Sophia Perl of Wisdom

I keep hearing people brag about how their startups aren’t going to need any humans to run them.  Why are people bragging about this?  If you truly have an idea that doesn’t require people (everything can be done with machines), then you have no sustainable advantage.  Other people can buy the same machines you have and you won’t have anything unique to offer, anymore.  If you have an idea that does require people, and not just any people, but smart people who are going to keep innovating for you, then you can create a business that can sustain itself in the face of competition.

Let’s take a more concrete example.  Admittedly, this is a gross over-simplification, but it’s still a good example.  Which is a better way to grow a startup?

1) Pursue an idea that takes 10 racks of servers and 1 sysadmin to run them?

or

2) Pursue an idea that takes 8 racks of servers and 3 sysadmins to run them?

I would argue that it’s a no-brainer.  If you’re starting a business, and for simplicity, you’re buying the servers, then a 48U rack of servers probably has the same price tag ($100K-$200K) as a sysadmin for a year.  If you have a business that takes 3 sysadmins, and you get good ones, they will be developing technologies, systems, and experience that are worth something in year 2 of the business.  If you start a business that has 2 extra racks of servers, how much better will that make your company look in year 2, as those assets depreciate?  You may have been able to serve a few more customers, but are you really safe from someone else coming along and blowing you away?  I doubt it.

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• 8/29/2008: ROFLThing San Francisco
• 9/3/2008: 2nd Annual LinkedIn Downtown SF Outdoor Networking Event
• 9/4/2008: Lunch 2.0 @ Powerset

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A few weeks ago, I was doing my usual skimming of daily Silicon Valley news.  I came across an article on how to get PR for your startup.  I particularly liked the point about picking up the check.  Check out the article for details!

From the article:

Here are my first ten tips on how to do PR for your startup.
1. Be the brand
2. Be everywhere
3. Always pick up the check–always.
4. Be a human being
5. How to bond with a journalist
6. How a CEO should e-mail a journalist
7. How a CEO should speak to a journalist
8. Invite people to “swing by” your office
9. Attach your brand to a movement
10. Embrace small media outlets

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Here is today’s gripe. I am doing some home remodeling at my house. I thought that I had some extra grout for the entryway but it turns out, nope.  I called up a major home improvement chain and asked about a custom order that I placed about 2 years ago.  I am thinking surely if I can’t remember the grout name, this store should have my records.  So guess what?  The store only holds customer data for a year.  At that point, I was utterly disappointed.  Of all industries, home improvements take years to complete and there can be multiple home owners for the same house.  All I want is to go to a store and ask, what paint color did this owner use, what kind of tiles does this house have, etc etc?  I know that not all home improvement projects go through one store, but think about what one store could do to manage a home owner’s projects.  The gist of the story is disk space is cheap, save your customer data and do some data mining on it.  If it’s not for the customer, do it so that you can operate your store more efficiently.

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• 8/22/2008: Outside Lands
• 8/24/2008: APWT Summer Mixer Brunch
• 8/24/2008: Annual Picnic at Fort Mason Center—Young Professionals International Forum
• 8/27/2008: “Startups Helping Startups” August Mixer
• 8/29/2008: ROFLThing San Francisco

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