Build Something A Few People Love

 “It’s better to make a few people really happy than to make a lot of people semi-happy.” – Paul Buchheit

This is a common saying amongst tech entrepreneurs.  Successful tech entrepreneurs have noted that something which a few people really love is always better than something which only a few people merely like somewhat.

This has made sense to me ever since I heard it.  It seemed like common sense: If you make something people merely like a little bit then if your product or service dies or disappears then no one would really care that much.  And if you make something a few people really love then it is likely that more people will think it’s “really really good” or just “really good”.

But I’ve thought about this subject a lot deeper and after reading some of Nassim Taleb’s* essays and books, I think I was missing a key insight.  The insight is that minorities, if vocal enough, often win and impose their beliefs and wants on other people who remain indifferent.

Let’s take the example of GMOs and Non GMOs.  If we have a family (mother, father, son and daughter) and the daughter decides she is staunchly opposed to GMO foods.  It is likely that the rest of the family will cave in and everyone in this family will start to eat non-GMO foods to placate the daughter.

As there isn’t a massive price and taste discrepancy between GMO and non-GMO foods the family doesn’t mind eating non-GMOs.

Now let’s say that this same family attends a party.  The host of the party will be informed that the whole family doesn’t eat GMO foods.  The host decides that it would be easier to make all the food at the party Non-GMO, rather than making separate dishes for this one family.  After all the price is pretty similar so shouldn’t effect the budget of the party by very much.

All of a sudden this large party of say 50-100 people are all subject to eating Non-GMO foods without even noticing and more importantly this large group of people don’t even care!

As a result of this party, local vendors will start to realise that they can increase their profits by selling Non-GMO foods.  As a result, a large part of society is made to eat Non-GMOs despite not caring much about eating GMOs.

There are two things at play here.  First the cost different between GMOs and Non-GMOs is not that much.  Also, there is an asymmetry present in this example: The people who won’t eat GMOs will not eat GMOs under any circumstance – they are staunchly opposed to it.  However, the people who eat GMOs do not mind eating non-GMOs.  When this asymmetry is in place, the minority can overtake the majority and impose changes on everyone.

Halal (Muslim approved food) is another example of an asymmetry.  Apparently a large proportion of the meat imported to the UK is Halal.  The asymmetry is present – non-Muslims don’t really care what type of meat they eat, but Muslims won’t eat anything but Halal.  The price of buying Halal meat will also be pretty much the same as non-Halal meat.

McDonald’s is also an interesting example, which is relevant to business.  Everyone I know of has had some sort of McDonald’s food at some point in their lives.  In fact when I go on holiday these restaurants are often packed with foreigners as a respite from exotic food or the possibility of contracting some type of food poisoning.  The fact is that society is largely indifferent to McDonald’s – no one really hates McDonalds – whether upper or working class, no matter which country they are from.  So, we can all agree that McDonald’s doesn’t make the best burgers in the world, but no one really hates them either, which means that people still go.

Now to turn this conversation back to business.  I am wondering whether this effect is what plays out in successful startups and makes business spread.  1 – Do they have a core group of people who love the product, 2 – Is there an asymmetry where people adopt a certain technology/service, refuse to give it up and therefore force people to also use the product or service and 3 – are the rest of the people who end up using the startup indifferent to adopting the change.

Thinking about different startups, I really do believe this is closer to the truth than I had originally thought.

If we take Google as an example.  I cannot even remember when I made the switch between Yahoo! and Google.  It just seemed to happen and I became just another user – I was indifferent to the change.  It is likely that when Google first launched, there were a core group of users that loved it and refused to use Yahoo!.  There was an asymmetry here – Googler’s refused to use other search engines.  The rest were indifferent and the switch to a different search engine was easy to make.  As a result Google spread, when people started to simply set the homepage as Google, no one was staunchly opposed to using Google/in love with Yahoo!.  This is probably how I made the jump without even thinking.

Moral of the story?  Make something people love!  This way, to create a massive success you only need three or four percent of converts to start using your startup instead of penetrating the whole market.

Good advice after all it seems!

* However, Mr Taleb was mainly talking about how this insight effects society, rather than startups and entrepreneurs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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NHS Startup Part XVII – The End

Gosh, it’s been a long time since I posted about my startup.

I’ve decided that this will be the last blog post which talks about the minutiae of my startup and the challenges a new company in the healthcare scene has to face in the UK.

The reason this will be the last update is because the specifics of my startup are not helpful to other entrepreneurs / healthcare innovators out there.  The fact is that everyone will have to traverse a terrain which is different and face challenges which are different.  This I have come to realise is why so much advice surrounding entrepreneurship is so general.

