Monthly Archives: October 2014

Growth

Lecture 6: Growth

Link: How to Start a Startup

(You can find notes to the other lectures here.) 
 

How to Start a StartupAlex Schultz (@alexschultz)

Growth hacking is just Internet marketing.
Great product leads to customers.
Retention is the single most important thing for growth.
If you don’t have a great product there is no use spending time growing it because it won’t grow.
Startups should not have growth teams. The whole company should be the growth team.
Every company thinking about growth has a different North star. You need to define that North star.
The first time you get paid is a magic moment.
Get people to connect with the thing that gets them to stick on your site.
When operating for growth everything has to come from the top.
“Build it and they will come” is not true.
Move slow to move fast.
Building to where the world is today is an easy mistake to make.
Book: Viral Loop
Book: Ogilvy on Advertising
Think about virality in terms of payload (how many people you can hit with any given viral blast), frequency, and conversion rate.
Do anything you can to remove friction from the flow.
Do your research first for what (keywords) people are going to (search for).
Research consists of:

  • What people are going to search for that is related to your site?
  • How many people search for it?
  • How many other people rank for it?
  • How valuable is it to you?

Google Adwords keyword planner tool.
The single most important thing is to get links from high-ranking websites.
Email is dead for people under 25.
If you get caught in SPAM then it is very hard to get out.
The most effective email you can do is notifications.
What notification you should be sending is the first thing you should think about for email, sms, and push.
Think about how you can create triggerable email campaigns.
Make sure you have deliverability.
Focus on notification and trigger-based email, sms, and push notifications.
aschultz@fb.com
Work really, really hard.

Business Strategy and Monopoly Theory

Lecture 5: Business Strategy and Monopoly Theory

Link: How to Start a Startup

(You can find notes to the other lectures here.) 
 

How to Start a StartupPeter Thiel (@peterthiel)

If you’re starting a company you always want to aim for a monopoly. You always want to avoid competition.
A business creates X dollars of value and captures Y% of X. X and Y are independent variables.
There are exactly two kinds of businesses in the world. There are businesses that are perfectly competitive and there are businesses that are monopolies.
The people that have monopolies pretend not to.
A monopolist describes their business as the union of two separate markets and a non-monopolist describes their business as the intersection.
The something of somewhere is usually the nothing of nowhere. E.g. the Stanford of North Dakota.
You want to go after small markets if you’re a startup.
How you get to a large share of a market is to start with a really small market and you take over that market.
Every moment happens only once.
Technology is designed to give a massive delta over the next best thing.
The thing about network effects is that they’re very hard to get started.
Software businesses excel at economies of scale.
You want to be the last mover–the last company into a category. Microsoft was the last operating system company. Google is the last search engine.
Most of the value of a company exists in the future.
One of the things overvalued in Silicon Valley is growth rates. Durability is undervalued.
The question of whether or not a business is going to be around a decade from now is what dominated the value equation.
You want something that is an order of magnitude better than what is available today.
Begin by studying the end game.
Even if you have a small market if the adoption rate is too slow you’ll give other people the opportunity to move in.
What is the actual market rather than what is the narrative of the market?
You don’t have enough time to mitigate risk.

Building Product, Talking to Users, and Growing

Lecture 4: Building Product, Talking to Users, and Growing

Link: How to Start a Startup

(You can find notes to the other lectures here.) 
 

