Say Something!

Dilbert - Honesty 3

The best sign I have that a company I’ve invested in is dead, or near death, is the silence.

This is why I encourage all of the founders I work with to send regular and detailed updates to all of their investors at least once per quarter, ideally once per month.

Even if you don’t have investors yet, the process of taking a step back and asking yourself what’s going well, what’s not going well, and what you could do differently is hugely valuable.

It doesn’t have to be complex.

In the simplest case just start by sending out basic financial details: how many new customers you have, how much cash you earned in the last month and how much cash you spent in the last month and how much cash you have left in the bank.

Then, later, as you grow, include some commentary about your current constraints – i.e. why aren’t you growing faster?, an update on your team – new hires?, open roles?, how you’re feeling about the culture?, and maybe point to some of your key numbers – how much are you spending to acquire each new customer? how much does it cost to support each customer each month? how many customers cancel (or “churn”) each month?

For bonus points, ask other people in the team to contribute a short paragraph about their area – e.g. the product/engineering teams might want to list the things they’ve recently released and the things they are working on next; the customer support team might like to highlight their Net Promotor Score; the sales and marketing team might want to talk about recent promotions they’ve run and the effects of those.

It shouldn’t take long as these are all details you should have at your fingertips anyway (and if not, then you have bigger problems than not keeping shareholders informed!)

Make sure you talk about both the good stuff and the bad stuff. Investors are smart enough to realise that startups are not a smooth curve up and to the right, and will appreciate the honesty. More than likely they will want to try and help you solve the problems, when you’re up-front about them, rather than stressing about the fact that there are problems.

The real payback on doing this will come when the time comes to raise more investment in the future. There is nothing worse for an investor than an email from out of the blue asking for more money. If you’ve taken the time to keep everybody informed of the progress then you’ll spend much less time telling them where you’ve been, so you can focus on where you want to go next, and you’ll likely find them much more enthusiastic about continuing to be part of it.

So, even when you think you have nothing interesting to say, say something.

It could make all the difference.

What are ya?

I’m Chair of the Board of Directors at Vend.

In some ways, this is a role I stumbled into.

I was one of the original investors, back when Vend was just Vaughan. We would spend a day a month and go deep on the business model and strategy. It evolved into a “proper” board after we raised more money and we added Miki to be an independent third voice in those meetings. It has since levelled up several more times, most recently after Barry was added as a fourth director.

I have, on more than one occasion, been told that I don’t look like a chairperson.

I’d like the record to reflect that the company has done okay despite this. What was just Vaughan is now 122 people, more-or-less, working in four offices in Auckland, Melbourne, Toronto, and San Francisco. And counting. We’ve grown from a handful of brave initial customers to over 10,000 retailers who use Vend to run their businesses – selling everything from jewellery to polo geargasoline to music lessons. We’ve raised over $35m, from what would have seemed to us at the beginning to be a dream list of investors from NZ, Australia, Germany and the US. We’re trying to spend that wisely to fuel further growth.

I try not to be offended, because I doubt that was intended. But I am always tempted to ask what they think a chairperson looks like. Or what role they think would be more appropriate for me.

The thing is, I’ve never really looked like the things I was.

I didn’t look like a computer science student in 1994. I wore shoes, for a start.

I didn’t look like a management consultant in 1997. I borrowed a suit jacket for the job interview. I never really got comfortable wearing a suit and tie.

I didn’t look like a founder in 1999. I can only imagine what the property managers I was cold calling made of the sloppy kid trying to convince them to advertise on the “internet”.

I didn’t look like a manager in 2003, when I came back from London to run the growing development team at Trade Me.

I didn’t look like an angel investor in 2007, after we had sold the company and I was starting to think about what to do next.

I suppose this should give me confidence to not put too much weight on what others think I do or don’t look like today.

I figure the best thing is to show them what I am, by doing the job as well as I can, rather than waiting for their permission. Maybe doing that will cause them to change their mind about what makes a good director or chairperson. Or, maybe not. Whatever.

