Notes from 'How to Start a Startup'
Theses are my notes from How to Start a Startup course. I would recommend this course to every person on earth who has to take decisions about a team or product. I found usefull insights that work on my daily tasks beyond creating a company.
How to Start a Startup
1. & 2. How to Start a startup
Problem –> Startup
- Evolve, pivot.
- Execution > Idea.
- Think in long term -> How will be the market in 10 years?
- Mission oriented, MISSION is !important.
- Look horrible at the begining.
- From an small market to a bigger one (expansion).
- First version can’t be big.
- Build something you need, if you don’t, you need to be close to someone who needs it.
- Must be simple to explain.
- Market first.
- Great idea -> great product -> great company
- Product is also talking with costumers.
- Users must love product.
- TALK to users.
- Easy starting with a product that small group of users really love.
- Growth by word of mouth.
- Start simple, smallest.
- Fix quick.
- Feedback from lovers from early days.
- Get first users manually feedback.
- User feedback -> Product decisions -> Show it to users -> User feedback -> …
- What do the like?
- What would they pay for?
- Founder do sales!
- Focus on growth:
- Total registrations.
- Active users.
- Activity levels.
- Net promoter score.
- Look for at least two founders.
- Know your cofounders.
- Ideal number of cofounders 2-3.
- Try not to hire, stay small and fast.
- Get the best people.
- Before hiring try to work together in a little project.
- Referals works.
- Equitity to employes 10% first 10.
- Retain talent.
- Fire fast.
- Execution well (ideas) is what adds value.
- CEO jobs:
- Settle vision.
- Raise money.
- Hire and manage.
- Make sure the entire company executes.
- Set key goals.
- Always keep growing.
## 3. Before the startup - Counterintuitive. - Intuition is good. - Work with people whith who you want to be. - Not expertise in startups -> ** Expertise in your USERS. - Understand your users. - Make something people want. - Growth hacks -> bullshit -> get **USERS LOVE. - Solve a real problem -> the nature of a problem evolves. - Learning by doing. - (About Mark Zuckerberg) Facebook is running him, instead of him running Facebook. - Learn powerfull things - JUST LEARN. - Twitter started as a side project.
4. Building producte, talking to users, and growing
- 1 sentece describing what problem we solve.
- Learn a lot about industry, identify costumers.
- Get on the shoes of your costumers.
- List of possible competitors.
- Identify customer segments.
- Storyboard ideal user experience (not just on your site).
- MVP (Viable you can sell).
- One liner. Describe in one line what we do in plain english.
- First users (HackerNews, Reddit, ProductHunt, Online communities, Friends, influencers, bloggers, press).
- Customers feedback (support, email, interviews, survey, …).
- Optimise for your first 10 users.
- Growth focus in just one channel, if it doesn’t work after 1 week iterate.
- Types of growth:
- Sticky, viral, paid.
- Existing users, people talking, $.
- Customers Life Value (CLV).
## 5. Competition is for losers. - Big piece of an small market. - Start small and monopolieze. - A business creates X dollars of value and capture y% of x. X and Y are independent variables.
- Great Product -> Market fit.
- Focus on month star.
- Retention curves.
- Magic moment - Facebook - See my friends face.
- Find one most important metric (month star).
- Research keysearch tool (Adwords).
7. How to build products users love
- Relationships with users.
- New users -> dating / Existing useres -> Marriage
- First impressions are !important.
- First touches:
- Landing pages.
- Sign up.
- First email.
- Account creation.
- Blank/starting interface.
- Login link.
- Ad link.
- First support.
- First impressions are OPPORTUNITIES.
- Emotion when people interact whith the page.
- Pricing (game -> rookie, franchises player, all-star, hall of fame).
- Support (ux like a magazine?).
- Interesting blog little big details.
- John Gootman:
- Money - cost/billing.
- Kids - user’s clients.
- Sex - performance.
- Time - roadmap.
- Others- others.
- Support Driven Development.
- Creators = Supporters.
- Support non-stop.
- Example. A support form added a selector ‘How do you feel?’.
- Alerts:’What we have done since your last visit’.
- Thank manually every user. Focus on the most passionate.
- King of the day (1 or 2 times a year).
- 4 days and a half working = 1 support + 1/2 friday meetings (max 15 minutes) + 1/2 friday personal issues + 3 days developing.
8. How to get started, doing things that don’t scale
- Do things that don’t scale.
- Launch, even if you have to do it manually.
- Become an expert on your business.
1- Test your hypothesis. 2- Laucnh fast. 3- Do things that don’t scale.
- Paying points of users.
- Don’t focus on ROI, focus on growth.
- Don’t give your product for free.
- Talk to users.
- The product you launch, won’t be the product you scale, optimize for spped over scability.
- Write clean code.
- Who do you want to reach? (Goals).
- Pres should have targeted audience and goals, such as: investors, customers, industry.
- Type of stories:
- Product launch.
- Business overviews.
- Hiring announcments.
- Contributed articles.
9. How to raise money
- Easy understandable elevator pitch.
- Bootstrap as long as you can.
- Core values.
- Better teammates than you.
- Find a mission that aligns all the members.
- Founders (parents) / Company (Child).
- CORE VALUE (unique).
- Diversity on background (genders, age, nationality, …) but no diveresity on values.
11. Hiring and Culture (II)
- Internal transparency.
- Hiring = gardering (seeds growing)
- Hiring != architecture (static).
- Creativity with lots of interssts very good in one.
- Work with them before hiring (freelancing).
- Incentive good people with big problems to solve.
