101 lessons learned for startups

101Lessons Learned

for

StartupsAndy Harjanto

Collected from others’ and myexperience as running startups

More details, please visit

Shift Happens Blog

http://www.andyharjanto.com

I’m just one of youNot a startup celebrity, Nor a superstar genius

Why listening to me?

Building a startup todayis not the same as building it a decade ago

Shift Happens

Development CostCapital Expenditure

Time to Market

Down Trend

Better ToolsCloud Computing

Modern Programming

Distribution Cost

Social Media

Fund Size

Up Trend Market Size

Competition

Noise Level

Globalization

Social Media

Easier Barrier to Entry

Impatience

Thinking Of Starting Up?

Building A Team

Customers

Designing Product

Distribution

Lessons Learned Topics we’ll be discussing

Most of topics discussedare also applicable to “startup” teams

inside a company

Thinking Starting up?

1

Do you have what it takes?

to be a good

Entrepreneur

http://bit.ly/5dGJFb

Resilience

Risk Taker Competitive

Tenacity

2

Prepare to unlearnwhat you’ve

learned2010s Startups have to domany things backward andunconventional

more later…

3

Your “killer” idea is just a

hypothesis Talk to potential customers, friends,family without writing a single code

4

No need to perfect your idea

It’s almost a guarantee to change

5

Careful for creating a new

market

It’s a lot longer to create

than you think

Less competition, yes, but…

6

Some games are in town really over. Don’t compete

Let the big boys play

7

Ride the wave, Be the first

Facebook Apps

Twitter Based Services/Tools

You have millionsof potential users

from day one

8

At the end of the day, does your product solve problem?

Remember, just cool won’t cut it

Can you retain users?

9

A 5 year business plan? How about 5 day operating plan?

Startup is operatingunder extreme uncertainty

10

Targeting Consumer Market....seems so binary

More often than not, you have to be BIG fast (millions of users) in order to succeed

OR Go Home

11

Targeting Business Market…be prepared for long cycles

Work with channel partners, sales, build relationship.

12

Your Plan: Getting revenue from advertising… Think again Unless you’re to top 5 sites

in your market, you’re almost nobody

13

Overnight success is a mythBuild a long runway

Media loves overnight

success stories

All you heard is, 6 month start; 1 million users

14

Don’t sweat over your competitors

They could be even more clueless than you are

15

Going against entrenched players?

They resist to change

Provide a product that solvesproblems in a different, better way.

16

Be wary of a small number of competitors in your market

It’s either you’re genius OR there is no market

17

Sadly, luck plays roles in your startup success too

It’s the economy, stupid

Your product is ahead of its time

Celebrities love your product

18

Gauge market interest first via Social Media

Don’t worry about someone stealing your ideas

19

Be prepared for extreme rollercoaster emotional rides

Low of the lows

High of the highs

20

Be prepared for rejection after rejection

No one cares about your startup

Persistence is the key

21

Just Do-It, you’re ahead of99% of people

Too many people just talk with zero action

Money Matters

22

If you start a startup to get rich, you’re in the wrong business

Only few will make it “big”

Change The World

Solves ProblemsChallenges

Independence

23

Startup is a very high risk business

It does not makesense from

financialperspective

Many ways to minimize the risk

24

Be prepared for at least 18 months without pay & benefits

Don’t jumpbefore

you’re sure

Too many jump and abandon

before fully developed

25

Always operate under assumption of no investors

Got change formy startup?

26 More than anything else, tractions are what investors looking for

Number of users

Number of subscriptions

Growth

Retention Rate

Traffic

Can business scale?

27

Knowing when to fold

Gut Feeling will tell you

More of art than science

Measuring your tractions is a good indicator

28

In many countries, government grants are plenty for startups

Governments encouragehigh tech companies to

have presents locally, createlocal jobs, and national

pride

29

Your passionate user are sometimes your best investors

30

Watch your burn rate very carefully. You’re on diet

No Physical OfficeSkype (Free)

Free Email, Docs

Free Software

Open Source

Ramen profitability

31

Less money gives you senseurgency and boosts creativity It’s amazing to see how human

survival instinct kicks in

32

Charge for the service from day 1 is not a bad strategy

You’ll get very passionate customers

who believe in your product

33

Spend generously on tools, books, chance to network.