How to Start a StartupAdora Cheung (@nolimits)

Take advice as good guidance but every business is different.
When you start a startup you should have a lot of time to immerse yourself in the problem developing solutions to the problem you’re trying to solve.
If you really want to disrupt an industry you should not be a player in it.
Get in the shoes of your customers from all angles of what you’re trying to build.
You should be obsessed with knowing what all of the other people in the space are doing.
Become an expert in the industry. There should be no doubt you are an expert so that people trust you and your product.
Cordon off some a certain portion of the customer base and optimize for them.
Storyboard out the ideal user experience.
Make sure there is a way for people to contact you.
If retention goes up over time that means you’re doing a good job. If it goes down that means you’re doing a good job.
You get more feedback if you make someone pay for (your product).
There is no point in building features for when you have a million users.
You don’t need to try to automate everything.
Imitation is cheaper than innovation in terms of time, money, and capital.
To get people to tell others about you you have to deliver a good experience.
clv > cac
There are different acquisition costs for different types of ads.
A lot of times something becomes a bad business when you start spending beyond your means.
Have a growth plan when you start out, What is an optimistic  but realistic method to grow this business?

Before the Startup

Lecture 3: Before the Startup

Link: How to Start a Startup

(You can find notes to the other lectures here.) 

How to Start a StartupPaul Graham (@paulg)

Startups are very counterintuitive.
You can’t trust your intuition all of the time.
You don’t need people to give you advice that doesn’t surprise you.
Work with people you genuinely like and respect and that you have know long enough to be sure.
There are a lot of people that seem likable for a while.
What you need to succeed in a startup is not expertise in startups. What you need to succeed in a startup is expertise in your own users.
The one thing that is essential is making something people want.
In college classes most of the work you do is as artificial as running labs.
The best way to convince investors is to start a startup that is actually doing well and then tell investors so.
The way to make your startup grow is to make something that the users really love.
All users care about is whether your software does what they want.
You have to have something people want and you only prosper to the extent that you do.
It is not in your interest to fool investors.
The difficulty of being a successful startup founder is concealed from almost everyone who has done it.
Do not start a startup in college.
The bigger problem you’re trying to solve is how to have a good life.
Usually the way for startups to take off is for founders to make them take off.
Starting a startup is really hard.
Starting a startup will change you a lot if it works out.
If you’re terrified of starting a startup you probably shouldn’t do it.
If you want a startup in college the only two things you need initially are an idea and co-founders.
The way to find startup ideas is to not try to find startup ideas.
The way to come up with good startup ideas is to take a step back.
The very best ideas almost have to start a side projects because they are such outliers that your conscious mind would reject them as ideas for companies.
Learn a lot about things that matter. Work on problems that interest you…with people you like and respect.
If you want to do a startup what you should do in college is learn powerful things.
Business school is to teach people management and management is only a problem with a startup if you are sufficiently successful.
The best way to learn how to start a startup is to just try it.
Ideally you’re successful before you hire two or three people.
The first hires in a startup are almost like founders. They can’t be people you “manage”. They have to be your peers.
As a general rule you want people who are self-motivated early on.
There is a difference between prices being high and a bubble.
Valuations being high does not mean a bubble.
Having kids causes you to focus because you have no other choice.
You will know when it is a good time to turn a side-project into a startup.
You will know it will become a startup when it takes over an alarming percentage of your life.
Do things that don’t scale.
When starting a startup many things will be going wrong. You can’t expect everybody to be perfect.
The advantage of hiring people you like far outweighs the disadvantage of having a small monoculture.

Ideas, Products, Teams and Execution Part II

Lecture 2: Ideas, Products, Teams and Execution Part II

Link: How to Start a Startup

(You can find notes to the other lectures here.) 
 

How to Start a StartupSam Altman (@sama)