- Some tools: hackpad, slack, intern mailinglist (subscribe/transparency), …
12. Building for the enterprise
- Identify rapidly changing factors.
- Enterprise softwere move much more moeny than consumer softwere.
- Do sales.
- on-premise computing -> cloud.
- expensive technology -> cheap.
- Customized softwere -> standarized.
- Large enterprise -> every business.
- Regional -> global.
- It-lead -> user-led.
- How things have been done -> OPPORTUNITY -> How things can be done.
- Start small, if people call it a “toy” you’re right.
- Listen to customers: listen what they want, but build what they need.
- Make a great product.
13. How to be a great founder
- Perception -> founder = Superman.
- Reality -> headeaches manager.
- Team: 2 or 3 cofounders.
- Location: seek for networks that hel solving problems.
- Skills in founders, not the same skills for every founder.
14. How to operate
- Company is an engine.
- Editor: clarify and simplify. Use frameworks they can repeat.
- Force yourself to simplify everything you do.
- Allocate resources.
- Ensure constant voice: same voice (work on company’s voice).
- Not just one managing style, one customised for every person.
- Insist on focus: Just one thing.
- Business Company Dashboard.
- Not verybody on meetings -> make notes and email them.
- Details excelent -> company excelent.
15. How to manage
- Focuns on what you can do, not on what happens to you.
16. How to run a user interview
- One division inside company dedicated to interview users.
- It’s hard to see who you’re building your product for.
- Don’t just do what they request. Know how they do busines, their feedback and then do what you think.
- Don’t show your product: you need to see what’s in ther head, not put something new into it.
- Don’t ask ‘How much would you pay for it?’.
- Don’t interview who’s available. Interview who you need.
- Record interviews and show them to rest of your team.
- ‘That’s intersting, could you tell me more about it? detective mode.
- Better face to face interviews.
17. How to design hardware products.
- No notes.
18. Legal and account business for startups
- Just know the basics.
- Delaware corporation (standard) KEEP IT SIMPLE.
- Be organize.
- Equity: execution > idea^.
- Equity: not exactly equal, but no so different.
- Founders are employers.
- Track all your receipts.
- Know your key metrics.
- SIMPLE + ORGANISED + EASY
19. Sales and Marketing
- Founder = Salespeople
- Sales is a funnel:
- Prospecting: find innovators, reach out > 100 companies. Methods = your network, conferences, email
- When you get them on the phone: just shut up and LISTEN.
- Get a yes or no response ASAP.
- Closin traps: redlines.
- Clients -> validation -> revenue.
- Free trials:
- No benefits (they don’t pay) don’t do trials.
- Give them annually agreements and your can cancell on first 30 days.
19.B. How to talk to investors
Before the meeting:
30 second pitch
1- What does your company do? 2- How big is the market? 3- How much traction do you have? (launched, sales, revenue, users).
2 minuts pitch
1- Clear 30 second pitch. 2- Unique insight. Competitive advantge (“Aha moment”. What the biggest players on market don’t understand). 3- How you make money (ads, direct, freemium, …). 4- Team If you have made something tell it “we founded paypal”. How long you met, and when/how full-time job. 5- The big ask $$$. How much do you need? For doing what?
- When to fundrise. Real growth < Ideal growth. Make a prodcut that can run without money (freedom).
- How to setup investors meetings: 1- Warm introductions. 2- Hinking parallel (spring, scheduled all in one week). 3- One team member.
During the meeting
- What you do?
- Who uses it?
- What’s the market size?
Avoid common mistakes
- Make sure the listeners understand what your’re working on.
- Know your numbers.
- For market size ideally build bottom up analysis.
- You should understand something that is counter intuitive.
- Your team should be unique suited for this business.
- Drive the conversation to a conclusion.
Hallmarks of a good pitch
- Capture interst, tell an intersting story, engage with the listener.
- Demostrate insights and command of the market, passionate not dismissive.
- Collaborative meeting more than an interrogation.
- Ask for money (clear with the numbers).
After the meeting
- Follow up. Anything by a check is a “no”.
- Work on creating deal heat (supply/demand).
- Do diligence on the investors.
- Know when to stop (addicted to fundraising).
- Build your company (fundraising is no the goal).
- After product market fit (months 12-24).
- Establish a structure. Every employer -> manager -> director. CLEAR REPORTING.
- Keep it simple, don’t try to innovate on structure.
- Building a great product > building a great company.
- Being afraid to hire senior people.
- Hero mode - extrem leading by exemple.
- Bad delegation- not giving enough responsability.
Not developing personal trackgin & productivity system.
- Codify how you do things.
- Codify why you do things.
- Have a clear structure - a path for careers.
- Performance feedback - simple and frequent.
- Compensation bands tied to performance.
- Eqity - be genours
- Your investors will give you bad advice.
- Distribute 3-5% per year.
Stock and vesting
- Keep up with refresher grants.
- Internal announcments for new positions.
- One word: alignment.
- clear roadmap and goals.
- All employers can say the same top 3 goals?
- Figure out value early.
- Be run by product, not process. (Ship every day).
- Have transparency and rhythm in communication:
- Weekly managment meetings.
- All-hands meetings.
- Quarterly and annual plannings.
- Offsite (weekends out, out of the office, …).
- Monitor burnout.
- Stay focused.
- Startups fail when founders quit.
Marketing and PR
- Start when your product is working.
- Don’t outsource key messages.
- Repeat key messages, again and again.
- Get to know key journalist.
- Build a great product.
- Develop personal connections.
- Have a competitive dynamic.
- Be persistent.
- Ask for what you want.
Go meet the people/users.
- Diversity of backgrounds but same mision.
- Complementary skills.