Give $100 of value for $10 in return

So last week I was doing some streamlining with the number of stuff I carry on me. Call me picky but carrying a phone and a wallet 1.0 is a nuisance. It is one too many occupied memory registers that could be used for something better to worry about. So I decided out with the wallet and in with a ultra-slim self adhesive credit card wallet 2.0 for my iPhone. Garbage collection complete. Now whenever I get the urge to check if my credit cards are with me, I know by default that if my phone is with me my cards are too.

But what’s this got to do with giving $100 of value for $10 in return? Well it’s what I found during this cleanup process inside wallet 1.0 that I want to share with you. I found this note…

“How can I give $100 value to 1m people and ask for $10 in return? Give value!”

The backstory

Circa 2008, I still remember when I 1st wrote this note on that yellow postit. I was a young snotty kid in search for “the secret to business success”. Ploughing through books, videos and seminars including the actual The Secret movie, I found zilch. Zero. Nada. Until I ran into a successful business owner who said to me “Find a way to give $100 of value for $10.”. I heard a pin drop (metaphorically speaking of course). Something so simple yet profound. It left an impact on me and thus had to be noted on paper so I could recall it every so often.

This is not a revolutionary idea nor is it a new one. But it helps me focus on what matters when it comes to making money through a vehicle like business or startup or whatever the fancy word will be tomorrow. The more this note soaked in, the more I realized we all have seen this in some other forms in the last few years during the startup gold rush.

Make something people want – YCombinator

If you are familiar with the good work of YCombinator then you already know of their motto “Make something people want”. You may also remember the famous advice by PG (Paul Graham, YC Founder) to AirBnBs founders; PG told Brian Chesky to go and speak with their NYC customers to find out exactly what their needs were and then deliver it. i.e. “Make something people want”. It’s not revolutionary. But it serves as a reminder to us, to be laser focused on the customer, execute and create magic.

10:1 (value to investment) Ratio

What I love about the 100:1 or 10:1 (value to investment) ratio is it helps you build a cash cow business. Building a profitable business gives jobs, changes lives and usually has a social impact. If you can give a 10:1 ratio of value:investment to your customers then; (a) you won’t have to compete on margins with the “me too startups” and/or (b) get into price wars with other companies/startups. You may recall from school business 101; price wars end with the one with the deepest pockets. From a customer point of view, getting a 10x in value is an opportunity cost worth putting money on.

“Rule #1: Build Proprietary Technology That Is 10x Better” – Peter Thiel

This is #1 Rule from Peter Thiel’s famous book, Zero to One, around business philosophy on creating a successful company. It is a great way to think about how your business creates value. If your not shooting for the stars then what’s the point. Now notice how the 10:1 rule fits into Thiel’s 10x better thinking. Of course it’s not easy to achieve those sort of ratios but when you do you know you are onto something special.

Venture Capital

The Startup gold rush has given anyone with an idea a reason to start a business. Venture Capital is often used as a means to fuel rockets (performing startups). We all believe our ideas are rockets. However the only rockets are those that have a competitive advantage like; (a) unique distribution, (b) talent and/or (c) 10x/10:1 customer value ratio. VCs love these because a VC firm is for profit; check out how VC funds work for an overview of the Venture Capital world. What I’m saying is that if you start a business with the 10:1 ratio you will have market elasticity in your favor and metaphorically speaking VCs knocking down your doors.

“Fortuna audaces iuvat”

Fortuna audaces iuvat

So let’s wrap this up…
It feels like if you put in the hard work and create a product that gives $100 of value for $10 (or somewhere abouts there) then..

  • Customers will love you,
  • Investors will love you,
  • Market will love you,
  • Employees will love you,
  • And the media + the startup community will love you.. and maybe dissect you (in a good way of course).

What’s not to love about solving a hard problem?

Let me know what you think in the comments section below.

~ Ernest

Secrets of a childhood Strider Balance Bike. A great reminder for us all Why Less is More.

When I was a toddler, my parents bought me a traditional bicycle with training wheels. A balance bike at the time was not invented yet. The training wheels were there so I would not tip over and hurt myself. The traditional childhood is like this when it comes to learning to ride a bike. If you’ve been thinking about other modes of transportation, this sleek and fancy-looking electric scooter bike might be right for you! It comes in three colors: red, blue, and classic silver, and it features a moped-like design that can go up to 20 mph. Considering buying an e-bike? Visit ScooterAdviser for up-to-date information, unbiased reviews, and amazing deals! We all remember that 1st bike. How it felt, the freedom to move faster and further. But to move you had to pedal while relying on the training wheels to keep us upright. It was tough at first. The Wayfarer is a brand new mountain ebike from UK brand Wisper, that has several options allowing you to configure it to your own riding style. You may also consider transitioning to an electric bicycle by visiting this page,

