David Cancel of Performable
Creating a data driven startup.
Timing is everything.
Marketing, big data, analytics.
“98 percent of the people that come to your website leave and they never come back.”
3 lessons learned the hard way:
1. The middle sucks. Don’t be in the middle. That is the valley of death.
2. Your “demo” is useless. No one cares about your demo. Why would you spend energy on a demo when you could be creating the real product?
3. So is your business plan. Your business plan is wrong and worthless. It will not be the same at day 1 as it is along the way and at the end.
You do not want to hear, “that is interesting.” That means that the investor does not care about your product.
Your biggest challenge is making people care. Don’t focus on competitors. Stop reading Techcrunch.
Sell a dream or sell traction. Don’t try to sell in the middle, don’t sell the demo.
Your idea doesn’t matter. It is about finding a pain point, solving a critical problem.
As soon as you hear “IF”– warning sign for your product.
If it is cheaper, if it was easier, etc…
Make sure that people will care about your product and want to start using it.
The Secret= #JFDI- Just Fu*king Do It!
Stop reading- Do something.
DOES ANYBODY CARE ABOUT YOUR PRODUCT?
“You are solving to make somebody care. There are NO repeatable patterns for startup success. Stop looking for one.”
- Be as close to your customers as possible, learn, pivot…
- Analytics and AB testing is not the answer.
- Test your assumptions.
- Optimize your business for learning, not data.
- Skip the fancy tools, use Google spreadsheet.
- Spend all your time on customer facing problems.
- Data visualizations are useless.
- Focus on your business, not the data.
- No one cares how smart you are.
Data-Driven Startup Checklist
1. Company wide dashboard: look at funnel, churn, how engaged your users are, how many of your users are leaving.
(Don’t pass step 1 until you have mastered step 1).
2. Conversion funnels: Keep it raw, simple. Where in your funnel are you sucking the most and focus your time there. Monitor your funnel weekly and see where the changes are happening. Create changes in these places for positive change.
(Don’t pass step 2 until you have mastered step 2).
3. Cohort Analysis: See how your customers behavior is changing. What happens when you introduce new features? Is your churn going up or down? Where is this occurring?
Does anybody care about your product?
Can you convey your product in a one minute pitch?
Ric Fulop of A123Systems
Don’t waste your time. Is there a large market for what you are trying to develop?
How to build the initial team? People is the number one consideration in funding and credibility factor. Companies do get started with 1 or 2 people. Start with a seed.
If you have real, differentiated technology and you can accurately portray your story in the right way you can get funding- if there is a market.
Attract the best people. Hire only the best.
When raising capital go to firms and people that you know specialize in. Find advisers that are credible and can validate what you are doing. If the investor gets a call or email from someone that they trust about you or your company they will be more responsive. Build momentum through your credibility.
Boston area angel investors- how to attract them to come on board with you. It is rare to build a company with two people. ***First thing is first, raise capital and then use that capital to build the team. What really matters is building a large business.
There is nothing wrong with failing.
Surround yourself with a broad network of advisors. Take your vision and access the people that care about your type of startup or your cause. Find prominent, credible people that want to support you- not always monetarily.
Find those people who’s charter in life is to support a cause like yours.
Can you show momentum in your business? Once you have traction you will have those relationships to work from. Not just about VC’s. “It is about building your team, building credibility. That will have more value than the idea to do Google and not being credible.”
Surround yourself with people who have done this before. The community here is rich, look for it and you will find it. They will be willing to speak with you.
Kevin Hale of Wufoo
Before launch: 100 percent development
After launch: 33 percent dev, 33 percent bug fix, 33 percent customer service.
Support driven design. Do onto others as you wish others would do for you. Create for others as if you had to support that shit!
Do not cheat. Do remarkable customers support.
2 rules to drive great customer support:
1. Make everyone responsible and accountable. Make everyone say thank you. Staying thankful to your customers and users is a good way to stay engaged and involved in the product.
2. Enlightened hospitality. When something goes wrong, respond and provide your service that will make up for your mistakes or problems.
Differentiate yourself by your customer support. Does everyone in your company feel comfortable picking up the support phone lines?
How can you scale remarkable customer support? Make software or a product that people will want to love. Make sure your product or software is one that will be able to create meaningful relationships with your users.
