Internal vs. External Deliverables

I wrote this email for Flowbit. The idea of internal vs. external deliverables is borrowed from Larry Chiang of Stanford University. 

Something to think about over the weekend: 

Moving forward, Flowbit staff will need to ask themselves frequently, "Is this task an Internal Deliverable or an External Deliverable?" The answer to this question can mean life or death for Flowbit as it grows. 

An internal deliverable is any work done that is not part of doing business with customers. 

An external deliverable is any work done that satisfies customer demand or gets more business. 

Large companies are full of internal deliverables. Human Resources, IT Departments, Building Maintenance, etc... But this is also why many companies die so quickly. Their non-revenue generating activities become burdens, and they have to make serious cuts. Internal Deliverables don't generate revenue. They're important, but they don't generate revenue. They can keep a company running, but they don't generate revenue. 

Examples: 

Internal Deliverable Examples: 

1. Figuring out corporate documents (an example of an important Internal Deliverable) 

2. Having meetings about what other people are doing (unless it's related to an external deliverable) 

3. Pitching for people who want to hear pitches 

4. Attending lectures and Pitch Events 

5. Talking at events

6. Doing interviews (admittedly they're really fun) 

7. Taxes, other legal stuff for the company 

8. Attending conferences (unless you go to sell or make business connections) 

9. Me writing this email is an Internal Deliverable 

External Deliverable Examples: 

1. Delivering a product to a customer

2. Consulting for a customer 

3. Reaching out to potential customers

4. Getting customers

5. Developing products that will be shipped to customers 

Internal Deliverables are often necessary and important, but only External Deliverables directly create revenue. Companies die through Internal Deliverables. 

An Exciting Day At Flowbit

Startups are hard. Really, really hard. I thought they were joking when they said it was hard --I thought I'd be smarter than the average bear and avoid the hardships. Wrong. Things can get bloody demoralizing at times. It's a good thing I study Stoic philosophy. It helps me survive the tough stuff.

But there are also good days. Great days, actually. Today was one of them.

Woke up for a 9:30 AM pitch at Skydeck. Who did we pitch to? The founder of Splunk, Michael Baum. Michael Baum saw the company to a $50 million valuation pre-IPO, and now the company is one of the fastest growing companies in Silicon Valley. It was an honor to pitch him, but I was also somewhat nervous. I figured he would tear us a new one in the Q&A.

Surprisingly, Baum wasn't too hard on us. Perhaps it was because our niche was so different from his area of expertise? Not sure. Anyway, he liked the idea and gave us some good advice on how to move forward. Or maybe he hated the idea? Not sure --Baum's not easy to read.

I could feel my phone vibrating during the pitch. I let it go to voicemail, but I called it back right after the pitch. It was Big Ideas at Berkeley.

"Hey Phillip," I said. "How are things on your end?"

"I'm about to make your day a bit better," said Phillip Denny on the other line. "Flowbit won First Place in Global Poverty Alleviation, with a grand prize of $X."

I literally jumped up and yelled, "YES!" Denny also invited two of us to a lunch tomorrow at Blum Hall, to meet some execs from USAID. Looking forward to it.

Later this afternoon, I had a conference call with Yasir (CFO) and an exec at a large water non-profit (identity kept anonymous until deal is finalized). The call lasted about an hour, and it got pretty technical. I was happy. I love talking technical to people who are serious about products.

We somehow closed a deal with them, and now we're doing a one-week trial of Flowbit with the potential to work together later. I remember that Yasir and I could barely hold in our excitement as I thanked the exec and quickly hung up the phone. We high-fived, smiling wide. "THAT'S HOW IT'S  DONE!" I exclaimed. "YUS!"

After that, we walked into a meeting with the entire team and Dr. Greg Hamm, a professor at Stanford University and co-founder of Agni Energy (a multi-million dollar renewable energies company in India). We talked to Dr. Hamm for a good hour about our company. We got a lot of good advice, and it turned out that Dr. Hamm was well connected to some angel groups in the area.

