The StartupYard 2015 Teams Are:

The international finance consultancy Mazars, a StartupYard partner, has published a guide to business for foreigners in The Czech Republic. The guide covers areas of international investment, EU grants, Tax law, immigration and labor laws, auditing, and incorporation.

“That’s the same homepage everyone has. It’s boring.”

I hear this quite a bit. As our first month of mentoring for StartupYard 2015 rolls along, we have 7 companies preparing to soft-launch their services and products, mostly with new branding, and some with entirely new names, over the next few weeks.

And we have this kind of conversation a lot. As they pick a name and take their first stabs at branding themselves, most of our startups suddenly become ambitious about their marketing language, site design, and logos. I love to see it, really, because it’s a sign of keenness to be bigger, better, and newer than the competition.

As they’ve all been working on their positioning statements for the past few weeks, and have gotten more comfortable with their value propositions, their go to market strategies, and their growth predictions, our startups start to feel that they’re experts on their own brands. As they hear more about calls to action, marketing campaigns, and branding generally, they start to get the itch to experiment with their own theories about their would be customers.

I find myself, on the other hand, being constantly discouraging; constantly talking about “consistent visual grammar,” and the “grammar of your design.” This often elicits blank stares of incredulity. What is “design grammar?” And why do we need that? Our Executive-in-Residence Philip Staehelin suggested to me earlier this week that I write a blog post to try and explain. This is that blog post.

The Great Sameness

A big part of this settling-in process is our startups exploring the branding of their competitors. They browse websites and check pricing and features, and they get used to what the market is focused on, looking for their edge. Our mentors also suggest competitors and potential partners they should look at, and the startups get very well versed in their market.

And then, it all gets a bit boring. We have a startup that is working on a competitor to Shopify or Volution, for example. Check out those two sites, and you won’t be surprised by what you find. Some variation in the choices of headers, a different call to action: “start for free,” instead of “get started,” or “get started now,” or one of 10 other possible variations. On the surface, they’re much the same.

Whether it’s B2B or B2C, a SaaS or a consultancy, the web has been taken over by a sameness in the way online companies communicate through their websites. Why is that? And why would that be a good thing?

Boring is not Boring

The answer is not sexy. As VWO points out, it’s because landing page design is more science than art. Companies with huge volume in SaaS products, like MailChimp, Mint, Shopify, Slack, and Dropbox, all use essentially the same layout for their homepages, and similar layouts for campaign landing pages. These pages have been tested, tweaked, and perfected using the collected data of tens of millions of visits to similar sites.

Companies with high inbound traffic pay expensive consultants, or use tools like Attensee or Optimizely, to collect fairly precise data on exactly how each piece of text, each image, and each particular call to action performs best- and they have the ability to tweak the site’s appearance for different regions, and even different types of users, to maximize the site’s conversion rate.

We seem to be arriving at a sort of paradox. We know, scientifically, which sorts of things work (or at least don’t fail) on landing pages and home pages, but that makes a lot of these sorts of pages look the same. Boring and safe is the rule. So their boringness, seemingly, would mean that they wouldn’t do as well as they do, because they’re not special. And yet, if they didn’t perform well, they would be changed. So what’s the deal?

Impress Me, but Don’t Surprise Me

This sort of thinking is the sort of thing that many startups struggle with early on. They begin to believe that “different,” and “surprising” are the same as “good,” and “effective.”

A sales director I worked with early in my career gave me a sound piece of advice that I’ve always remembered. He said this:

“If I asked you to show me 4 fingers, what would do?”

I held up 4 fingers on one hand.

“What if you held up two fingers on each hand?”

I hadn’t thought of it.

“Wouldn’t that be weird? When your customer gives you their attention, like clicking on your website or signing up for a newsletter, they are usually asking for information. They are not asking to be surprised. They are asking to be persuaded.”

There are many ways to hold up 4 fingers. However, his point was that doing something a customer doesn’t expect, even if it *is* surprising and impressive, is not necessarily going to make them trust you, or buy from you.

A “surprising” website, with a novel design and fancy layout, may make an impression on your prospect. But that impression is as likely to be: “this company is clearly good at making impressive websites,” as it is: “I trust this company to do whatever it is they are trying to sell me.”