Your ROI is excellence

34

Don’t optimize your productFor VC

VC: How big is the market size?

Superstar developers?

At the end of the day,

traction matters the most

35

Get into partner programswith the big guys

Many offer free software and services

Building A Team

36

Find a great co-founder

Share the same values

Compliment skills

Check and balances

37

1st Stage: Hire Designer and Community Manager, instead

This could also be You

Ideas Validation

Gauge Market Interest

Quick Prototypes

38

2nd Stage: Hire Great Developers, Testers

This could also be You

Quality Code

Knows Scalability

Supportability

Security

39

Hire for Culture Fit & PassionateSet min-bar for Intelligent

Ideas Validation

Gauge Market InterestInterview Process: Make the candidate as ifan employee for a day

40

Hire temp, consultants to keepburn rate low

Gauge Market InterestChannel Partners

Product Videos

Marketing materials

41

A very short daily meeting is muchbetter than a long weekly meeting

Human needs constant reminder

of progress, accomplishmentand togetherness

42

Run effective meeting in22 minutes

http://bit.ly/caXq6h

43

Don’t grow fast, until youget to the product-fit phase

Gauge Market InterestKeep in in quick tight cycles of build, validate, learn

44

666 is the number to avoid

In a given startup project, no more than

6 people

6 months

6 day a week

45

Everyone should be CEO ofsomething

Promote a culture of

Veni, Vidi, Vici

I saw the problem

I own the problem

I solve the problem

46

Be decisive; majority of decisions are irreversible

“An hour meeting with 7 people to decide one API changeWhat a waste!”

Heard on the street:

47

External dependencies are kiss of death for startups

They’re not moving at the same speed

Reorg does happen

They can easily out-live you

48

Run your team on POT(progress, ownership, transparency)

http://bit.ly/6XT3NG

Designing Product

49

Why building an awesome product no body wants?

“Build it, they may not come”

Talk to customers, before writing a single code

50

Fail-Fast; andGet Traction-Fast

Really means Fail-Fast on bad ideasIt does not mean abandoning project too quickly

51

Quick build, validate, measure

and learn. It’s in our engineer DNA that welike to build a perfect system

Resist to be perfect

In an early stage,

52

Can you tell the difference:Progress vs. Wasted Progress?

Run tight, small loops of

Ideas (Hypothesis),

Validate/Measure and

Build

53

Don’t just accumulate work done without measuring

Measurement will give you feedback to continue path, or tochange direction User Traffic

Bounce Rate

Retention Rate

Conversion RateUser Happiness

54

It’s OK to write messy codesduring validation process

55

Your spec should be UIprototypes

Written spec is easily obsolete

The cost of writing,maintaining

UI prototype is minimal and fun

56

Suppress many of your ideas

It’s not a feature to featurecompetition

It’s who solves the problems the

best

57

Just build it now and fast. No need for optimization yet.

Your code will likelybe a throw away

as you gather feedback

58

Concentrate on core scenariosMake it great!

People either love it Or hate it!

No place for mediocrity

59

Ignore your 10% cases.That will take 90% of your energy

60

Eat your own dog food daily

In the early phase, It’s better than hiring

a full-time tester

Use your own product

regularly

61

Boost virality, make sharing a click a way

People love to share

62

Boost retention rate.Human is a curios being

Add a few analytics, newsabout themselves and friends

e.g.“your doc hasbeen viewed 5 times”

63

Boost retention rate.Human craves for attentions

RIM (Blackberry), Twitter, Facebook do this perfectly

They make users addicted to their product, by tellingthem – “You’re important”

64

Minimize FrictionsUsers are “very lazy” nowadays

One click

One minute setup

No installation

65

Don’t give user optionsSet appropriate default

They have enoughother things to

worry

66

Ship your product with a minimum feature set

Enough to showcaseYour core scenarios

Add featureslater after

after undisputablefeedback

67

After iterations, often ask what features to drop, instead of add

Remember, your ideas are justa hypothesis; willing to let go

Pivot on your core beliefs, andgo to other directions appropriately

68

What Microsoft, Google, Apple can’t afford, but you can?

