Ep. #525 - Is Your Startup Concept Any Good?
In this Startup Hustle episode, Matt DeCoursey and Matt Watson answer the question, “is your startup concept any good?” In Part 4 of the “How to Start a Tech Company” podcast series, we’re diving into the importance of having a well-thought-out startup concept.
Covered In This Episode
Yes. Of course, having a good startup concept is a requirement in starting a startup. However, launching a startup is more than that. Founders must also navigate actually execute it to have a product or service.
In Part 4 of the “How to Start a Tech Company” Startup Hustle podcast series, the Matts talk about what makes a startup concept great. They also discuss market fit, addressable market, and more.
Join their conversation to know if your startup concept is good in this Startup Hustle episode.
Missed the previous episode? Click here to listen to the third episode, or just dive right into the entire “How to Start a Tech Company” series.
- Brilliant ideas are everywhere (0:08)
- What is product-market fit? (7:18)
- Calendly and GigaBook.com (11:29)
- Focus on your addressable market (17:16)
- Don’t be a “cowardly” entrepreneur. (21:12)
- What is the future of disruption? (26:59)
- The business equivalent of a poorly executed play (30:51)
- You don’t know what you don’t know until you know (37:23)
- It doesn’t matter what the plan is if it’s not concrete (43:33)
- How do you know if your startup concept is any good? (47:54)
- Wrapping Up (53:36)
So, that’s another dangerous thing about having a startup is when you put yourself in other people’s mercy sometimes, and you don’t control your own destiny, it can be very difficult Now partnerships can also be very, very good. But sometimes they can be really, really bad. And they can totally kill your ability to execute.Matt Watson
I think everybody’s got an idea. I think the key is validating the deal, that idea, and executing it. And the best way to do that is to talk to mentors, talk to other people who potentially use the product, and people in the industry to get their feedback.Matt Watson
It’s a good idea, but then, it’s an illusion. If you don’t understand it and don’t understand the industry, or the problem you’re trying to solve, you are grossly under it. Well, you’re asking to step into a bad product market fit.Matt DeCoursey
When I say building something that’s bigger than you, meaning something that has widespread application, we talked about the total addressable market and stuff like that. And I mean, overall, your idea is good if you’re passionate about it if it helps other people, it helps businesses sell more, spend less, or create some kind of peace of mind for the general user.Matt DeCoursey
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt DeCoursey 0:00
And we’re back. Back for another episode of Startup Hustle, Matt DeCoursey here with Matt Watson. Hi, Matt.
Matt Watson 0:06
What’s going on, man?
Matt DeCoursey 0:08
Dude, I got so many ideas like they’re they’re I got books pages, and they are all 100%. Brilliant.
Matt Watson 0:16
They’re all unicorn ideas.
Matt DeCoursey 0:19
All of them every single one.
Matt Watson 0:22
Does that mean we’re going to be billionaires?
Matt DeCoursey 0:24
Yeah. Yep, jets, Lambos, the moon, all of it. Now, before I tell you about all these brilliant ideas, and you can tell me if any of them are any good. Do want to let you know that today’s episode of Startup Hustle is brought to you by full scale.io helping your brilliant ideas become a reality and help you build software teams, Full Scale dot I O. Now, welcome. It’s what this is this part four.
Matt Watson 0:51
Yeah, absolutely. This is fun. 48 more to go. Certainly that.
Matt DeCoursey 0:55
So part part four of our series of how to start a tech company. This is on the Startup Hustle podcast every Wednesday, and 2021. And because we started late, and maybe a small portion of 2022. So speaking of good ideas, starting in our 52, part series on the first week of the year would have been better. So Matt, you know, as you’re aware, just from Startup Hustle and a lot of other things as well as you I talk to a lot of people about a lot of ideas, some of which are in motion. So I’m over which are concepts. But one thing I’ve realized is all of them have an amazing idea that’s guaranteed to make a gazillion dollars, do you find that as well?
Matt Watson 1:41
At least they think they do. I mean, my lawn guy asked me, he had some idea for an app until I met him last night, the other day in my backyard. And he’s like, Yeah, we we use these things to detect the sprinkler lines. And we’re you know, and we’re thinking that you could build a mobile app for that. I’m like, Okay, but how does a mobile phone detect a wire in the ground? I’m sorry, I think I ruined his idea. But he thought I had a million dollar idea, I think.
Matt DeCoursey 2:11
So now what I sometimes do when it comes to giving people advice, and I often break hearts as well, I think the best thing we can do for some of them is explain the reality of a lot of it. Because if I’m trying, if you’re asking for advice, and you want input, you need to hear the truth, you need to know what you’re getting yourself into. And if I can save you from falling down the money pit or at least helping you realize that it’s there, then I think I’ve done you a service. So sometimes the best thing to do is nothing at all?
Matt Watson 2:43
Well, this happens a lot when you have people that have great ideas. But if that idea requires, you know, building some sort of product or technology, and they don’t know how to actually do that, then it’s hard for them to fully understand the execution and if it’s possible, or how hard it is to do.
Matt DeCoursey 3:00
Yeah, and I think the key is execution. You know, as mentioned, I think I think ideas are cheap. I mean, they’re, they’re everywhere. I mean, I’ve got books and books of notes of like things like, I mean, I’ve got so many things that I probably could have, or maybe in some cases should have done but didn’t. Because in the end, all you can do is all you can do. And much like the backpack that you talked about in previous episodes, the more things I create, get us into or choose to do, but I gotta carry them around with me. So, you know, at this point, if it doesn’t have a high upside, or I’m not super passionate about it, I’m not really interested in doing that. But for many people that want to start a startup, it starts with one simple idea. So before we get into some of the some of the things that make a startup concept, any good do you have an overview? Would you have a preface or anything that you would like to say before we address the court?
