Put Customers Before Cash, Startups Told

PARIS (04/25/2000) - Customers and community are more important than cash and capital, entrepreneurs were told here today at Upstart, a conference for European startups and venture capitalists.

Entrepreneurs should "focus on the customer and not on their exit strategy," said Jerome Mol, chairman of conference organizer Tornado Insider Group, opening the conference. He also advised them to have fun and to "move extremely fast".

Former Apple Computer Inc. evangelist Guy Kawasaki offered the same advice but reversed the priorities in his keynote speech entitled "Rules for Revolutionaries". He urged new businesses to get their product out there as quickly as possible, and only then worry about whether they were meetingcustomers' expectations.

"Don't worry, be crappy," advised Kawasaki, now chief executive officer of Garage.com, a business which puts startups in touch with investors.

"Revolutionary means you ship and then test," he said -- adding that this approach should not be applied to revolutionary new medical devices.

"Lots of things made the first Mac in 1984 a piece of crap -- but it was a revolutionary piece of crap."

Waiting for technology to catch up with the company's ambitions would have meant waiting three years and missing a window of opportunity, he said.

Nevertheless, companies should not forget those ambitions.

"I'm telling you it's OK to ship crap, but it's not OK to stay crappy," Kawasaki said. Products should be revised -- or churned -- to respond to customer feedback. "Microsoft (Corp.) is great at churning," he said.

Finding a few committed customers is vital for new businesses, he said. "At the start of the revolution it's more important that you make evangelists than sales. These (evangelists) are more important than fulfilling sales quotas."

Another keynote speaker took a similar tack, prioritizing grass roots involvement over marketing dollars.

"A community, built from the ground up with a dedicated focus, is far more effective than mass marketing," said Pierre Omidyar, founder and chairman of eBay Inc. "Brand awareness doesn't necessarily help build business. If there's no community ... then there's no business."

However, this meant hard work, he said, and "traditional marketing executives would really rather just write a large check for a traditional large marketing campaign."

The network marketing message was quickly taken up by some of the participants in the "elevator pitch" conference session, in which startups seeking financing were given three minutes to pitch to investors in the audience. Edward Johnstone, chief executive officer of London-based travel advice Web site ZedZed.com, paused in his delivery as if to rewrite his speech. "Of course, we won't be marketing to (our users)," he said.

The Upstart Europe conference, which is being held at Disneyland, near Paris, continues through tomorrow. Details can be found at http://www.tornado-insider.com/upstart/.

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