“Solve a problem”

“Expect the unexpected”

“Provide value”

“Make connections”

These platitudes may seem clichéd and obvious, but they are cliched for a reason – it’s the truth and giving advice more specific is often not relevant or helpful.

Having said that here’s another update!

I Am a GP Partner Now

GP partners are owners of clinics in the UK.

This is a very privileged position I am in.  Basically I now have a test bed to test my application in.  I also have an allocation of money from the practice to keep building my app.  So, I am very lucky indeed to be have been given such a massive opportunity.

This is the best position a founder could be in!  Solving your own problem with outcomes which will be beneficial to yourself validates your idea for a business and ensures that at least one person will benefit from your product or service!

Keep in mind that 88% of founders fail because they fail to make something that people really want and will pay for.

To Spread or Not to Spread

The app is being used in a few test beds now.  As such I haven’t pushed for it to go into more and more healthcare settings.

The reasons for this is that the app has potential to become really killer.  But I need time to build the rest of the necessary features.  This will take 8 months or so.

It may seem risky to not keep pushing for it to go into more and more places, but there are a number of reasons why  think it’s a good idea to not spread to quickly in the healthcare space.

The first is that it’s very difficult to get into anywhere – but now that I am convinced that I will be able to get into more places, I need to make sure to not blow it by providing bad services or a crappy product.

The other reason is that when you’re creating enterprise software, the app itself is a small part of the whole business.  This is another reason why it’s a bad idea to learn to code just to make a business.  The fact is that people don’t just pay for an app (particularly in healthcare), but infrastructure, support, insurance, certification, governance etc etc.  Also, as you provide software to more settings and businesses, more code needs to be written to provide infrastructure for billing, handling new data and new protocols have to be written for implementation.  The legal implications and finances also becomes a whole lot more complicated.

Looking at it this way, I’ve figured that the best way to go forward is to really make an awesome product, get sales lined up and then launch in more places once we’re happy that we can deliver something remarkable.

The Future

The future looks good at this point.  I’m solving a real problem, we have customers, the scope of the app could make a really positive change for both patients and healthcare providers.

There will be plenty of challenges up ahead.  However, just because I’m not writing these in-depth updates doesn’t mean much for followers of the blog.

The fact is that anyone who really wants to do what I am doing can just read my blog and follow me.  As the whole blog is about entrepreneurship and healthcare, people will learn a lot more by reading and understanding the general view-point of an entrepreneur than to follow all the details closely.

Because let’s face it, how many other people out there are GP Partners and creating software for the NHS?

Politics Is The Opposite Of Entrepreneurship

There seems to be one main similarity between politics and entrepreneurship; they both try to create change.  However, the methodologies that they use to make change happen couldn’t be more different.

Politics may seem like the older brother of entrepreneurship, but when you inspect politics close up it seems more like that unsightly Uncle, who smells a bit odd and may have spent time in prison.

The Entrepreneurial Journey

This is a summary of pretty much every entrepreneurial autobiography I have read.  I should stop buying these books, but there’s usually a few nuggets of valuable information in each book which are quite insightful.

The classic story of the entrepreneur goes like the following.  A young (usually male) person gets exposed to a gap in the market place or a pain point in their own life.  Fuelled by ambition, a longing to create a real impact and the hope of breaking away from a life of monotony the young entrepreneur experiences what is commonly called an “Entrepreneurial Seizure”.   This is the moment where he says “Screw it!  I’m going for it!”.  At this point no matter what his family and friends say, it only adds to the fire of ambition to go for it*.

Our young protagonist then gets started on creating their product or service.  Due to a lack of funds he sells his belongings, downgrades his car, takes on more shifts at work, rents out spare rooms in his house and starts wrangling banks and family members for some money.

The entrepreneur then realises that no matter how much money they gather, they won’t be able to create the business they saw in their vision by simply gathering money.  He needs to actually create a business which generates money and allows him to re-invest in the company and grow the business with money from actual customers.

With this knowledge in mind, the entrepreneur creates a streamlined business serving a small group of customers with a very niche product.

After months and possibly up to a year of hustling for new customers, autodidactism and networking the young entrepreneur finally hits product-market fit and has several million dollars worth of business a year.

Now it’s just a case of scaling the product or service to serve as many people as possible.

Before the entrepreneur knows it they are entertaining offers to sell his company at sums needed for an early retirement.

The Political Journey

Contrast the above journey with those involved in politics.

Someone in a given organisation or society wants to make a difference by changing policy.  Usually the ideas which inform these changes are borne out of class rooms, books, meetings and gossip rather than the kind of acute pain which causes someone to start a business.

