Up and Running:

Sabrina Parsons posted For the best customer service: TWEET! on her MommyCEO blog earlier this month. She’d called customer service repeatedly, left messages and gotten no response. Then she tweeted about it, and this (the photo below) is what she got: a new, replacement pair of shoes for her son.

This could seem like a good story of a good company, but there’s that dark side to it, the bad service first, followed by good service after it appeared on Twitter. She said:

Here is a company that produces an excellent product and seems to care about customers. But their customer service process is broken. If only those of us who tweet can get good customer care–then they need to fix their process. Don’t get me wrong, though–I love the personal attention I can get from companies via Twitter. But I know those days are numbered. At some point there will be too many people doing the same thing, and Twitter won’t be a good communication vehicle. So companies like this need to fix their customer service issues NOW.

I agree with her conclusion. Twitter is new and exciting, a classic shiny new thing that we can all play with. But mind the telephone in the meantime.

I like the following line in “Love Minus Zero/No Limit,” by Bob Dylan.

She knows there’s no success like failure. And that failure’s no success at all.

Here’s a good look through the window of things going wrong or, at the very least, not as planned.  I happened upon it yesterday morning while drinking my coffee, absorbing the early-morning web on a sunny summer morning in Oregon. It’s called BabbleSoft looking for a new home.

I’m sure it was a hard decision to write about; but I’ll bet it was even an even harder one to make. Posting in entrepreMusings, Babblesoft co-founder Aruni Gunasegaram said she came to the decision during a beach vacation. It’s typical, isn’t it, how things like this percolate in the background and come out when there’s time to reflect? She writes:

Babble Soft, an idea that I started tinkering around with after my first baby was born in 2003 (our first beta web app release was in 2007 and iPhone app in 2009), has reached a point where my partner Nicole Johnson and I can’t do it justice and build it to the company it could be.  We just don’t have the monetary and time resources that a consumer web- and mobile- (iPhone) based product Baby Insights and Baby Say Cheese require to become a household name.  I’ve been working on Babble Soft part time while balancing kids, the house, etc. for most of the company’s life.  I spent a few months full time on it just before I took a day job about a year ago, and now the time has come to find a new home for it.  Nicole has been working on this part time, after hours, as well.

We are both discovering that Building A Web Business After Hours is hard to do with two small kids around.  And doubly hard when two ventures are trying to get off the ground in one household: My husband is starting the pre-K to 2nd grade Magellan School that’s scheduled to open this fall and our resources are also being tied up with that and our kids will be attending the school.

That’s a hard moment in business. Still, much better to recognize it and deal with it than to let it linger on, unsaid, forever. And presumably, there is still hope; she doesn’t say closing down. She’s hoping to find it a home.

You’ll notice, I hope, in the quote above how she has a couple of other things going on as well. And oh, by the way, she’s also director of the Austin Technology Incubator and teaches entrepreneurship at the University of Texas.

I knew a man who let a borderline failing business hang around his neck like an albatross for years, even though he knew he should close it down. Arune Gunasegaram has a lesson for all of us in this brief, and somewhat sad, blog post.

Desire alone, or passion and persistence alone, don’t make a business. Sometimes you have to take a step backward. And go on to something else.

Sure, you’re probably saying to yourself that entrepreneurs aren’t supposed to be fearful–there’s the image of the daring entrepreneur jumping off the cliff. Me, looking back, I jumped off some cliffs and was pushed off others. I went off on my own, leaving a good job when I didn’t have to, and I got through the worst of it, that dark year in my business that about every business faces, because I damned well didn’t have any other choice (meaning, I was pushed).

Somebody asked me about it once (or challenged me on it, I should say, because there was some contention at that moment): “Aren’t you too fearful to run a business?”

“It’s obvious that you’ve never run your own business,” I answered. That didn’t solve the argument — heated it up, actually, I’m sorry to say–but I did offer, a few minutes later, that being fearful is part of what you’re supposed to do. They pay us for that.

