Common Startup Problems

Common Startup Business Problems

Matt DeCoursey is the author of the Million Dollar Bedroom while Matt Watson is an entrepreneur who sold his previous company for $150 million. They host a podcast with a huge following, the Startup Hustle.

On the 67th episode of the Startup Hustle, we hear from DeCoursey and Ray Levi, Stackify‘s Development Director, about the common startup problems faced by many businesses or companies.

Limited Resources and Putting in a Lot of Hard Work
It’s a challenge for startups to operate with a limited amount of resources in terms of financial, hiring and retaining employees, physical infrastructure such as office space, supplies, and equipment, and many more. They have to fully utilize these resources to survive and thrive in a highly competitive environment. Ray said that for the founders of a startup, it takes a lot of hard work on their part to establish and sustain a business, and they’ll often be working hard and long hours just to get things done by themselves.

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Sustaining Focus
As a startup founder, one must focus on doing the things that he or she is good at, and the things that one can do for the business with the greatest opportunity for a positive outcome. Matt said that a lot of times, there is that tendency to get distracted by a lot of things happening and one might lose focus on what needs to be done as a startup founder. And that’s to focus on the product, service, and the direction where the company is headed.

Diversity in the Company
One can have all of the best intentions in trying to overcome a lack of diversity in the workplace, but still have to make decisions that are based on the best interests of one’s company. The issue is not hiring more women and minorities to work for the company, but the limited number of applicants one can get for the projects. Because if one can’t get the candidates needed, then one can’t start a project.

Validating the Product
Whether one’s startup is involved in software or anything else, one must validate the product. The best way to validate a product is through customer satisfaction and sales. Do anything to get real users to try your brand such as offering a free 7- or 14- day trial. If they’re satisfied with the free trial, there’s a big possibility they’ll be converted to paying customers.

Lack of Structure
Unless one figured out how to have a structure in the business, it is a struggle to run the company. It needs an organized and supportive structure that guides what to do in the operations, how to manage employees, and all the other things needed in running a business.

Finding a Niche for Your Brand
As the startup moves forward and starts validating the product, one should be looking for niches to excel. For example, there were a lot of things that were very similar to GigaBook, and some of them serve specific industries or leaned toward different types of service professionals. But as GigaBook listened to its users, it realized there was a huge opportunity for those who needed a higher level of customization. So, the company decided to try to do everything it could to make the application as customizable on every level as possible.

Different Opinions Among Business Partners
DeCoursey and Watson often have different opinions on how things should be run at Full Scale. They have different opinions about the way things should go, the direction that things should take, the roles that they should play, the hours they should work, the titles they should have, etc. To deal with differences in opinions, Matt said that one must pick and choose one’s battles and decide what one is passionate or not passionate about.

Figuring Out How to Sell and Market Your Brand
Figuring out how to sell one’s brand and how to market it is the most challenging of all startup problems. The solution to this challenge is to become an excellent salesperson and marketer. It all boils down to being good in selling and marketing one’s brand because this will result in more revenues. This, in turn, will solve some of the challenges – the limited resources, diversity issues, validating the product, sustaining focus, and lack of structure.

To sum up the podcast, these are the common startup problems:

  • Limited amount of resources
  • Putting in a lot of hard work
  • Sustaining focus
  • Having diversity in the company
  • Validating the product
  • Lack of structure
  • Finding a niche for your brand
  • Different opinions among business partners
  • Figuring out how to sell and market your brand

Listen to Episode 67 of the Startup Hustle Podcast – Common Startup Problems

Here is the transcript from Episode 67 of the Startup Hustle Podcast – Common Startup Problems

