Thursday, February 16, 2006

E(ngineer) is before M(arketer) in TEAM

Having recovered from my Florida vacation, I'm now in the middle of cranking through a bunch of work at the office. That said, one quick note. My wife spent this weekend over at the NADA conference (NADA = National Auto Dealer Association) wheeling and dealing for another startup she's working on (while I spent my vacation battling it out with the kids :)). She's caught the web services bug as well and as the company evolves and gets more grounded I'll post more on what its doing.

Of the three companies she's founded or been a key executive, this one has probably the best chance for success. (The first company we cofounded announced that Lee Iacocca just became an investor and advisor. Speaks well for the management we brought on that ultimately bought us out... maybe they really did know better ;)). I say this because of the experience we had with Cima Systems and what Lisa experienced on her own with her second company. For comparison sake, the first company was fairly well-funded with 'professional' management, the second completely bootstrapped.

The third company, however, has something which I think is absolutely key to the success of any startup (for those of you considering that jump) - an engineer/designer/product manager crossover as founder.

These days with hosting and bandwidth fairly cheap, open-source code abundant (i.e. low to no software license cost) and new ways of gaining early product distribution (*cough* blogs), by far the biggest expense in a startup is design and development expense. Cima Systems ran into choppy waters with our software distribution model (proprietary client/server software running on 3rd party software licenses that required on-site maintenance - though I think they have switched to a hosted service by now). The second company improved on that with a hosted VOIP service using open-source code for the soft switch, but was dependent on outsourced engineering. Talk about a bind when your working capital is low and you can meet payroll for the month, but don't have enough to fund the next 3-6 months development.

Lisa's third company is starting to gain great traction because the engineer knows how to develop products based on a combination of his own vision AND customer feedback (Henry Ford once stated that if he only listened to what his customers wanted he would have built a faster horse) while leveraging open-source code and web services as a basis. He's got great feel for design and product architecture. And finally, he executes within one standard deviation of a launch date (in the other startups it was closer to three or four :(). Over and above a great product, professional management, top salespeople, a holistic business plan or massive market opportunity, an engineer who is bought-in to a unified strategy and is able to both design and build a product that appeals to at least one key customer, trumps all.


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