Another major lesson learned: baby steps come first

I think it's useful to think of start ups as babies. The metaphor works pretty well. Start ups and babies require lots of love to get from infancy to the toddler stage. And when it comes to starting a technology business, it's necessary to take baby steps before walking and you have to walk before running. 
At Judy's Book we had a BIG vision -- I think in retrospect, perhaps too big for a start up and in retrospect I think we didn't take the necessary steps to break that BIG vision (your friends yellow pages) down into sufficiently small enough baby steps to prove out the concept before expanding the concept nationally.

Judy's Book lesson #1: markets win

My first and biggest lesson learned from the past 3.5 years can be summed up in a business school lesson I learned many years ago and now really grok: markets win.  You know the adage about putting a quality manager in a lousy market and the market winning. The reverse has also been stated: put a lousy manager in a great fast growing market and the manager seems like a winner. The primary job of an early stage CEO is to get into a great market. I thought that online local search was such a market -- but the details of that market have stumped many a company and many an entrepreneur. 
Online local requires critical mass in a geography and a category. Online local also requires local customer acquisition. Both of these items are very challenging for any company -- and make the market of online local gnarly. I still think the market is a good market -- someone is going to make a lot of money -- but trust me, online local anything is HARD. Very hard.

Emotions of winding down a company

I haven't read a lot about the emotions that accompany a wind down.  For that matter, I haven't read a lot about the emotions that accompany business in general. This post is about my emotions.
The past week has been filled with anxiety once I knew what was happening and before I told the employees, with relief from telling employees what was happening, embarrassment of having failed and reading about it in the newspaper(not succeeded in the way I hoped -- I actually don't view Judy's Book as a total failure but more on that later), and sadness of letting go of the company dream as well as letting go of my mother in law.
Sadness is where I'm at today. Many people including myself worked hard for a long time to try and make this business work.  It didn't work the way I/we had all hoped. Now people are working hard to wind things down responsibly and they're starting to look for other jobs. In situations like this, employees move on fast -- no one wants to be the last one not to find a seat with another company. It's a bit like an adult version of musical chairs.  At times, I can feel some of the angst as they look for work.  I'm struck by the realization that there are a whole host of relationships with people I like -- that I used to see everyday and now I know that I won't see them. That's a bummer! I'll miss them. I'll miss my investors and our die hard customers. I'll miss Judy's Book. It's sad to see all that come to an end. Yep -- Sadness is where I'm at today. 
I'm glad it's been sunny in Seattle...reminds me that everything is going to be ok in time.

Lessons in Internet Layoffs: Word travels fast

I'm going to write some blog entries about the process I'm going through with Judy's Book. One lesson learned is an obvious one -- word travels FAST in the internet age. Case in point: I announced to the company that we were going to be doing layoffs at 11AM on Tuesday.  By 11:20AM, people were IMing and emailing with past employees. People we hadn't even heard from in a over a year contacted us and asked what was going on. By 3PM, I had gotten an email from 2 reporters asking what the story was. I posted my blog around 4PM and by 5PM, there was a post on both the Seattle PI and techcrunch.
Some things to think about:

  1. That was fast! Imagine any business doing a lay off or winding down 20 years ago and compare it to the story above.   Word may have taken 6 months to travel as far as it did in 6 hours today. Wow!
  2. Don't try to contain a story like this -- all you can do is get out in front of it and hope for the best. Stories and the truth want to be free.
  3. Have a press and blog strategy on the checklist of any layoff you're doing.

Time is the enemy

Today was a tough day. For the second time in my life I had to tell a great team of people that the idea they'd worked so hard on was going away. After 3+ years, our management team and board of directors has decided to scale back our operations at Judy's Book and seek a strategic acquiror.

As a CEO, I know this is the right thing to do for our investors. But as an entrepreneur it's disappointing to stop chasing an idea just when it's beginning to take root in the popular consciousness. We've (I've) made plenty of mistakes along the way with Judy's Book, but our decision last year to focus on local shopping wasn't one of them. Greg Sterling has been more eloquent about this opportunity than I'll ever be, but I'm certain the ideas we're pursuing here at Judy's Book will ultimately become a significant piece of the online and local
shopping puzzle, and I'm sorry that I and my team won't be the ones to carry the ball across the finish line.