Matt Watson 3:57
Well, I’m hoping that one of your ideas will get me into the three comma club, I really want to be part of the three comma club and trace the trace Commons. Yeah, and I think this is a great a great topic today. So I’m excited to talk about startup ideas, because everybody’s got one.
Matt DeCoursey 4:15
So when it comes to an idea, like and I want to actually before we get into the tree list, I want to I want to readdress something that we’ve said a lot on the show, and that any good idea solves a problem. I mean, is that fair to say?
Matt Watson 4:33
It should solve a problem and it’s, it potentially needs to solve a unique problem for a specific set of people. It doesn’t necessarily need to solve a problem for everybody.
Matt DeCoursey 4:44
True, true. And I think that the the more specific you are with that problem, the easier that it is to get it to market and potentially monetize it. Now there’s a key ingredient there. And I think that many people overlook this because your idea for whatever it is that you do, it might be a brilliant idea that that changes the world. But if it doesn’t generate money, or create money, you are going to have a very hard time not only getting people to support it, you’re going to have a difficult time getting it to market. And you’re going to have a very difficult time keeping it open.
Matt Watson 5:20
Yeah, I’ve known a couple couple of people who’ve had this business where they thought it was great to take pictures and all this stuff. So then after you die, your your family could see it sounds like a great idea. But then there’s just nobody wants to buy it. There’s no need
Matt DeCoursey 5:36
to get someone to pay for it. Right? Yeah. There’s a lot of that it’s
Matt Watson 5:39
like these ideas make sense. But who’s gonna pay for it?
Matt DeCoursey 5:43
Yeah. So we’ve talked in the past about the difference between a business to business solution and a business to consumer solution. I think another thing to in trying to understand if your startup concept is any good, is and like I said, before we get into the list of some of the good and bad stuff is, I think that an understanding that business to business solutions are executed well can be more lucrative, they’re easier to get investment around. And they’re kind of easier to build revenue around, because businesses are going to spend money in larger amounts, and usually, in many cases, in a free and easier way than a consumer.
Matt Watson 6:24
You know, I was reviewing our QuickBooks yesterday, actually. And there’s like 20 things we pay for on our credit cards that are like zero to $200 a month and about half of them and I’m not even sure what are.
Matt DeCoursey 6:36
Right. Right. And that if it was your personal, you’d look at it and scrutinize it a little more. Yeah. People that are making buying decisions and spending a company’s money? Well, it’s, it’s, it’s a little easier for them, because it’s not theirs. And then another thing too, is you will you mentioned, you’re saying that could be like $200. Now Giga buck, which is kind of a mix. I mean, it is a business to business solution, but most of the people using it are? Well, I mean, obviously we have we have some enterprise users, but the more common user is the solopreneur, which is worth $15 a month to us, and you have to stack up a lot of $15 bills.
Matt Watson 7:18
Takes a lot of them. Yeah, so it does.
Matt DeCoursey 7:20
Okay, let’s talk about some of the things that are amazing research team at Full Scale and the Startup Hustle squad put together. So you know, and they nailed this. So we’ve talked in the past, and we will again soon about why startups fail. The number one reason is usually the lack of a product market fit. So a good idea has to have some kind of product market fit. Now will you explain what that means?
Matt Watson 7:46
Yeah, and the biggest struggle you have is you think you have a great idea. And you find five people that agree with you, and they buy it. And that’s fine. But that doesn’t mean that you really have what we would call product market fit, to be able to go scale it to the broader market. And the market is a much bigger thing. And just because you think you have a great idea, and maybe you’ve validated it, even with a few people, it doesn’t mean that you’ve created a product that that fits into what the market is looking for, or existing, you know, segments of the market, in a lot of a lot of times, especially when you’re selling stuff to businesses, inventing a whole new market category can be very difficult, because nobody understands what it is they don’t know what they’re buying, you’re better off if you’re like, Oh, I’ve created a better version of something, or I compete with them. And I do this thing different or whatever. So people understand like, okay, that’s the market you fit in. But when you’re trying to sell something that does something totally different that nobody can relate to. That’s really difficult as well.
Matt DeCoursey 8:51
Yeah, and then putting yourself in a position where you have to educate anybody and everybody about why your solution matters. Well, that’s going to take a lot of time. It’s a lot of work. And it’s also a lot of kind of, well, people’s attention spans are very finite, especially in 2021. You know, so if you if you don’t part of having a product market fit, that matters is like, is it really clear, like when I go to is it so obvious to me, what your what your startup does. And I think that a lot of startups struggle with that. And some of them are on the other end of it is like they they’re trying to solve 10 problems, before they’re any good or brilliant at solving one.
Matt Watson 9:37
Well, and in fact, Fi is a good example of this. So we do application performance management, which is a huge industry. It’s an it’s a very defined market. But we decided to focus on software developers and the that’s kind of our niche and the features and functionality they want. But that’s been a little bit of a challenge for us because APM generally is seen as A little different thing. And so, you know, it was a little harder road for us actually. And we have to do a little more education to our customers because of it.
Matt DeCoursey 10:10
So I was outside of this series, I was talking recently to a guy named Eric Schwartzman, who is a subject matter expert. And when it comes to digital marketing, and he was talking about how it’s very important to typecast yourself, and meaning like, hey, look, this is what I do. This is what we do. This is how we do it, and really define those that lane and then stay in it. And, you know, I think that’s hard for some startups, because well, you know, as you’ll soon see, and Startup Hustle TV, we have Andrew Morgans, our brother in arms, hosting these shows, saying the pivots my favorite move. But if you’re already like, hey, we’ll start it. And maybe we pivot quickly. That’s not a very clear definition of what it is you’re trying to do.
