Yesterday we held an all-hands meeting for Provo Labs where our team all met each other for the first time. It turned into a three hour meeting, which is too long for me, but I think it was useful. We talked about our business model and each of our portfolio companies briefly.
Imagine working for years at a company, developing products or services, and not knowing what your customers think of them. I think the vast majority of employees are in that situation--nearly completely disconnected from their customers. Yes, companies have technical support people and sales people who talk to customers, but what about executives and senior managers? The people making the big decisions often have little if any "customer capital" -- or knowledge of what the customers want and think.
Jakob Nielsen in 1997 wrote an essay on why every amateur web designer should do usability testing, at least with a couple of people. Sit down with someone and watch them try to do something with your web site. In 2000 he did a statistical analysis on why watching 5 users is enough to get almost all of the usability testing problems out of the way.
FORTUNE Small Business: Ten top colleges for entrepreneurs - March 1, 2006 I heard recently that in the 70s there were something like 10 universities that offered entrepreneurship courses. But currently it's over 1,700. So entrepreneurship education is booming. But what is interesting to me is that the most successful business people of all time come to lecture at business schools, and the people in the audience are the students, some of whom actually run a business, but most do not.
I was asked Tuesday at the Corporate Alliance summit why most companies fail. My guess is that most companies fail primarily because they don't have the right team of people. The CEO might not be right, or the CEO hasn't chosen the right people in the right positions, because most CEOs don't know the talent level required at each position and the teamwork needed to build a successful company. This is especially true of young CEOs, who haven't been around the block, who haven't seen great talent in action, in all the roles necessary to build a successful company.
Yesterday at the monthly UVEF luncheon, Scott Frazier gave a masterful presentation about investing in and selling companies. He reviewed his 5 most successful investments to date (including 2 where he was CEO) and how they were valued during the early and later stages. His bio from a BYU web site says this:
We entrepreneurs sometimes feel victorious after we have raised capital from family, friends, angels or VCs. But the pressure and the hard work are just beginning. You have to stretch those dollars until you get to cash flow positive, and it is always difficult to do so. The worst case scenario is to run out of cash before you have built the product or successfully sold it to real customers. Or you are just starting to get customers, but you can't afford to spend more money on sales and marketing to attract more.
BYU just held its graduation ceremonies last week with more than 6,000 students finishing their undergraduate college experience. I'm glad the traffic is gone. I have some advice for graduating college students everywhere.