You asked the biggest profit making question ever. At the time you were probably standing in front of your customer. Or, perhaps you were sitting behind the comfort of your desktop. But man, you popped the question: “Do you know of a friend I could speak with who would also be interested in [insert your service]?” At this point, you’re ahead of the game. Most people don’t even ask the question. But you did. And sometimes, that feels like enough.

Then, the worst happens. The customer responds! In fact, you get three referrals. Three! That means, that you need to contact three new people who know absolutely nothing about you. What do you do?

Step 1- Celebrate. Whenever someone gives you a referral, that’s awesome. That means the customer, adviser, friend, or acquaintance, trusts you enough to put you through with one of their friends. So before you even begin, you’re on solid ground. You’ve been given a quality contact on a silver platter.

Step 2- Contact the referral within the week you received it. Timing is everything. Here’s why. Your customer probably already told his friend that you’re going to reach him (sometimes you know, sometimes you don’t). In this case, your customer is counting on you to fulfill your obligation in reaching his friend. Your customer put his social and in some cases professional reputation on the line in order for you to reach his friend. And you were postponing the contact how long? Another good reason to talk with the referral within the week is because you get lazy. Sometimes you forget. Don’t be a procrastinator. Startups can’t afford that.

Step 3- Thank the customer for the referral. Thanking the customer even before you reach the referral will put the customer at ease and feel good about his contribution. His friend is in your hands.

Step 4- Connect the dots when you contact the referral. A simple introduction including the name of the customer who referred the friend offers A LOT of clarity for the referral. If you’re writing an email, connect the dots in the subject line (“ Referral from Mike Hudson”). This will increase the chances of receiving an email or phonecall back.

Step 5- Update the original customer on your conversation with the referral. Your customers will love you for this. Even if the conversation with the referral leads to nowhere, just the fact that you came back to thank your original customer again means the world. It shows that you care about that customer and his referrals. It means that if you ask for another referral, the customer knows that you’ll follow through quickly and will be happy to present you with more contacts. In other words, you’ll build a stronger relationship with your customer. Trust baby.

Elders can sniff out a fake.

They not only have tons of life experience but tons of people experience. In other words, they understand how people work. They notice a liar when he is avoiding eye contact and mismatching his words and body gestures. Elders can sense ingenuity in a heart beat based on a handshake. You may know someone like this. Maybe a mentor, friend, or grandparent. Elders are usually people who have been around for a while.

Most investors fall into the elder category. They care about the details and use those details to determine your character and capabilities–teachable genius or arrogant jerk? Yes, increasing traction is important (see an earlier post on gaining traction) but what’s even more important is what’s behind the traction–you! That’s if you plan on sticking around to grow your startup. Otherwise, investors will find other ways.

As a startup, you should know the way of the elder. In fact, become an elder. You don’t have to be old. Study people. Learn the tricks. Sniff out the liars. Get faster at it. In the long run, this will save you time (and pain) when hiring.


“What doesn’t kill you only makes you stronger.” -Friedrich Nietzsche, German philosopher

Well, maybe.

Most techy founders are obsessed about two things: product and money. There is a problem with this. If one focuses too much on the product, then it’s easy to miss out on building things that people actually want. If one focuses too much on the money, then it’s easy to make poor decisions for short term gains. Both obsessions lead to destruction.

What is the fresh founder supposed to be obsessed about then? In addition to being obsessed about your vision, a founder should also be obsessed with learning.

I know, it sounds cliche. It’s not. Running out of learning definitely is worse than running out of money. The most successful startups are composed of the fastest learners. The fastest learners tend to be the ones that move the fastest too. Go figure. And the most adaptable.

Not sure what you’re supposed to learn? Start making mistakes. Learning from your own mistakes is a good motivator. You can also learn from other people’s mistakes too. Eric Ries wrote a whole book about it.

Is your startup fail safe?

Startup Inception, Don’t Stop There

“An idea is like a virus. Resilient. Highly contagious. And the smallest seed of an idea can grow. It can grow to define… or destroy you.” Dom Cobb, Inception (2010)

One of my mentors once told me to write down twenty-five startup ideas in one night. I looked at him in horror. He said, “Ideas are the easy part.” My eyes squinted. “But…how will I know if they’re good ideas?” His eyes squinted. “There are lots of ideas out there. Let the best idea will win.”

Everyone wants to hold onto one idea and “run with it.” But before you quit your job, steal your family and friends’ money, and breakup with your girlfriend, try exploring SEVERAL ideas first. The best idea will win. But it must earn it. Have each of your ideas compete for attention and resources. Which ones solve the biggest pains? Which ones have capabilities for future applications? Which ones do you have some expertise behind? Which ones take forever to sell? Which ones require significant funding?

It’s good to dream. But all dreams turn into work. So do your homework. Explore several ideas. Don’t let one idea…destroy you.