Who are you waiting on to tell you that you qualify?

PS I’m currently thinking about who could be the fifth person on the Vend board, and I’m determined to not limit ourselves just to people who look like directors. The ideal candidate would be somebody with a sales and marketing focus, ideally with experience in retail and/or small-medium business, who is excited to help us grow to the next level and beyond. Y’all are the closest thing I have to an old-boy network (and with the added benefit of not being all boys!), so if you know anybody who we should consider for this role please do let us know.

Remarkable Amazon Customer Support

If you make something remarkable then people will tell their friends. However, it’s sometimes overlooked that this is true for both remarkably good things and remarkably bad things.

For example…

Some time ago I was experimenting with publishing this blog to other channels, and signed up for an Amazon Kindle Publishing For Blogs account. For some reason I still don’t understand I couldn’t just use my existing Amazon account, so I created a new account using the same email address. I never took it much further than that.

Shortly after that, however, I started receiving emails from Amazon Vendor Central. Initially they were few and far between, announcing such irrelevant things as new fulfilment centres in West Columbia, SC and a new feature that allows you to download a bill of lading (BOL) for submitted routing requests. Annoying, but, infrequent enough to be ignored.

Late last year, when these morphed into regular monthly product update newsletters, I decided to unsubscribe. But, curiously, there was no “unsubscribe” link in the email footer (this was actually how it came to my attention, as I had recently swapped out my previously complicated email rules with a simple one that highlighted all emails containing the word “unsubscribe”). Instead there was this (emphasis mine!):

If you have questions, please sign in to Vendor Central at https://vendorcentral.amazon.com or Advantage Central at https://advantage.amazon.com and click Contact Us at the bottom of any page.
Please do not reply directly to this e-mail.

So, I tried to sign in to Vendor Central, but instead of a simple email preferences settings page I got this error message:

There was an error with your account
It looks like the email and password combination you used is meant for a different site. You can use this email and password combination for Kindle Publishing for Blogs, or use a different email and password combination for Vendor Central.

So, following the link to the Kindle Publishing for Blogs sub-site, I tried again:

Screenshot 2014-03-23 17.01.35

Bugger! Despite wasting more time trying to get around that road block, it was ultimately pointless, as it turns out there is no email preferences options on the account. Thou shalt be opted-in, it seems.

Next step was to use the recommend “Contact Us” option. I sent what I thought was a pretty straight forward request:

I want to unsubscribe from the newsletter emails, but there is no link provided in the messages or any obvious option on this website.

I immediately got an automated response from their ticket management system.

The following are the five (!) responses I received in reply to this request over the following weeks, in full unedited glory.

+ 1 day:

Greetings,

Thank you for writing to us.

I have contacted the appropriate team regarding the same. I will be sure to update you on the progress of these investigations as soon as I have additional information.

We appreciate your patience and understanding regarding this issue

Best regards,

Gopi Krishna
Amazon.com Vendor Services

+ 3 days:

Greetings,

I am forwarding the following case details to our department concerned. Rest assured, they will look into it and get back to you at the earliest with an update.

We appreciate your patience with us.

Best regards,

Gopi Krishna
Amazon.com Vendor Services

Poor Gopi doesn’t seem to be getting much attention from the department concerned (presumably the unsubscribe department?)

But, I was in luck, because he took it upon himself to escalate to his colleague, Manoj.

+ 4 days:

Dear Vendor,

Please note, I am working with the concerned team regarding this and will send you additional correspondence as soon as we have an update. This may take 3 days approximately.

Best regards,

Manoj Kumar
Amazon.com Vendor Services

The three day estimate, it turned out, was a little optimistic.

+ 10 days:

Dear Vendor,

Please note, I am still waiting for an update from the concerned team. I will send you additional correspondence as soon as we have an update from them.

Thank you for the patience.

