
Most Startups Should be Deer Hunters - DanielRibeiro
http://www.bothsidesofthetable.com/2009/09/16/most-startups-should-be-deer-hunters/
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netcan
Interesting points and useful analogies. But, I think it would be better
framed within a specific subset of businesses rather than all startups. Also
some subset of strategies.

Classical disruption for example, suggests a completely different strategy.
Start with rats (ie an animal no one else even considers game). That is
usually applied in a context where a rapidly improving disruptive technology
is at the core of the business and it is getting ready to eat everything else.
But it works in some other cases too. Adwords started as a service for fringe
advertisers (rats to most ad sellers). Bullshit infoproducts, affiliate
marketers & micro-businesses spending $5 on 100 clicks. They quickly moved
into rabbits (ISPs, online businesses) and giant rats (that happens when your
service is so useful, it actually makes customers). Deer came easily. Local
dentists, ISPs, virtually every SME had an online marketing consultant at the
door. Adwords is ideal for deer. Before that all they had was expensive and
unreliable local media ads and trade rags. These days adwords gets a nice
amount of elephant meat in its diet and they still do it with rat guns.

Its great to hear entrepreneurs argue about things in such definite terms.
They are basically making the case for their way.

I think the main thing to take away though is to be extremely aware of what
you are hunting. Make a conscious decision. Pick a strategy that works for
your game and be aware of the risk profiles and gotchas of the strategy. They
all have them.

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danso
I'm not an avid hunter but I was hoping the metaphor would involve something
about waiting in a tree stand or in the bushes -- for f--king hours on end,
without the promise of even seeing a deer if you failed to apply deer urine
and/or judge the wind properly...but it still being an enjoyable test of
patience and whatnot. Deer aren't easy to kill if you're abiding by normal
hunting regulations.

~~~
mindcrime
_I'm not an avid hunter but I was hoping the metaphor would involve something
about waiting in a tree stand or in the bushes -- for f--king hours on end,
without the promise of even seeing a deer if you failed to apply deer urine
and/or judge the wind properly...but it still being an enjoyable test of
patience and whatnot._

I also thought he was setting up analogy that was going to be something like
that. Except I was thinking he was going to talk about the need to scout the
land, understand your prey, use appropriate bait, choose the right weapon,
etc. Those things would all work as analogies for a lesson about startups as
well, I think.

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mindcrime
Wow, that really resonates with me. As an enterprise play, we are definitely
at risk of picking the wrong segment here. Although, our options are a little
bit more limited due to the nature of our products. We're doing what you might
call "Enterprise 2.0" stuff, operating at the intersection of social-
networking (see: Enterprise Social Network), social-network-analysis,
information retrieval and business process management... The stuff we're
building really only starts to have utility _in_ the larger companies. So
we're still interviewing people, and researching and exploring to try and find
the right target segment.

There's a train of thought in my mind, fueled by our first big round of
Customer Discovery interviews, that we are looking at (using employee count as
a rough approximation for overall company size) companies with 1000 employees
or more. _Maybe_ it really starts at 500 employees, but we're still working on
that. Depending on where you draw the line between deer and elephant, we could
wind up in either segment (or both).

Rabbits are definitely out for us though, at least given our current model. If
things don't work going this route, we could pivot to a SaaS app that does
less, and go down-market to the smaller companies. We did interview a few
smaller companies earlier and saw some interest in that model, so it could be
an option.

Our next step is to do a very focused Customer Discovery effort, focusing on
manufacturing companies in the Southeast (mainly NC to start with, since
that's where we are) with 1000 employees and up. But we'll mix in a few of the
ones that are between 500 and 1000 as well, as we try to isolate the right
focus.

The idea of landing an elephant or two _does_ seem tempting, but msuster makes
some good points there. We definitely don't want to get too caught up special-
casing stuff for one big customer, to the point that they become our _only_
customer, because we can't serve anybody else!

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edanm
Excellent article. This is relevant advice not just to startups, but to every
company - you need to decide what kind of customers you're going after.

I see it a lot in our Software Consultancy. We're constantly focusing on what
our goal is: small startups, medium sized companies, or large businesses. And
whether the're technical companies, or non-technical. Those are the two
biggest issues we have, and they affect _everything_ we do - from marketing
(market technical skills? Market "solving problems without bothering you about
it"?) to pricing (value-based? time based? Fixed-price Project based?) to how
to grow technically (should we learn more languages and platforms to sell our
skills to technical customers? Or should we lean towards learning a more
specific niche if we're targeting a specific type of company).

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arbuge
The part about avoiding rabbits really hits home. You see so many SaaS
companies going for ~$19-$99/mo business models. Think about the thousands of
customers you need to gather & retain to turn a few million revenue with that.
Feasible if you can automate and scale the customer acquisition process but
any direct sales effort is likely to be a non-starter.

And since it's Friday, here's some folks who are really nailing the
recommended approach: <http://goo.gl/ue7uo> :-)

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Iterated
>This is especially problematic in the Web 2.0 / Freemium world where too many
company build their business models around trying to build massive scale of
free customers and then convert a small share to low monthly payments. I guess
it has worked for some companies? (Basecamp? Who else?)

Dropbox? Skype? I feel like there's a lot of freemium companies that make it.

I like this message though. Good advice for not just startups.

~~~
miahi
It's not efficient to hunt rabbits. You have to lay traps and just wait for
them to come. You can eat them as soon as they are trapped (sell them an app)
or keep them in the trap (sell them a service, like Dropbox, or rent them to
the zoos, like all AD/social-based sites). You have a problem when your rabbit
trap starts attracting deers (the elephants are too big to see it) and you're
not prepared. They can break your trap and also release all the rabbits.

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anonfunction
Awesome metaphor! At my company we are going after all three, and I can see
how narrowing down our focus with laser like precision (on deer of course)
could really help define our priorities.

~~~
mfieldhouse
'Many start-ups (and even growth firms) lack this discipline and they
therefore serve customers off all sizes. This leads to suboptimal results for
all.'

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rurounijones
Sound advice wrapped up in a very understandable analogy.

I have a little side-project going on which could easily cater to all three of
those categories and, to be honest, in the back of my mind I have always
thought about the Elephants when the realistic part of me knows I should only
cater to the Deer.

Nice to be reminded to focus properly, I guess that elephant-related feature I
was thinking about can be deleted

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jot
Any thoughts on what decides the point at which a business is no longer an
early stage startup? When does it make sense to level up from deer hunter to
elephant hunter?

~~~
ams6110
After you've bagged enough deer to be able to feed the team of elephant
hunters for 6--18 months (the typical enterprise sales cycle time).

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perttulaurinen
Another aspect: just have fun and shoot everything that moves.

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michaelochurch
Also, in the old version, you can only carry 100 pounds of food back to the
cart. The hunting subgame was fun for its time, but you're really better off
putting your money into oxen and, if needed, buying food along the way.

Finally, don't ford the rivers. Pay passage if you can. Above all, start in
May. You won't regret it.

~~~
T-hawk
Good advice for simply making it to Oregon. Not deep enough to play for the
best finish, starting as the farmer with little money but earning triple
score. With those limited resources, you need to hunt as much as possible. And
getting the top score means arriving with all party members in excellent
health, which means leaving as early as you can in March and resting copiously
along the way at the first sign of any disease.

Anyway, this article is pretty much reflective of Joel Spolsky's old article
on software pricing. Selling $100,000 to an elephantine enterprise requires
$50k worth of sales process. Selling $10 software to 10,000 rabbits requires
$50k worth of customer support and infrastructure. Selling $1000 software to
100 users is the sweet spot.

