some big contest (Rock Master) around there each year. So if you are into climbing, this might be a place to visit for you.

Overall Riva and nearby Torbole should be good place to start your biking expeditions from. There are supposedly nice routes in the south too. Actually while at Riva I spotted a large group (around 30) of mountain bikers driving through the village.

Desenzano

Desenzano harbor

Desenzano is one of the biggest villages around Garda. The coastal area is quite nice as you might expect. There are railway connections available. You can easily get to Milan or Venice from here. And it's not too expensive either. It cost around ten euros to get to Venice in the regular train. There is actually a faster and more expensive one for those in a hurry. It's almost ridiculous how cheap it is to travel by train in Italy.

If you are around Desenzano you should visit Sirmione. It is an ancient village built on a peninsula. There are historical sights (mainly grotto of Catullus and a castle) and atmosphere you might expect.

Padenghe Sul Garda

Padenghe Sul Garda is located between Moniga del Garda and Desenzano. We went there looking for a market. Apparently it's open only during the Summer season. Nevertheless it was a nice visit.

Venice

Water, there's a lot of that in Venice

Venice was definitely one of those places that really impressed me. It was perhaps a bit too crowded for my tastes. But you could tell the city has some real history behind it. It might easily be the most beautiful city in Europe.

You won'd find too much green there. I think the charm of the city lies in its architecture and culture. As you might well know the city has been built on a group of small islands. As a result it is filled with small alleys and bridges. It can be easy to get lost there without a map or preferably a GPS. Even still you might find yourself in a cul-de-sac.

In a sense the structure of the city felt really chaotic. Unlike in many Western cities there was no clear grid to base your navigation on. It's just a mess of crisscrossing streets. Furthermore there are just four bridges that go past the great river separating various parts of Venice.

It might be interesting to live in a city like this. Given there are no cars you pretty much have to walk everywhere or take a waterbus. I would not be surprised to hear people are really fit around there.

Technical Difficulties

No trip is complete without its share of difficulties. This was the first trip I took my Galaxy S2 on. As roaming costs are ridiculous (around a euro per megabyte) I ended up disabling data connectivity for the duration of the trip. Unfortunately this meant Google Maps routing didn't work anymore. It is possible to load maps for offline usage. It cannot, however, create routes offline. This is supposedly something they're currently in the process of fixing.

It was possible to work around this issue by using WLAN connectivity to get the route done. I am sure there are many apps available that support offline routing as well.

I also had some issues with map accuracy at times. Places weren't always where they were supposed to be or there were roads where there weren't any. I reported the issues I was having so hopefully they'll spend some effort in fixing those.

Conclusion

There was plenty to see during this brief trip. The weather wasn't as good as it can be but I know it can be a lot worse. I think Fall is a nice time of year to visit Italy, particularly if you are used to a cooler climate. I guess spending four or so Winter months around there wouldn't be a bad idea. The cost of living is pretty cheap and weather adequate. In addition you don't have to deal with the darkness.

I hope this post gave you some ideas where to visit at Garda. I know it was just tip of an iceberg. There is a lot you can see and do at Garda. I consider it a jewel of northern Italy.

Customer vs. User

So what's the difference between a customer and a user? The former brings the food to the table while the latter just benefits from your service. Consider Google for example. It is highly likely you are at least their user. If you use AdWords, you are actually their customer. As a user you are a part of their product that they provide to the people and businesses interested in reaching you.

This duality provides a nice way to think about your business model. It isn't enough to get a million users if you cannot get any revenue. You will need some actual customers too to make it all work out monetarily. In order to make your business profitable you will need to figure out how to convert users into paying customers. Or you could start the other way around. Find a few paying customers and build something that's worth their money.

I think this is something where many startups struggle. It doesn't matter how good you feel your product is unless it has some value in the real world. Starting with a customer gives you an edge. You will really have to provide some tangible value to make people exchange their money for your service.

If you can do this with a few and prove that your service is actually useful, you have proven something extremely valuable. It is much easier to scale something that has been shown to work rather than to aim for the masses at first and just hope it will work. You are not going to reach those masses without something really tangible.

I think this is one of the key ideas of Steve Blank's concept of customer development. I ran into the separation between customer and user in Ash Maurya's "Running Lean". It's one of those books that really gives you some perspective and tools to apply in building your business.

Your Baby Is Ugly

I've come to realize many people are really fixated on their ideas. This is likely one of the very basic mistakes an entrepreneur can make. Entrepreneurship, especially in the context of startups, is all about discovery. You probably know the story of Christopher Columbus who set out to discover a route to the East Indies. Instead he found something else.

I think Columbus' case sums up quite well what it's about. You might have an initial, a direction. You could easily end up somewhere else in the end, though. This isn't necessarily a bad thing.

Initial idea is just a starting point. It is your duty as an entrepreneur to survey the surrounding world and make your reality match the actual one. The last thing you want to be doing is spending blood, sweat and tears on something that does not work out. If you are going to make a long trip, you had better prepare well.

Mitigating the Risks

There are multiple ways to mitigate the risks involved. Of course you cannot get rid of them entirely. But not doing your due diligence before delving into actual product development is just foolish.

I already hinted at one way in an earlier post, Ash Maurya's Lean Canvas. Alex Osterwalder's Business Model Canvas is another. They provide very basic frameworks that allow to visualize your assumptions and develop actual, working business models. In essence these are tools for customer development.

I believe knowing your actual customers and their pains well is one of they keys in building a successful business. To quote Sir Richard Branson, running a business is all about making a difference in people's lives. How is it that you are making the difference?

You will also want to understand how your business relates to others. Who compete with you? What value do you provide? Can you form strategic partnerships?

These are just some examples of questions you will have to ask yourself. In addition you will want to think about overall goals and milestones of your business to drive it forward. Just starting off from somewhere won't do. You will have to make the numbers work.

Conclusion

No idea exists in a vacuum. When your vision and the reality collide, the latter wins. This is the reason why you really need to take market research seriously. I know this is a hard thing for us technical people to swallow. The thing is this allows us to validate our ideas and initial assumptions. Perhaps the baby isn't so ugly after all. And besides, if you are going to fail, it is better to fail fast rather than to spend a few years of your life doing that.

If you want to know more about startups and Business Model Canvas, I really recommend checking out Steve Blank's free course on Udacity. The lectures are somewhat entertaining and I for one gained a lot by going through those and the questionnaires involved.

Not so ugly baby african pygmy hedgehog by Adam Foster (CC BY-NC-ND)