Introduction to Software Products and Startups

1 — ProductsSoftware DevelopmentFrom Code to Product

Is this a restaurant? Tasty, nutritious foodFrom Code to Product Lecture 1 — Products — Slide 2 gidgreen.com/course

Is this a product?From Code to Product Lecture 1 — Products — Slide 3 gidgreen.com/course

Some leading productsFrom Code to Product Lecture 1 — Products — Slide 4 gidgreen.com/course

Lecture 1•  About this course•  Products and people•  Layers of a product•  Software platforms•  What does a startup do?•  Founders and goals•  External resourcesFrom Code to Product Lecture 1 — Products — Slide 5 gidgreen.com/course

Course objective“Learn how to turn a coretechnology or idea into a softwareproduct which delights users,succeeds in the marketplace andbecomes a profitable business.”From Code to Product Lecture 1 — Products — Slide 6 gidgreen.com/course

Our assumptions•  You can program•  You are web savvy•  You know English, ish•  No other experience•  Technical founder(s)•  No investors (yet)From Code to Product Lecture 1 — Products — Slide 7 gidgreen.com/course

Syllabus 1 2 Products + Process 3 4 User Interface + Localization 5 6 7 Business models + Analytics 8 9 10 Marketing + SEO 11 12 13 Desktop, web, mobileFrom Code to Product Lecture 1 — Products — Slide 8 gidgreen.com/course

We won’t cover…•  Raising money•  Forming a company•  Recruiting•  Legal issues•  Enterprise sales•  Management•  Exit strategyFrom Code to Product Lecture 1 — Products — Slide 9 gidgreen.com/course

Products are for peopleFrom Code to Product Lecture 1 — Products — Slide 11 gidgreen.com/course

People are physical Brain Eyes HandsFrom Code to Product Lecture 1 — Products — Slide 12 gidgreen.com/course

People are emotionalFrom Code to Product Lecture 1 — Products — Slide 13 gidgreen.com/course

People are impatient“The vast majority of people who visityour site… will arrive with their fingerpoised on the Back button… So yoursite has to say: Wait! Dont click onBack. This site isnt lame. Look at this,for example.” — Paul Graham, Y CombinatorFrom Code to Product Lecture 1 — Products — Slide 14 gidgreen.com/course

People are irrationalFrom Code to Product Lecture 1 — Products — Slide 15 gidgreen.com/course

People are self-interestedFrom Code to Product Lecture 1 — Products — Slide 16 gidgreen.com/course

People are skeptical“The average American is exposed to several hundred admessages a day and is trying to tune out.” — Prof. Philip Kotler, 2005“On average, Americans are subject to some 3,000 essentiallyrandom pitches per day.” — Inc.com, 2005“Not too long ago, the average American was exposed to overthree thousand advertising messages in the average day. Today,you get that many before breakfast!” — Newspaper Association of America, 2002From Code to Product Lecture 1 — Products — Slide 17 gidgreen.com/course

People are followersFrom Code to Product Lecture 1 — Products — Slide 18 gidgreen.com/course

People are short on cash$30,000$25,000 US Inflation-Adjusted Median Income$20,000 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010From Code to Product Lecture 1 — Products — Slide 19 gidgreen.com/course

What is a software product? Code that solves problem + Inputs and outputs + User packaging + Can generate cashFrom Code to Product Lecture 1 — Products — Slide 21 gidgreen.com/course

Layers of a product Less unique eting Less technology But more visible to end users Mark Core (in general…)From Code to Product Lecture 1 — Products — Slide 22 gidgreen.com/course

Layers of Microsoft Excel e Offic soft Calculation engine MicroFrom Code to Product Lecture 1 — Products — Slide 23 gidgreen.com/course

Layers of Google …, Maps mail, PageRank PR, GFrom Code to Product Lecture 1 — Products — Slide 24 gidgreen.com/course

Code Breakdown Example 48% 13% 14% 5% 9% 11% Algorithm CoreFrom Code to Product Lecture 1 — Products — Slide 25 gidgreen.com/course

What’s the core of PayPal?•  High volume transaction processing?•  Integration with external systems?•  “…PayPal is: a security company pretending to be a financial services company” — Max Levchin, FounderFrom Code to Product Lecture 1 — Products — Slide 26 gidgreen.com/course

An ideal core•  New•  Clever•  Invisible Objective:•  Hard to reproduce Barrier to entry•  Research-based•  Optimized for speed•  Improve with usageFrom Code to Product Lecture 1 — Products — Slide 27 gidgreen.com/course

An ideal core interface•  New Familiar•  Clever Simple•  Invisible Obvious Objective:•  Hard to reproduce No barriers to usage•  Research-based•  Optimized for speed•  Improve with usageFrom Code to Product Lecture 1 — Products — Slide 28 gidgreen.com/course

Combining the ideals Product Technology InterfaceDesktop P2P + VoIP Config-free Web Messaging 140 characters Mobile Super effects Instant postingFrom Code to Product Lecture 1 — Products — Slide 29 gidgreen.com/course

Major platforms PCs Web Touchphone Tablet Initial adoption 1977 1993 2007 2010 2011 shipments 350 million — 250 million 50 million Jan 2012 users 1.4 billion 2.3 billion 350 million 60 million Annual growth 10% 12% 100% 150% Core platformsFrom Code to Product Lecture 1 — Products — Slide 31 gidgreen.com/course