As a student trust your instincts to identify if a market is going to be big.
One of the hard parts about running a startup is that it is real life.
Just keep going.
Cofounder dating is crazy.
The track record for founders who don’t already know each other is really bad.
It is better to have no cofounder than a bad co-founder.
You need somebody who behaves like James Bond rather than somebody who is an expert in a given domain.
Take advantage of school.
You want a tough and a calm co-founder.
It sucks to have a lot of employees. Be proud of how few employees you have.
At the beginning you should only hire when you have a desperate need to.
The cost of getting an early hire wrong is very high.
Hires really matter. These people go on to define your company.
When you are in hiring mode it should be your number one job to get the best people.
The best people know you should join a rocketship.
If you’re going to join a startup make sure it is a rocketship.
The amount of time you should spend hiring is either zero or twenty-five percent.
If you compromise and hire somebody mediocre you will always regret it.
Every person in a startup sets the tone.
The best source for hiring is people you already know or other people in the company already know.
Personal referrals are the trick to hiring.
Experience matters for some roles and not others.
For most of the early hires experience doesn’t matter much and you should go for aptitude.
Most first-time founders are terrible interviewers but good at evaluating somebody after they have worked together.
Call references.
Good communication skills tend to correlate with hires that work out.
For early employees you tend to want somebody with a real risk-taking attitude.
Look for somebody who is maniacally determined.
You need unstoppable people.
You should aim to give ten percent of the company to the first ten employees.
Your employees are the ones that build the company over years and years.
Be as generous as you possibly can to employees.
One things that founders forget is that after hiring employees you have to retain them.
As a founder you have to give your team all of the credit for the good things that happen and you have to take responsibility for the bad stuff.
Fire fast when it is not working out.
The co-founder equity split discussion does not get easier with time.
if you’re not willing to give a co-founder an equal share of the equity that should make you think hard about whether you want them as a co-founder.
Every founder, including yourself, has to have vesting.
With vesting you’re pre-having the conversation if one of you leave.
Co-founders should work in the same location.
Execution, for most founders, is not the most fun part of starting a company but it is the most critical.
The way to have a company that executes well is to execute well yourself.
Whatever the founders do becomes the culture.
Focus is critical.
Most startups are not nearly focused enough.
One thing about starting a startup is that you get no credit for trying. You only get credit if you make something the market wants.
If you work really hard on the wrong things no one will care.
You can’t be focused without really great communication.
Growth and momentum are something you can never lose focus on.
You should always know how you’re doing on your metrics.
The secret to startup success is extreme focus and extreme dedication.
Startups are not the best choice for work-life balance.
You generally need to be willing to outwork your competitors.
Set a quality buy that runs through the whole company.
Be decisive.
You can do huge things in incremental pieces.
Momentum and growth are the lifeblood of startups.
Always keep momentum.
Always keep growing.
Set an operating rhythm.
Don’t let the company get down because of competitors in the press.

Welcome, and Ideas, Products, Teams and Execution Part I

Lecture 1: Welcome, and Ideas, Products, Teams and Execution Part I

Link: How to Start a Startup

(You can find notes to the other lectures here.) 
 

How to Start a StartupSam Altman (@sama)

30% (of startup knowledge) is pretty generally applicable.
You need a great idea, a great product, a great team, and great execution.
If you do really well in the areas you can control you have a good chance of having some amount of success.
You should only start a startup if you feel compelled by a particular problem and you feel a startup is the best way to solve it.
Specific passion should come first and the startup should come second.
Great execution towards a terrible idea will get you nowhere.
Great companies start with a great idea not a pivot.
Some day you need to build a business that is hard to replicate.
The best companies are almost always are mission oriented.
The company should feel like an important mission.
With mission oriented companies people outside the company are more willing to help you.
You need conviction in your own beliefs.
The truly good ideas don’t sound like they are worth stealing.
You need a market that is going to be big in ten years.
You can’t create a market that doesn’t want to exist.
Good startup ideas are almost always easy to explain and understand.
Get to know a lot of potential co-founders.
One of the most important tasks for a founder is to make sure you build a great product. Until you’ve built a great product nothing else matters.
Build something users love.
It is better to build something a small number of users love than something a large number of users like.
If you don’t have some early, organic growth then your product is probably not good enough yet.
Over the long run great products win. Don’t worry about your competitors raising a lot of money and what they may do in the future.
Very few startups die from competition.
Start with something simple.
It is hard to build a really great product so you want to start with as little surface area as possible.
Get users manually.
The company will build whatever the CEO decides to measure.
Growth is the indicator of a great product.
 