Depending on how you count it, Judy's Book is my fourth or fifth startup, and it definitely won't be my last. It's hard to say goodbye to great ideas and even better people, but it's also exciting to be looking ahead to a new chapter. More to come...stay tuned. Don't turn the channel.

web 2.0

I'm one of those conference attendees that tends to hang in the lobby. I hear that there's a name for people like me -- "lobby lurkers". I think that fits. I get tired sitting in the big rooms listening to lecture style powerpoint presentations. I much prefer the dynamic of interactive networking and think that lobbies and coffees are best for it. I'll be hanging in the lobby by the coffee pot at the Palace hotel -- home of teh web 2.0 conference.  Hey ....just saw John Battelle....gotta go.

Seattle Start Up Shout Out: Blist is one to watch

I met with Kevin Merritt, CEO of Blist today. They're still in stealth mode and not talking much about what they're doing. But I assure when they do start talking, people will listen. Consumers, businesses, and investors will all listen. What they're doing is very cool!  When Kevin gives me the go ahead, I'll give you more of my opinions about the company. But in the meantime, keep an eye out -- blist is one to watch!

Cultural differences

Yesterday, I had the pleasure of teaching an entrepreneurship class to a group of visiting students from China. I was struck by a few things:

  1. There were a striking number of their questions were about copying businesses and how to protect oneself from competitive imitation.
  2. The students were interested why there weren't any Chinese brands in the US. They asked if I thought this was due to some cultural prejudice by the US. It was a good question that I wasn't able to immediately answer.
  3. I was impressed by their ability to speak English. Impressive.

Insane valuations

I was on the phone with an entrepreneur friend of mine and he was saying that valuations out there are getting pretty frothy and they are indeed!  It's no wonder that ebay finally had to take a $2.6 billion writedown on its skype acquisition.  No wonder indeed. And today at breakfast I heard that the rumour mill had Microsoft valuing a 5% stake in Facebook at $300 to $500 million, which places the value of Facebook at roughly $6 to $10 billion! Read about it here. Note that I wrote about this deal weeks ago and feel that I actually played a role in starting the rumour ;-)

Eat the anxiety

As pressure in business mounts, and I feel anxious about getting something done or accomplished. A mentor of mine once told me to eat the anxiety and use that anxiety as motivation.   I try not to literally eat the anxiety -- I am after all still watching my girlish figure but I do try to use the feeling as a motivator. And I love the saying -- "eat your anxiety". I find myself repeating the quote regularly.

O-wesome!


O, originally uploaded by a sack of seattle.

My wife and I were in Las Vegas over the weekend. We saw O at the Bellagio. Simply put, it was the best theatrical event I've ever seen in my life. Awesome! Awesome! Awesome! Worth every penny of the $170 per person ticket price! The event defies verbal description and just needs to be experienced. I recommend that everyone see it when they're in Vegas.

Poll: Bin Laden tops Musharraf in Pakistan

I found this article on CNN very disturbing. Below are a few quotes:

"We have conducted 23 polls all over the Muslim world, and this is the most disturbing one we have conducted," said Ken Ballen, the group's head. "Pakistan is the one Muslim nation that has nuclear weapons, and the people who want to use them against us -- like the Taliban and al Qaeda -- are more popular there than our allies like Musharraf."

According to poll results, bin Laden has a 46 percent approval rating. Musharraf's support is 38 percent. U.S. President George W. Bush's approval: 9 percent.

66 percent of poll respondents said they believe the United States is acting against Islam or has anti-Muslim motivation. Others refused to answer the question or said they did not know.

4 percent said the US had a good motivation in the war on terrorism."

74 percent said they oppose U.S. military action against al Qaeda and the Taliban inside Pakistan.

After American relief efforts following the October 2005 earthquake in Pakistan's Kashmir region, 46 percent of Pakistanis had a positive opinion of the United States, according to the poll. But as of last month, only 19 percent reported a favorable opinion.