New users = dating. First impressions are everything. What is the first impression of your software or your company with your users?
ex) first email, account creation, login link, ad link, first support request…
Existing users = marriage. What makes a long term relationship work- with your users. FIGHT for it. How do you fight for? How do you resolve your issues? People will fight about the same things.
Each step of your funnel is a step where support will come into play. Make support top of mind for everyone in your company.
What is the emotional stage of your users throughout your product?
Do you want to have the BEST- price, BEST- product or BEST- overall solution. Focus on one of those three and then focus on what comes underneath that.
Stephen Wolfram of Wolfram Research
Hire people that are in similar stages in their lives. You will end up getting frustrated. For example, if you are 21 and you hire a CEO that is twice your age you will not be on the same page (most likely).
Plan to build something and then plan to throw it away and do it right the next time.
Take your technologies that you are building seriously. People will be using it.
You have yourself to blame when it goes wrong. That in itself will keep you motivated and moving strong full force ahead.
How can you tell if someone is going to be a successful startuper? A wide range of personalities can succeed. There is a certain tenacity, stick-with-it-ness. Get rich quick ego does not work. There will be different stages of your life where you are good at doing certain things.
“Startups don’t get done in 2 hours.”
Have you been around success? Have you been close to the process of things going from nothing to something? This will help with your degree of confidence, helping you to dive in and build something on your own.
Arrogance. To be able to go after your dream or idea you will have to be a little arrogant with your project.
Alexis Ohanian of reddit
West side, east side. You don’t need to go to silicon valley to start a company. Your first order of business is to actually JUST START!
Pitch your idea to someone over coffee or a drink. Good money you will be spending. Feedback. REMEMBER-THEY MIGHT NOT LIKE YOUR IDEA, BUT THEY MIGHT LIKE YOU.
Be cheap. When you come out of college your standards are very low. Network (drink with, have parties with…) people around you. These people you work with and are friends with now will be the people creating amazing companies in the near future.
There are angels everywhere. What better way for successful startupers to give back to the community. Investing in the startups, they aren’t loosing alot of sleep at night. “Combination of firefighters and yoda.”
Angel investors all have a common enemy– potential for really scary salaries to take away from those best and brightest coming out of school.
- Stop sleeping in class- start thinking about your startup right now, get used to it because you will live with it everyday of your life.
- Co-founders matter a lot.
- Hacker News. Great place to get honest feedback.
- What will make you get out of bed. What is your story? Why do you get up every morning to do this?
- You get the opportunity every day for adversity to push you back. Don’t quit. Love thy hater! Have people in your life who are critical.
Save America. Save the american dream.
James Lindenbaum of Heroku
Ask for lots of advice. Take what you want and what can work for you.
Do a startup program.
Work on user experience.
His top two things:
1. Throw things away. Be able to throw your ideas away. Learn to be able to throw your ideas away. If you realize that your customers want something else, if you start going one path be able to pivot. Have this at top of mind. “Be willing to let go, be willing to stray from that dotted line. Then you will move on to a different path. Your path will be much more of a squiggly line than a straight one.”
2. Be able to throw away code. Hard work has produced an understanding. Do not get too attached too your code. It is valuable when you have the epiphanies. When you have moments of clarity and you realize the problem is one thing and not what you were working on. That is when you discard that code and rework.
Machete Design. Discoverable features, discoverable designs. A machete has a hammer, a straight edge, a knife, etc- what will you do with it? Think about the machete as you create and discover different things you can do with your software or product- VS a swiss army knife style. How many barriers to entry do you have on your product? How many different tools have you jammed into your software or product?
How many steps does it take your users to do one thing with your software? Make sure your software is discoverable and intuitive as users go through the product.
Bill Clerico of WePay
Starting a business is not easy. Requires commitment.
You never know where you will meet your future business partner.
Death bed test. Will you regret this when you are 50 years old?
Times might get tough. Figure out interesting ways to make some money and keep your head high. Fight through.
Create something that will help you to stay committed.
Don’t try to raise money too early. “Focus on product. Once you get a good product working, everything else will flow.”
Y Combinator. Build something that people want and need. Be able to show people that there is a need and that people do need your product.
“Product has to come first, product will change everything for your company.”
***Build a great product and all else will follow.***
Your relationship with your co-founder is everything. Weigh the costs of your discussions, weigh the costs of what you are working towards.
Stay cheap. Make sure you don’t create road blocks that do not let you live cheaply. This could keep you from going after your dream and going to build your product out of nothing.