Best regards,

Manoj Kumar
Amazon.com Vendor Services

Sadly the next message from Manoj was not so hopeful.

+ 17 days:

Dear Vendor,

As per the update from the concerned team, there is no way to “unsubscribe” vendors from vendor newsletters. Newsletters go out to all vendor central users as defined when the newsletter is setup. Therefore, you may report news letters to ‘Spam’ folder.

Thank you for your understanding.

If you have additional questions about your case, [number], please click [link]

If you have questions about a different issue, please review our Vendor Help

[link]

Please click one of the following links to let us know how we’re doing. Your input helps us improve the vendor experience.

Did we successfully answer your question?

If yes, click here:
[link]
If not, click here:
[link]

Best regards,

Manoj Kumar
Amazon.com Vendor Services

I clicked no.

Pretty remarkable.

Team Size != Success

DJ: How tremendous is Fatboy Slim?
Brad: The band of the 90’s, if you want to call it a band because it’s a one man name.

It’s easy to get seduced by the idea that in order to be successful you have to be big.

Maybe that was true in the past, but it’s not necessarily true now. And it makes it much harder to tell from the outside who is winning.

One of the exciting ventures I’m involved with at the moment is Vend. The team photos from the last few years shows that the team is growing quickly:

Christmas 2011
Christmas 2011
Christmas 2012
Christmas 2012

When we re-created the photo from 2011 with the much larger team in 2012, in the same location and same t-shirts, the comments on Twitter were interesting. Many of those sending their congratulations seemed to assume that big team = big success. Actually, the formula for companies in this situation in the short-term is more like big team = big payroll. The success comes later. Sometimes.

Luckily at Vend our underlying business has grown at an even faster rate than our headcount. Or, maybe it’s not luck?

It’s great to see that as the group gets bigger so does the potential to do something really impressive. Here is the 2013 team photo, taken last week, complete with colleagues who have joined us from the new offices in Melbourne, Toronto and San Francisco.

Christmas 2013
Christmas 2013

I can’t wait to see the 2014 version!

Another example.

Earlier this year Hawkes Bay based Majic Jungle Software launched an awesome iPhone/iPad game called The Blockheads. We were honoured to be part of the group helping to beta test it prior to launch, and it was great to see it develop over that time into a delightful and engaging game. It was no huge surprise to see it go on to top the iTunes downloads charts and create the third big success from this developer (1).

Again, it was interesting to see some of the reaction on Twitter:

As it turns out the “team” in this case is just Dave Frampton (2).

He’s the band of the 90’s, despite the one man name.

Maybe rather than celebrating raw number of people employed by our companies we should use the revenue per employee measure that Paul Callaghan used to talk about in his “Beyond the Farm and Theme Park” presentation:

I was fortunate to see Paul give that presentation in person a couple of times, and one of the numbers that really sticks with me is that there are only about 1.3m FTE jobs in NZ. The challenge we collectively have is to make as much from each of them as we can. Everybody from big companies through to individuals working by themselves both have a role to play.

It’s easy to complicate business, but actually the rules are very simple: in the long run you win by making stuff which is so great that people will pay you more for it than it costs you.

There are lots of different ways that you can organise yourself to achieve that outcome.


(1) Here in NZ we get very excited when our singers are top of the Billboard charts, or our movie makers are successful at the box office, but often overlook the equivalent regular successes notched up by local mobile application developers
(2) Dave was, of course, assisted by his wife Emma

Rabble Rousing

A couple of months ago we launched Rabble, the directory of kiwi technology companies.

We were blown away by the response. We started with just over 100 companies, from our own networks, and I had a small wager with the team that we would eventually be able to double this number. We ended up doing that within the first few days as many companies that were not listed were quick to get in touch as ask us to add them to the site. We now have just under 300 companies listed.

So, this week, we’re pleased to release the next version of the site. This adds a number of new things, which we think starts to make it really interesting for everybody:

People

First and foremost, we’ve added people, the most important thing in the world.