After the meeting, I headed home and drafted up the letter of intent for the water group. Shipped it off. And now I'm figuring out how we can solve their problem in our one-week trial period. It's exciting.

Today was definitely one of the good days. Days like these remind you why you're sleeping on the floor at a friend's apartment. They remind you why you've been full-time on no income for 5 months. They remind you that if you just keep pushing the ball forward inch by inch, you'll eventually get somewhere good.

We're not out of the woods yet. I'm sure some dark days lie ahead, but I'll enjoy this one for as long as it lasts.

Day 5+6: DEMO Mobile + Interviewing/Getting Interviewed

Wednesday: Went to UCSF and pitched our business in front of approximately 500 people. I spoke on the same stage as Vinod Khosla and Steve Blank. Kind of stressful, but also very exciting. I didn't even think while I was on stage --it was all over so quickly. I just pitched my 90 second pitch, held up the product, and spoke from the heart. I was a bit nervous walking up there, and the bright lights made it hard to see --but I treated it like having a conversation. As soon as I start to execute, the nervousness goes away. That's the secret about overcoming nervousness in public speaking. Just start doing it and forget about being nervous. Just be in the moment.

We talked to a bunch of VCs and got some good advice on where to take the company. It's exciting.

Yasir (a Flowbit co-founder) and I hung out with some people at the afterparty. We ended up visiting a posh startup incubator called Monkey Inferno over in downtown. That place was ridiculously fancy. It looked even nicer than a rich person's house. Made a lot of friends there --met a reporter from CNET, a photojournalist, some expert product managers and programmers, as well as super cool creative types.

Pretty much spent the whole day in SF. Left at 9 AM, got back home at 2 AM.

Thursday: Took it easy, for the much needed de-stress day after a conference. Interviewed two people who want to join our team, and also was interviewed for someone's class paper on entrepreneurship. Fun stuff.

Anyway, off to bed. I've got to go visit a water treatment plant tomorrow (Friday)!

Too Tired To Write (Day 4)

It's 2 AM and I must wake up early tomorrow. Too tired to write.

Tuesday is prep for DEMO Mobile in SF, and Wednesday is the actual DEMO Mobile pitch day. Couple that with some stressful Flowbit decisions, and you get a perfect storm of stress.

Product works well at least.

Tough Calls, Bird Walks, and Spontaneous Ramen

I went in to Skydeck today to do some work and deliberate a business decision. I thought I'd get some outside advice, so I walked over to the offices to see if Jeff Burton (the director of Skydeck) was in. I knew he likes to come in to work on Sundays, so I figured the chances were high.

Jeff was there, so I sat down and talked to him for a good half hour about Flowbit. Jeff co-founded Electronic Arts back in the days before videogames became popular. He shared some EA stories with me and discussed leadership philosophy, and he also advised me on some things regarding Flowbit's business and fundraising efforts. I left the office with some clarity, and I felt like I knew what I needed to do about an impending business deal for Flowbit. I made up my mind, made a difficult phone call, and executed what I believed was right for the company.

My friend Catherine called me and asked if I wanted to go bird walking with her (yes, she walks her birds). I ended up spontaneously joining her to walk her two cockatiel birds to the bird store. Afterwards, I visited her apartment and helped make some delicious ramen using the baked ramen noodles I had brought up from LA. I hadn't made ramen in years, but Catherine and her roommate thought it was great!

Overall, it was an enjoyable Sunday. Making potentially make-or-break business decisions is absurdly stressful. The information overload from researching alternatives, doing background checks on involved parties, and imagining failure and success outcomes can put the human brain in a state of paralysis --but at the end of the day, a decision must be made. I felt relieved after making the call today. It's time to move forward.

I'm glad I was able to sneak in some spontaneous adventures. They made Sunday actually feel like a Sunday, and not another workday.