Matt DeCoursey: Hello, and welcome back to another episode of Startup Hustle. Matt DeCoursey here with Ray Levi, who will be sitting in for Matt Watson today. Hi, Ray.
Ray Levi: Hey, man.
Matt DeCoursey: Glad to have you back. You were just here, oh, what was it, a week ago or so?
Ray Levi: Yeah, it wasn’t too long. I don’t think I can fill the shoes adequately of Mr. Watson, or Master Watson.
Matt DeCoursey: We’re done calling him Master Watson, but yeah, those are really tough shoes to fill.
Ray Levi: Well, I didn’t wear my gold shoes today.
Matt DeCoursey: I have mine on.
Ray Levi: I actually thought about it, but-
Matt DeCoursey: Yeah, I have mine on, and I just got my 50th pair of gold shoes. It was a milestone.
Ray Levi: I have seen the pictures.
Matt DeCoursey: I know, but it wasn’t like parading them everywhere.
Ray Levi: Don’t want to.
Matt DeCoursey: Anyway, well I’m glad you’re here.
Ray Levi: Yeah, me too.
Matt DeCoursey: Today we’re going to talk about some of the most common challenges that startups encounter. Ray, and I won’t disclose our age, but we are not old. We are experienced.
Ray Levi: Well, what do they say? Experience is making mistakes on somebody else’s dime. Is that what they-
Matt DeCoursey: I don’t get that luxury, on some levels, but let’s give some… For those that weren’t involved in your last episode, give us a little background about who you are, and why we want to listen to you?
Ray Levi: Well, that’s an interesting intro.
Matt DeCoursey: The last part’s hard to answer.
Ray Levi: Well, you want to listen, because all of this knowledge.
Matt DeCoursey: Yes, you mean experience.
Ray Levi: Experience, right. Over time, you do learn from mistakes you’ve made. I’ve been in development for a long time, and gone up through different avenues of management, but then, also, I was in a startup, as well. We ended up educating a market and not having a product that resonated.
Matt DeCoursey: You are currently involved with Stackify.
Ray Levi: Currently in with Stackify.
Matt DeCoursey: Mr. Watson’s-
Ray Levi: Mr. Watson’s venture.
Matt DeCoursey: The CEO there of that company.
Ray Levi: Correct.
Matt DeCoursey: You guys have been doing a great job of not only pushing the envelope on that, like I’m really impressed with the turnaround, but you’re also doing a fantastic job of dealing with the Full Scale office over in Cebu, which you recently visited.
Ray Levi: Yep, that was a great opportunity to get over there and meet those folks face-to-face, just really love watching this place grow.
Matt DeCoursey: Yeah, it’s been… Talk about growth. It’s just hard to keep up with, and you also were kind enough to post a video of the frog purse on the Startup Hustle Facebook chat, and wow, man. Wow!
Ray Levi: I still haven’t-
Matt DeCoursey: You weren’t kidding. It really is a purse made out of a frog.
Ray Levi: I haven’t brought it in yet. I will bring at least one of them in and show you.
Matt DeCoursey: You’re right. The creepiness was definitely there. I understand why many people did not want it as a gift. We will have a different episode on whether or not your judgment was skewed on buying three of them. Did you get a discount?
Ray Levi: Well, you know. Did you get a discount?
Matt DeCoursey: Well, right, I guess.
Ray Levi: I mean, to hear the guy speak, he lost money on the sale, right?
Matt DeCoursey: Of course.
Ray Levi: But there’s no way.
Matt DeCoursey: Did you sleep at night, knowing that you had put a poor merchant in Cebu City out on the streets, with your purchase of three frog purses.
Ray Levi: You know, I made the mistake of leaving one on the nightstand, and I woke up and it was looking at me. I’m not sure that it moved over the night. I don’t think it did.
Matt DeCoursey: All right, off the topic of the frog purse, but if you do want to check it out, join our Facebook community. That’s the Startup Hustle chat, really weird. Okay, so clearly our show’s about startups. That’s what we talk about a lot. You’ve been involved with them. I’ve started them. I’ve seen some come and go, and deal with a whole lot of them. A lot of them have the exact same issues, and for those that also want a little reference, at one point we did a series called How to Start a Startup. I think it had five parts, and we talk about a lot of the things, but never in a bulleted fashion. They’re more peppered over about five different ones. Prior to turning on the red light in here, we made a list, and I will lead, and we can get through this dance together, Ray.
Ray Levi: Sounds good.
Matt DeCoursey: One of the things in here, and part of what got our conversation started was related to one of your female co-workers, who has a very active role in the female developer community here in Kansas City, but it’s related to diversity.
Ray Levi: Right.
Matt DeCoursey: Startups are kind of dude-centric-
Ray Levi: They really are.
Matt DeCoursey: When it comes to software.
Ray Levi: Yeah, and especially, if you think about it, it’s going to be people you know. I mean, that’s how you would begin operations is people you know and trust. People you are confident working with and know what they’re doing, so it may be skewed to your way of life and where you live, really.
Matt DeCoursey: I think some of it is related to the fact that, in the United States, we typically don’t push our daughters to… If you’re in a software startup, I just don’t meet a lot of female software developers. I think it’s just related to the fact that we just don’t push our daughters into it.
Ray Levi: No, I think that’s absolutely true. Like I said, I’ve been developing code since ’80-something. I won’t say the year, late ’80s.
Matt DeCoursey: That definitely made it better. You seemed a lot younger because of that.
Ray Levi: I know. Well, what are you going to do? Yeah, I mean, 1%, 2%, maybe 5%. I mean, there’s not that many in this market at least.
Matt DeCoursey: We have quite a few.
Ray Levi: Of developers, I mean, developers.
Matt DeCoursey: Yeah, but we have a few female developers, but when you mention it, it might actually be like 1 in 20, out of the number of employees that we have.
Ray Levi: One lady that works for us, that Full Scale brought to us, she’s fabulous. I mean, we’d love to keep her, but she got pulled away to a different country, and so we’re losing her.
Matt DeCoursey: She set records for testing, so good for her. Then we have a team lead, that works for another client, that is just absolutely fabulous-
Ray Levi: Yeah, it’s definitely not a matter of ability. It’s just-
Matt DeCoursey: And an excellent karaoke singer. Okay, so diversity, now that’s a tough one to get around, especially if you’re trying to do it intentionally. Now, I think you can have all of the best intentions for trying to overcome a lack of diversity, but you still have to make decisions that are based on the best interests of your company.