Holding up two fingers on each hand might make someone think. But it might make someone think: “this guy is an asshole.”

Rather, “impressiveness” that translates to someone actually buying your product, is found in your descriptions and demonstrations of the product itself. The product should be impressive. The way you talk about the product should be in view of that impressiveness.

If you have a product market fit, then your marketing of your products should get out of the way as fast as possible. And the best and easiest method of getting out of the way, is using a visual design, a way of doing things, a “grammar,” that your prospective customer is likely to be familiar with.

Wanting a “creative,” and “different” website is natural. You want to be different. But “being different” about the way you present your products -if they are good products that the customers actually want to buy- is usually going to be a waste of your, and more importantly, the customer’s time.

Think about it. When you walk into a car dealership, you look around for the person who can answer your questions about the car. You expect that person to be in a suit, maybe with a nametag, so that you can recognize him or her easily. If someone came up to you in cutoff jeans and a bolo hat, smoking a cigar, you’d certainly remember that. But would you want to buy a car from them?

My guess is no. Because you didn’t come into the shop to appreciate a creative salesman. You came into the shop to appreciate and learn about a car you’d like to buy. The salesman wears a suit because he doesn’t want to distract you from doing exactly what you want to do anyway.

That is where the sameness of design comes from. As products get better, more specialized, and more powerful, the trappings of how we talk about them, and how we present them online actually get more straightforward. As we are all more comfortable with the ideas and the types of products we are discussing, the need for bells and whistles slowly diminishes.

A Mature Market Means a Shorter Sales Cycle

My father once took me with him to buy a car, when I was a little boy. This was in the early 90s. The salesman called the morning of the visit, and we spent hours talking with him about the cars my father was looking at. He took us to lunch, and on a drive in the car my father wanted to buy. They went through pages of options for the car, discussing all of them. They haggled some more, and they had coffee. They discussed financing. We spent 6 hours at the dealership.

This year, 25 years later, I bought the first car I could call my own, for my own family. The saleswoman was pleasant, and offered me coffee. The meeting took less than an hour, including the test drive.

Why? Because I had spent time at home configuring the car I wanted to buy on the company’s website. I had printed out the options I wanted, so when I got there, the deal was practically done already. She gave me a few pieces of advice, trying to upsell me on a few items. That was about it.

A car salesmen of a century ago would have been expected to take their clients to dinner, visit their homes, and work a sale for days or weeks. That was done because customers weren’t familiar yet with what they were buying. Trust in the dealer translated to trust in the product. But today, a Google search is a click away. Trust is statistical; scientific.

The web has followed a similar evolution: today, people expect the sales cycle to be short, and they’ll punish you for making them jump through any hoops. Every step between the customer and the content, or between the customer and the purchase, is a step that some customers would rather skip, and a step that is likely to diminish trust, rather than enhance it.

Clean and Frictionless are Two Separate Qualities

In our last cohort, one of our startups showed me a landing page that was nothing but an image, and a headline with a provocative question. It was something like: “Do you believe in True Love?” There were two large buttons: Yes, and No.

“Ok…” I said. “And now what?”

“Well,” the founder said, “It inspires you to click on it to give your answer.”

“Ok,” I said. And I clicked “no.”

Another text appeared: “Are you sure?”

:Facepalm:

I got what he was trying to do. Our generation has been raised on a diet of “interactive,” that promotes the idea of interaction without actual engagement with anything. It’s a ploy. Like having a popup in a video game that says: “press X repeatedly.”

But at least in a video game, the designer would be trying to trick you into feeling like you’re having fun after you’ve bought the game. We can tolerate trickery of this kind. It’s expected, and we’re already invested in the product. But for a landing page?

First, the visitor has already clicked a link or entered a URL to get to the site. That’s 1 action. Now they’re being presented with an “activating” action that doesn’t accomplish anything they haven’t already decided to do.

Would the prospective user be much more likely to download the app or buy the product after being activated twice? Not likely. Would the person who clicked “yes,” then be significantly more likely to download the app, than that same person would have been, if they had not been “activated” in this way? I don’t think so. And there would be no way to test it anyway.

Second, this sort of landing page is a conceit that people recognize for what it is. But whereas we’ll accept this kind of trick in a video game as part of the experience, a landing page has no “buy-in” from a visitor that ensures they’ll put up with your nonsense. They would have to click to get to the site, then click “yes,” and only then would you even get a chance to persuade them to buy or look at or download something.