Let’s take the example of an employee who is in a large organisation that wants to work his way to the top and make change happen.  She will necessarily go through a number of jobs and work up a hierarchy.  On this journey she will discuss her thoughts with people at the coal face and have a clear idea of the type of change she wants to make.

However, as she gets nearer to the top she will realise that the system is not as simple as she thought.  All of a sudden she will have to work hard to please shareholders, board members, unions, lobbies, fringe groups and also the people who are actually doing the coal face work which she wanted to help in the first place.

Usually this person will end up doing work which is ethically questionable on the way to the top.  “I know it’s not the right thing to do.  But, if I do this I’ll be able to get to the top and make the positive difference people need.  It’s for the greater good.”.

This type of cognitive dissonance seems to be quite prevalent among politicians.

When this person finally does get to the top, the policies and change she wanted to create will also get tainted by all the different vested interests mentioned above.  The fragment of a good idea that our politician had will be deformed from the start and likely not result in much of a change at all.

Contrast

My main point with this post wasn’t to display why politics is inefficient, but it’s to show how entrepreneurship and politics are fundamentally the opposite of one another.

Entrepreneurship is bottom-up.

Politics is top-down.

This also explains why politics rarely produces change that people want and why entrepreneurship must always result in change people want.

In entrepreneurship, when you build a product or a service, you have to generate money to allow it to keep growing and spreading.  To generate cash, you must have produced something that the market has to pay for.

All entrepreneurs know that their initial idea for a business will be way off course.  In fact because of this there has been a whole movement in the last decade called “The Lean Startup” which advocates getting something out into the market place, learning and iterating your business plan.  The assumption in entrepreneurship is that the founder actually knows very little with regards to what people want.  So you may as well get something out there and see if there is any traction.

This way entrepreneurship must produce products and services that serve people’s wants and needs from the get-go.

In politics, ideas are usually made in something like a boardroom.  Ideas do not get validated by something like “The Market”.

I find it quite interesting how even if politicians want to make change, they can never do it in the way they wanted.  This is obvious if you understand that there are too many vested interests pulling you in different directions, that the world is far too complex to understand let alone predict and that the world is in continual change.

*As I’ve mentioned before, starting a business, as long as it sticks to Thalesian principles is actually the wisest decision someone could make.

Thalesian Principles And Why More People Should Start Startups

The purpose of this blog post is to illustrate how startups are different from traditional businesses, but also why more people should start a startup.

What’s A Startup??!

There is a misconception that any business “is a startup”.  In fact most businesses are not startups.

Is that corner store a startup?

Is a website that you have created which is bringing in a small amount of revenue a startup?

Is a digital agency (web development company) a startup?

If you register as a freelance doctor/artist/consultant/web developer are you a startup?

The answer is no, but could be a yes.

Allow me to explain.  Startups are a special type of business as they are designed to 1. scale and 2. scale fast.

If you look at the above examples it is incredibly unlikely that any of these will be able to scale to serve a massive number of people or do it quickly.  There are exceptions such as Starbucks which found a way to scale and do it quickly.  However, businesses which require a lot of human resources are the hardest type of business to scale and likely will never be able to do so.

Equally a digital agency will find it hard to scale.  The bigger they get, the more people they will need to hire, the more they will have to charge to cover their overheads and therefore they will price themselves out of the market.  Again, anything which requires human intensive work is very difficult to scale.

How about websites which bring in a little bit of money?  Most are not startups as they won’t be able to scale and grow to serve large numbers or people.

In essence a “startup” is synonymous with growth.  They are the one and the same.

Thalesian Principles (A Story About Startups)

Startups are old news.

Thales was a pre-socratic Greek philosopher.  He also became very rich.

Thales invested in olive presses.  When there was a good harvest and therefore high demand, he would rent out the presses at a high rate.  One version of this story says that Thales predicted a good harvest one year and so bought all the olive presses due to his analytical skills and prediction that olive presses would be of great need.

Indeed Aristotle himself said that this shrewd business decision was due to Thales’ philosophy skills.  However, others have noted that it wasn’t Thales’ extreme intellect that helped him to make the decision to invest in something which may not have returned any money, but because Thales understood that some investments have a convex (unpredictably high) return on investment.

Thales understood that it didn’t matter what he invested his money in as long as there was a convex return on investment.  All he needed to make sure was that there was a limited downside (the initial investment) and a convex (near unlimited) upside.  He understood that even if he lost the money he invested in olive presses, it wouldn’t affect him too negatively and that he would simply be able to invest in something else down the line.

Why More People Should Start Startups

They have finite limited downsides and possibly unlimited upsides.

It may seem to outside observers that entrepreneurs seem to risk it all by going on their ventures.  But most entrepreneurs are actually very safe and know how much downside they can handle on a given venture.  As long as there is a limited downside and an unlimited upside, entrepreneurs are happy.