Ray Levi: And you’re limited by the applicants.
Matt DeCoursey: Right, right.
Ray Levi: If you don’t get the applicants, you simply can’t.
Matt DeCoursey: While that may be a challenge, I don’t know if that’s a direct challenge to the health or success of the startup. I think it’s more of a scenario.
Ray Levi: Well, I think it depends on the problem you’re trying to solve, as a startup.
Matt DeCoursey: Yeah, well, that’s true.
Ray Levi: I mean, if you’re trying to solve a problem that is of female concern, primarily, you need to be able to-
Matt DeCoursey: Yeah, I think there’s a lot of female startup founders, compared to actual web developers.
Ray Levi: Right.
Matt DeCoursey: I mean, I’ve talked to quite a few of them, and actually one of the Startup Hustle alumni, Rachael Qualls, is launching some really cool stuff. She’s the founder of Venture 360, and a new product called LIQUIFI, that may or may not be ready soon. I’m not sure.
Ray Levi: That’s a question I had for you, actually. You talk about startups and Startup Hustle, are you predominantly talking about IT startups, or just in general all startups?
Matt DeCoursey: We’ve tried to… We would really like to fan that out a little bit, because of the background that Matt and I have, especially the more recent stuff with software. Obviously, software’s running everything, and we own another company that helps other companies find developers, so it definitely dominate… We’re not always real diverse.
Ray Levi: Well, and regardless of what that startup does, software is going to be part of it. There’s going to be an element there. They’re going to need to buy or build something.
Matt DeCoursey: Right, so I did actually intentionally say diverse in my book, Million Dollar Bedroom, because Matt Watson was into that. That’s actually what really sparked our deeper friendship, but then also there’s a guy named Jaysse Lopez in there, who’s very well-known in the sneaker community, and then… of course, right?
Ray Levi: Is that how-
Matt DeCoursey: Yeah, well, he’s a client of mine. We helped him build his brand, and we helped provide software for their store, Urban Necessities, which is really well-known. I mean, it’s a huge store out in Vegas. Then also, a home builder, the guy that built… one of the pioneers in the model home concept. All right, so when you have a startup, whether it’s software or anything else, you have to validate the said product. Some people seem to skip this step, because they are just certain that it’s validated.
Ray Levi: Yeah it’s the “if you build it, they will come,” concept, when that’s just not the case.
Matt DeCoursey: That doesn’t work?
Ray Levi: No.
Matt DeCoursey: Yeah, you run into that a lot, and I think people feel that way about websites. They’re like, oh yeah, I built this website, and I’m not getting any traffic. Why? Well, I mean, it involves a lot more than that, so there’s several ways that you can validate your product and your idea, but, I mean, sales is really the one that matters.
Ray Levi: Well, you’re looking at competitive trends. I mean, clearly you’ve got an idea to solve a problem or provide a service, right? You wouldn’t have even thought of it if there wasn’t at least a perceived need in your own mind, so there’s probably somebody else doing it, too.
Matt DeCoursey: I think a way to speed that up is, and this sounds counterintuitive to those with lack of experience, but almost rush a release in the beginning. Give it away. Do anything you can to get real users, and not just you and the people around you, to validate whether it sucks or not.
Ray Levi: Yeah, I mean, if you go to look at almost any service right now online, there is almost always a free 7-14 day trial, whatever it is. I mean, we do that at Stackify.
Matt DeCoursey: I even mean just give it away for a while, if that’s what it comes down to.
Ray Levi: At the very, very beginning, for sure, especially when it’s… You know you haven’t really gotten to the most loved product yet, but you might have a minimally viable product, you know?
Matt DeCoursey: Right.
Ray Levi: The MVP can be vetted to some degree with just giving it away.
Matt DeCoursey: I think a lot of people hang onto it too soon. I’ve seen some, and this is software related, but some very famous quotes from very successful people saying that if you don’t look back at the very first release that you ever made with absolute sheer terrible and embarrassment later-
Ray Levi: You should be embarrassed by it, absolutely.
Matt DeCoursey: Then you hung onto it for too long.
Ray Levi: Yep, well, they’ve always said that about Microsoft products. They’re no good until release three. Think about it. If you think about some of the things, like Windows 1.0 was a joke, right?
Matt DeCoursey: There’s a story I always tell people, and if you listen to all the podcasts, you’ve heard me mention it, but it’s about the shopkeeper that’s so busy cleaning the store that he forgets to open it every day. You don’t want to be that guy. You don’t want to be that guy. You’d rather have a store that’s dirty, full of people that are, you’re figuring stuff out, than you are to never open the door, because it’s super clean.
All right, so moving on, almost any and every startup has to figure out, has to try to see how they can thrive on the limited amount of resources that they usually have. Even well-known founders that have funding in the seed stage are still trying to figure stuff out on limited resources, so I mean, do you have some insight on how you can improve that or what you should do? Because you’re pretty much guaranteed to have to do this, at some point.
Ray Levi: Yeah, and that also feeds into another one of the bullets that we’ve put down there, which it’s a lot of hard work to have a startup, and with limited resource, that means you’re going to be wearing a lot of hats, and you’ll be working hard and long hours often to get it done yourself.
Matt DeCoursey: Right, I think one of the things that’s important is that you need to focus on doing the things that you’re the best at, and the things that you can do for the business that have the greatest opportunity to result in positive outcome. A lot of times, as founders or those with limited resources, you can have a tendency to get distracted by everything from that. I talked to a lot of largely software related startup founders, and I also think that the thing that just drives me nuts is I feel like so many of them just don’t stop to sell something every now and then.
Ray Levi: Yeah, well, that requires a lot of introspection to be able to know what you’re good at and what you’re not good at.