Matt Watson 11:08
Well, and sometimes the best startup ideas are the simplest, you know, the people who have some idea to like change the whole world and conquer the whole world and do everything for everybody is way more difficult to do than trying to do something simpler. It doesn’t mean you can’t add more things later. But the simplest ideas a lot of times are the best.
Matt DeCoursey 11:29
Well, okay, so let’s talk about Calendly. All right, so Calendly and Giga book were, they came out around the same time and, and by the way, Calendly just raised money at a $3 billion valuation. So they got it right. But I remember in the beginning, because people were just starting to do freemium, and a whole lot of other things. And that wasn’t necessarily the norm. And we’re like, well, all they do is bridge a gap between a booking link and Google Calendar. Well, in retrospect, that would have been a brilliant solution for us to pursue. Instead of because we were busy trying to make sure like, oh, it can take payments, it can do all this crazy stuff. Well, they smoked this. They did, like I mean, the proofs in the pudding man $3 billion valuation and and you know, now, we, we ended up going into a different lane and serving a niche of people that wanted something highly customizable. But quite honestly, if we had done what they did a Yoga Book, well, a, it probably would have been a hell of a lot more straightforward. Because they’re like, words, we do want, this is what we do. And we’re going to be so brilliant at it. And you know exactly what it does. And yep, and with that, you have to begin to mute the commentary. And that was the problem we had is like, we would talk to people, like I wish this took payments, I wish to send a text message, I wish to send all this other stuff. And next thing, you know, you’re running around in circles, creating a ball of rubber bands, trying to build everything for everyone every time and it was a mistake.
Matt Watson 13:03
Yeah, that and that happens a lot, especially in your early days, because your early customers drag you different directions, right? And, you know, Calendly said, Look, no, this is what we do, we’re going to be the very best there is at this one thing, just this one thing, that’s it. And a lot of times those become the best of breed products for that one thing, but they’re they don’t do everything right. So people outgrow them. They use Calendly for a while. And then they figure out, it doesn’t work for some scenario, and then they move on to get the book. But,
Matt DeCoursey 13:31
but but the massive amount of people in reality needed this one simple slice. You know, now on top of that, though, and you’ve run into this, too, is you can also paint yourself in the corner, like, Yeah, I mean, I can only imagine how much work because most of those users are free. Yeah. And you know, some of that freemium stuff it was like so there’s an app that my wife has been using to learn how to speak French Duolingo. And it’s huge. It’s huge. It’s like well funded and everything I read an article about it, then 97% of their users are free. Like you have a free you have a free product as well. It’s Taxify and some of that I mean, you have you hey, look if it’s out there, it’s got your name on it. You got to it once like a kid, you got to take care of it. Yep. So so be careful with some of that. Because if you if you if you’re already resource-strapped going in, that can be tough. Okay. Now, what is what is Tam t a M,
Matt Watson 14:29
total addressable market. And this is something to always keep in mind of when you’re starting a company and its its total addressable market, but it’s also just thinking about how big your company that can grow to be, you know, especially if you’re looking to raise venture capital and stuff. investors don’t want to invest in companies unless they can grow to do millions of dollars in revenue and a lot of time 10s of millions of dollars in revenue. So if you’re, you know, as you’re thinking about your idea, and you think about how it’s going to grow and scale, if it doesn’t have the potential to do you Many millions of dollars a year in revenue, it’s a different kind of business than one that can.
Matt DeCoursey 15:06
And some of that is well, and when you’re addressing your total, while you’re looking at your total addressable market or your Tam, as they say, you know, you’re talking about addressing specific customer pain points, addressing common issues and a unique way or clear opportunity to disrupt. Now, if you’re pretty far down the funnel with your specificity and the niche that you’re in, one thing that can come up is like, Well, is there any other competition and if you run into multiple competitors, they can get real crowded and real nasty, to fight for some of that now, in the event that so it was, you know, Jack Welch, the former CEO, and guy at GE, at one point was being criticized because when he came in and took over ge, he does a ton of stuff. And he got really sold off or closed all the divisions that weren’t not at least number one or two in the industry, or whatever they did, because and it became like kind of a business school philosophy that if you’re not number one, or number two, and what you do, there’s a valid argument for the fact that you are maybe on your way out. And so you know, some of that now, look, it’s a crowded world out there. Now, there’s a ton of software that does a ton of things and a ton of stuff. But you got to be aware of what the total addressable market can also, you know, with that be a huge flaw, like, and it can be a problem. So like, we use Giga book as an example, at first, I was like, Oh, my God, anybody could use this. And then we sat down to try to promote it. And we’re like, Oh, my God, anybody could use this same words, different context, because a massive, total addressable market, well, then you gotta have like, a Coca Cola money or something like that, to, to be able to advertise it, because you can’t pinpoint. Yep. And be super specific, especially in the digital marketing world, like, who are we going to? I mean, you have to be hyper-specific. Now, you did that by saying we’re addressing software engineers, at stack advice, so at least you have a start there. But that’s still a huge swath of
Matt Watson 17:16
people. Yeah. And that was part of our challenge, too, is at stack fie. We said, Look, software developers, our customers, there’s millions of them in every, you know, every country in the world. Like you said, you can’t go target all of them, and which one of those actually want to buy my product? If I’m going to spend money on marketing? Or I’m gonna hire a salesperson? Who am I? Who am I calling? You know, I can’t call all of them. So who am I gonna call first, and that who you’re gonna call first is who you’ve got to focus on first as your addressable market, until you can handle more than that. And for us, we eventually figured out, okay, it’s companies have more than 200 employees and might be in this industry, they’re in these countries, you know, they have, you know, they do this type of business or whatever, you got to figure out what it is. And the problem everybody makes in their early days as a startup, as they look at that TAM kind of like you point out with Giga book or like, everybody needs a scheduling system. Our total addressable market is $10 a month times 7 billion people. That’s our total addressable market, right? That’s what people do. And then they put that in their pitch deck, and we’re like, we’re gonna get all of these customers in three years, and we’re gonna have hockey stick growth. No, don’t do that. But that’s what people do. But you got to be more realistic. You want to understand, especially to investors, like as we grow, we can grow into this big market, but it’s like, we got to start with something small. And then eventually we’ll add more products, or we’ll expand into it in the different niches, and will will continue to grow it. But those people that say, we’re going to do $70 billion a month, because everybody needs us. Forget it.