If you can design a business* which will grow and grow quickly (as in a few years), this means that you may end up with an incredible return on your initial investment.

This is why I think more people should be starting well designed startups instead of putting their money in traditional investments such as 401Ks and pensions etc.

Let’s say that you can put aside several thousand dollars a year to invest and do what you want with.   If you put your money into a 401k or something like property then after a certain number of years you will get a certain predictable amount of money back.  The problem with these more traditional investments is that it takes many many years to get anything back.  Also, you are handing over your fate to society, the government and the economy.  If the markets crash, if there is a recession or if Wall street screws up then either you’ll break even or you’ll end up losing your money as so many people did in 2008.

So, the options you have are to either put your money into something which will give “predictable” returns (which will be either low or non-existent) or put your money into something which can actually generate lots of wealth – like a startup!!

*There are ways to design your business in a way which allows it to become scalable, but this topic is too large for this blog post.

This Is What Starting A Business Looks Like

Starting a startup is hard work.  It’s a very different kind of “hard” work than what most jobs require.  It’s not as difficult physically, as doing something like construction and it’s not as intellectually demanding as something like medical school.  However it is emotionally and psychologically draining as there is so much uncertainty involved.

Not only this, but there is added pressure on the founders of an early stage startup because it’s testing whether their “vision” is real or actually a hallucination.  This can make them feel very bare and vulnerable.

I think the best way to describe what it feels like to be a solo founder is via this video:

Visionary?  Or Just having a hallucination?

First you have to be willing to put yourself on the spot, be willing to be ridiculed and possibly laughed at.

Very few people are willing to be that first person dancing to their own tune though.  Most people never even get to this stage and they fail because they didn’t even get started.

Then when you’ve finally proved that you’re not insane and that there’s a party going on which is going to make an impact and a positive change, people will join you – these are your early adopters and your co-founders.

Then before you know it you’ve got a whole business dancing to the tune of common interests and values, working towards a common goal.

The Case For Private Businesses In The NHS

As a GP and entrepreneur, with my own software being used in the NHS, I have found that my opinion has continually changed with regards to businesses in the NHS.

I used to think as a junior doctor that a lot of the private companies dealing with the NHS were evil for two main reasons: overcharging the NHS for their services and the unethical use of patient data.

I think these two points are still valid for certain companies.  If you read some of the reviews of some of the NHS software suppliers then it’s patently obvious that certain organisations like TPP who provide the electronic health records for around 30% of NHS GP practices have stonewalled themselves from criticism.  Their software is also very dated and horrible to use as a result.

But, there are some great things about private enterprise.  One of the greatest differences between government ran organisations and private enterprises is accountability.

We live in an age where when there is outrage at a private company, real change can happen.  Just look at how the CEO of a multibillion dollar company was recently ousted for unethical behaviour.

I think that the world is changing.  People and consumers have a voice now, because of the Internet and how connected we are.  We can raise our concerns when we’re not happy and take our business elsewhere, or in my case start a business which is more ethically sound (I hope! :p ).

I feel that this is quite different from government organisations.  As private businesses become more transparent and ethical due to consumer pressures, large government organisations are appearing more and more opaque as time passes by.  Due to the lack of market place pressures they are also very inefficient and lack the focus that private enterprises need just to survive – but this is the subject of another blog post! 🙂

Selling “Time”

I really think that this blog post is a must read for any business owner out there.  I was introduced to this concept a while back and it has been continually brewing in my mind.  It’s totally changed my outlook on my own businesses and how other businesses operate.

The big idea:  It seems that businesses nowadays are selling “time” rather than anything else.  No matter what industry, it seems that what companies are actually doing is selling “time”. 

This sounded really weird to me at first, but now it’s actually painfully obvious.

We may think that Uber sells taxi rides.  But what it really sells is time.  Before I’ve gotten off of a train ride, I’ve already called an Uber.  It’s selling me time.  Time that I would have wasted waiting around for a taxi if it wasn’t for Uber.

What does Amazon sell?  Retail goods?  Actually it sells time. It takes me a second to order a product and get it delivered the next day.

Does JustEat or GrubHub sell food?  Or does it sell time and convenience.

What about Instacart?

It’s a really interesting way of looking at things and has implications for my own health tech startup.  Yes, I am automating a load of medical work, but actually when I think about it, I’m selling doctors and patients their time back to them.

One of the things that I’ve been thinking about recently is why this is such a big deal.

I think it’s a big deal because technology has allowed us to tap into a whole market place that didn’t even exist just a decade ago: the market place of time.  And back of the envelope maths says that this new market place is worth trillions of pounds.