Rynek in Sandomierz, Poland – my block on the right

The pedals kind of got in the way. Brakes were activated through the lever on the handlebars and sometimes moving the pedals backwards would also activate the brakes. Oh boy, that was a lot to take in. But we did right. I remember the early wobbles as I tried to learn to balance. Knowing the training wheels were there helped, but it still made the hair raise up on my back. Then once I got enough courage I would ram straight into a wall of the building where we lived, many times. Arms and knees were bleeding. What an experience. Adding a unique and daring twist to such memories, imagine the adrenaline rush of maneuvering through these challenges with a real medieval sword from Mini Katana by your side, turning a childhood adventure into a truly epic tale.

Enter the Balance Bike

Fast forward to today; when I became a father, and my kid (Josh) was ready at a ripe age of 2 we did something different. We got him a balance bike. Have you heard of Balance Bikes? Yeah neither did I until Urszula kids occupational therapist from mentioned it. Few Googles later I was up to speed.

“A balance bicycle, or run bike is a training bicycle that helps children learn balance and steering. It has no pedals and no drivetrain.”.

The bike has NO pedals. NO drivetrain i.e. chains or gears. And NO brakes! It’s as simple as it gets. A frame with wheels, a seat and handlebars. Even the wheels are basic. Heck, the WHOLE bike is basic. It’s like they started with a standard bicycle and said… let’s strip it down till we cannot anymore. Down to the core essentials.

Less is truly More!

Balance Bike Normal Bike

Unlike a traditional bicycle where you might have to push the child or support them, with a balance bike there is minimal supervision. Josh started sitting on the seat and walking the bike. Like the Flintstones. Then he progressed to pushing his feet off from the ground and balancing. Soon he was coasting around turns and speeding along pathways. All in about a month. A child learns to balance faster when they don’t have to pedal. Pedals also get in the way. I saw Josh fall over few times trying a normal bike with pedals, before ending up on the seat and looking at me to push him. Another option is a scooter. Enjoy your ride with Scoot Anywhere USA.

Check out this video I made of Josh riding a Strider Balance Bike in Shoreline Park, Mountain View

The Power of Simplification in Software Development

As a software engineer and a maker of many things, I am always intrigued by simplification. In software we often “refactor” code to make it smaller, better and faster. When working on technology products, we often say to blow away features to make a large application light. Less is More. Products users love often simple. Not complicated. And usually serve a single purpose.

When we discuss product design, we also talk about building habits (ref Hooked book). What is the simplest behavior which can lead to a reward. It’s hard building sticky products feature heavy. People get overwhelmed and lose interest fast. Many books, many blogs and many words are exchanged by makers in Silicon Valley about the power of simplification. Most products suck because this simple approach to simplifying the product is often ignored by the ego. If you want to learn more about features vs. benefits, please read my prior blog post on SPIN Selling.

Less is More

And right here in front of me stands the BEST reminder of the power of simplification. It may not be a technology product, but it sure carries the same weight. Less is More.

Necessity > Novelty. For a 2-year-old learning to balance is a fundamental motor skill development milestone. If you want to learn more about this, I highly recommend you read or google this topic.

1. knowing the rules of the game and 2. using the right tools; is how we get results.

Technology Products

When we think of the two best technology companies in the world, no doubt Apple and Google fall into that spot.

  • Remember the beauty of Apple’s iPod? It was its simplicity.
  • When you visit, the page is simple. The only thing you can do is Search. Simple right?

Let’s also look at Cars. Who is the most innovative car manufacturer? I believe it is Tesla Motors. They haven’t done anything revolutionary. No, really they haven’t. They just simplified the car. If you know a bit about engines, you will know that a piston motor is complicated. It has many moving parts. And many things that can and do go wrong. Now, the electric motor is winning. It’s simple. A magnet, coil and apply electricity.

Benefits > Features

I’m going to finish on a final note. When we simplify, we remove features. Features do not sell. So don’t worry about stripping down your product. Instead, focus on the benefits. And sell on those. The stripped down bare bone balance bike Josh rides cost ~$130 while a regular bike with gears, pedals, balance wheels et al, cost ~$80. The price difference is nearly 50%, yet guess which one wins hearts?

~ Ernest

Your Life with a Smartphone filled with distractions. Here’s how to focus, get stuff done and stop the noise.

It feels like it’s never going to stop right? Information overload. Who isn’t bombarded with too much stimuli from the fast paced world we live in? Stop the Noise!