Matt DeCoursey 18:47
But now if I only capture 20% of market share in my first two years I’ll have
Matt Watson 18:53
true yeah, you’re right. Maybe it’s a good plan.
Matt DeCoursey 18:56
I see that on pitches and I’m like, Man, that’s a lot. So, by the way, do not underestimate how long it takes to generate $1 We talked about that right away and Startup Hustle TV which by the way, by the time this comes out, we’ll be like, there’ll be time for episode four. Oh wow. Monday, February 1, episode one and two they’re coming out and and in episode one Matt Watson performs feats of athleticism be on your like the $6 billion dollar man so you are in the trace Commerce
Matt Watson 19:32
Matt DeCoursey 19:34
I’m so old that we want to have the $6 Million man which now would just be like the equivalent of like buying a gumball and a gumball machine when it comes to certain things like he’s they deprecated that technology. So you know when there’s still on the the TAM subject you talked about addressing specific customer pain points. When it comes to a business to business solution it needs to help them sell more or And last, preferably both. Those are that’s an easy sale. Now it’s a lot trickier when it comes to, to like an actual just real-world consumer. You know, cuz Well, what what is what problem are you solving? And how specific as and is it something they’re worth they’re willing to pay for? Because there’s a world of free shit out there. That’s your real competition is all the free stuff?
Matt Watson 20:27
Well, yeah, consumers are really fickle, right? Like they, they will throw money away on things that they don’t even care about, like, they’ll they’ll spend $5 on a latte. But they won’t, you know, save some money and spend 25 cents for a cup of coffee at home. But they are going to spend $5 for an app in the App Store, forget it not going to spend $5 on an app, I’m going to find a free one. But the $5 dog for
Matt DeCoursey 20:52
God forbid I have to pay for something. So the net, you know, one of the things in here on your team, we were talking about addressing common issues in a unique way you had on this earlier in the series. You need to be careful that you’re just not trying. Okay, you were talking about reinventing tick tock, because you wanted one feature. Yes. And or and that’s a big mistake. Like it is a big mistake. Because well, first off, like in that particular example, like how many hundreds of millions of dollars in years behind and exposure and everything are you behind? Like you’re not are we mentioned in Episode 501 of our favorite episodes ever was with Lirael halt. And that was like episode 12 or something. And Darrell says you should you should look at being a coward and go somewhere and do something where you can you don’t want to fight the Giants. Like don’t be brave, go, the cowardly approach says Go suck, do something where you can go do it, and people will leave you alone to get really good at it. And you don’t have to fight Goliath, you know, so.
Matt Watson 21:57
And to some degree, if you’re after a total addressable market, that’s that big. Everybody will come after you. Right, because they, they see the big dollars too. And they’ll bring their weight and might behind them somewhere like Amazon will make their way into the space and crush you eventually. And to some degree, you’re better off finding a smaller little market. Nobody wants to mess with.
Matt DeCoursey 22:20
Yeah, and I’ve told this story when this guy sees me again in person, he’s probably going to punch me in the face. But I gave a speech years ago, and I had a dude waiting to give me a business plan and pitch me afterward. And you know, he was like, I’ve got an idea that’s going to take down Amazon and I literally looked at him. I was like, I don’t want to hear it. He’s like, What do you mean, I was like, because that’s just not going to happen, dude. I said, I actually was like, I made I made a comment. I was being polite. You know, I was like, unless you have pictures of Bezos, which by the way, years later, someone did. And that still didn’t take the thing down. So, you know, I mean, yeah, you gotta be careful with that. And it’s easy to get squashed underfoot? Cuz do those kinds of companies that I mean, they squash things every day without even knowing it. And they just really do. Yeah. Okay. So let’s talk for a second about disruption. You know, like, classic examples of disruption that people really okay, Uber. Rum, without a doubt disrupted the whole way that people would use
Matt Watson 23:23
a test. Airbnb is a good example.
Matt DeCoursey 23:27
Yes, yeah. Hotel on the largest hotelier in the world now. And so now when you think about disruption, like what do you think about?
Matt Watson 23:37
You know, you know, my first company VinSolutions was, in some ways disruptive, because our competitors had old server-based software, and it didn’t do internet marketing and email very well. And we come along and had a, you know, a less expensive product that was web-based and did really good job with internet marketing and email, it was very disruptive. And we we grew like wildfire because of it. And you, if you’re gonna build something disruptive, it’s got to be a lot better. It can’t be just a little better. You know, they say, it’s got to be like, 10 times better. You know, you can’t call somebody and be like, Yeah, I know how to use QuickBooks today. We’ve got this one extra feature, or I can save you like $5 a month. Like that’s not enough. Like, there’s gotta be, it’s gotta be disruptive. It’s got to be a big difference. And Uber was a big difference over the taxis because I could click a button and they would just come to me and it was cheaper. Like that was disruptive.
Matt DeCoursey 24:34
It was cheaper, it was faster and it was easier. So you know, business school teaches you better, faster, cheaper, and a good good school teaches you that you have to be like in a grade at two out of three of those to really have a chance, which really supports your comments. They can’t just be one like it can’t just be faster. because not enough people are going to like look to especially if you have to move people from If your future customer base is heavily reliant on getting people to switch from anything, because guess what? People are lazy?
