Most don't understand the issue until it's too late.

My first startup was what entrepreneurs call the hardest. A two-sided marketplace.

Two-sided marketplaces are the hardest startups because founders must solve the chicken or the egg conundrum.

A two-sided marketplace needs suppliers and buyers. Without suppliers, buyers won't come. Without buyers, suppliers won't come. An empty marketplace and a founder striving to gain momentum result.

My first venture made me a struggling founder seeking to achieve traction for a two-sided marketplace. The company failed, and I vowed never to start another like it.

I didn’t. Unfortunately, my second venture was almost as hard. It failed like the second-hardest startup.

What kind of startup is the second-hardest?

The second-hardest startup, which is almost as hard to develop, is rarely discussed in the startup community. Because of this, I predict more founders fail each year trying to develop the second-toughest startup than the hardest.

Fairly, I have no proof. I see many startups, so I have enough of firsthand experience. From what I've seen, for every entrepreneur developing a two-sided marketplace, I'll meet at least 10 building this other challenging startup.

I'll describe a startup I just met with its two co-founders to explain the second hardest sort of startup and why it's so hard. They created a financial literacy software for parents of high schoolers.

The issue appears plausible. Children struggle with money. Parents must teach financial responsibility. Problems?

It's possible.

Buyers and users are different.

Buyer-user mismatch.

The financial literacy app I described above targets parents. The parent doesn't utilize the app. Child is end-user. That may not seem like much, but it makes customer and user acquisition and onboarding difficult for founders.

The difficulty of a buyer-user imbalance

The company developing a product faces a substantial operational burden when the buyer and end customer are different. Consider classic firms where the buyer is the end user to appreciate that responsibility.

Entrepreneurs selling directly to end users must educate them about the product's benefits and use. Each demands a lot of time, effort, and resources.

Imagine selling a financial literacy app where the buyer and user are different. To make the first sale, the entrepreneur must establish all the items I mentioned above. After selling, the entrepreneur must supply a fresh set of resources to teach, educate, or train end-users.

Thus, a startup with a buyer-user mismatch must market, sell, and train two organizations at once, requiring twice the work with the same resources.

The second hardest startup is hard for reasons other than the chicken-or-the-egg conundrum. It takes a lot of creativity and luck to solve the chicken-or-egg conundrum.

The buyer-user mismatch problem cannot be overcome by innovation or luck. Buyer-user mismatches must be solved by force. Simply said, when a product buyer is different from an end-user, founders have a lot more work. If they can't work extra, their companies fail.

Choose.

DNA makes us distinct.

We act alike. Most people follow the same road, ignoring differences. We remain quiet about our uniqueness for fear of exclusion (family, social background, religion). We live a more or less imposed life.

Off the beaten path, we stand out from the others. We obey without realizing we're sewing a shroud. We're told to do as everyone else and spend 40 years dreaming of a golden retirement and regretting not living.

“One of the greatest regrets in life is being what others would want you to be, rather than being yourself.” - Shannon L. Alder

Others dare. Again, few are creative; most follow the example of those who establish a business for the sake of entrepreneurship. To live.

They pick a potential market and model their MVP on an existing solution. Most mimic others, alter a few things, appear to be original, and end up with bland products, adding to an already crowded market.

SaaS, PaaS, etc. followed suit. It's reduced pricing, profitability, and product lifespan.

As competitors become more aggressive, their profitability diminishes, making life horrible for them and their employees. They fail to innovate, cut costs, and close their company.

Few of them look happy and fulfilled.

How did they do it?

The answer is unsettlingly simple.

They are themselves.

• They start their company, propelled at first by a passion or maybe a calling.

• Then, at their own pace, they create it with the intention of resolving a dilemma.

• They assess what others are doing and consider how they might improve it.

• In contrast to them, they respond to it in their own way by adding a unique personal touch. Therefore, it is obvious.

Originals, like their DNA, can't be copied. Or if they are, they're poorly printed. Originals are unmatched. Artist-like. True collectors only buy Picasso paintings by the master, not forgeries, no matter how good.

Imaginative people are constantly ahead. Copycats fall behind unless they innovate. They watch their competition continuously. Their solution or product isn't sexy. They hope to cash in on their copied product by flooding the market.