With that as background, I’d suggest you take five minutes and watch Pamela Slim’s five-minute piece The Upside of Fear from a recent Ignite Phoenix event. You’ll notice I borrowed her cliffs metaphor, but that she works that one, among others, beautifully. And by the way, this is also a great example of how slides ought to work in presentations. Part of the format in the Ignite events is a five-minute limit, slides that advance automatically and show for 15 seconds apiece. That makes for great presentations, as Pam shows us.

And more important, she’s right. Take five minutes and watch this.

If for any reason you can’t see the video here, you can click this link to see the original on BlipTV.

If you’re not familiar with Pam’s Escape From Cubicle Nation blog, you probably should be. She’s an excellent writer, and her blog is about going on your own.

Of course there is that “other side” of entrepreneurship, the side you see when things don’t work out right. It happens.

Jason Calcanis, founder of Mahalo,  has a long, detailed, painful picture of the plight of the high-tech, high-visibility startup when it seems to be grinding slowly downward toward failure. That’s What to do if your startup is about to fail. Also called, by the way, “Don’t Stop Believing.”

On a less-well-known-but-just-as-real level: Yesterday I got an e-mail from a man who’d been working on a very interesting project, combining robotics and pneumatics to create a device that would protect older people from breaking their hips. I saw his business plan at several points along the way, also his pitch and presentation, and offered some tips. I’d hoped he’d make it. But it was a very ambitious idea.

Here’s what he told me in his e-mail (with some blanks to protect things that would be awkward, not intended for sharing):

My business idea hit a wall that was simply impossible to overcome. After four years and at least 100 hours of patent searches I stumbled upon a patent that was exactly, and I do mean exactly, my idea. I found it 26 pages down on a Google search concerning [omitted] I literally had written 3 out of 4 paragraphs of their patent myself. There was not one original thought that was new to me. There simply was no work-around as their patent was well written and comprehensive, leaving NO wiggle room. I sat and cried for three days. I moped around for a month and then I pulled myself up and decided to get on with my life.

I have been paying the bills scanning family photo albums and turning them into “family life stories.” I will never make a bunch of money editing photos and video. That said it is enjoyable and it does keep the bills paid leaving me a lot of time to ski. Which is great especially this time of year.

If you hear of a project in need of a good sales and marketing person, please keep me in mind.

So that’s the other side of the startup game. Things don’t always work. And when they don’t, it’s disappointing.

I’ve been involved with failure myself, more times than I want to remember. And I like his response to it: still looking, paying the bills with something else and oh, well, more time for skiing.

There’s a good lesson there.

Interesting piece on The NY Times‘ tech blogs today, Web 2.0 meets Darwin, pointing out, unfortunately, that what goes up (some Web 2.0 ventures) can also go down.

Watching the stock market this morning has been like attending a bungee jumpers convention. (”Does his cord look like it’s a little frayed?”) Meanwhile, it doesn’t matter whether the Dow is 9000, 8000 or 7000 for tech companies to realize they need to pull away from the cliff as fast as they can. Signs of turmoil abound.

Author Saul Hansell cites several fire sales and failures, and adds:

The stream of negative news is just starting. Radical cutbacks. Fraud discovered. For every company we hear about now, there are many more that realize they are on very thin ice and are trying to figure out if they can avoid a very cold bath.

Further on he cites Rafe Needleman’s list of 11 companies in trouble . . .

Rafe Needleman takes his shot at picking this generation’s biggest losers. It is a gallery of those nifty little Web 2.0 companies that figured they would get big fast and worry about revenue later: Twitter, Meebo, Zillow and so on. He also wonders about some first-generation survivors that may not be able to make it through a second ice age, like Skype and Ask.com. I don’t agree with his analysis. MySpace may no longer be hot with a bullet, but it has revenue of $800 million a year and tens of millions of users. We should all have that kind of trouble. In any case, the dead pool is a game to play in between watching the Dow gyrate and the presidential candidates hurl mud.

Lots of bad news here, but Hansell has a point: Revenue of $800 million and tens of millions of users aren’t really that bad. “We should all have that kind of trouble.”