Matt Watson 25:10
Yeah, they don’t
Matt DeCoursey 25:12
care is like you said, it’s like, is it more work? Well, okay, Matt, you mentioned earlier, you looked at QuickBooks and you’re like, what are some of these expenses that we’re going into? Now, if they’re $20 a month, and you don’t know what it is, like, for me, sometimes that gets back burnered Because I’m like, my real upside here is saving $20 a month and I move on to finding something I could save 200 a month on, or 2000 a month before I’m that far down the funnel. But that proves that there’s a stickiness to some of it. And you know, when I think about disruption, I think about like friction, and, you know, you want to start a fire, friction has to exist. And so you have to there has to be something that that, okay, so like when it comes to Uber and taxi cabs, like, dude, if you ever were if you ever had to get a cab pre Uber, you either had to wait for one to drive by, or you had to call the cab company. And there was a decent likelihood that that cab would actually pick someone else up before it actually found you. Yeah, like, or waiting 45 minutes or something like that. And it’s just it was a huge mass and then on top of it really, really expensive. So it was it was and a lot of that comes back to peace of mind. You didn’t have that peace of mind of wanting to call you know call the cab and like deal with it. It was aggravating, I think it’s some disruption does begin around peace of mind and also comes around and peace of mind is sometimes giving people their time back. And that’s why like, so like Instacart and some of these other things like if you can fit if you’re disrupting something, that especially doing something that people don’t like doing, like a lot of people don’t like going to the store and going shopping.
Matt Watson 26:56
Matt DeCoursey 26:58
Right, right. So there’s a there’s a disruptive nature there now that that isn’t so disruptive that it put the grocery store out of business, but it is still disruptive in the way of thinking or doing specific things. So and you know, this has been a buzzword for a lot of companies for a long time. And I think that the further and further we get down the start just the air quotes, startup timeline. Well, more people find ways to disrupt things and do things differently. Like what’s the what do you think the future of disruption is? Like? What’s it based around?
Matt Watson 27:33
I don’t think it changes much. I think these things just they ebb and flow, and things come in trend and out a trend, right? Like, they take office space, for example. We were everybody had their own office and everything was going to we work. And then we have COVID and then kind of what happens after that, right? And like some things just naturally have some ebb and flow. And sometimes they’re, they’re impacted by other factors. They can’t control that happened in the industry or in the market, or politics or whatever it is. That totally changed things. You know, a couple years ago, it was probably good to own a jail, you could lease to the federal government, but Biden put an end to that yesterday. Yep, that’s a bad place to be right now. Right? So some things just come come and go, and you think you can be disruptive in a space and all of a sudden it changes dramatically?
Matt DeCoursey 28:20
Yeah, and I think from like a technological standpoint, I think the future of disruption is going to be highly driven by like, the AI and machine learning type things, the women, where can a machine just outperform people, you know, are like I you know, and so much of that is like, and you look at like, and I’m not an astronomer, but the ability for, you know, like AI that I chart and identify planets, because there’s a are stars because there’s a billion of them, you know, and like, and then that, and that might not be a great example. But in that case, it would be very difficult to do it as a person and be very slow. It’d be very inefficient. So we’ll see. You know, like we’ll see, I think that a lot of that a lot of that technology as it becomes more accessible. Like there’s the, by the way, I think no code, I think no code is a big disruption for a lot of people. Because the ability to build a simple app, you look at like, like Zapier was kind of the the leader with that. And it made like, Zapier makes it very easy to connect Gigaba to Google Calendar, or like, Well, we already connect to Google Calendar. It’s a bad example, but maybe Google Sheets, or something like that. And the no code, the reason that that platform got so big was it was really easy for the lay person, the non technical person to build an integration or a connection. And the no code stuff is helpful for a lot of different reasons for that kind of stuff, connecting applications or maybe just building something that’s like, kind of a one-off like you’re not a technology, you’re not a software platform or something like that. So who knows Okay, now an idea without action is worthless. And it was actually our friend Jackie McCarthy, who mentioned that in the Startup Hustle chat, which is where I’d like to see the listeners, come find us and join us because we talk about a lot of this stuff. In the Startup Hustle chat, I’ve been secret not so secretly anymore crowdsourcing some content. But she is right. That’s the thing. And we mentioned at the top of the episode is an idea without execution, worthless.
Matt Watson 30:35
And that an execution means, you know, actually doing it a lot. That’s the first problem. A lot of people have ideas they don’t ever actually see them through. But it’s you got to have the right team, you got to have the expertise, the connections, the hustle, you got to have the hustle. To do it, it’s a lot it all comes down to execution.
Matt DeCoursey 30:55
You know, execution can be described and defined in a lot of different ways. And, you know, being someone that was an athlete growing up and still like sports, it’s a well run, play. You know, like, I mean, and we’re chiefs fans here in Kansas City, if Patrick Mahomes just runs face to face at full speed into the running back, and the ball flies out and lands on the ground. That is the announcers. Well, well, Matt, that’s a poorly executed play by the Chiefs there. And that’s the I mean, that is the business equivalent of having okay, because on paper, it looked great. You were supposed to go this way, I was gonna go this way I give you the ball, these guys move some people out of the way, and we have a forward gain and progress. Now. It’s easy to put it on paper. It’s like 1000 times harder to actually do it.
Matt Watson 31:49
Well, and some of it, it all comes down to the details, right? It’s the It’s Your point about Mahomes. It’s but from a startup, it could be just follow up policy procedure, those sorts of things that you ultimately fail, because like, yeah, we we don’t follow up with customers, we don’t answer customer problems fast enough. We don’t follow up on our leads and our sales and we just, we’re just not executing at the basic fundamentals of some things need to be done. We’re just sloppy and just are our employees don’t do their job or whatever it is, and just faltering because of execution at the fundamentals.