That’s like making your prospective car buyer pay for a test drive. Only a highly motivated buyer would bother. I told the founder that if he did that, he could expect a >50% bounce rate on the landing page, and no positive effect on the bounce rate for the homepage it was linking to.

He launched the page and payed for Facebook ads, and the bounce rate was high as I had predicted, with no effect on the download rate for users who passed the first design hurdle. So he took the page down, and let users go right to the homepage. Lesson learned.

From Design to Content

Design in any mature medium, over time, becomes less baroque. Less “unique” in broad strokes. People learn what works. Everything gets to be more shorthand, and conventional. Gone are the salad days of edgy web design, with MySpace pages and GeoCities domains, replaced by white space, edge to edge. The new watchword for web design best practices is “clean,” not “shiny.”

Take a look at a prime example of an historically “edgy,” homepage, that has become progressively more conservative over the years. There’s a good chance you’ve visited. It’s Apple.com.

Do you sense a trend here? Discounting its first few iterations, which reflected the lack of clear web design principles in the age of GeoCities (and clearly before Apple considered e-sales to be vital to its strategy), the site had a “brochure” layout that was common in its time. The first web designers were, after all, magazine and textbook publishers, and those design principles migrated from the older media.

What’s interesting is when Apple introduces, around the time of the release of OSX, an “OSX Skin” for its websites. Here, the company is clearly trying to impress the visitor with the overall visual appeal of its operating system: a taste of what you’ll get when you buy a Mac.

In today’s terms, then, this would be like turning the Apple homepage into the screen of an Apple Watch or a mockup of iOS, and making the visitor navigate the operating system, to see how impressive it is. Surprising, yes. But would that be a boon to sales?

As we push forward in time, Apple stubbornly sticks to its “Mac Os” skinned visual design, but the design departs further and further from the actual contemporary operating system. The design settles, starting in the late 2000s, into a hybrid of the magazine and top margin button layout that we’re all familiar with. It’s sleek, it’s Apple, but it’s also ordinary. You know it when you see it.

While we can be sure that Apple actually had a hand in making this the prototypical design for most tech company homepages, we also see that once it’s set in place, it dithers less and less, and experiments become less frequent. We have found something that consistently works. The design has become the background. Our focus is on the content of the pages.

Design is the Background: Content is Everything

As our experience of the web has fragmented between tablets, mobile, browsers, apps, Social Media platforms like Facebook, the individual “design islands,” that used to constitute individual websites, have become more and more difficult to distinguish.

Publishing platforms like Medium or even Wikipedia do away with as much design as is possible, leaving only room for the content they contain to be found, catalogued, and displayed.

So, “impressive” design has become anathema to the web experience, as the quality and volume of the content available on the web has increased. We don’t want people looking at our websites anymore. We want them going straight to our content and products.

Because unlike 15 years ago, our content and our products can sell themselves; people are familiar with the notion of online business, and they don’t need to be reassured, they need to be given frictionless access.

The web has transformed from a “global village,” of boutique shops, to an expo, where everyone has essentially the same amount of space to display their wares: and the quality of their offerings determines everything.

That fragmentation and decentralization away from home pages can be seen in many places- particularly in SaaS products. How many people who use Dropbox actually go to Dropbox.com?

Instead, Dropbox has made itself integral to many of the things people do all over the web. Likewise for Twitter. I doubt that many web services 10 years ago would have imagined that they could activate and maintain customers, for years, without those customers having to bother ever visiting their websites.

Increasingly, traffic and eyeballs are concentrated on a handful of central platforms like Facebook, Google, or Reddit, from which the majority of readers browse the content of other pages.

This is becoming true of e-commerce as well, with e-shops being migrated directly onto Facebook. There may come a day when launching a successful SaaS will not even require a dedicated website. That day may be sooner than you think.

Why This Makes Design More Important

You may have concluded by now that I mean to suggest that the grammar of your of your site design, your product design, and your marketing are becoming less important. On the contrary. As users become more and more fluent in up-to-date principles of web design, they become attuned to deviations from the norm.