Dustin Moskovitz (@moskov)

Be focused and keep working.
Number one role of being a CEO is managing your own psychology.
You spend most of your time as a CEO on the problems that other people bring to you.
An an entrepreneur you’re always on call. You’re a role model. You’re always working anyway.
After you have two people you need to step it up and be full-time committed.
It is important to keep in mind the context of the type of company you’re trying to start and the best place to start it.
The best reason to do a startup is if you can’t not do it.
Your subconscious can tell if you don’t have passion.
If it is not something the world needs don’t do it. Do something the world needs.

Customer Acquisition Plans for Bootstrappers

Episode 200 | Customer Acquisition Plans for Bootstrappers
Date: 2014-09-02
Link: Startups for the Rest of Us
Figure out things that are necessary but aren’t necessary for you to do. Get somebody else to do them.
Most business plans are crap.
A customer acquisition plan is different than a marketing plan.
Build, test, deploy, measure, fix what is broken, then repeat.
You can only optimize a page so far.
You need to be able to measure your progress towards your high level goals and your milestones along the way.
Work backwards from your goals. (e.g. how many customers do I need to reach my revenue goal?)
Customer contacts made is the number of emails you’ve sent that have actually been opened.
Just because you have an email address doesn’t mean you have a good lead.
The volume of your email list is less important as your price goes up.
You need to understand what your sales funnel looks like.
If you don’t understand what your sales funnel looks like it is hard to fix it.

Traction: A Startup Guide to Getting Customers (with Guest Gabriel Weinberg)

Episode 199 | Traction: A Startup Guide to Getting Customers (with Guest Gabriel Weinberg)
Date: 2014-08-26
Link: Startups for the Rest of Us
 
Everybody should take a 48-hour (retreat) by themselves at least once a year.
Prequalify people early.
Book: Traction: A Startup Guide to Getting Customers
Traction trumps everything.
Traction is sustainable customer growth.
Traction is growth.
If you don’t have growth in a startup you don’t have a startup.
Your key metric should be growing up and to the right.
B2B and B2C companies often get traction from the same mechanism.
Engineers already have a predisposition to focus on the product.
The first step (in identifying marketing channels) is brainstorming.
Any good marketing channel eventually saturates for you.
Spend 50% of your time getting traction. It is just as important as product development.
You generally want to go where your competition isn’t (for marketing channels).
Some things might work in phase one of your startup but they won’t work in phase two or phase three.
For every platform there is usually a company, or multiple companies, that solves things the platform company didn’t think to do.

How to Perform an SEO Health Check on Your Website

Episode 198 | How to Perform an SEO Health Check on Your Website
Date: 2014-08-19
Link: Startups for the Rest of Us
Look at manual actions under Google Webmaster Tools.
Review crawler errors.
If you have a lot of content have a site map.
Review any site messages that come up.
Most SSL certificate vendors offer free reissuing of certificates.
Bing Webmaster Tools.
Bing gives you the actual search queries.
Put in a calendar reminder to look at Google and Bing webmaster tools once a month.
Google Analytics.
Compare traffic of last week to last month.
If you don’t have landing pages then you need to make some.
You can set up alerts in Google Analytics to alert you to traffic nosedives.
Disavow shady inbound links.
Check your domain authority using Moz’s Open Site Explorer.
Google takes away ranking points for a slow website.
tools.pingdom.com
seositecheckup.com
quicksprout.com
There is always something new you don’t know about.

How to Sell a Web Application (with Guest Thomas Smale)

Episode 197 | How to Sell a Web Application (with Guest Thomas Smale)
Date: 2014-08-12
Link: Startups for the Rest of Us
When you’re larger you have a multiple of EBITDA.
With smaller businesses it is generally a multiple of seller discretionary earnings.
Software apps typically sale for close to 3x.
When preparing a sale depersonalize the site as much as you can.