Matt DeCoursey 32:22
And we were talking about like future disruption. That’s where I actually see certain types of AI and machine learning, helping a lot of businesses because data is everywhere, and there’s information and patterns and stuff that occur. The okay the biggest problem with execution now it’s people
Matt Watson 32:39
Oh, yeah, people. They’re not reliable, because
Matt DeCoursey 32:43
we’ll we’ll quote will quote our good friend, Neil Sharma, who is often says, software shows up to work every day. Yep, absolutely. Yeah. Now it can also go run wild. Okay, let’s share a poor execution story, Matt. So I’ll go first. So I wrote about this a million dollar bedroom. 10 years ago, I built a self generating website, that was a marketplace for buyers and sellers or tickets. Now, as we were working on getting that figured out, in the early stages was executed poorly. And a couple of times, we found it just running haywire in our server, and by the time we figured it out, it would have made like 3 million web pages, of which 2.9 million were duplicates. That’s not a poor, that’s not a properly executed plan. That was something that you know, and I think other things with execution is just simply knowing that you have any instance where you know, you have, you know, what you need to do and just manage to repeatedly never
Matt Watson 33:48
do it. Yep, absolutely.
Matt DeCoursey 33:52
What have you, I want a story from you, dude.
Matt Watson 33:56
About failed execution. And now
Matt DeCoursey 33:59
I know that most everything you do is executed with flaws. Like the I imagine, like all star Hall of Fame athletes crossed with, like the precision of a Navy SEALs team.
Matt Watson 34:12
Well, so a great example of this from my
Matt DeCoursey 34:15
laughing I’m laughing when I say that, but from from the VinSolutions
Matt Watson 34:18
days and early on is we had built our product, and we were selling it, and we got a new partner that was supposed to resell the product. And we thought we were going to be like millionaires, because they were going to resell our product and send us all this business. And what we found out really what happened for the next year is a simple lack of lack of execution. It never went anywhere. Because we couldn’t get the partner to execute, to sell our product to do what we needed them to do. They just they didn’t help. And so that’s another dangerous thing about having a startup is when you put yourself in other people’s mercy sometimes, and you don’t control your own destiny, it can be very difficult Now partnerships can also be very, very good. But sometimes they can be really, really bad. And they can totally kill your ability to execute.
Matt DeCoursey 35:08
Suck the bandwidth, other things. All right. So once again, today’s episode, Startup Hustle is brought to you by full scale.io, we will help you properly execute building a software team at your startup. Okay, let’s talk about bad ideas now. You know, like, you know, one of the things and once again, thanks, again to those that help us make, help us execute quality podcasts. Because we do you have many people that help us build these lists and do this research. And then we have our own input. And so sometimes we just completely go off of plan. But talking about that, you know, anything that has a mismatch of business to the founding team, and while the idea may be good, I think that it becomes not so great if the people that are involved in the business don’t have any passion for that solution, or somehow just don’t have a historical background, like I would be very, I would be dumb for me to get into the construction business at this point in my life, because I don’t understand it. I’ve never worked around it. I’ve never worked in it. And I’m certainly not a craftsman. So while there might be a solution, like here in Kansas City, we have labor chart, who does a great job of helping organize projects and stuff like that, but I don’t understand the problem, or I don’t understand the problem that I’m trying to solve. So I can, you can take a good idea and make it bad by mismatching it with the wrong people.
Matt Watson 36:37
Do you know anything about heart surgery, I want to start a business that does heart surgery. Now I hear I hear they make a lot of money like $100,000 the procedure, so I think we should do it.
Matt DeCoursey 36:50
Okay, that’s a good example. That kind of goes in because the next item on the list was lack of experience in a field. Like I said, it’s like, a good idea. But if you don’t understand it, and look, this is this is what can make a concept or an idea seem okay. But then, well, it’s an illusion. Because if you don’t understand the industry, or the problem that you’re trying to solve, you make grossly grossly under it. Well, you you are, you’re asking to step into a bad product market fit?
Matt Watson 37:23
Well, and you don’t you know, you don’t know what you don’t know, right? Like, if you think I’m gonna sell software to car dealers, right then or let’s say, actually a good example. This is like selling software to schools; you don’t understand how difficult that is and how they buy stuff and their their budgeting cycles, and all these different things they have to go through. And the most important part of this is the connections. If you worked in a specific industry, and you have connections, doing something in that industry makes a lot of sense. Versus if you if you’re like, oh, I want to do something then whatever industry and you know, nobody that’s in that industry, you’re at a huge disadvantage.
Matt DeCoursey 38:00
So let’s talk about VinSolutions for a minute, because you certainly were not in the automotive business. You actually were selling computers at Sears, read the story in my book, The million dollar bedroom. And Matt, you got like 20 pages about you in it. But you didn’t know anything about it. But your partner certainly did.
Matt Watson 38:17
He did. So I wasn’t Yeah, I was the technologist and he had the connections. He knew the people. He knew the product we needed to deliver and I could build the product.
Matt DeCoursey 38:27
And they knew the pain points. They knew exactly where the struggle was, and why. And here’s the thing is some of those people, some of your partners owned car dealerships, so they really understood what their peers, okay, so if you if you in this case, if I owned the car, lot like God, I’m just bleeding money doing this, it makes it pretty easy to understand the value of the solution and go I bet everybody else would love this
Matt Watson 38:54
and it legitimizes do and they become your referral, like, Oh, everybody knows so and so uses this, and I can call them and get a referral and all that kind of stuff. Having having a partner that has experienced the industry and is reputable is really beneficial.
Matt DeCoursey 39:12
When did you know that VinSolutions and by the way, guys, are those listening? I shouldn’t say guys, folks, you know, Matt, Matt and his partner sold that business for around 150 million bucks. And so I mean, they did something right. But when At what point did you really realize that it was a great idea?