They're mostly pirates. They're short-sighted, unlike creators.

Creators see further ahead and have no rivals. They use copiers to confirm a necessity. To maintain their individuality, creators avoid copying others. They find copying boring. It's boring. They oppose plagiarism.

It's thrilling and inspiring.

It will also make them more able to withstand their opponents' tension. Not to mention roadblocks. For creators, impediments are games.

Others fear it. They race against the clock and fear threats that could interrupt their momentum since they lack inventiveness and their product has a short life cycle.

Creators have time on their side. They're dedicated. Clearly. Passionate booksellers will have their own bookstore. Their passion shows in their book choices. Only the ones they love.

The copier wants to display as many as possible, including mediocre authors, and will cut costs. All this to dominate the market. They're digging their own grave.

The bookseller is just one example. I could give you tons of them.

Closing remarks

Entrepreneurs might follow others or be themselves. They risk exhaustion trying to predict what their followers will do.

It's true.

Life offers choices.

Being oneself or doing as others do, with the possibility of regretting not expressing our uniqueness and not having lived.

“Be yourself; everyone else is already taken”. Oscar Wilde

The choice is yours.

My ego is so huge it won't fit through the door.

I don't know how I feel about it. I should be excited. Many of you have this exact dream to publish a book with a well-known book publisher and get a juicy advance.

Let me dissect how I'm thinking about it to help you.

How it happened

An email comes in. A generic "can we put a backlink on your website and get a freebie" email.

Almost deleted it.

Then I noticed the logo. It seemed shady. I found the URL. Check. I searched the employee's LinkedIn. Legit. I avoided middlemen. Check.

Mixed feelings. LinkedIn hasn't valued my writing for years. I'm just a guy in an unironed t-shirt whose content they sell advertising against.

They get big dollars. I get $0 and a few likes, plus some email subscribers.

Still, I felt adrenaline for hours.

I texted a few friends to see how they felt. I wrapped them.

Messages like "No shocker. You're entertaining online." I didn't like praises, so I blushed.

The thrill faded after hours. Who knows?

Most authors desire this chance.

"You entitled piece of crap, Denning!"

You may think so. Okay. My job is to stand on the internet and get bananas thrown at me.

I approached writing backwards. More important than a book deal was a social media audience converted to an email list.

Romantic authors think backward. They hope a fantastic book will land them a deal and an audience.

Rarely occurs. So I never pursued it. It's like permission-seeking or the lottery.

Not being a professional writer, I've never written a good book. I post online for fun and to express my opinions.

Writing is therapeutic. I overcome mental illness and rebuilt my life this way. Without blogging, I'd be dead.

I've always dreamed of staying alive and doing something I love, not getting a book contract. Writing is my passion. I'm a winner without a book deal.

Why I was given a book deal

You may assume I received a book contract because of my views or follows. Nope.

They gave me a deal because they like my writing style. I've heard this for eight years.

Several authors agree. One asked me to improve their writer's voice.

Takeaway: highlight your writer's voice.

What if they discover I'm writing incompetently?

An edited book is published. It's edited.

I need to master writing mechanics, thus this concerns me. I need help with commas and sentence construction.

I must learn verb, noun, and adjective. Seriously.

Writing a book may reveal my imposter status to a famous publisher. Imagine the email

"It happened again. He doesn't even know how to spell. He thinks 'less' is the correct word, not 'fewer.' Are you sure we should publish his book?"

Fears stink.

I'm capable of blogging. Even listicles. So what?

Writing for a major publisher feels advanced.

I only blog. I'm good at listicles. Digital media executives have criticized me for this.

• It is allegedly clickbait.

• Or it is following trends.

• Alternately, growth hacking.

Never. I learned copywriting to improve my writing.

Apple, Amazon, and Tesla utilize copywriting to woo customers. Whoever thinks otherwise is the wisest person in the room.

Old-schoolers loathe copywriters.

Their novels sell nothing.

They assume their elitist version of writing is better and that the TikTok generation will invest time in random writing with no subheadings and massive walls of text they can't read on their phones.

I'm terrified of book proposals.

My friend's book proposal suggestion was contradictory and made no sense.

