Categoría: Startups

The difference between «Good» and «Wow!»

Javi Padilla

A few weeks ago, I had the chance to meet a Spanish entrepreneur who gave me a fantastic advice: “‘Good’ is like ‘ok’, ‘nice’, but it’s not enough: You always need to work harder to get a ‘Wow!’”. He illustrated that sentence using two websites. “The A site (a social network) is Good. Facebook is Wow”.

Since that day the Moodyo Team “re-thinks” and shares -in a “safe environment”- every idea until we feel that the “Wow!” has arrived. I don’t mean that we haven’t worked in the right direction in the last months. We’ve always been so passionate about our project, we’ve spend hundreds of hours designing, developing, spreading the word about our startup and, of course, testing it. But now we’re heading to a new stage: “If there’s no ‘Wow!’, there’s no next step”. Easy, right?

How to detect a genuine “Wow!”?

Now that I’ve tell you about our “secret”, I’d like to add a few details that may help you in your way to get the “Wow!”. In my own experience, the “Wow!” cannot be detected by an individual. That’s impossible. You can’t be sure if that thing in front of your eyes is an “universal Wow!”.

Ok, this is a new concept. A “Wow!” is perfect for your family or your closest peers but, if you are working to succeed in a global market you need an “Universal Wow!”. Let’s call this the “uWow!”.

Why am I ditching the “individual ‘Wow!’ detection” or the opinion from your family members? Easy: You’re “the best” for your grandma, your wife, parents, brothers… You’re a “Walking Wow” for them. Their opinion comes directly from their hearts and, sadly, it’s not useful for that global project that you have in your mind.

So, to succeed you should do the following:

1) Hide what you’re going to show. Suggestion: open and toggle full screen that lovely beach picture that you have in the “Last summer pictures” folder in the Desktop of your computer.

2) Call to ALL the members of your team and locate them around the screen.

3) Put the cursor over the button that shows the item you want to show and…DON’T CLICK YET!

4) Look at their faces. And now click on the button keeping an eye on their reaction.

If you’re looking to the screen they’d have the chance to look themselves in a millisecond and change their original opinion. Look at their eyes. Their reaction right after watching your screen will give you the real average score that you’ve reached with your work.

Again, this is not the final stage. After the “Wow!” from your partners, you need the approval of outside people that we’ll call: «The World»: 20-30 people who aren’t friends, relatives or partners. The World won’t have any revenue or benefit from your idea. Instead of that, they would have to spend money using your idea (i.e: an online shop…). So, if they say: “Wow!”, you’re almost ready to go.

What about the final stage? The Investors. Ok, this might look like the ugly monster at the end of that amazing video game. Regardless how hard it might be, you need to convince them and make them say “WOW!”.

If you succeed with all the steps from above it’s very likely that you have a “Wonderful idea”. Now you only need to be in the right time at the right place.

But…Wow!

Hey, what about the ROI?

Javi Padilla

If you’re about to meet a VC firm there’s one thing you should remember: take your timeline and measure the time between the meeting begins and someone from the Venture Capital firm asks for the Return on Investment (ROI) of your startup company. Write down the exact times you get in all the meetings you’d have (of course, you won’t get the money in the first meeting…)

Despite of the fact that all companies -and all VCs, of course- should get some revenues in a medium-time period, an excesive pressure over the team to make them earn money asap would result in a serious damage to the company.

The recent social media history can give us some clues:

-What would be (The) Facebook today if all the VC companies that helped Zuckerberg to build his social empire would have asked for revenues since the first days? It’s very possible that Facebook wouldn’t be earning 4 billion dollars each year now (7 years later) and the company wouldn’t be valued in 100 billion. There wouldn’t be any Skype joint-venture, no “social-boom” and, of course, no 750 million people sharing their lives inside a website.

-What about Foursquare, Twitter and other similar companies? All of those ventures have changed the way we share our lives through digital channels. We’ve moved from the classic “Hi! I’m taking a beer at the corner” SMS to Check-in with the Foursquare App. We instantly share our opinion about a TV show with thousands of people using the same “hashtag” in Twitter.

And, is Foursquare a company offering revenues to their shareholders? Of course not. And it’s been “so long” since they got their first investment. But what can you do when 10 million people -and counting- are using the same app to share their location? Find a way to monetize that. Because when you find the right path, yes, you’re smart: you’ll get all the revenues you’ve been waiting for.

So, does this post means that you’re supposed to look for a VC company offering an “infinite time” to recover their investment? Absolutely not. They put their money to help you and in exchange you’d be commited to do your best to make your company grow as expected and they earn money in a reasonable time.

But never forget this: if you have a good idea and your product is built over strong basis with a good business plan, don’t sell a big piece of it to the first VC company. You need the money but you don’t need anybody destroying your dream (your product).

By the way, I found yesterday an interesting book while reading an article in TechCrunch. “One Book Every Entrepreneur and VC Should Own” is a compilation of advices from Mark Tuster (www.twitter.com/msuster), a man that’s been around since 1999 helping companies…starting by his own enterprise. Reading that book you will get unvaluable information about some concepts that you may know if you’re about to start a negotiation: “Drag along rights”, “Redemption rights”, “2x liquidation preferences”, and so on. I’ve only read a summary, but can’t wait to get it and read the whole thing.