October 06, 2010
Startups Must Break One Rule, Says Bonaforte in StartupCamp 2 Keynote
By Paula Bernier, Executive Editor, IP Communications Magazines
Say what you like about Jeff Bonaforte, but the man is most definitely not boring.
As discussed in a TMCnet story posted yesterday, the StartupCamp 2 event – which was collocated with ITEXPO (News - Alert) this week in Los Angeles – featured five upstart companies doing rapid-fire presentations to a standing room-only crowd.
The Xobni executive – who previously started an online storage business called idrive, launched
His first tip was that a startup must break one rule, but breaking more than one rule can be risky (although, as his examples below illustrate, it has been done, and with great results).
“The problem with startups is that they tend to want to break every rule,” he said.
He said Skype (News - Alert) broke the rules that indicated folks didn’t want to talk on computers. Twitter, meanwhile, limits folks to just 140 characters for their communication. Southwest Airlines introduced no frills flying through secondary airports, to the jeering of big airlines that didn’t think it would work, he says. And FedEx made a business out of charging $20, not 20 cents, to send a letter, Bonaforte noted.
These companies found success by keeping their eyes on the ball – having the patience to follow their plans through to profitability and continued growth, and reacting but not over reacting to the changing business climates in which they operate.
“The risk of overreacting is as bad as under-reacting,” said Bonaforte.
He offered, as an example, the fact that Yahoo offered unlimited storage to address a Gmail challenge, and did so at its own peril.
Bonaforte continued that while speed is important for an upstart, execution trumps speed.
“Speed matters, but it is the speed to getting it right,” he said.
Apple’s iPhone (News - Alert), Facebook, Google, Skype and Zynga, Bonaforte added, are examples of companies that were not first to market with their solutions, but which took the time to deliver quality, unique solutions to customers.
He concluded by talking about how hate – not love – is what makes the world go ’round in terms of new product success.
New products, he explained, have to address specific (real or perceived) pain points of customers. That’s because customers will only change their behaviors for two reasons – if they’re scared, or if they’ve been through an important life event, like the birth of a child, he said.
Edited by Tammy Wolf