Startup: An Insider's Guide to Launching and Running a Business by Kevin Ready Page B

The engineers and creatives were then able to understand how much gravity (or lack thereof) was at play with the project. As it was, users did not really want to opt into that tool set when we deployed it, and it was removed from the site entirely within a few weeks.
    Takeaway: When starting any project, always ask yourself and the people involved to describe the specific intention of the effort. Beyond saying “do this,” clearly describing the desired outcome will help you to ensure that value isbeing created, and that everyone has clear insight into the thought process behind the actions they are taking.
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    How to Determine the Demand of the Market
    This is basic. Anybody who reads this will say, “I already know this.” Be that as it may, even seasoned executives can forget this from time to time.
    The exercise: Identify the total set of all potential customers, and the expected transaction value for each one per unit of time. Then calculate the percentage of them you think you can reach with your marketing message. Follow up by estimating how many will actually pull the trigger and pay you their hard-earned cash ( Figure 2-2 ).

    Figure 2-2. The law of profit potential
    A useful way to apply this rule when analyzing a business opportunity is to ask yourself how much money is in the entire market for the product or service. In other words, how much would you make if you were able to take 100 percent of the transaction volume that is available? This first analytical step concerns the market opportunity.
    The next step is to ask honestly how much you can expect to capture in the next year, and then in the next two years, and so on. Basic. I will often “chunk down” and ask this same question about incremental changes to an existing product. “If we modify our product by adding A and B, how much more sales can we really expect to capture?”
    This idea is important as heck because it can help you to identify the good ideas and prevent you from chasing the silly ones. Going ahead and doing this exercise every time you want to consider a new product or a product change is a must do . It will add clarity to what might seem at the gut level to make sense, but on closer observation isn’t worth pursuing.
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    Make Yourself Obsolete
    When you start out, as the founder of a business you are going to be wearing multiple hats. That means you are going to be responsible for many areas of your business, and be The Decider on everything from the important stuff to the necessary but time-consuming little things. In the beginning, you will likely become a hands-one expert in multiple areas of your business. If you don’t know how to manage something, you are going to have to either learn it yourself, or hire someone to do it for you. Hiring out for certain tasks is a natural phase of evolution for every business. At some point in the future you may have the option of posing as the big CEO, chauffeured to the office every day, known to ominously occupy a big leather chair and to steeple your fingertips under your chin while you consider your further plans for world domination. Until you get to that point, you may find yourself needing to handle some customer support calls, vacuum floors, and even fix your computer network when it goes down.
    Advertising agent, marketing and product planner, security expert, customer support representative, business trend prognosticator, contract negotiator, legal document writer, intellectual property monitor, window cleaner, paper clip buyer, furniture assembler, utility bill payer—these are some of the many hats you may wear.
    Figure 2-3 illustrates a trend. The trend is going from 100 percent you to a small percent you. This trend line represents a process that you have heard of before: the process of delegation .

    Figure 2-3. Trend line representing delegation
    Delegation means
     
Hiring the right people
Training them to understand the business (start with