Build good relationships. Build your community. Create the open dialogue with your users. Listen to them.
Continue to learn to sell.
Bob MetCalfe of Polaris Ventures
Stay in school for as long as possible. Don’t leave school to start your company, you can do it while you are in school.
The desire to do a startup is not inherited.
Luck does come into play.
Negotiate your terms.
Think about how you name your company. Make good decisions.
The importance of selling. There is a recurring error in startups- selling is not important, well nothing happens until something gets sold.
“Nerds and the suits in your company have to get along.”
George Bell of General Catalyst Partners
Informed ignorance. You have no idea how much can go wrong.
Maintain culture. Keep the high bar on who you hire. “As soon as you populate your company with b players, you are on your way to failure.” Transparency, communication, make people feel like owners, share information. “Transparency is empowerment, if people feel like they can possess and own decisions. They will operate to their fullest power.”
Leadership optimism. Talk about how positive your business is, sleep with your paranoia at night. Do not spread the bad feelings around the office, the culture of the business will fall. Your employees will see how you are reacting on a daily basis and react from that.
Not enough articulation. Know where the small break through is that will cause the new explosion. “Small break through that leads to the larger piece.”
Look at your idea, your company in the long term. Instill the culture that you are in for the long haul. Creating the long term feeling of the business will help with persistence.
***Who got up faster? Who fought hardest for the development of their culture? Who hired the A players? Take a longer term view of your company.
Ayr Muir of Clover Food Lab
Food truck started out of MIT.
Get to know your customers really well. Building the community, bringing together people.
Check out your ramp rates and compare to your first customer base. Data, data, data…
How many of your customers will recommend your product to their network? People talking to other people about their experience with your product will help your business to grow in a short amount of time.
Have cheap failures. Is this going to burden your employees? Will it effect the customer base on a large scale? Take those lessons and apply to the business. Tweak your product from what your customers tell you.
Test your business model, experiment. Try new things to see what works.
What is your motivation? Will that drive you to work really, really hard. Do you care deeply about this idea and this potential business? “The combination of caring deeply about it and loving the day to day of it will help you succeed.”
Mick Mountz of Kiva Systems
After MIT started with Webvan-a version of PeaPod. Realized there was a problem with the way the warehouses operated- creating unnecessary costs and losses on orders.
Brainstorm the problem. Test your ideas at the limits.
Step zero- flip the switch. Instead of analyzing all the risks, thinking about what if for too long you won’t get started.
White board and business cards.
Product- team- customer- funding. Research your idea and file your patents. Go out and validate the product with potential customers. Get something working, have the real concept of what you are working on- “Convey the concept, not the final product. Don’t over engineer the first iteration.” Keep your mental roadmap in your mind at all times. What are the next steps that you need to take to get to the final product?
Expand your product line as the customer asks for it. “Your products will morph and take on extensions for offensive and defensive reasons.”
Develop a map for the long term organization. Have the idea from the start on what you want the organization to look like over time- create a chart or roadmap of where the organization will be in five years, ten years, etc.
Network like crazy to build out your incredible team. Your team is the group who will first create your unbelievable product. Next steps will be leadership team as you begin to get traction in the marketplace.
Customer validation. “Tune your product on the fly, with real world feedback.” Then pilot your product with real customers so you can show prospective customers what is actually working.
Funding. What are your long term funding needs to keep the company moving along and as the company grows? Which funding model will apply for your business? SEEK CUSTOMER FUNDING REGARDLESS OF WHAT HAPPENS WITH RAISING..
Day 1. Build funding and dilution model. The benchmarks will help you through your fund raising efforts to show you where the money will take you in getting to the next level, next step.
Keep your great customers and reflect.
Chris Wanstrath of github
What the hell happened? A look back on how it happened…
Putting a dashboard in the middle of two different repositories. Changed to social coding- easiness in working with people. “github is better with more people, the more people working on it- created built in marketing.”
Let your users market your product for you. Using your network of people who use your product- these users are blogging about their work and they wanted to share the experience with their networks.
Super fans. If you can get your users excited about your product and what they can do with it- one person at a time to spread your idea.
Customer sessions. Being in person with your users helps you to understand what they do not like, things that are not working easily with the product.
“Be super fanatical about your customers. That is how they will remember you.”
***Use your brain. You all have great ideas. Examine good ideas within your own company, on its own merit. Look at the ideas in respect to your own company. Worry about your company and what is good for your company.