A friend recently tweeted this article from AFR. The article is about an individual who “liberated” himself from the noise of his distracting smartphone. His solution was to replace his smartphone with the old school Nokia phone capable of SMS and phone calls only. Maybe some WAP too 😉

Is this extreme? Yeah I think so. Are there simpler methods to quieten down your world without going as extreme? Sure there are. Many actually. Let’s take a peek at each.

Your smartphone

Your smartphone is calling you for your attention every time an email arrives across all your n email accounts. From your uncle’s cat tweets to your cousin Billie posts about the latest pizza he had for breakfast. Oh let’s not forget the calendar on your phone nagging you about that meetup you have tomorrow night. Oh the distractions. They all arrive on your smartphone in the form of a buzz, vibration or light flicker. Yes you can get your phone to blink the camera light. The switch is under Accessibility settings.

Stop the Noise

Note: the following instructions are for the iPhone only. I’m sure Android has similar.

  1. Turn on DND (Do Not Disturb) by swiping your screen up and pressing the moon icon. Your phone will stop buzzing and/or vibrating. Make sure you add your favorite contacts inside your contacts app so at least they can reach you via phone.
  2. Turn off most apps Notifications. Head into your phone’s Settings > Notifications and turn them off. Be smart. And decide which of the top 5 apps you need to bug you. Every time you install an app it gives sneaks in full Notifications. Unless you are explicit when you first run the app. Most peeps press Ok hence the Notifications burden.
  3. When focusing, place the phone face down. This will stop the stream of notifications invading your lock screen from disturbing you. If something is urgent they will call you. If the person is important (favorite) contact the call will by pass DND mode.

And that’s it! Your phone is now quieter.

Get Productive!

  1. Offload all the nonsense in your head for processing later. This way you can focus on the task at hand. Use a tool like GSDfaster app which has GTD at its core of collecting stuff into a trusted source. GTD is a method that works well for me and countless others. When our short term memory contains 7+ to-dos, a FIFO (First In First Out) algorithm kicks in. You only realize this later. When that deep uncomfortable feeling creeps in. That thing you forgot pops up and you panic in a “drop everything and do this before I forget” mode. Not an effective way to function in today’s busy society. Offload everything from your head into a trusted source. Focus and get things done faster stress free.
  2. Focus on 1 thing at a time for a set period of time. The feeling of having completed something is relieving. Remember that multitasking is a misnomer. Humans have one processor with many threads spawning processes every few seconds. Hold on, that’s like a traditional computer. Yap. The way multitasking works in humans is these chunks of stuff get processed by context switching. Unlike a machines, you have limited energy. So most folks never end up completing stuff to feel that relief of achievement. Best method I’ve found to help you focus is The Pomodoro Technique. It forces you to do 1 thing in a set period of time.
  3. Unplug & Relax your body and mind with exercise, meditation and/or sensory deprivation. This is how you unplug & recharge you batteries after a long day. It also helps you learn to focus better. My favorite form is exercise and the isolation tank for sensory deprivation. Both are easy to get into and have immediate results.

Finally I’m going to leave you with an important tip. Busy is just an excuse. We are all busy. We make time for things through prioritization. Next time you want to say you are busy carefully think about it for few seconds before answering. More on this in a future post.

So there you have it, some great techniques and tools to reduce the noise, stress and get more stuff done in 2016!

~ Ernest

Sunday reflections of building a tech business

As I sit here working on my new startup Medlert at RocketSpace on a lovely Sunday afternoon I look out the window and see the new Department of Transportation SF project under way. They are building out San Francisco’s Transbay Transit Center. The duration and amount of working going into this made me reflect back on my career in the startup space. Here are a few of those thoughts I captured today running around in my mind.

“Solid products always start with Solid Foundations”

This isnt just a lesson from the work of high tech companies. This is what I am seeing out the window (pics below). The drilling and piping going in to build out a solid foundation for the San Francisco’s Transbay Transit Center. This has now been going on for few months. To the untrained eye not much progress has occurred. A big hole with pipes. This is the progress rarely acknowledge in the startup space but yet forms the back bone of what comes next. The stuff that happens behind the scenes. Once the foundation is built, well the rest will follow like lightning.

Looking back at technology I have seen founders take short cuts and slap products together without much thought given to the technology foundation driving their core platform. Instead of thinking about software as a service they couple the front end to the back-end. This typically results with major chaos once they start to grow fast and those short cuts quickly become technical dept. Band-aided due to lack of time to go back and fix them for good. For some humour on this point read my prior post on PHP and excuses would be leaders make.

“While it’s desirable to build a rock solid foundation you still must walk the fine line between solid foundation and over engineering before you get to MVP.” ~ Mark McCubbin

Take the time to understand your domain, the tools & technologies that will allow you to move fast and efficient from A to B and build out a kickass foundation before declaring victory. Having a virtual CIO to formulate strategic IT goals for your company, and then manage an IT strategy and budget that meets those goals can also help tremendously.