You can now join, create a profile and link to the company or companies that you are associated with.

For example, this is my profile:

http://www.rabble.co.nz/profiles/2-rowan-simpson

If you are already associated with a company on Rabble you should have received an email from us with instructions for completing your profile. Once you’ve done that you can add others to that company too. We will get in touch with anybody you add who is not already listed to ask them to join and create a profile.

We’d love to see every company on Rabble with a full list of founders, team members, investors, directors, advisors, etc.

One of the big advantages we have in New Zealand is that we’re all no more than one or two degrees of separation removed from anybody else. But, for some reason there is still sometimes a perception that it is difficult to get in touch with those within the industry who might be able to help you with your business. It’s really not, or at least doesn’t have to be. We hope that having this directory of companies and people available and searchable will make it even easier for everybody who is listed on the site to find the right connections when needed.

Unfortunately there are a few companies from the original list which currently don’t have any people associated:

http://www.rabble.co.nz/companies/orphans

If you can recommend the right people for us to add to these orphans to get them started that would be much appreciated – let us know at rabble@southgatelabs.com

New Categories

We originally launched with four categories: Software, SaaS, Marketplace and E-Commerce. We’ve now added three new categories: Mobile App, Hardware and Services.

If you have a company in any of these seven categories then you can now add yourself directly to the directory – look out for the blue “Add Company” button on the top right of the page. And, if you’d like to suggest other categories for us to add then please get in touch.

As well, we also allow each company to nominate the stage they are at: Pre-launch, Start-up, Growth or Established, and people searching on Rabble can filter the list of companies by category, stage and location to quickly find the companies they are interested in.

Jobs

The biggest constraint for just about all of the good startups we know is finding good people to join the team and help them grow the business.

It’s depressing to see many otherwise smart people working in boring jobs with large corporates while there are so many great opportunities open at local technology companies.

So, every company listed on Rabble can now include details of current vacancies on their company profile, and we’ve added a new Jobs section which summarises all of the jobs listed on the site.

To add a free job listing to your company, just use the “Add Jobs” link on the company page.

Investment Opportunities

Despite mounting evidence to the contrary, there is still a perception that there is a shortage of capital for growing technology companies in New Zealand.

However, that’s not to say that it is always easy to make the connection between the right company and the right investor.

So, we now allow any company listed on Rabble to indicate if they are currently seeking investment. Those that do will be listed on a new Investments section. Current rules mean we can only display this information to those who have confirmed they are eligible investors – there are instructions on the Investments section page which can help those who are eligible get setup with access.

There are still many investors who wait for opportunities to come to them, often unaware that this means they miss out on all of the best deals. Hopefully Rabble can allow those investors who are willing to cut out the middle man to connect and talk directly with companies who are seeking help.

Featured Companies

Each week we will feature remarkable companies on the Rabble homepage.

We’ve started with six companies with global ambitions, nominated by John Holt from the Kiwi Landing Pad in San Francisco:

  • BIMStop – the building information management marketplace
  • Biomatters – bioinformatics software to speed up and simplify research for molecular biologists and biochemists
  • BookTrack – soundtracks for books
  • IndieReign – the independent film marketplace
  • Vend – retail point-of-sale software and inventory management
  • vWorkApp – dispatch and scheduling software

In the first two months we’ve had thousands of people use the site – so we hope that the exposure to qualified people we can give to companies in this spot will be valuable to them.

If you’re interested in being featured, or in choosing a list of featured companies for us, please get in touch.

There is heaps more we’d like to do with this. We’ve already spoken to a few different people with ideas for how the data that is captured in Rabble can be used to deliver value back to all of the companies listed. So, look out for some further developments over the coming weeks and months. And, if you can see some potential, we’d love to talk to you too.

But, for now, we mostly need your help to spread the word and in add more companies and people to the site.

If you’re not yet listed add yourself today. And, if you know of anybody we’re missing please tell them about us.

Thanks in advance for your help!