The Microconf Reader: Startup Wisdom From Successful Founders
The Microconf Reader: Startup Wisdom From Successful Founders
The Microconf Reader: Startup Wisdom From Successful Founders
Milestones to Startup Success | If Its Worth Doing, Its Worth Stealing | A Recipe for Building a Billion Dollar Business | Five Reasons You Havent Launched | Running A Software Business On 5 Hours A Week | How to Break the Trust of Your Customers in Just One Day | How to Take on Goliath
Contents
Milestones to Startup Success If Its Worth Doing, Its Worth Stealing A Recipe for Building a Billion Dollar Business Five Reasons You Havent Launched Running A Software Business On 5 Hours A Week How to Break the Trust of Your Customers in Just One Day How to Take on Goliath 1 7 13 17 21 36 41
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Metrics
Obsessing over metrics can wait until after youve achieved product/market fit then they are critical to your success. Dave McClure has a great video on startup metrics that matter (relevant part is at about minute 2:20). Most of the tools out there provide way too many irrelevant metrics and miss the essential few. Both Dave McClure and I are advising KISSmetrics on a solution to this problem.
Start Charging
Another key step before growing your business is to implement a business model. The ideal timing for implementing your business model is discussed in this blog post. Ive often heard the argument that startups are focused on user growth and prefer to delay revenue in the short term. I believe the fastest way to grow is with a business model and explain why in this blog post.
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Driving Growth
Once youve achieved all of the previous milestones, then you can focus on driving growth. CEOs must take an active role in driving customer growth whether or not they have an interest in marketing. Nearly all of the risk and upside in a startup is in your ability to gain customer traction and then drive scalable customer growth. The CEO should not abdicate this responsibility to the marketer. Its important to stay aggressive and take all slack out of the market (make it completely uninteresting to pursue the market for any other competitor). Your early advantage
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Business building
Fast growing businesses are difficult to manage. This is the point where you should bring in some experienced operations people if they arent already on the team.
It Wont be Easy
Finally, the top three risks to growing via these milestones are: You lose patience and decide that one or more of the milestones really arent that important.
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The electronic age has made it outrageously easy to copy other peoples hard work. This is most obvious with the bits and bytes representing documents, images, and most controversially music and movies, which can be duplicated in seconds and cost only as much as the disk space theyre stored on. But its not just created works that are being copied. The Internet has given a platform to every entrepreneur with a good idea and the gumption to test it. At the same time, it has given a platform to every entrepreneur without a good idea, but with the gumption to test somebody elses. So it was with browsers, and so it is with just about any other product, service, methodology, or business model you can imagine.
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So, have you come up with a marketing strategy thats working well? Have you developed a business model thats raking in the dough? Have you invented a new product or service that is proving surprisingly successful? Someone is already thinking about copying it; and is probably even in the process of doing so right now. If they turn out to be really good at it, you could be in trouble.
Oh nowhat to do?
Firstly, have a bit of a partyor at least take a moment to slap yourself on the back. Being copied means that someone thinks of you as a thought leader, an innovator, a guru, or whatever else floats your boat. Youre already ahead because you got there first.
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But secondly, realize that you might now be fighting for your life. Make the most of your lead by doing all the things that got you to the head of the pack to begin with. Dont be a Microsoft, who after claiming top spot in the browser market were then content to coast on their successadding only the bare minimum of new features and standards support to new versions of IE despite these things being what made it so popular in the first place. Their complacency not only cracked open the door for Firefoxs little toe, but actually fueled its development because people wanted more than IE offered. You wont get far on inertiaalthough the bigger you are the farther youll go. If you get complacent youll be overtaken quickly. Even Firefox is starting to feel what its like to have its heels nipped at, with Chrome becoming many peoples browser of choice,
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Focus. Focusing on how you can be a big business is the first mistake. Instead focus on creating something ultra valuable that people cant live with out. The question to ask is, How would you feel if we werent around anymore? If they say they would die youve got a hit. Focusing on large billion dollar exits only sets your site way too far in the future and misses all the details you need to get there. Small. IBM, Facebook, Google, Mint, Microsoft, etc... All these companies were started by just a few people. They are not overnight billion dollar companies. They were a few people who came together to solve a problem. I doubt anyone planned from day 1 to make a billion dollars. Large things form from small. So dont fret your idea isnt worth a billion dollars today, just plant it like a seed in the garden. Time. Around 99.9999% of companies have not created over a billion dollars in value in less than 3 years. Are you in? Seriously, how long do you want to do it? Validate. Make sure before you start building something you have an idea of the problem you are solving. We spent 6 months building betarcade.com (its not live, so dont bother checking). Thats a lot of time and money we wasted, which could have been spent questioning users, doing surveys on surveymonkey and putting up ads to see what conversions would have been like for peoples interests. Ask for an upfront contract with people you talk to. Go even further and make them pay you ahead of time. Learn. The best thing you can do is fail. Not fail fast kind of stuff but just make tons of mistakes. You should be asking that after everything you do. Make sure not to spend all your time reading articles like this one, so you can balance it with creating, failing and learning from your mistakes.