They told him to compose another genre. This book got three Amazon reviews. Is that a good model?

The process disappointed him. I've heard other book proposal horror stories. Tim Ferriss' book "The 4-Hour Workweek" was criticized.

Because he has thick skin, his book came out. He wouldn't be known without that.

I hate book proposals.

An ongoing commitment

Writing a book is time-consuming.

I appreciate time most. I want to focus on my daughter for the next few years. I can't recreate her childhood because of a book.

No idea how parents balance kids' goals.

My silly face in a bookstore. Really?

Genuine thought.

I don't want my face in bookstores. I fear fame. I prefer anonymity.

I want to purchase a property in a bad Australian area, then piss off and play drums. Is bookselling worth it?

Are there even bookstores anymore?

(Except for Ryan Holiday's legendary Painted Porch Bookshop in Texas.)

What's most important about books

Many were duped.

Tweets and TikTok hopscotch vids are their future. Short-form content creates devoted audiences that buy newsletter subscriptions.

Books=depth.

Depth wins (if you can get people to buy your book). Creating a book will strengthen my reader relationships.

It's cheaper than my classes, so more people can benefit from my life lessons.

A deeper justification for writing a book

Mind wandered.

If I write this book, my daughter will follow it. "Look what you can do, love, when you ignore critics."

That's my favorite.

I'll be her best leader and teacher. If her dad can accomplish this, she can too.

My kid can read my book when I'm gone to remember her loving father.

Last paragraph made me cry.

The positive

This book thing might make me sound like Karen.

The upside is... Building in public, like I have with online writing, attracts the right people.

Proof-of-work over proposals, beautiful words, or huge aspirations. If you want a book deal, try writing online instead of the old manner.

Next steps

No idea.

I'm a rural Aussie. Writing a book in the big city is intimidating. Will I do it? Lots to think about. Right now, some level of reflection and gratitude feels most appropriate.

Sometimes when you don't feel worthy, it gives you the greatest lessons. That's how I feel about getting offered this book deal.

Perhaps you can relate.

Generative AI hype: some thoughts

The sudden surge in "generative AI" startups and projects feels like the inverse of the recent "web3" boom. Both came from hyped-up pots. But while web3 hyped idealistic tech and an easy way to make money, generative AI hypes unsettling tech and questions whether it can be used to make money.

Web3 is technology looking for problems to solve, while generative AI is technology creating almost too many solutions. Web3 has been evangelists trying to solve old problems with new technology. As Generative AI evolves, users are resolving old problems in stunning new ways.

It's a jab at web3, but it's true. Web3's hype, including crypto, was unhealthy. Always expected a tech crash and shakeout. Tech that won't look like "web3" but will enhance "web2"

But that doesn't mean AI hype is healthy. There'll be plenty of bullshit here, too. As moths to a flame, hype attracts charlatans. Again, the difference is the different starting point. People want to use it. Try it.

With the beta launch of Dall-E 2 earlier this year, a new class of consumer product took off. Midjourney followed suit (despite having to jump through the Discord server hoops). Twelve more generative art projects. Lensa, Prisma Labs' generative AI self-portrait project, may have topped the hype (a startup which has actually been going after this general space for quite a while). This week, ChatGPT went off-topic.

This has a "fake-it-till-you-make-it" vibe. We give these projects too much credit because they create easy illusions. This also unlocks new forms of creativity. And faith in new possibilities.

As a user, it's thrilling. We're just getting started. These projects are not only fun to play with, but each week brings a new breakthrough. As an investor, it's all happening so fast, with so much hype (and ethical and societal questions), that no one knows how it will turn out. Web3's demand won't be the issue. Too much demand may cause servers to melt down, sending costs soaring. Companies will try to mix rapidly evolving tech to meet user demand and create businesses. Frustratingly difficult.

Anyway, I wanted an excuse to post some Lensa selfies.

These are really weird. I recognize them as me or a version of me, but I have no memory of them being taken. It's surreal, out-of-body. Uncanny Valley.

Fixing problems isn't enough.

Numerous articles and how-to guides on value propositions focus on fixing consumer concerns.

Contrary to popular opinion, addressing customer pain rarely suffices. Win your market category too.