Matt DeCoursey: Yeah, it’s definitely… or to not think you’re really good at something that you’re not, or where to find and look for help in specific places. I think that trying to do everything yourself, well some of these, you don’t have a choice, but you know what? Some stuff can just be done later.
Ray Levi: That’s true.
Matt DeCoursey: Some people get so worried about certain processes and accountability and stuff like that. How about you go sell a whole bunch of stuff, and then figure out how to clean up the mess after? Because, I’ll be honest with you, your business is better in that scenario than the one where you don’t sell anything, but you’ve got this amazing process ready for when you might.
Ray Levi: Yeah, I mean, that really depends on where you are in that process, too, right?
Matt DeCoursey: Yeah.
Ray Levi: I mean, because you can’t go sell a bunch of stuff when you have 500 clients already.
Matt DeCoursey: Right, right.
Ray Levi: If you’re just getting going, sure. You can go out and make a bunch of promises, and here’s my roadmap, and here’s some projected dates of what I’ll have and the… That’s different than an established startup. I mean, I think that’s where Stackify is. We’re a well-established startup, and trying to bridge the gap.
Matt DeCoursey: I don’t think you guys are a startup anymore. I think you exited that when you got users in 60 countries.
Ray Levi: Well, yeah, that’s a good point.
Matt DeCoursey: It really is. Maybe when you had users in two or whatever. You guys have a well-defined plan and stuff like that, so some of what we’re talking about is also related to the next item on the list, is the lack of structure. Now, this is a tough one, because it’s hard to actually have structure, well I mean, until you get it figured out, it’s going to be a shit show. It’s guaranteed.
Ray Levi: Yeah, I mean, it’s cowboys out West.
Matt DeCoursey: Lord of the Flies.
Ray Levi: Yeah.
Matt DeCoursey: We’ve always been really transparent about what we’re doing at Full Scale. If you want to check out what we do at Full Scale, go to We help software businesses find resources and scale their business faster, but that’s… Are you shocked at how fast that’s grown?
Ray Levi: I really am. I had no idea. You guys, I mean, six months ago was there anything?
Matt DeCoursey: There was a handful of people. Now we have 90, and I have to keep tapping the brakes, because I can’t open office space fast enough, but here’s the thing is, with that, there was a ton… One thing that’s tough about a startup… Okay, so if you buy a franchise, like if you buy a Subway, you’ve got this monstrously high chance of succeeding, because it comes with an owner’s manual.
Ray Levi: And a supportive structure that shows you exactly what to do, how to cost your food, how to price your food, all the stuff.
Matt DeCoursey: This is what you do when the bread oven breaks.
Ray Levi: Exactly.
Matt DeCoursey: This is what you do when you run out of-
Ray Levi: Here’s your guide to interviewing people. Here’s how you-
Matt DeCoursey: Right, yes.
Ray Levi: All that stuff, and the software behind that.
Matt DeCoursey: Or maybe here’s some applicants or someone that can help, or whatever, or a brand name that people recognize that will shorten your path to revenue. When you open the Subway, you’re going to have… Maybe that’s a bad example. Maybe Jared ruined Subway.
Ray Levi: Oh, my God.
Matt DeCoursey: Sorry, I’m from Indianapolis, and that’s where he’s from, but God… Anyway, that’s a whole other thing, but with lack of structure, one of the things we made notes about is also, you can accidentally put everything but your people first, and if you don’t have great people, or you don’t value what they do, or you put them in a position where they don’t give a shit, guess what?
Ray Levi: Yeah.
Matt DeCoursey: Kaboom!
Ray Levi: It’s really all about the right person-
Matt DeCoursey: It’s done.
Ray Levi: On the bus in the right seat.
Matt DeCoursey: Yeah, yeah, I mean-
Ray Levi: That’s really, that’s what it’s about.
Matt DeCoursey: Or a whole bunch of them-
Ray Levi: Right.
Matt DeCoursey: And having them not be… You talk about the bus. Now, look, you’ve got to figure out structure, but try. Try, because no one really wants to work, and in that bus that has all the… I picture the kids throwing things, and no one’s seated, and at the same time, though, no one wants to be on the bus where no one can talk, and you have to look straight forward. You’ve got to find a way to create structure, but you know what we did, what we did and what we still do, at Full Scale is we talk to the employees. What could we do better to make your life easier?
We get some weird answers sometimes, but for the most part, you know, Ray, it was like the little things. I’ll give you an example. We cater meals. I believe that you ate one.
Ray Levi: I eat one every day.
Matt DeCoursey: Did you eat the dried fish?
Ray Levi: I ate the dried squid.
Matt DeCoursey: Weird. I didn’t even know we had that on the menu, but that’s why I don’t eat that. You know why we cater meals is because we got the feedback that, because of where our office was, that it was a 10-minute walk to restaurants.
Ray Levi: Right.
Matt DeCoursey: We said, you know what? We’re just going to cater meals. It was a huge hit! They love it.
Ray Levi: Yeah, we do that here too, I mean, at Stackify, because if you think about what… In our –
Matt DeCoursey: Well, it pays for itself, because people go back to work.
Ray Levi: It pays for itself.
Matt DeCoursey: They go back to work quicker.
Ray Levi: It’s a 20-minute break usually, and because the food’s here, you don’t have the drive time and everything else, so it’s-
Matt DeCoursey: I think it’s a win-win, though-
Ray Levi: It is.
Matt DeCoursey: For both employer and employee, but that… In this particular example, at our office in Cebu, it was directly related to that kind of feedback, and those are the kind of things that we would hear about, and sometimes it’s little things, too, that… All right, so I’ll give you an example. For our employees that were driving to work-
Ray Levi: I was going to ask you, how are you going to handle parking in the new space?
Matt DeCoursey: Well-
Ray Levi: You get, what, 10 spaces or something?
Matt DeCoursey: Yeah, but they will invariably have some kind of metered parking. With that, right now we give everybody a transportation allowance.
Ray Levi: Oh.
Matt DeCoursey: Whether they take public transportation and get dropped off, or do whatever, drive their own, it covers, at a minimum, the parking costs. Certain things like that are… I mean, that’s a minimal expense. It’s 25 bucks a month per employee, which, when you have 400 employees, is $10,000, but it’s a lot better than having people disgruntled all day because of a dollar for parking.