Historical user growth2 billion PCs Web Touchphone Tablet1 billion 0 1980 1985 1990 1995 2000 2005 2010From Code to Product Lecture 1 — Products — Slide 32 gidgreen.com/course

Other platforms•  Mainframes•  Supercomputers•  PC servers –  Linux, FreeBSD, Windows Server•  Game consoles –  Wii, Xbox, PlayStation, handhelds•  Other mobiles –  Blackberry, Symbian, Windows MobileFrom Code to Product Lecture 1 — Products — Slide 33 gidgreen.com/course

What does a startup do?•  (Raise money)•  Development•  Monetization•  Marketing•  Publicity•  Biz dev•  (Exit)From Code to Product Lecture 1 — Products — Slide 35 gidgreen.com/course

Baseline scenario Steady growth by word of mouthRevenue 5% per month = ~80% per year Time From Code to Product Lecture 1 — Products — Slide 36 gidgreen.com/course

MonetizationRevenue More revenue per user Time From Code to Product Lecture 1 — Products — Slide 37 gidgreen.com/course

Business development LoseRevenue Gain partner partner Time From Code to Product Lecture 1 — Products — Slide 38 gidgreen.com/course

MarketingRevenue users of extra tant flow Cons Time From Code to Product Lecture 1 — Products — Slide 39 gidgreen.com/course

Publicity DiminishingRevenue returns Depres Euphoria sion Time From Code to Product Lecture 1 — Products — Slide 40 gidgreen.com/course

Example: Not so Cuil Didn’t Kill Google Launched as Google KillerRaised Raised Relaunched $8m $25m as Cpedia DeadMar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10From Code to Product Lecture 1 — Products — Slide 41 gidgreen.com/course

Everything but the ProductRevenue Revenue Time TimeRevenue Revenue Time Time From Code to Product Lecture 1 — Products — Slide 42 gidgreen.com/course

Product development growth rateRevenue Increasing Time From Code to Product Lecture 1 — Products — Slide 43 gidgreen.com/course

Word of mouth•  Sharer: –  Helping their friend –  Building social capital –  Thanking you•  Recipient: –  Saving time –  Is “in the know” –  Becoming a sharer•  Also: word of webFrom Code to Product Lecture 1 — Products — Slide 44 gidgreen.com/course

Growth by word of mouth Monthly 1 year 2 years 5 years 10 years 3% 1.4x 2.0x 5.9x 35x 5% 1.8x 3.2x 19x 349x 7% 2.3x 5.1x 58x 3358xFrom Code to Product Lecture 1 — Products — Slide 45 gidgreen.com/course

On marketing schemes…“The one thing we learned over 5 years isthat nothing works better than justimproving your product. Every minute,every developer hour we spent on any oneof these crazy things… was nothingcompared to just making a better versionof the product and releasing it.” — Joel Spolsky, Fog Creek SoftwareFrom Code to Product Lecture 1 — Products — Slide 46 gidgreen.com/course

Startup founders•  2 or 3 people –  If just one, get lots of advice•  Complementary skills –  Vision + Product –  Technology•  Friendship + trust•  Shared goals•  Everyone vestsFrom Code to Product Lecture 1 — Products — Slide 48 gidgreen.com/course

Founder goals•  Make money•  Have fun•  Be free•  Create something•  Do good•  Get famous•  Make moneyFrom Code to Product Lecture 1 — Products — Slide 49 gidgreen.com/course

How much annual income? $1,000 Feel good $10,000 Extra money $100,000 Lifestyle$1,000,000 Working richFrom Code to Product Lecture 1 — Products — Slide 50 gidgreen.com/course

How big an exit? $2 million Something neat $20 million Team + technology$200 million Scaled business $2 billion Scare someone bigFrom Code to Product Lecture 1 — Products — Slide 51 gidgreen.com/course

BooksFrom Code to Product Lecture 1 — Products — Slide 53 gidgreen.com/course

Some websitesHacker News Links to news news.ycombinator.comMashable Social media news mashable.comMixergy Interviews Interviews with founders mixergy.com/interviewsOnStartups Answers Q&A for startups answers.onstartups.comQuora Q&A popular with startups quora.comReadWriteWeb In-depth startup blog readwriteweb.comTechCrunch Leading startup blog techcrunch.comFrom Code to Product Lecture 1 — Products — Slide 54 gidgreen.com/course

Thought leaders — Entrepreneurs37 Signals Ruby on Rails 37signals.com/svnSteve Blank “Customer Development” steveblank.comJason Cohen SmartBear Software blog.asmartbear.comSeth Godin “Permission Marketing” sethgodin.typepad.comDharmesh Shah HubSpot onstartups.comJoel Spolsky Stack Overflow joelonsoftware.comEric Ries “Lean Startup” startuplessonslearned.comFrom Code to Product Lecture 1 — Products — Slide 55 gidgreen.com/course

Thought leaders — InvestorsChris Dixon Founder Collective cdixon.orgBrad Feld TechStars feld.comPaul Graham Y Combinator paulgraham.comGuy Kawasaki Garage Technology Ventures blog.guykawasaki.comDave McClure 500 Startups 500hats.typepad.comMark Suster GRP Partners bothsidesofthetable.comFred Wilson Union Square Ventures avc.comFrom Code to Product Lecture 1 — Products — Slide 56 gidgreen.com/course

And check these outFrom Code to Product Lecture 1 — Products — Slide 57 gidgreen.com/course

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Introduction to Software Products and Startups

by gidgreen on Jun 18, 2012

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