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And for dessert you need to consider the end users. Dont chase your tail around them. Build something you want for yourself. If you create something that you would actually pay money for, then its hard to go wrong -even if you only end up with 1 customer.
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Reason #4: Youre Busy Adding Features (That No One Will Use)
When was the last time you spoke with someone who is planning to use your application in the wild? Not your friend whos testing it out to make sure it doesnt crash when you login, but a real customer who entered their production data and told you they are anticipating the release of your application more than Iron Man 3? If youve not working directly with at least two customers you have no idea if what youre building is adding value. Or a total waste of time.
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Document. Everything.
Im indebted to my day job for teaching me the importance of proper internal documentation. As weeks stretch into months stretch into years, no matter how good of a memory you have, you will eventually have things fall through the cracks. Your business is going to produce: Commit notes. Thousands of them. Bug reports. Feature requests. Pre-sales inquiries Strategic decisions Statistical analyses
etc, etc. The exact method for recording these doesnt matterwhat matters is that you will be able to quickly recall necessary information when you need it. I tend to have short-term storage and long-term storage. Short term things, like What do I need to do this week?, get written down in a notebook that I carry with me at all times. (I lock it in the drawer when I get to work, but feel no compunction about sketching things on my train ride.) Things that actually need to get preserved for later reference go into something with a search box. This blog actually serves as a major portion of my memory, particularly for strategic direction, but I also have SVN logs (with obsessive-compulsive commit notes often referencing bugs or A/B tests by number), email archives, and the like. (One habit I picked up at the day job is sending an email when I make a major decision outlining it and asking for feedback. Note this works just as well even if youre the only person you send it toat least youll force
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Grandfathering
This is a huge and unsettled topic about which we are still getting feedback on each day. Maybe we should have offered a grandfathering option, maybe we should have given a grandfathering option to those that already integrated, maybe we will do all of this, but at this point we have not. The issue here is that it really depends on the business, the pricing change and how dramatic it is for each customer. Looking back, the best option would have been a grandfathering option which allowed the previous pricing but only included community support. Still an open topic. After personally replying to more than one hundred tickets, tons of comments across multiple publications and on Twitter, threads on Hacker News and many other channels, it was important to look back on all of this feedback and see what went wrong so our team (and others) can learn from it. Regardless, we broke your trust, trust that took a massive amounts of time to build, and now we may never get it back. I dont have any neat solutions for you and I dont want to feed you crap. All I can say is that we have learned more from this mistake than from anything before and will use that knowledge to change the way we think about everything related to Chargify. That might not seem like enough of a mea culpa from me, but our desire has always been to empower entrepreneurs to succeed with real tools and solutions for growing business, and that mission hasnt changed. That was the driving force behind this pricing change, and whether you believe that or not is your call; we will show you our commitment to you, our customers, with our actions now.
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Final Thoughts
Finding companies who have successfully employed one or more of these strategies isnt terribly difficult. Certain open source products such as Linux and MySQL have certainly carved out rather large portions of the market. On the commercial side, you dont have to look any further than companies like Mint.com, Skype (which took on traditional phone providers), and Netflix. For smaller, self-funded companies you can look to Red Gate, 37signals, Source Gear, and Atlassian. To people like us, these companies are financially doing quite well today. But they all had to start at the bottom and cut their way through the competition before they got to where they are today. That takes time, effort, and a lot of hard work.
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Conclusion
Theres a lot more where this came from dont miss MicroConf 2011 to hear more from these (and other) successful founders: www.MicroConf.com If you enjoyed this eBook, please let us know on Twitter: @microconf Loved your free Startup Wisdom eBook: http://bit.ly/MicroConf2
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