Ray Levi: Right.
Matt DeCoursey: I know it sounds weird, but people get disgruntled about stuff like that. I think overall, and when we look at Full Scale, we always refer to ourselves as people-centric and people first. Don’t treat your employees like cattle. I mean, we’ve been really particular. Do you know how much extra money we would have in our account if we didn’t bring the high workplace standard that we have?
Ray Levi: Part of that is in the equipment that you provide. I mean, I’ve heard stories of other places where-
Matt DeCoursey: We had big equipment complaints and sharing jobs-
Ray Levi: They have terrible machines.
Matt DeCoursey: And just really crappy stuff, and just lame things, like blacklisting your ability to go on the Internet, like, my God, we’re not in prison. Anyway, we talked about doing a lot of different things, but at the same time, you also have to have some amount of focus on your product, your service, or the direction that you’re headed in, right?
Ray Levi: If you don’t, your site’s going to look like Amazon’s site. Amazon does everything, but you get onto this page, and there’s so many links, you’re like, what in the heck am I doing here, right? You’ve got to focus and build a thing. The hedgehog principle’s what they call it a lot of times, you know? Pack it all in your cheeks, and that’s what you’ve got. You’re always going to be focusing on a very fine line of what you want to build, and who you want to reach, and what problems you’re trying to solve.
Matt DeCoursey: You’ve got to be good at one thing before you try to be good at 12.
Ray Levi: Right, you can’t diversify until you’ve got one thing down.
Matt DeCoursey: Matt Watson, who will quote Craig from… Your co-worker at Stackify will say, “Be careful what you put in your backpack, because once it’s in there, you’ve got to carry it around.”
Ray Levi: says that a lot.
Matt DeCoursey: If you pack too many things in the backpack, it gets really heavy. It slows you down, you know? That can really have a lot to do with your success or failure. In the regards to focus, sometimes you focus on something, and it fails. That results in what is commonly referred to as a pivot. If your business is new, regardless of what you do, you’re pretty much guaranteed to embrace a lot of change, right?
Ray Levi: Right. You’re going to fail.
Matt DeCoursey: Right, as a software developer, isn’t that the predominant thing?
Ray Levi: Fail fast.
Matt DeCoursey: Until you finally get it right.
Ray Levi: Fail fast and course correct. If you think about anything in life, that failure is not as bad as how you react to it. Think about playing golf. We talked about golf a little bit one time, that-
Matt DeCoursey: Yeah, I’m not good at it.
Ray Levi: You’re not good at golf.
Matt DeCoursey: Are you?
Ray Levi: No, but what happens to some golfers is they-
Matt DeCoursey: I fail fast at golf.
Ray Levi: You fail fast on it, right off the tee.
Matt DeCoursey: All the time, yes, yeah, I don’t waste any time.
Ray Levi: The way you handle a fail, the way you handle that bad hole, could either ruin you for the rest of the round, or you could just brush it off and keep going, course correct and go on. That’s super important is to fail fast, course correct, and keep plugging along.
Matt DeCoursey: I was talking to someone about golf over the weekend, largely because he was good at it, and I wasn’t. One thing I did tell him. I said, “You know, even though I’ve never been good at golf, I did trim 10 strokes off of my score when I quit getting upset about golf.”
Ray Levi: Right.
Matt DeCoursey: The worst thing I could do would be get upset. Now-
Ray Levi: I thought you were going to say you trimmed 10 strokes by only playing 17 holes.
Matt DeCoursey: No, I used… Well, what I did is I developed my foot wedge, and that, and just blatantly cheating and lying about my score both trims quite a bit off-
Ray Levi: Yes, well sure, absolutely.
Matt DeCoursey: And never putting anything on my card above an eight. It’s the snowman rule.
Ray Levi: It’s the double par is typically what it… 8 or 10 tops.
Matt DeCoursey: If I had to really keep score, it’d be ugly. Tiger Woods, with his last win over the weekend, would’ve beat me by about 50.
Ray Levi: That’s an amazing thing for him to come back, but-
Matt DeCoursey: Yeah, you know he had to get his rotation set up again. He’s back in business. Who would’ve thought painkillers aren’t great for athletic performance? We’re talking about constant change and the need for it. You know, one thing that I’ve noticed over the years, and even before I opened my own business… I worked in the music industry, as you’re aware. I did so during a very turbulent time. The last year I worked in the music industry was 2008, and I was watching all of… not all of, but a healthy amount of the accounts that I called on, and the places go out of business. It was almost certain that the people that were resistant to change and adaptation were leading that charge. It’s easy, after you’ve been successful for a while, or because you believe something should be the way that it is, to refuse to change.
Ray Levi: What do you attribute that to, that change in the market? Is it-
Matt DeCoursey: Change is tough.
Ray Levi: Is it Internet sales of the musical equipment, like Musician’s Friend is huge, right?
Matt DeCoursey: Well, that was part of it. That was part of it, but I’ll give you an example. I was in Washington D.C., and I opened a chain of piano stores, Yamaha piano stores, for a couple out there. I distinctly remember arguing with the owner about why it was important that we had a website.
Ray Levi: Oh wow.
Matt DeCoursey: He just didn’t believe it. He just was like, “That’s not where people are looking.”
I was like, “Whether they are now or not, they will be.”
Ray Levi: Absolutely.
Matt DeCoursey: “This isn’t going away.”
It was like, “Well, we need to really make sure we get in these Yellow Pages.”
I was like, “Who gives a fuck about that? I mean, let’s be realistic,” but the thing is, we get used to certain things working the way that we want them to, and then, so this is the thing that always would drive me nuts, and this is away from that business that I just described, which, by the way, did really well. It was just a difference of understanding about where the modern marketplace and where you were found, really.
Ray Levi: Well, I think from this perspective, it makes a lot of sense, because you’ve got to let your hands on the piano. The feel, the sound… I mean, they are very different instruments.
Matt DeCoursey: Right, but you can’t ship them.
Ray Levi: Well, even if you could-
Matt DeCoursey: You wouldn’t want to.
Ray Levi: You wouldn’t want… so that-
Matt DeCoursey: I was just trying to have people find out where we were.