That attunement can be to your detriment if your design is sloppy or jarring. Or you can turn it to your advantage, by trusting your site visitors to follow clear, consistent, and focused visual and messaging cues. Trading flash for subtlety is just the first step.

StartupYard is now officially underway, and our cohort of 7 exciting startups have now joined us at Node5, to begin an intensive month of mentoring.

How it works

 

Typically, our mentoring days are hectic. Startups have to study and think about who they’ll be meeting with beforehand, so they’re prepared for many different kinds of conversations in the same day. We require our startups to be present and ready to meet with mentors, who come in during the morning, and begin meeting with the companies one-by-one. They meet with meetings can run as short as 20 minutes, or as long as an hour or more, with some mentors and companies never really wanting to suspend the discussion. Each mentor comes into the experience with different motivations and priorities. Most have backgrounds or a great deal of experience in business, sales, and marketing, and that can be a big challenge for startups that are usually dominated by technical founders. But as we like to tell our startups: you can teach an engineer business skills much more easily than you can teach a businessperson to think like an engineer.

The job of the startups, and particularly their CEOs, is to be like a sponge, absorbing not only what the mentors have to say about their products, their companies, their markets, and themselves, but also how the mentors react to their ideas, their plans, and their work so far. Hopefully, mentors and startups will “click,” for whatever reason, and the mentor will slowly form a relationship with the startup, becoming a resource and a touchstone for future conversations and connections. In the best cases, the mentors become long-term advisors and even sometimes investors in the startups. These meetings are, in part, auditions for that kind of chemistry. To help reinforce these relationships, we require the startups to report on their discussions, with notes and key insights for each meeting, as well as next steps with each mentor (if any). Not every meeting is a home run, but the startups have plenty of chances to meet the right advisors.

We start the first week of the accelerator with a tool we adopted last year, the Positioning Statement. This is a simple but powerful tool for stating, as clearly and as concisely as possible, what a company’s place is on the market. It isn’t a feature list, or a business plan, but more of an orientation about the type of company a startup is and will be, and its relationship to other companies, or to potential customers. The positioning statement format looks like this:

Product Positioning Statement:Our Product isFor (target customers): Who (have the following problem): Our product is a (describe the product or solution): That provides (cite the breakthrough capability): Unlike (reference competition): Our product/solution (describe the key point of competitive differentiation):

It is the job of the startups to turn these essential points into a brief, declarative statement about the company. Though they’re not always accurate in terms of what a company has accomplished up to the present moment, they represent what the company would like to be when it enters the market.

 

Why a Positioning Statement?

 

What we find time and again when it comes to startups that are just beginning to think about raising funding for their ideas, is that they are unequipped or unready to talk about their ideas in ways that make sense to different types of interested parties. And being unable to clearly discuss their ideas, they’re often equally unsure or unaware of what aspects of the business they haven’t considered fully, or well.

That’s why the first term in the positioning statement template we use (first pioneered by Geoffrey Moore in his book Crossing the Chasm), is about “who.” If there’s one aspect of a startup’s market that they’ve probably given less consideration than is needed, it will be the customers. We often hear: “we are our own customers,” as if that is an explanation that warrants no further examination at all. Often ideas seem very natural once you’ve lived with them and thought about them for months, or even years. But you will never be inside the head of your potential customer, because you thought up your product. It’s better not to pretend that you can have any objectivity about it; you have to talk to customers -a lot of them- and intellectually understand how they relate to your products and to your company. The thing that sells your customers on your products may be totally unrelated to what motivated you to make the product in the first place. Maybe you wanted a more efficient process, or a more beautiful and intuitive experience. But your customers may respond only to price. Or it may be the exact opposite. You have the opportunity to make a thousand avoidable errors by assuming you know your customers better than you really do. Knowing them takes an enormous amount of input, and it can’t be done any other way than with feet on the pavement, and by calling and writing to as many people as possible. The positioning statement begins as a projection of who you think your customers are: but that is a point of discussion, and the mentors will have ample opportunities to challenge those assumptions, given their years of experience with customers themselves.