Core Value Statement

Value proposition usually means a product's main value.

Its how your product solves client problems. The product's core.

Answering these questions creates a relevant core value proposition:

• What tasks is your customer trying to complete? (Jobs for clients)

• How much discomfort do they feel while they perform this? (pains)

• What would they like to see improved or changed? (gains)

After that, you create products and services that alleviate those pains and give value to clients.

Value Proposition by Category

Your product belongs to a market category and must follow its regulations, regardless of its value proposition.

Creating a new market category is challenging. Fitting into customers' product perceptions is usually better than trying to change them.

New product users simplify market categories. Products are labeled.

Your product will likely be associated with a collection of products people already use.

Example: IT experts will use your communication and management app.

If your target clients think it's an advanced mail software, they'll compare it to others and expect things like:

• comprehensive calendar

• spam detectors

• adequate storage space

• list of contacts

• etc.

If your target users view your product as a task management app, things change. You can survive without a contact list, but not status management.

Find out what your customers compare your product to and if it fits your value offer. If so, adapt your product plan to dominate this market. If not, try different value propositions and messaging to put the product in the right context.

Finished Value Proposition

A comprehensive value proposition is when your solution addresses user problems and wins its market category.

Addressing simply the primary value proposition may produce a valuable and original product, but it may struggle to cross the chasm into the mainstream market. Meeting expectations is easier than changing views.

Without a unique value proposition, you will drown in the red sea of competition.

To conclude:

1. Find out who your target consumer is and what their demands and problems are.

2. To meet these needs, develop and test a primary value proposition.

3. Speak with your most devoted customers. Recognize the alternatives they use to compare you against and the market segment they place you in.

4. Recognize the requirements and expectations of the market category.

5. To meet or surpass category standards, modify your goods.

Great products solve client problems and win their category.

The Merge cut Ethereum's energy use by 99.5%.

The Crypto community celebrated on September 15, 2022. This day, Ethereum Merged. The entire blockchain successfully merged with the Beacon chain, and it was so smooth you barely noticed.

Many have waited, dreaded, and longed for this day.

Some investors feared the network would break down, while others envisioned a seamless merging.

Speculators predict a successful Merge will lead investors to Ethereum. This could boost Ethereum's popularity.

What Has Changed Since The Merge

The merging transitions Ethereum mainnet from PoW to PoS.

PoW sends a mathematical riddle to computers worldwide (miners). First miner to solve puzzle updates blockchain and is rewarded.

The puzzles sent are power-intensive to solve, so mining requires a lot of electricity. It's sent to every miner competing to solve it, requiring duplicate computation.

PoS allows investors to stake their coins to validate a new transaction. Instead of validating a whole block, you validate a transaction and get the fees.

You can validate instead of mine. A validator stakes 32 Ethereum. After staking, the validator can validate future blocks.

Once a validator validates a block, it's sent to a randomly selected group of other validators. This group verifies that a validator is not malicious and doesn't validate fake blocks.

This way, only one computer needs to solve or validate the transaction, instead of all miners. The validated block must be approved by a small group of validators, causing duplicate computation.

PoS is more secure because validating fake blocks results in slashing. You lose your bet tokens. If a validator signs a bad block or double-signs conflicting blocks, their ETH is burned.

Theoretically, Ethereum has one block every 12 seconds, so a validator forging a block risks burning 1 Ethereum for 12 seconds of transactions. This makes mistakes expensive and risky.

What Impact Does This Have On Energy Use?

Cryptocurrency is a natural calamity, sucking electricity and eating away at the earth one transaction at a time.

Many don't know the environmental impact of cryptocurrencies, yet it's tremendous.

A single Ethereum transaction used to use 200 kWh and leave a large carbon imprint. This update reduces global energy use by 0.2%.

Ethereum will submit a challenge to one validator, and that validator will forward it to randomly selected other validators who accept it.

This reduces the needed computing power.

They expect a 99.5% reduction, therefore a single transaction should cost 1 kWh.

Carbon footprint is 0.58 kgCO2, or 1,235 VISA transactions.

This is a big Ethereum blockchain update.

I love cryptocurrency and Mother Earth.