Ray Levi: Well, right, and-
Matt DeCoursey: I mean, D.C. is like a labyrinth.
Ray Levi: Right, and price comparisons are going to have to get in that market, but the brick and mortar stores are important for a lot of things. I mean, I wouldn’t buy a guitar without playing it first. I wouldn’t buy a piano-
Matt DeCoursey: They’re important for me figuring out what I want to buy on Amazon.
Ray Levi: Exactly. I mean, seriously, when we can’t hear anymore the headphones we’re about to purchase, when we can’t go to a Best Buy and actually hear them, how you going to know which model is the best for you?
Matt DeCoursey: I’ll actually buy it while I’m there. I mean, if I’m going to a store to buy something, I don’t really give a shit if it’s a few dollars more.
Ray Levi: Well, and it’s… Yeah, it’s that-
Matt DeCoursey: The thing that would drive me nuts, that I think is something you need to avoid is, well, things aren’t just… I just wish things were the way they used to be. If you have a start… We didn’t really define what a startup was at the beginning of this. It could be anything from something you literally just started for something that… I mean, shit, there’s startups that are six years old. You’re still a startup if you haven’t found any traction or made any moves forward. You-
Ray Levi: I’d like to look up what an actual Webster definition of startup is, because like you said, we’re a startup. We’re six years old.
Matt DeCoursey: Let’s do it.
Ray Levi: Let’s do it? We don’t-
Matt DeCoursey: I don’t normally google things in the middle of the podcast, but I think you have a great-
Ray Levi: At some point, you’ve matured enough where you shouldn’t be considered a startup anymore. I do not know where that is.
Matt DeCoursey: Startup: The action or-
Ray Levi: To start is to set something in motion.
Matt DeCoursey: Process of setting something in motion.
Ray Levi: Well, the first link there, what is a startup by Forbes?
Matt DeCoursey: Then a newly established business.
Ray Levi: Right.
Matt DeCoursey: I think that’s an actual article, which… Well, here. Let’s let Wikipedia-
Ray Levi: Oh, Wikipedia, of course.
Matt DeCoursey: They have my face on the Wikipedia page for startups, unbelievable! Wow! I didn’t-
Ray Levi: I think that’s for douche bag.
Matt DeCoursey: No, no, no.
Ray Levi: Oh, no, no.
Matt DeCoursey: No, that was someone else that posed. A startup or a start-up, which I’ve never spelled start-up, is an entrepreneurial venture, which is in a newly emerged business venture that aims to meet a marketplace need or problem by developing a viable business model around products, services, process, or platforms. A startup is a new business venture designed to effectively develop and validate a scalable business model. My God.
Ray Levi: That’s a lot of words.
Matt DeCoursey: Most people do not identify that definition. All right, so as you’re aware, I’ve got young children. My daughter knows more about being a startup founder than most adults. If you ask her, “What does every business need?” she will tell you, “Customers.”
Say, “What do customers do?”
She will say, “Buy things.”
“What do customers buy things with?”
She will scream, “Money!”
That is a lesson in your startup right there.
Ray Levi: Does every woman in your life scream money, though? I mean-
Matt DeCoursey: No, no, I actually have a pretty-
Ray Levi: More money!
Matt DeCoursey: I have a pretty… I’m the spending problem within my life.
Ray Levi: Really? That’s not surprising.
Matt DeCoursey: Well, no, it’s not a problem.
Ray Levi: It’s not a problem.
Matt DeCoursey: It’s not a problem.
Ray Levi: Until you admit to it, it’s not a problem.
Matt DeCoursey: We talked earlier about the need for hard work, and Master Watson, when he was giving a presentation, he actually quoted me for number one, because the tagline that I always talk about, and I consider it to be my slogan, is that success demands payment in advance. Here’s the thing. It’s not sexy. It’s not glamorous. If you get back to… actually in Million Dollar Bedroom, Watson’s talking about… There’s a part when he talks about how the people that you know… that there’s people all around you that are winning at things that aren’t glamorous or sexy. They’re niche. If you go back to episode 12 of Startup Hustle, with Lirel Holt, he will talk about a cowardly approach, meaning… He’ll say, “I just want to do something no one else is doing and go get really good at it, where they’ll leave me alone.”
Ray Levi: Well, that goes back to your wish to not retire, but just to have somebody else do all the work, the Mickey Mouse-
Matt DeCoursey: No! That’s the wrong, that is the wrong way to put that.
Ray Levi: That’s pretty much what it sounds like what you said.
Matt DeCoursey: That is not what it sounds like. I-
Ray Levi: It was the feeling beneath what you were saying.
Matt DeCoursey: No, I want to focus my energy on selling and promoting the brand, not on-
Ray Levi: That’s much different than what it sounded like.
Matt DeCoursey: No, because well, Mickey Mouse is the Magical Kingdom’s ambassador.
Ray Levi: Mickey Mouse doesn’t do anything.
Matt DeCoursey: That’s bullshit.
Ray Levi: He does nothing.
Matt DeCoursey: He’s the-
Ray Levi: He’s just a figurehead.
Matt DeCoursey: That… Well-
Ray Levi: He’s the queen of Disney World.
Matt DeCoursey: No, that’s Minnie, and just so we’re clear on that, but no, Mickey Mouse does… You know why I can disagree? My two-year-old son is obsessed with Mickey Mouse. It’s where it starts. It’s what grabs your attention. It’s the gateway drug to everything else that Disney will then inundate them with, but no, in regards to what you’re talking about, it’s, that is… The cowardly approach is taking an approach and having an idea that, okay, you’re not cowardly if you’re trying to put Amazon and Google out of business. That’s-
Ray Levi: You’re just not smart.
Matt DeCoursey: That’s brave. That’s overly brave. You spend enough time, and you talk to Watson about it, and I think the example he used in my book was, hey, here’s this guy, and he’s gotten uber rich importing ostrich feathers from wherever.
Ray Levi: Yeah, I mean-
Matt DeCoursey: It’s always weird, little niche things, so as you’re validating your product, and you’re moving your stuff forward, you should be looking for those niches. We had to do that with GigaBook, because there was-
Ray Levi: Right, well, if you think about Matt’s history, VinSolutions was VinStickers to start. He was hand… They were printing off the actual stickers for used cars. New cars come with the nice sticker at the top of the… Used cars did not, so he would run around, and they’d deliver these stickers by the handful to the dealerships. That’s how they started.