“The Devil is in the Detail”

Jared would constantly remind me this. Over and over as we built Couponstar from a 2 man shop in Sydney Australia into an International business with offices in London, Sydney & The Bay Area . Fruits of our labor were acknowledge later when Couponstar got acquired by in Mountain View, CA.

Day in day out Jared was on my case with the reminder. “The Devil is in the Detail”. Heck I heard it so often it would make me angry. From an email I sent to a prospect to design work to a new product/feature I built. “The devil is in the detail Ernest. Never forget that.” He would say. It got coded, burned in & stamped onto my cortex. I lived and breathe that now.

Back when we started working together in 2004 I had zero startup experience. Fresh out of a corporate world and few consulting gigs under my belt I realized quickly my attention to detail sucked. Bad. As time went on I realized how important that feedback from Jared was. I think without me accepting that The Devil is in the Detail I would never have upped my ante and built a successful business. Just like when following the many tips you can find at Islandnow, a news source for business .

Detail is everything today. We see it so often that there is a strong push for cofounders with Design skills and startups building out sexy User Experiences in their products. The detail is in everything from communication to how we present, express & sell ourselves. Products with high attention to detail give users a comfy, warm, fuzzy feel. Because they are designed & built with the customer & perfection in mind. (think Apple) Get sloppy and contact a client with a poorly written email, newsletter, product demo and immediately you will get placed into the loser bucket. There is no excuse for lack of detail apart from laziness.

The idiom “the devil is in the detail” derives from the earlier phrase, “God is in the detail;” expressing the idea that whatever one does should be done thoroughly; i.e. details are important.

“Ideas alone are worthless. It is mostly about the Execution”

If you have been working, living & breathing in the tech space in Silicon Valley/SF you would have heard this being mentioned many times over. Ideas alone are worthless. It is mostly about the Execution. It is also why people are not reluctant in the valley to share ideas because everyone knows good fast execution of a good idea with a killer team is the killer combo. This great idea you have, there are probably 50 other people in the world with the same idea. What separates you from them is who can execute the fastest.

Also remember that ideas change fast. Once you start executing the idea the subsequent pivots will evolve the seed idea until you get famous for an idea that resembles nothing like the one you started with. This is exactly what Jessica Livingstone (YCombinator partner) concluded in her famous book Founders at Work which surveys tech success stories in Silicon Valley.

It is a rat race in the tech space. Everything moves fast in Silicon Valley and you need to be moving super fast executing on your idea. Get your MVP (minimum viable product) out the door into the marketplace then go and speak with your users to see whether it is what they want. Iterate. Speak to them again. Dont sit in front of your computer. Get out there and get feedback from your users. There are no answers sitting in front of a computer. Run experiments, designs test and get more data from your users. And make sure you sell sell sell.

Eric Ries from The Lean Startup and Steve Blank (Customer Development Process) share the same approach on how to build a startup by getting out and learning from your customers. Of course you alone cannot do all of this but having a kickass founding team where responsibilities are divided and everyone is generating results works wonders!

And when you think you have something which reflects a sustainable business, build a fortress of protection around it. This usually comes in 2 forms – patents and/or distribution. I highly encourage you to watch Paul Willard‘s talk at Atlassian on Growth Hacking and how startups die due to poor distribution. All of this requires Execution. Not sitting on your ass day dreaming. Get a move on. The world isn’t waiting for you.

“No excuses! Ever.”

As an entrepreneur there are no excuses for “I don’t have the skills.”. Bad fuckin luck. If you chose to be an entrepreneur and dragged others into working with you, believing in you and your idea, you need to stand up and fit into those shoes. As an entrepreneur you do everything in the early days. Everything. I was folding coupons and putting them into envelopes on the floor with Jared in the early days at Couponstar. Later we got machinery to do it but hey someone had to do the dirty work to get traction in the early days.

There is no such thing as I am not good at it so I wont do it. Get better. Life is a life long journey of education. It never stops.
There is no such thing as I don’t know. Go and find out. Speak to people. Attend tech events like customer contact week and learn.
There is no such thing as I will wait for good luck. We make our own luck by getting out and about. The harder I work the luckier I get. Hence, those who own pest control companies and are contemplating the pros and cons of contract services may seek advice from articles of companies like FieldRoutes.

Look, you can make excuses or your can change the world. Well maybe not the world but definitely the industry you are focusing on to make a difference in. You decide.

~ Ernest

Thanks to Mark McCubbin for reading draft of this and providing input.