Startup in Seattle

1. How$I$learned$to$stop$worrying$and$love$uncertainty$

2. ! Damon&Danieli&(@damondanieli)&
! Microsoft&for&14&years&
! Senior&Developer&in&the&Hardware&Group&
! Lead&Program&Manager&of&Xbox&Live&
▪ Gamertag&‘d’&
! Technical&Lead&of&Xbox&Entertainment&Network&
! Got&married&on&December&6th,&1994&
! Went&back&to&work&at&Microsoft&that&day&
! I&LOVED&Microsoft!&
! Left&Microsoft&in&2008&to&start&a&company…&

3. ! Leaving&Microsoft&
! Getting&your&ducks&in&a&row&
! Founding&a&Company&
! Types&of&funding&and&Risk&Model&
! Building&the&Founding&Team&
! Life&on&the&“Outside”&
! Lean&Startup&Principles&
! Fun&Technologies&
! Running&Services&in&the&Cloud&
&

4. ! Sharpen&your&saw&
! Buy&a&laptop&(you’ll&need&one&for&demos,&meetings,&coffeeshops,&etc)&
▪ A&Mac&will&interoperate&with&a&lot&more&open&source&than&a&PC&
▪ SSH,&homebrew,&“./configure&&&&make&&&&make&install”&
! Research&what&is&out&there&(there&is&a&LOT&to&learn)&
▪ Clients&(iOS,&Android,&PC,&Mac)&and&frameworks&(Cocoa&Touch,&Twitter&
bootstrap,&backbone.js)&
▪ OS&and&Servers&(Lion,&Ubuntu,&CentOS,&etc)&deployment&(cap,&ssh,&git,&etc)&
▪ Server&Application&stacks&(NodeJS,&Rails)&
▪ Standards&(HTML5)&
▪ Amazon&Web&Services&
! Boring&stuff&
! You&have&it&GOOD&at&Microsoft!&
! No&Startup&can&match&your&paycheck&or&benefits,&but…$
▪ Every$startup$that$has$a$successful$liquidity$event$will$beat$your$stock$awards!$
! COBRA,&401k,&etc.&

5. Booth
strapping& Angel& VC& Profitable&
Independent& Usually&“hands&off”& “Capitalized”& Independent&
& & & &
Nobody&has&leverage& Minor&leverage&via&& Stock&option&pool& Nobody&has&leverage&
on&your&company& convertible&notes& 83b&Elections& on&your&company&
& & Preferred&shares& &
Hiring&very&HARD& Hiring&easier&but&still& Board&of&Directors& Investors’&frowns&turn&&
& hard& Leverage& upsidehdown&
Portion&large&for&coh& & & &
Founders:& Common&stock& Equity&comes&out& Hiring&easier&
The&only&“wrong”& Equity&large&for&early& of&option&pool&for& &
Answer&is&50/50& Employees& all&future&employees& Equity&small&for&new&
employees&

6. Booth
strapping& Angel& VC& Profitable&
Independent& Usually&“hands&off”& “Capitalized”& Independent&
& & & &
When*you*become*profitable,*(in*your*investors’*eyes)*you**
Nobody&has&leverage& Minor&leverage&via&& Stock&option&pool& Nobody&has&leverage&
on&your&company& convertible&notes& 83b&Elections&
instantly*become*smarter,*more*handsome*and*your** on&your&company&
& & Preferred&shares& &
children*are*of*better@than@average*intelligence*
Hiring&very&HARD& Hiring&easier&but&still& Board&of&Directors& Investors’&frowns&turn&&
& hard& Leverage& upsidehdown&
Portion&large&for&coh& & & &
Founders:& Common&stock& Equity&comes&out& Hiring&easier&
The&only&“wrong”& Equity&large&for&early& of&option&pool&for& &
Answer&is&50/50& Employees& all&future&employees& Equity&small&for&new&
employees&

7. ! 2008 ! Client&
! Madrona&$1M& ! iPhone&
investment&
! ObjectivehC&
! I&had&
▪ No&PowerPoint&slides& ! Mac&+&Xcode&
▪ No&business&plan&
▪ No&Clue!!!& ! Server&
Goal:*Find*the* ! Ruby&on&Rails&+&MySQL&
opportunity*in*the*
iPhone*Space* ! Morph.labs&hosting&

9. ! I&built&several&initial&MVPs&(Minimum&Viable&
Products)&to&test&if&there&was&a&market&
! User&Generated&Content&on&Mobile&
! PhotoFeedd,&CarFeedd,&TravelFeedd&
! Kids&game&to&test&out&“storybook”&market&
! Spell&Flyer&
! Bluetooth&proximity&based&games&
! Showdown&Poker,&Gunslinger,&Psst!&
! iOS&3.0&had&GameKit&and&Push&Notifications&
! These&were&the&initial&ingredients&of&a&Xbox&Live…&

10. ! Server&
! 2009-2010 ! Ruby&on&Rails&+&MySQL&
! Idea:&& ▪
▪
Client&"&REST+&JSON&
Marketing&website&
“Xbox&Live&for&Mobile”& ▪ Developer&website&
▪ Admin&interface&
▪ Friends,&Invitations& ! XMPP&server&
▪ Multiplayer&Networking& ▪ ejabberd&
! STUN/TURN&
▪ Voice&Chat& ▪ Chlanguage&
! Madrona&$3M& ! Hosting&
additional&investment& ! EngineYard&hosting&(Rails)&
! AWS&(XMPP)&
! CEO&+&8&employees& ! NTT&(Global&STUN/TURN)&

