Book: The Four Steps to the Epiphany: Successful Strategies for Products that Win

Author: Steven Gary Blank

Rating*: Recommended

Review: Perhaps one of the worst edited books I've read, but it's got great content. This book outlines how to develop a business that focuses on the customer. It defines what strategies to use at each stage of a business based on the type of market the business is in. Blank uses business that have failed as warnings to others (reminds me of a great demotivational poster, image lost due to blog update).

My favorite example was Webvan and how it grew too fast, too quickly and spent too much money before proving that they had a product that could support such growth.

This book breaks down the process of building a business into many steps, each with it's own set of deliverables. The process actually reminds me a bit of agile development applied to a business process. Basically, take small bites and iterate until you are ready to move to the next stage. It's difficult to predict where the market might take you so be flexible, preserve capital, and don't jump ahead of the market (spending millions on branding is not always the best use of capital before the product is even available as is pointed out in a couple examples in the book).

What I like most about this book is the focus on the customer and market type. These are very important concepts when starting a business but are often times overlooked, especially by entrepreneurs that have a technical background. If you're starting a business and you want to succeed, you should definitely read this book.

*NOTE: The book reviews on my blog are written for developers considering starting a Micro ISV. The rating (recommended, not recommended, etc) is based on content from that perspective only.

Joel (from Joel on Software) had another great post today (Seven steps to remarkable customer service). In today's post he talks about how to provide great customer service and how great service with highly qualified and compensated employees can actually save a company money in the long term.

As a consumer, I know that I would rather pay more for something (within reason of course) if the company is one I trust. The company's I trust are the ones that provide great service. I define great service as a company that returns phone calls, is on time, honest, listens to my issues, and attempts to address my issues in a reasonable fashion. It seems like most service companies (at least in my area) seem to fail the first test (I can't get any landscapers to return my calls, grrr).

The company I work for has off-shored some of the development work to India, but they kept the technical support in the United States (where the majority of our customers are). This seems to make a lot of sense to me. I know I grow frustrated when I get a technical support person with a heavy accent. I always feel bad when I have to ask them to repeat something because I don't understand what they said.

I've contacted Microsoft developer support a few times in the last couple of years. I've been happy with the level of service that they have provided. They seem very committed to resolving whatever issue I may be having and will go to great lengths to resolve it. However, the support call usually starts off in India (I assume the support person is in India due to their heavy accent). The person is usually very helpful, but I often times have trouble understanding them. Of course, overall I'm satisfied with the level of support, but I would be happier if I didn't have to deal with the accent as well.

My prediction for the next big movement in customer service will be home-based customer service representatives providing support for their local region (I have heard of some companies doing this already, but it isn't wide-spread yet and the infrastructure to support it doesn't seem to be quite there yet). With telephony services the next big thing in the Internet, it's only a matter of time before some large organization has figured out how to provide this type of customer service in a cost-effective way that maximizes customer satisfaction.

Of course, based on Joel's article, this approach may not be very practical when taking a long-term approach to customer service (at least for the software industry). Having a strong feedback loop from customer service to product development is very important in improving the quality of the product which reduces the amount of customer service that is required to support the product.

Book: Engineering Your Start-Up: A Guide for the High-Tech Entrepreneur

Author: James A. Swanson, Michael L. Baird

Rating: Recommended

Review: This book is focused on financing a high-tech startup. Although I recommend the self-funded approach, it's important to know the ins and outs of financing so that when you want to grow your self-funded company, you haven't made any major mistakes that will make that more difficult than it already is.

This book is a bit dry and technically challenging (at least for non-finance people). However, the authors do a decent job of defining the jargon used in the industry.

A few of the gold nuggets in the book...

• Ch 6, Startup Financing Terminology and Stages - This includes some of the most basic terminology that a entrepreneur should know to keep from looking too foolish :).
• Ch 8, Evaluate Markets and Target Customers - Reinforces the arguments for a small (but potentially profitable), niche market and discusses ways to analyze the market to make sure that you can succeed (at least increase your chances).
• Ch 20, The Legal Form of Your Startup - Definitions for all of the basic types of organizations (Class C, Class S, Partnerships, etc).
• Ch 21, Making the Startup Decision - Things you need to consider when starting a business, especially while still working for another company.

This is a review of some of the books I've read over the last year concerning the business of software. I'll post more reviews as I finish some of the other books in my collection.

• MUST READ - Micro-ISV: From Vision to Reality (Bob Walsh) - This book has a lot of information to help decide what features a product should have, who the market for the product should be, and how to market to that group. It also includes what legal issues you need to consider when launching a product. The book uses a lot of examples of real software companies to illustrate the concepts in the book.
• MUST READ - Eric Sink on the Business of Software (Expert's Voice) (Eric Sink) - This is a collection of articles written by Eric Sink for various publications. He is the founder of SourceGear, a software company that produces a version control system (he also has a great blog!). The articles seem to cover most of the aspects of running a small software company, such as marketing, funding (or how to avoid it :), hiring, etc. The articles are well written and sprinkled with enough humor to make them enjoyable. Eric is the author that coined the term "Micro-ISV".
• Recommended - Bringing Your Product to Market...In Less Than a Year: Fast-Track Approaches to Cashing in on Your Great Idea (Don Debelak) - Ok, this is not, technically, a book on the business-of-software, but it's still a great book to read to understand many of the issues that a startup might face. It's main claim to fame is the concept of turbo-outsourcing which is pretty much a non-issue with software (unless there are specific hardware requirements). Since software has such significantly different production requirements and distribution channels than typical marketable products, I wouldn't put this on my "must read" list, but I still believe it's worth reading.