That’s all normal, and it’s necessary too. Most startups are built around the kernel of an idea: a feature, rather than a whole product, much less a fully formed company culture, a business plan, and a go to market strategy. We probably wouldn’t take a startup that only wanted to “be in X business,” hoping that they’ll find a niche, simply because there’s money to be made. Rather, we take startups that have a laser focus on one small aspect of a much larger industry. It’s that singular focus that allows some startups to grow so quickly: they do one thing extremely well, and they do everything else well enough that they’re able to make a business out of it. That one thing makes their company a success, and they pick up the other nuances as they grow. The positioning statement is about drawing their attention towards all the things that they need to do well enough to survive and grow on the market, from the earliest stages. Knowing their customers is the first and possibly the most vital thing that they have to do well enough to survive, and which they will have to do very well to thrive.

Feature, Product, Company

 

Each of our startups, to varying degrees, are somewhere along the road between a Feature, a Product, and a Company. Few are real companies, although some are getting close. The danger for many startups, and we see this very often in our selection process, as well as outside mentoring, is that they skip one of these steps- most often the Product step.

 

Often we meet interesting, brilliant founders who have devised very impressive solutions to obvious problems. However, we usually leave these meetings with a single impression: “It’s a feature.” While starting with a key feature is usually the key to a startup’s early growth, a lot of startups stop right there. They build the company too exclusively upon the idea of a single functionality, making it both more vulnerable to competition, and less saleable as a product. You can convince customers to use your calendar app, for example, if it does most things about as well as Google Calendars, but has one feature that Google doesn’t have. However, if it has that killer feature, and doesn’t do any of the basic functionalities of Google, then it will be nearly impossible to actually sell. It might be interesting to customers, but it won’t sell itself. And worse, many startups actually get themselves into this situation on purpose: they tailor the product to a hyper-specific feature set, because they think that that will save them from comparisons to established products. “We can’t compete with Google, so we don’t even try.” Certainly they will have saved themselves from any positive comparisons to the competition. Now all the comparisons will be about what the product doesn’t do. Though many startups will answer this by saying that their product doesn’t have competition, our answer is always the same: there is always competition. Competition is either another product, or doing nothing. A feature list that is too narrow to justify the time necessary to use your product, has laziness or disinterest as an indigenous form of competition.

Startups have to be focused on their key differentiators, but there’s a minimum threshold that a product needs to breach to be called “a product,” and to justify someone paying for it, or adding it to the list of things they will use on a regular basis. And even if a startup hits a homerun with a small, absolutely killer feature, there is little stopping competitors from noticing the demand for that feature, and simply adding it themselves. Job done. This is one of the toughest things for our startups to face, and it’s one of the real values in the mentoring sessions: the mentors help them to understand how they can exist in a competitive marketplace. Finding that recipe of focus is the first monumental challenge for any company that wants to grow like a startup has to.

 

Overkill To Kill Objections

The positioning statement frames that “window into the mind,” by establishing the company’s (and therefore the product’s), place among other products and in the market as a whole. It establishes, in broad terms, how the startup will go from a killer feature, to a product people will buy, to a company that people will trust, so we make sure that our startups spend quite a bit of time hammering out, refining, going over, and rehearsing their position statements, listening to what the mentors say in response, and paying attention also to what they don’t say in response. The objections that mentors raise will be about basic concerns, many of which the startups have not previously considered. Are there legal complications? Do they understand the market well enough? Is the business plan workable? Do the costs make sense? Do they have the right branding? Would the mentor buy from or invest in the company? These are all objections that add value in experience for the startups- they will have to work to answer all of them, and more that they haven’t even begun to think about. Eventually, these problems will begin to find their solutions, and the startups will be able to incorporate the answers into their pitches, their marketing, and their business plans.

So answering objections is important, but a lack of objections is also key- do the mentors not object because they are convinced, or because they don’t understand? This is a sense that our startups have to develop over many sessions, repeating and refining until they find the exercise to be a waste of time, and desperately want to move on. That’s when we know they’re ready to present.

 

 

This week, StartupYard welcomed about 35 of its mentors on the Riverboat Labe, for a 2 hour cruise on the Vltava, in the heart of Prague. The event was cosponsored by our partners, French accounting and legal consultancy Mazars, who operate in The Czech Republic, and have pledged their services to our upcoming cohort of startups.

Mentors from such companies as Seznam, Google, Microsoft, Avast, Ysoft, Rockaway Capital, and Credo Ventures, to name just a few, were in attendance as well.