I know also… I worked for a medical transcription startup here in town, and the owner, when they started, he was running around delivering the documents, printed up documents, after they had received the recordings from the doctor, and they transcribed them, hand deliver them. He was the owner, but he was also the delivery boy. That’s the hard work. That’s wearing the hat that needs to be worn at the time, and making sure the job gets done, no matter what.
Matt DeCoursey: I mean, that and also in regards to the niche stuff, so I use GigaBook as an example. There were a lot of things that were very similar to it, and some of them served specific industries or leaned towards different types of service professionals, but as we listened to our users, we realized we had a huge opportunity with people that wanted a higher level of customization, so we decided to try to do everything we could to make it as customizable on every level of the stack as we could. That’s a lot of responsibility, because there’s a lot of things that go with it. It also became our biggest strength and our biggest weakness.
Ray Levi: Yeah, so the biggest weakness would’ve been writing one-off code for individual clients. That’s when you really get burned, right?
Matt DeCoursey: Yeah, we didn’t do that, but-
Ray Levi: Because-
Matt DeCoursey: It became harder to set up.
Ray Levi: You’ve got to… Well, it does, and-
Matt DeCoursey: That was the issue.
Ray Levi: You also have to be able to say no sometimes, guys. “Sorry, I know this is what you want. Here’s how we encompass that in a different way.” You have to be flexible.
Matt DeCoursey: Yeah, we were talking a little bit about that. I think we can add that to our list, is if you’re in an early stage business, you have to be a little bit careful and cautious about what you chase.
Ray Levi: Absolutely.
Matt DeCoursey: Because you can spend a… We did that at GigaBook, too. We got knocked way off course. Fuck it. I think I’m out of my NDA, but by Trunk Club, who is an online clothier. I think, in the end, they really were using this for an advance science experiment, because they wanted to see what would happen if they put a booking option in their onboarding process. We increased their engagement. It was probably way too early for us anyway, but we dedicated a lot of time and effort to that, and then basically struck out on it, and next thing you know, we were three months down the road, and we-
Ray Levi: It’s not profitable, right?
Matt DeCoursey: Well, it could’ve been, but it just… Finally, at one point, I had to say, “Hey, I need to know if you’re going to do this or not, or I cannot spend any more time, energy, or effort on it.”
Ray Levi: It’s like the TWA model back in the day.
Matt DeCoursey: My mom worked for TWA for 20 years.
Ray Levi: I worked there for a while, as well.
Matt DeCoursey: You did?
Ray Levi: Five years. I was working on the reservation, coding up the reservation system, but we’re going to lose money on every ticket, but make it up in volume.
Matt DeCoursey: Yeah, that’s why. I’m reading a book right now called The Art of Thinking Clearly. There’s a… It’s like a 103-page thing. It’s about the weird things that we convince ourselves are not the case in our thought process, and there’s one in there that says, “If 50 million people all say something that’s wrong, it’s still wrong,” because we have a tendency to believe that just because a lot of people say it, that it could be true, but if they’re all wrong, they’re all just still wrong.
Ray Levi: Well, you know, the old statement, “Eat shit. A billion flies can’t be wrong.”
Matt DeCoursey: I disagree with your point of view, Ray. That’s actually the next thing on the list. We often have differing opinions about the way things should go, the direction that things should take, the roles that we should play, the hours we should work, the titles we should have. I will stop going on, because I could probably just list things for an hour, so you’ve got to pick and choose your battles. You’ve got to decide what you’re going to be passionate about and what you’re not.
Ray Levi: What’s the ditch you’re willing to die in, right?
Matt DeCoursey: I haven’t heard that before, but it’s true, yeah.
Ray Levi: What ditch are you willing to die in? Is this worth going to the mats?
Matt DeCoursey: Yeah, and I’ve gone through that even some this year, with different people I’ve participated in things with. I’ve definitely seen a lot of people just some things I… One thing I enjoy about being business partners with Matt Watson is just, I mean, sometimes he’s like, “Cool.” I mean, “If you feel strongly about it, cool. Do it.” It’s not like we’re going to argue about it and different things. Then sometimes there’s things that we’re a little more vehement about, and we listen to each other and aren’t afraid to say, “You know what? You’re right.”
It’s not about being right. It’s not about… because here’s the thing. When two people really argue, especially business partners or people that work together, someone loses in a lot of ways. I’m saying if you’re really at war, you’re like, “Yeah, but I won the argument.” Okay, but what did you sacrifice along the way?
Ray Levi: Exactly.
Matt DeCoursey: Have you completely pissed off someone you work with? There’s a whole lot of things, when it comes to differing points of view. I think, also, some people have a tendency to, oh, you can belittle people.
Ray Levi: Well, you can… This goes back to your earlier episode about picking the right business partner. I mean, it really does. If you’re not likeminded, you’re going to have a lot of these conflicts, but if you do, if you agree primarily on your direction, it’s going to be a little easier. Picking the right partner is the first thing there, but again, is it worth the risk? Am I damaging this relationship, because we’re arguing about the color of our shirts that we’re going to wear to the convention?
Matt DeCoursey: Which has absolutely no bearing on the success, unless they’re colored like some of the shirts that I’ve seen you have, and then they are, without a doubt…
Ray Levi: Look, these are shirts I’ve had since high school, okay?
Matt DeCoursey: It’s time.
Ray Levi: Should I go to the store?
Matt DeCoursey: It’s time, yeah.
Ray Levi: Kohl’s? Nope. Old Navy? Yes.
Matt DeCoursey: Is that still a thing?
Ray Levi: I don’t know.
Matt DeCoursey: You’d probably go to Kmart, and are those around anymore?
Ray Levi: I don’t know. I think Sears and Kmart are gone. I mean, I don’t know.
Matt DeCoursey: Well, you talk about the inability to change.
Ray Levi: You can’t teach an old dog new tricks.
Matt DeCoursey: Is that really true?
Ray Levi: No, actually it’s not true at all.
Matt DeCoursey: I was going to say… I mean, I feel like anybody can learn, and I’d like to believe that’s the case, as well, because I’m getting older.