11. ! First real-time multiplayer game platform for
mobile!
! First title was Big Fish Games’s Big City
Adventure
! Activision licensed our SDK for Call of Duty
! +++
The$toughest$technical$challenge$I’ve$ever$had$as$a$professional$

13. ! Pivoted into Freemium Social Games

14. ! What Eric Ries calls a lean startup pivot, I call a business iteration
! Pivots can be much more devastating
! You get to tell all those people (friends, investors, family, employees, ex-
coworkers, press, etc) whom you sold on your original vision that you were
wrong
! You get to fire staff that are not suitable for your new direction and lose the
rest of the staff that feel your vision is not suitable for them
▪ We lost a great developer who said we were “arranging the deck chairs on the
Titanic”
! Q: Were we going to explode from internal pressure or implode from a
vacuum?
! Standing at the doorway…
The$toughest$emotional$challenge$I’ve$ever$had$as$a$professional$

15. ! And&our&servers&immediately&collapses&
! In&our&rush&to&get&product&in&market&before&we&ran&out&of&
money…&
! We&knowingly&launched&before&we&had&the&full&server&infrastructure&in&place&
but$did$not$estimate$the$success$of$the$title$
! We&unknowingly&build&a&relational&structure&in&our&database&but$did$not$test$
the$write@load$
! We&unwittingly&had&a&clienthside&bug&that&would&sent&thousands&of&
messages&if$the$user$tapped$quickly$enough$
! We&unintentionally&exercised&“lean&startup”&principles$because$we$wanted$
to$stay$in$business$
! The&dev&team&and&I&hunker&down&in&a&windowhless&closet&for&5&
months&and&rewrite&the&servers&several&times&as&our&userbase&
grew,&and&grew&and$grew$

16. ! Trade&Nations&is&a&huge&success&
! Over&a&year&later&it&is&in&the&Top&100&Grossing&Games&
! We&launch&MetalStorm&Online&a&few&months&later&
! It&becomes&a&huge&success&
▪ It&has&one&of&the&largest&leaderboards&(>5M&players)&of&games&on&iOS&
! We&heard&that&Apple&had&to&increase&their&Game&Center&multiplayer&
capacity&for&us&
▪ Irony&given&that&we&stopped&being&a&multiplayer&game&platform&provider&to&
make&the&title…&
! We&launch&Battle&Nations&in&November&and&it&was&the&#1&Top&
Grossing&Game&on&iPad&until&January&
! We&grew&from&11&employees&to&60&in&2011&
! We&have&been&profitable&ever&since&

17. ! Amazon&AWS&“Cloud”&+&RightScale&
! EC2,&S3,&ELB&
! Over&100&servers&
! Java&
! We&needed&to&write&persistent&game&sessions&
! Developers&were&comfortable&with&it&
! Rails&is&not&designed&for&the&threading&model&needed&
! MySQL&
! Used&as&a&dumb&keyhvalue&store&
! Consistent&hash&of&key&across&N&masters&
! Node&+&CoffeeScript&
! For&lightweight&services&such&as&the&Maintenance&page,&Matchmaking&
System,&Push&Notifications,&Realhtime&Multiplayer&Servers&
▪ The&first&company&who&can&write&a&realhtime&multiplayer&game&in&JavaScript&

18. ! Application&Stacks& $ brew update
$ brew install rbenv
! Node+express+vows& $ rbenv rehash
$ ruby-build 1.9.2-p290
▪ CoffeeScript,&bundler,&npm& $ rbenv local 1.9.2-p290
$ gem install rails
! Rack+Rails/Sinatra&& $ brew install redis
$ rails new eastsideinc
▪ rbenv,&ruby,&gem,&cap& $ cd eastsideinc
! No&SQL&stores& $ git init
$ git add .
! Redis,&MongoDB& $ git commit –a -m "Initial commit"
$ rails server
! Tools&
<HTTP Server is listening on 3000>
! brew&
! Sublime&Text&
! git&and&github&

19. Clients& Protocols& Load&Balancer& Application& Caching& Data&Stores& Offsite&Backup&
HTTP Hourly&
Snapshots&
&
Mobile Analytics&
Device &
Masters Slaves &
DynamoDB&
Heroku
Elasti- MongoLabs&
AppJet
HTTP ELB& Cache MongoHQ&
EngineYard S3 # EMR
Pusher& Redis- Redish&
Mobile Elastic-
Device ToGo ToGo&
Beanstalk
RDS&

20. ! You&just&got&the&task&to&deliver&a&task&to&store&all&ad&
impressions&during&the&Superbowl&
! And&you&have&3&days&to&bring&the&system&up!&
! Shazam’s&results&on&DynamoDB&
! 100,000&writes/second&over&4&hours&
! <3ms&latency&(avg)&
! <8ms&latency&(TP99)&
! 1.4&Billion&writes&total&
! Note:&this&is&10x&PEAK&tweets&during&that&period*&
*I&never&thought&I&would&use&“Peak&Tweets&Per&Second”&as&a&unit&of&performance&

22. ! Contact&
! damondanieli@gmail.com&(@damondanieli)&
&
! Have&Fun!&
! HTML5&+&Canvas&
! Node&+&CoffeeScript&+Redis&
! Read&
! Getting$Real:$the$book&by&37Signals&
! Engineering$your$Startup&by&Swanson&and&Baird&
! The$Lean$Startup&and&startuplessonslearned.com$Eric&Ries$
! Four$Steps$to$the$Epiphany&by&Steven&Gary&Blank&