Since late last year, StartupYard MD Cedric Maloux and I have been working on making StartupYard more of a public resource for Startups and investors in the region; for example, with our SOS program, our public events, and on this blog. As one of our mentors noted to me during the cruise, StartupYard, especially now with the demise of Wayra’s Prague operation, is the sole “full-fledged accelerator,” in the area, providing an intensive mentorship based program. This makes community building and trust among our core of active mentors more important than ever. We remain one of the few communities solely focused on developing startup culture in the Czech Republic, and in the CEE region.

Given the degree to which we rely on our mentors, this event was, we think, a decidedly successful opportunity for them to let us know what they want from their mentorship experience. Aside from networking and finally putting faces to the names that all of our mentors recognize from our blog, our emails, and our public events, our mentors got the opportunity to share their ambitions for this community with the whole group of active mentors. Here are a few of the key insights we gleaned from the event:

 

CEE Startups Suffer from Chronic Low Visibility

As Daniel Hastik mentioned to me during the event, and as others also expressed, StartupYard’s enduring mission has to be focused on selling CEE startups, and the region, to western investors. While Silicon Valley, New York, and London are glutted with cash; much of it going into huge valuations on “unicorn” startups, CEE startups are consistently cash strapped; despite a high level of technical execution, an attractively low cost base, and a raft of great business ideas floating around.

StartupYard’s own experience in the last year has been proof of this trend. Even though Czech applications accounted for less than half of our total for the 2015 open call, we selected, on their merits, 6 out of our final 7 startups from the Czech Republic. The majority of these startups are already generating revenue, and have clients in place, yet their access to western investment has been limited to non-existent. StartupYard has seen, from our talks with foreign corporate partners and investors -especially those in the UK and France- that there is a growing interest among outside investors in the region, but that investors have little access to good information about local startups. StartupYard and other accelerators and incubators have a vital role to play in bringing standout entrepreneurs onto investors’ radar in the west. And that’s exactly what we plan to do in the coming months; it is one of the purposes of our first ever Investor Week, in which visiting investors will have a chance to see the potential in local startups.

 

A Responsibility to Give Back

Also commonly expressed among our mentors, who are composed of entrepreneurs, corporate partners, investors, and domain experts, was a feeling that they were responsible for giving back to the CEE region, and the Czech Republic, by sharing their knowledge and their experiences with younger entrepreneurs. Among our mentors are some of the key creative and entrepreneurial leaders of the Czech technology sector, and that is an economy that had to be largely rebuilt at the time that many of these people were starting their careers. Now those people are among the first in decades to have the opportunity to invest in future generations of entrepreneurs.

 

These mentors have participated in bringing the Czech Republic back towards the incredibly high level of efficiency and creative energy that it experienced during the first CzechoSlovak Republic (1918-1938), after 50 years of war, invasion, and stagnation under communist rule. The Czech Republic’s transition to a market economy since 1989 has been viewed as a model for the region, and these businesspeople and engineers forged that model themselves. So while the Czech Republic largely missed the computer revolution of the 1970s and 80s, its first generation of truly self-made entrepreneurs fought mightily to regain that ground, and is just now reaching middle age, and looking for ways to foster innovation in the younger generations of inventors and business people. An enormous store of talent and experience is now at the disposal of young entrepreneurs in The Czech Republic, and in many ways, that has not been the case in nearly 70 years.

 

Marek Novy from @seznam_cz addresses StartupYard mentors. pic.twitter.com/GnAJ0b1Osr

— StartupYard (@startupyard) February 18, 2015

 

Also among our mentors, such as our Executive in Residence Philip Staehelin, Skype Product Manager Amit Paunikar, Zentity CEO Abhishek Balaria, and public speaking trainer Jeanne Trojan, are foreigners who have dedicated many years, or decades, to their adopted country, and are keen to see the generation of entrepreneurs coming forward take the next steps toward fulfilling the region’s enormous creative and business potential.

Local Innovation Remains Important

Most of our mentors have been a part of successful ventures in the Czech Republic, and local innovations and improvements in the local economy remain a point of interest for most of them. While our startups aren’t working on local products, StartupYard’s central mission includes improving conditions for startups in Prague. We are also planning a few other exciting events and initiatives, but we’re not ready to announce them… yet!