I was visiting Portland, Oregon last weekend and noted one particularly interesting location that seems to be changing owners and businesses every 12 to 18 months. There’s a new restaurant there now, new to me at least, and it’s the third one since 2003.

I found a story about this location and its changing face in a local newspaper. It had lasted more than 30 years as a single successful restaurant, then fell into disfavor. The worker-at-lunch customer base changed as the area changed. Several businesses that supplied the restaurant with customers moved.

There were 20 years of next to nothing in that location. But in the 1990s, the neighborhood came back. It became trendy (think of Soho in New York or the area east of Market Street in San Francisco). Traffic patterns changed, and local businesses changed. Now it seems like a good location.

Or so it seemed to the people who put a new restaurant there in 2003, the ones who put a different restaurant there in 2006 and, again, the ones who found it vacant this year and have just established another new restaurant there.

I don’t claim to know the restaurant business, but I wonder . . . do certain locations work, or not work, regardless of updates and traffic and parking? Is it a bad idea to establish were others have failed?

Or alternate title: “Yeah, Right!” and “Oh, Brother,” as one of my daughters would have said when she was in her early teens. She would have been rolling her eyes, too.

I got an e-mail the other day with the title “Imagine Facebook for Business.”

Pretty good subject line for an unsolicited e-mail. Got my attention. But I was already thinking “OK, that’s easy enough to imagine. We call it Linkedin.” Not what the e-mailer wanted me to think.

I visited the site in question…

[Tangent, off topic: I'm not going to give the URL, because this post without the URL can be edgy and fun but, with the URL, it would be mean. I don't know the guy. And although unsolicited e-mail annoys me, as this blog gets more attention, I get more of it; and what the heck, I don't wish him ill or anything. I put myself out there by blogging, so no harm, no foul--but no URL, either.]

… and the truth was more like imagining Craig’s List without the listings. Some photo services, some remodelers; a total, if I read it correctly, of 61 random businesses in several dozen different places. I searched for “editor” in ZIP code 97401 (Eugene, Oregon) and came up, of course, with 0 results, followed by ads for 20 random businesses in 20 random places. Dance lessons in New York, poop scooping in New Jersey (an interesting variation on editing my stuff, I admit, but a bit harsh), computer consulting in Oklahoma, bookkeeping in North Carolina, photography in Texas, and so on.

So why am I posting on this, in this blog? Three reasons:

1. Understand the upside and downside of the critical mass phenomenon. Sites like this work if–and only if–they have critical mass. Lots of big successes, including Facebook, Craigslist, Youtube, Netflix, Amazon and so many others, got on the right side of critical mass and managed to stay there. You and I can’t get there just by inventing some database function. You have to be original, or capitalized with tens of millions–and smart or lucky, or something else.
2. Exaggeration can make you look foolish. Don’t be the Facebook of this, the Youtube of that or the Netflix of something else unless you really have something strong to show.
3. What you really need, as a small startup, is focus. Let your dreams be as grand as you like, but focus your business down to a very sharp edge. For example, maybe this unnamed new site could have made it with focus on a specific type of business in a specific location. All the businesses it could gather in some small town, all the pooper scooper businesses nationwide or something like that. Find the long tail. Join it.

So this is a bit of a rant. Sorry.

At the Princeton business plan contest earlier this month, David Johnson, advisor to VCs and a VC fundraiser, was asked whether being involved in a failed effort would rule out an entrepreneur from future funding. His answer:

“Failure is not a problem. It’s a good thing to know what that feels like.”

At a venture competition some years ago, in the judges’ meeting before it started, the judges went around the room introducing themselves. We talked about our companies and our successes. Ty Pettit, an entrepreneur and fellow judge from Portland, Oregon, opened his introduction with the following (paraphrased):

“Probably my best qualification to judge this competition is that I’ve just finished mopping up a company I ran into bankruptcy and had to close.”

Can we talk about startups without contemplating failure?

I think it’s important to understand that failures happen. With good planning you minimize the chance of failure by doing some counting ahead, knowing what’s required and what’s at stake. But don’t ever bet what you can’t afford to lose.