Spontaneous Ramen:

Day 3: Napkins, OASES, and Lawyers

Today was another "normal" day for me. Visited Sweetheart's and did some hard thinking about Flowbit over some boba milk tea. I didn't have any paper, so I actually ended up writing out my ideas on a napkin --hey, that's how startups are born, right? On the back of napkins.

Afterwards, I wandered over to Barrows Hall to get some work done over AirBears wifi. I discovered that the OASES club at Berkeley was having a Poker Night in one of the rooms! I decided to buy in after I finished a chunk of my work. Ended up losing all of my chips after just three rounds! I went all-in on an almost-flush of hearts.

While at the OASES event, I tracked down a guy who had sent us his resume for an internship opportunity. His resume mentioned OASES. I introduced myself to him and said, "Hi, I'm Nick from Flowbit!"

He looked at me, puzzled. Bad sign.

"You sent us your resume," I said. "I saw OASES listed as one of your clubs, so I figured I might be able to find you here. We're interested in you."

We went out into the hall and I talked to him a bit. I asked him how much he knew about our company. "Not much," he said. That's when I realized he probably just spammed us his resume and didn't learn about what we actually do. After about 10 seconds I realized this kid was probably a no-hire. But I decided to give him a chance to think about us.

We booked him an interview time but I later told him that he should only confirm if he's really serious about Flowbit. Hey! I discovered a great way of filtering candidates who apply to your organization. Find out what club/volunteer organization they participate in, go to one of their events, and surprise introduce yourself to the person! If he asks, "What does your company do again?" then he's out.

Finished the night pacing around in front of Wheeler Hall while on the phone with our lawyer, talking about some legal junk. It was kind of stressful and I couldn't go inside --all the buildings were locked. I probably looked crazy pacing around at 10 PM on a Saturday, talking about all sorts of legal. Luckily nobody was around to eavesdrop (I'm very careful about these things).

Staying the night again at the undisclosed fraternity. I'm starting to get to know the bros here pretty well. I always wondered how it would be to be part of a frat --I guess I'm getting a small taste of it this week :P

Day 2: My First Frat Party

Spent last night (Day 1) at a fraternity in Berkeley (whose name/identity I will not reveal, since I have no idea if there are bad consequences to revealing what happens at specific fraternities). The bros were quite cool, and totally not jerks like the stereotype you might expect. A Haas student let me stay in his room for the night.

Today was an intense day at work. Pretty much pulled a 11 hour day at Skydeck, and much of that was spent in intense meetings. Very tiring indeed.

I also attended my first frat party, again at the undisclosed fraternity. It was a pretty fun experience. The bros here are quite cool. I believe a sorority was invited to the party here, so we enjoyed some nice company throughout the night. It was very interesting seeing how the Greek community does partying. As an engineer at Berkeley, I had very little exposure to such things. :P

Party hard, play hard. I learn something new every day. For instance, finger tutting gets you a long way if you have LED-powered gloves.

Yet another night, crashing at the undisclosed fraternity.

Day 1: Homeless in Berkeley

It's a long story, but I don't have a home in Northern California for the next 60 days. Like the people in People's Park, I'm technically homeless. It's a funny story why this is, but I'll spare you the details. Startup lifestyle!

Work calls. I am in Berkeley for Flowbit, and we have a potentially huge project coming up. I'll be working out of my car, essentially. And luckily I have plenty of friends who are willing to let me crash at their places while I'm up here (thank you!).

I will be an "Entrepreneur in Residence" at many people's houses over the next two months. I'm looking forward to it. It's a great opportunity to get to know people better, and perhaps I can add value to other people's lives while I'm roaming around the Bay Area.

They're always telling you to "get out of the building" if you want to go into entrepreneurship. Now I'm forced to stay out of the building! This experience could either be quite miserable, or quite exciting. I'm 100% mobile, and hungry for opportunity.

-Nick