They can’t ship a crappy product,

even for their betaThey have reputation to maintain, You don’t!

Use it to run a tight feedback loop to

improve your product

69

Without instant gratificationUsers drop like a fly

I saw dead users leaving

First 60 second experience is critical

70

Create a product that 10xbetter

Dare to be different

Stand up and get noticed

The world is a very noisy place(and getting worse by day…)

71

Collect less, better privacy,security.

Many analytics tools are goodenough to measure user behavior

72

Don’t put any features, concepts that you can’t explain in 15 secs

Does your product ship with you?

Don’t makeuser think

73

Reach Product-Market Fit Phase. Celebrate, Work Harder.

40%will be upset

If your service discontinues

74

Watch out for yoursite performance

Users have no patience for sluggish sites

75

Do a side project/experiment.Minimize your risk

Many side projects made it big

76

Use Cloud Computing

Let’s not be IT guysLet’s focus on building

great product

Sleep better at night

77

Building a new walled garden,community is really, really hard

Piggy back existing onesfacebook

twitterlinked-in

Customers, Where r u?

78

Never too early to start your marketing campaign

How about Day 1?Or even 90 days before

valuable contentsquality

comments

79 Show the world what you’re doing. Stealth Mode is counter intuitive.

Are you worried someonestealing your ideas?

Really?Are you building

space shuttle?

No need for private beta

80

There is no such thing is product launching for startups

Continuous improvement

Unless you’re Apple.

81Approaching Press. Do you have unique, interesting stories?

They’re not your writers

Build a human connection first

82

Don’t have good retention rate,Don’t go to press yet!

Newspublished

Traffic Wasted

83Most effective way to acquire customers? Your passionate customers

Good news, travel fast and far

84

Save your money on press releases. Ineffective.

Different countries, however, it could be different stories

85

SEO, Social Media takes time to develop

Millions of others are doing it;

how you stand out?

86

Viral is not a strategyPeople are immune. Mutate!

Unless yourProduct is irresistibly good

87

Simple pricing is almost always better than complex one

Have 1-3 pricingoptions as opposed to complex pricingchoices.

Customers want predictable costs,

not many options

Going Global

88

US is a crowded place. Go play outside

Less competitorsGrowing market

Of course, there is a catch…

89

Partner locally. Remote management is an illusion

Close, personal relationsoften are prerequisite

outside US

90

Global team communication is easy. Culture fit is hard

91

In many countries, social status is more important

…than your product itself.

“Your product sucks,But X uses it, so I use it”

92

One size does not fit all

Package your product differently in

other countriesbased on market

demand

Miscellaneous

93

Nice guy finishes first… in the long run

94

Admit mistakes, start from the top. We’re all learning

95

Set expectation to teamChanges are constant

We’re a startupnot a manufacturer

96

You’ll be surprised, many peopleare routing for small guys

Many offer a helping hand

97

Whom Microsoft, Google, Apple should be worried?

YouThey may have the muscles, but you can

run fasterFew of you will be the next them

98

Startup is not a job

It’s a life style. It’s drive and passion to change the world

with little financial reward.Yes, few made it very big

Yes, it has been known that startup entrepreneurs have genetic defects

99

It’s a growing pain experience with big personal rewards

100 Subscribe to these

excellent blogs, vlogs, podcasts

• Paul Graham http://bit.ly/pgqy8 • Steve Blank http://bit.ly/juvQr • Venture Hacks http://

bit.ly/1BOE8x • Both Side of Table http://

bit.ly/EsjT7 • Mixergy http://bit.ly/rgDKP

101

It’s a blank canvas… What are you waiting for!

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Contact me mailto:andy@gestone.com