Matt Watson 39:32
Well, I mean, I would say after the first two or three years, we figured out we at least had a business, but I don’t think we thought it was worth anything until five or six years later. And then all of a sudden, people start thinking it’s worth worth money. And then, you know, everybody’s trying to steal everybody’s stock and fight over everything.
Matt DeCoursey 39:52
So you know, Matt, for those that are unaware, Matt and I started the podcast in December of 27. and teen and a few months later became business partners in Giga book. And at Giga book, I was developing that whole platform and there was a huge market opportunity. And Matt, what Matt was interested in was helping or getting, getting access to the relationships that I had spent years building in the Philippines. And we were originally we had a beautiful little plan, because we were going to help you solve some of your software development team growth needs, mark that up a little bit, giga book wouldn’t have had a burn rate, we would it’s really kind of a beautiful solution. But we got a couple of months into that. And because other people were asking us so often, what literally saying, What can I do to get some developers over there? I can’t find them here, we quickly realized that what was a good idea here had presented a way more lucrative or, or faster growing, you know, idea on the other side. So we weren’t even to we were two months into that before we started. Well, basically, turning the business to focus on a different way. Because we had actually, well, I said better way, we’d found a better way. And you know, so at some point you talk about when’s your idea Good, while you, so you’re on one to Full Scale has got to just under 200 employees now, in less than three years. And if it weren’t for COVID, that probably about 350. You know, so you know some of that it’s like you talked about realizing your idea was good. It took us three months, at Full Scale to realize, oh, shit, this is what we really need to be doing. And then events solutions, like five years. So I think that there’s no set, quote, gestation period for when that reality hatches.
Matt Watson 41:53
Well, in from my VinSolutions example, we were making money within the first six months, right? So that wasn’t a problem. But the the problem we have is people that think they have an idea and like years go by, and they think they’ve got some great idea, but they never really execute on it. They really never make it happen. Or they keep thinking it’s going to be this big thing and keep working on it, but just need to let it go. Although somebody who has tuition,
Matt DeCoursey 42:20
no, yeah, all day, all day. I mean, I Well, 90% of people are going to talk about it and never do it. I mean, and by the way, failed execution is also never starting. I was I’m in a really big Facebook group about podcasting. And someone asked the question yesterday, it said, how many episodes and do people usually quit. And I said zero, because they never start, which is the giant body of everyone. It’s true. So let’s talk about a few things. As we as we head towards the, the end of Part Four of of our, of our series, How to Start a tech company and, and you know, here’s the thing, we’re four parts into this, and we haven’t even really gotten into the tech company part of it. These are all things you need to consider when we’re doing this for you, everyone like this is for you. Because we have made expensive mistakes in the past, learning what we’re sharing with you so and absent. So a few things to consider before you’re starting a business is, you know, turning your idea into a plan. And every entrepreneurial journey does start with an idea. You do have to begin to plan but the reality is your plans wrong?
Matt Watson 43:33
Well, it almost doesn’t matter what the plan is because the plan isn’t, isn’t in concrete. And that’s not exactly how it’s gonna play out. But your plan at least is your North Star, you’re like, I’m going that direction, right? Like the journey is is is gonna go a little the left and a little to the right as we go. But at least I know where I’m going. And I think I think this is no different than saying I want to lose weight and I don’t lose 50 pounds. It’s really difficult to sit sit there and figure out how am I going to do that. Well, that’s overwhelming. But if you can figure out how to how to lose one pound or two pounds, and figure out what the steps are and how you get there. That’s the key to the plan. Like okay, I’ve got an idea. What do I need to do? Well, I need to find a business partner, I need to find my first customer I need to validate my idea. Like you got to come up with a simple steps. And then and then the whole thing doesn’t seem as daunting.
Matt DeCoursey 44:20
Yeah, I actually talked about that and balance me my my book about how to be awesome. And your mind can’t wrap itself around things that are bigger than like the palatable nature of it. So a lot of people you said what’s your goal? And they say, Well, I want to lose 40 pounds. You only need to be to lose five pounds, like or one pound or any of that because no one just loses 40 And the same thing occurs with a business you’re like okay, I want to egg Matt, you know what I want to do? I’m going to sell a company for 150 million bucks just like you did, buddy. But that doesn’t happen right away. It has to happen and you eat the elephant one bite at a time. And you should start with the tail. Like you know That’s it. And there’s no way around it. I you know, if I have a tagline that I love that I created, it’s that success demands payment and advance, you are gonna have to pay upfront for success people I have yet to prove this wrong. Like the overnight sensation was usually eight years in the making. Yeah, I mean, and that’s really like so much of it. And, and people like, Well, what about so and so what, dude, you’re not successful because you inherited $500 million. That’s not success. That’s a weird birthright that some people have and some people don’t. But when you really and truly define success, it is it is you always an upfront payment. That’s time, energy, emotion, all of it. Another thing too, and we’ve talked about this so much, I feel that I’m so vehement about this next point is follow your passion. Because the passion is jet fuel, man, it is just jet fuel, and it’ll make it’ll then it’ll force you to be disciplined on many days, because passion will drive you a lot more than anything else.
Matt Watson 46:07
Yeah, you’re right, that idea about being a heart surgeon, and I’m really passionate about that you probably do something else.