Ray Levi: It just depends on the individual.
Matt DeCoursey: Actually, on the complete flip side of that, I think I’m better at learning new tricks now than I was 10-12 years ago.
Ray Levi: Probably learning different tricks, too, right?
Matt DeCoursey: I’m not stubborn. I have the ability to be more open-minded, and I think that my willingness to want to learn new things is better.
Ray Levi: Well, and over your lifetime, you’ve experienced that being closed minded is not a good way to be, and it doesn’t help.
Matt DeCoursey: I’ve trained myself to really only invest both financially and personally/professionally into things I’m passionate about, and that I understand. I’ve had an opportunity to participate in some different businesses that ended up doing okay, but I just didn’t get them, so without understanding them, how am I going to bring a lot of value to them.
Ray Levi: With the clothing mention, though, I have to ask you, what does your shirt say?
Matt DeCoursey: It says, “Supreme.”
Ray Levi: It’s like a twist off-
Matt DeCoursey: Yeah, it actually is a bottle cap that says, “Supreme,” and it says, “Piss off.”
Ray Levi: Piss off, I thought so. I don’t get it.
Matt DeCoursey: It’s funny, because Watson always gives me a hard time, because I buy stuff by Supreme, who is, in my opinion, one of the greatest marketing companies in the world. They will pretty much put their name on anything, and the dumbest things you could ever imagine. It’s what I call hype. It’s funny, because I actually support that, because if you can get away with it, and you’re good at it, then you can have my money, because I think so many people are not good at it.
I think the last thing, and what we can close out on is perfectly related to what you just mentioned. Out of all the challenges that startups have the most, it’s figuring out how to sell something, figuring out how to market something. I have three words that… I consider myself to be an excellent salesperson and marketer. My approach is different than a lot of people. Well, I’ve received five leads in the last week for Full Scale from this podcast.
Ray Levi: Oh, nice.
Matt DeCoursey: That being said, we don’t… You’ve never heard an ad in here, and I don’t spend all the… It’s not super shilly, but there’s different approaches to doing things. Nothing will solve your limited resource problem more than selling. Nothing will let you tackle your diversity problem, because you can hire more people if you have revenue. Nothing will validate your product more than sales. Nothing will sharpen your focus more than selling something over and over again. Nothing will fix your need for a lack of structure than sales running down the pipeline. You talk about things like collaboration and change, or things not being sexy. You know what is sexy?
Ray Levi: Sales.
Matt DeCoursey: Sales.
Ray Levi: Sales is sexy, no question about it.
Matt DeCoursey: Sales cures ails, people, and nothing happens until you sell something. Don’t make the mistake. I would rather have a crap product with an amazing marketing plan behind it. Look at all those things, right? Now, well, you’re old enough to tell us. What was better, the Betamax or the VHS?
Ray Levi: I knew you were going to say that. That was exactly-
Matt DeCoursey: You knew where I was going?
Ray Levi: I did exactly. The Betamax was superior in quality.
Matt DeCoursey: But it was marketed poorly.
Ray Levi: It was marketed poorly.
Matt DeCoursey: And so no one bought it.
Ray Levi: It was a closed… It was more of a closed standard. It wasn’t opened up to all manufacturers.
Matt DeCoursey: Where is that now?
Ray Levi: You look at Wang Computer. Wang had it by the tail.
Matt DeCoursey: Wang, man.
Ray Levi: They had the tiger by the tail, and they threw it away.
Matt DeCoursey: Well, we-
Ray Levi: Guess what? Apple was going down that same route, but they recovered from that.
Matt DeCoursey: Well, we talk about marketing. With the business documentaries that Matt and I are going to be continuing to review, one of them was about Compaq Computers, who really, in many ways, invented the first portable or laptop.
Ray Levi: Luggable is what I call that thing.
Matt DeCoursey: It was 27 pounds, and they’re like, “But it has a handle.” I was like, wow.
Ray Levi: It was a tower computer with a tiny screen and a handle is what it was.
Matt DeCoursey: They marketed it well, and everyone else didn’t. Everyone else had these stuffy ads, and they had that snarky English guy that made really funny or bad jokes.
Ray Levi: Is that the IBM versus the Apple type of-
Matt DeCoursey: Yes, yes, that was something.
Ray Levi: That was a hilarious bunch of commercials. I don’t know how many they sold.
Matt DeCoursey: I can’t remember. It’s in the documentary. It’s called Silicon Cowboys. Make sure to watch it before we do the review of that. We’re going to make those educational narratives, and we’re going to… I think we had a lot of cool stuff on there. We had one about Henry Ford. There was another one that a Japanese sushi chef, who has received a three-star Michelin rating with a 10-seat restaurant in a Tokyo subway.
Ray Levi: That’s amazing. That’s amazing.
Matt DeCoursey: That’s more inspirational, one about the story for Compaq, another one about venture capital and the story about how that came about. Then we also heard… I believe we are having Wolf of Wall Street versus classic Wall Street.
Ray Levi: Right, that’s the one I told you about.
Matt DeCoursey: I mean, the one that came out right around the time when you became a programmer. Who was the girl that-
Ray Levi: That crushes me.
Matt DeCoursey: Was that Daryl Hannah?
Ray Levi: I don’t know. I-
Matt DeCoursey: She had awesome hair.
Ray Levi: That’s great.
Matt DeCoursey: I mean, that’s the thing that’s important. Well anyway, Ray, thanks for coming in and sitting in for my esteemed colleague, Matt Watson, who is doing anything other than podcasting with me today.
Ray Levi: He is Mickey.
Matt DeCoursey: Maybe.
Ray Levi: He is Mickey today.
Matt DeCoursey: He will be back. He will be back in the studio within the blink of an eye. What won’t occur within the blink of an eye is the success of your business, so make sure you work hard. Listen to some of the things that we said today, but really, going back, success demands payment in advance. Pick a path. Push it down. We didn’t visit on failing fast too much, but try hard. Figure out what doesn’t work on your way to figuring out what does work. When you figure out what does work, start rolling with it. Is that fair enough?
Ray Levi: Absolutely.
Matt DeCoursey: Sales cures ails.
Ray Levi: Sales really does cure ails.
Matt DeCoursey: Businesses need customers. We’ll see you next time.
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