Matt DeCoursey 46:13
I mean, so the thing is, is, you know, in that you’re entering a dogfight, you know, like just a nasty, nasty battle is that’s what entrepreneurship is, is, is, you know, like, if you’re not passionate about being that fighter, you’re gonna stay down on the mat, and folks, you’re gonna, you’re gonna spend time on it, we all get knocked down. That’s the, that’s our whole mission of Startup Hustle and Startup Hustle TV is like is is hey, look, expect expect to take some blows, because you’re going to you are out of doubt. You know, another thing mount is, is you know, listen to the listen to listen to find our study people that have been successful. And I think I everyone says that, but I want you to not be one dimensional, don’t just look at entrepreneurs like unit that, you know, I’ve got some interesting relationships, some of which are with rockstars. And I love talking to high level musicians. And people that just like do like world-class kind of things, because they have a similar but maybe slightly different approach to finding success and doing things and they phrase it and frame it and tell you about it in different ways. If you can look, success is as a process and a pattern that regardless of what industry you’re in, or what you’re trying to get to, is very pattern aesthetic. And so talk to people that have done it and ask him and asking tough questions. And by the way, people like to talk about themselves. And then those same people likely had someone else give them advice. So don’t assume that anybody’s not accepted, you can actually reach out to Watson all the time, every time, right?
Matt Watson 47:54
having mentors is extremely important. And also, you know, reaching out to people in the industry that you’re trying to build a solution for to get their feedback and their advice. And I’ve had, I’ve talked to a couple of people before that, like I talked to me recently from Kansas City was trying to build something that they thought stack five was the target customer and I’m like, Well, I want to use this. There are all these other things I can use that work that are industry-leading products to do the same thing. Why would I take my risk using your thing? Like, I don’t understand this at all. And in you know, you want to and sometimes it’s like they don’t even know, like, I didn’t know those things existed? Well, you didn’t know because you gotta go ask the right people that work in this industry that know about these things. So that’s the key is, like you said, listen to the pros, mentors, people in the industry, you got to talk to people. That’s one of the number one things you got to do as entrepreneurs, you just got to talk to people because you never know, like, like, you may not be able to help me with APM software for software developers, but you might know somebody who does. And that’s the thing you just never know.
Matt DeCoursey 48:57
So speaking of pros, and once again, we do have a lot of really interesting and engaging discussion in Startup Hustle chat, go to Facebook, type in Startup Hustle in the search thingy, and you’ll find us so here’s here’s a few things. So we I asked the group a couple of weeks ago, how do you know if your startup concept is any good? And these are some of the highlight answers we came up with. So Quinton Scarborough, pocket next. He said when it clearly and easily solves an external and an internal problem for its customers. Another one is as consider starting with the problem and not the solution because you need to solve a problem that was from Rana Mumtaz. When someone sees your vision and invests in you from it, Belinda Wagner mentioned that Justin Lawson says niche, just niche and there’s a lot of merit to that there’s riches in the niches. Chris Douglas is a simple solution that everybody wants. David Baga soup You’re entrepreneur people willing to pay you to build it. That’s that’s a good indicator of whether your ideas any good and, and then and then Andrew Ryan, one of our one of my favorite contributors. And that group says an idea nothing, it all comes down to great execution, distribution and product market fit. He kind of summed up the whole episode, and align so And speaking of summing up in episode now it’s time for our founders freestyle. In another episode brought to you by FullScale.io, check out what we do, we’d love to talk to you about your solutions and needs. So Matt, what did you take out of this episode? What’s really like, what’s the standout? And what do you what do you love? What do you don’t care? What do you not care about?
Matt Watson 50:45
Well, I think everybody’s got an idea. I think the key is validating the deal, that idea and executing on it. And the best way to do that is to talk to mentors, talk to other people that potentially use the product, people in the industry get their feedback. That’s with stack phi, you know, I talked to some of those people. That’s how I hired some my first employees like, Oh, I get this problem. I want to I want to join you on this adventure. And, you know, there’s lots of good things that can come from it. And then I’ve got my worst idea ever for you. After you do your freestyle.
Matt DeCoursey 51:17
Oh, wow. Wow. Yeah, I think overall, I think that your idea is good. If you can generate revenue with it, if you have the everything that it takes to get to say your you can execute it. Because, like, there’s this many ideas that many people should be realistic with themselves that they won’t execute well, you have to be open and honest with yourself. First off and foremost, self-deception when creating a new business, or startup is a recipe for disaster people, like, you know, assuming that you’re always going to figure it out, which I gotta be honest, sometimes I wasn’t ideal in that in that marketplace. But I have a long history of finding the solutions. So it’s questionable, you don’t know you’re gonna find it. I think that knowing and understanding that whatever you’re building can have has the the ability to be bigger than you meaning like, you’re not just creating a job for yourself. Yeah. You know, and that’s, that’s, I think that’s, that’s something that a lot of people they kind of get stuck in their business because they put everything into it. And then it just they just basically created a job for themselves now and when I say building something that’s bigger than you meaning like, something that has widespread application, we talked about total addressable market and stuff like that. And I mean, overall, like your idea is good if you’re passionate about it, if it helps other people, it helps businesses sell more, spend less or create some kind of peace of mind the for the general user, tell me about your bad idea.
Matt Watson 52:55
All right, so I was meeting with this guy once and his job his company, they they sell like little toys to McDonald’s and stuff like that. They put him happy meals. So he said the problem is it takes too long to have to have a made in China and shipped over. And so what he wanted to do is build them on the boat while the boat was on the way from China to here. He thought that would that would get it get them built faster. So
Matt DeCoursey 53:24
so instead of cheap overseas labor, you now have to employ sailors.
Matt Watson 53:30
I guess you put the labor on the on the boat. Yeah. I don’t know. That was this. I’m struggling
Matt DeCoursey 53:36
to figure out how we’re aware that would that I Yeah. That’s yeah. You know, the worst idea of all Matt is don’t don’t start your own TV show. For those of you listening, come check out Startup Hustle TV. It’s live. We’re on YouTube. We’ve created something we’re really happy about and proud about and we’ll be doing for a while. So come see what it’s like to be an entrepreneur through the lens of an entrepreneur. I’m out.
Matt Watson 54:03