Internet startups101

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This is a presentation about internet startup basics I gave at Trade School Vancouver's launch day.

This is a presentation about internet startup basics I gave at Trade School Vancouver's launch day.

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  • 1. Internet Startups 101 Ian MacKinnon (@imackinn)Saturday, 19 January, 13
  • 2. What is this Talk It’s for People • who have an idea for a mobile or web app • looking to work for a startup • just want to learnSaturday, 19 January, 13
  • 3. Warning • There is a lot of opinion in this • A lot of relying on industry leaders • The best people still only success 10-20% of the time • I cite where I can, but some bits of wisdom are hard to pin-downSaturday, 19 January, 13
  • 4. What is a Startup? • "The only essential thing is growth. Everything else we associate with startups follows from growth." - Paul Graham • A coffee shop is not a startup, but a coffee chain expanding, or something that distributes coffee to thousands of households is • We mostly talk tech because nothing scales quite as easily as softwareSaturday, 19 January, 13
  • 5. So, you have an idea...Saturday, 19 January, 13
  • 6. STOP! • Stop building your idea, start solving a problem • Be careful not to have a “made up problem” • “Customers don’t care about your solution, they care about their problems”- Dave McClureSaturday, 19 January, 13
  • 7. • “Get out of the building” -Steve Blank • Who needs what you’re making? • Why isn’t someone already doing this? • What are people forced to do now that your product does not exist? • Will people pay for a solution to this pain?Saturday, 19 January, 13
  • 8. but but but...it’s secret • You’re so much more likely to be making something only you will want than someone stealing your idea • Nobody credible will sign an NDA to hear your ideaSaturday, 19 January, 13
  • 9. What you don’t need to worry about yet • Name • Logo • Business titles • Business cards (sorta) • Business plansSaturday, 19 January, 13
  • 10. But, I need something, right? • Launchrock.com • Unbounce.com • Get some seed people; build a mailing listSaturday, 19 January, 13
  • 11. Incorporating • You’ll need to eventually, but the best companies tend to be products first • Don’t do a partnership, simple corporate structureSaturday, 19 January, 13
  • 12. Getting Started • What is the absolute minimum thing you make to validate your idea as being useful? • Put the big assumptions up front • “Minimum Viable Product”Saturday, 19 January, 13
  • 13. Minimum Viable Product • “The MVP is a version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort” • Doesn’t have to be public • Deployed to early adoptersSaturday, 19 January, 13
  • 14. But, I’m not a ProgrammerSaturday, 19 January, 13
  • 15. • You can’t outsource your core competence • If you don’t have tech in-house, you won’t be able to move as fast • Investors won’t take you seriously if you’re dependent on an outside firmSaturday, 19 January, 13
  • 16. Options for Lone Non- Technical Founders • Find old friend who’s a programmer • Hire Contractor to make an MVP • Learn yourself (codeacademy, BCIT, etc) • Network, but tech events are filled with people like you • Sell something firstSaturday, 19 January, 13
  • 17. Partnerships • Don’t split up company right away • Make sure commitments are taken into account • Reverse vesting is your friend. Most investors will ask for it anywaySaturday, 19 January, 13
  • 18. Ok, back to making stuff....Saturday, 19 January, 13
  • 19. Programming Languages • Unfortunately, this is an early decision that has a lot of long-term implications • “The single worst strategic mistake that any software company can make: they decided to rewrite everything from scratch” -Joel Spolsky • Determines who you can hire, not just technically, but culturallySaturday, 19 January, 13
  • 20. Mobile • iOS => Objective-C • Android => Java • Phonegap • TitaniumSaturday, 19 January, 13
  • 21. Web • Ruby on Rails • DJango/Python • PHP • Java • .NETSaturday, 19 January, 13
  • 22. Launching • The product is typically deployed to a subset of possible customers, such as early adopters that are thought to be more forgiving, more likely to give feedback, and able to grasp a product vision from an early prototype or marketing information. • You can try for TechCrunch, but sometimes mid- level bloggers are your sweet-spotSaturday, 19 January, 13
  • 23. But what if it sucks? • “If you are not embarrassed by the first version of your product, you’ve launched it too late” -Reid Hoffman • “Your #1 competitor starting out will always be the BACK button.” -Garry Tan • If you launch a crappy product, nobody is going to knowSaturday, 19 January, 13
  • 24. Distribution • “Get distribution or die trying” -Parveen Kaler • How will your users find you? • Who is going to be your first paying customer? • You pay for users or they refer each otherSaturday, 19 January, 13
  • 25. Saturday, 19 January, 13
  • 26. Pricing • Don’t give your initial customers it for free • “You get the real feedback after you ask for $20” -Dan Martell • Don’t ask “What would you pay for this?” • “You’ve found the market price when buyers complain but still play” -Paul GrahamSaturday, 19 January, 13
  • 27. Validated Learning • “If you launch it and see what happens, you’ll succeed -- at seeing what happens” - Eric Ries • “The truth is apolitical” -Google AphorismSaturday, 19 January, 13
  • 28. Pirate Metrics (Dave McClure) • Acquisition • Activation • Retention • Referral • RevenueSaturday, 19 January, 13
  • 29. Iterating • “Your startup is essentially an organization built to search for a repeatable and scalable business model” -Steve Blank • Pivot if necessary • “It’s not the customers job to know what they want” -Steve JobsSaturday, 19 January, 13
  • 30. Saturday, 19 January, 13
  • 31. Traction • Loosely Defined, but you can tell when you have it • Month-over-month growth • Customer/market fit • Ideally a “Hockey stick”Saturday, 19 January, 13
  • 32. Let me know what it’s like to have traction :-(Saturday, 19 January, 13
  • 33. InvestingSaturday, 19 January, 13
  • 34. Should you take Investment? • Might allow you to quit your day job • Investors can ask questions that are illegal for employers to ask • Software costs are ridiculously cheap • You’ll need large market, scalability, exit plan, value proposition, unfair advantageSaturday, 19 January, 13
  • 35. Investment Concepts • Equity • Convertible notes • X% of company doesn’t mean X% of control • Accredited Investors • Dumb Money vs. Smart MoneySaturday, 19 January, 13
  • 36. Seed Stage • 25k isn’t hard to get for credible teams • A lot of accelerators popping up • Serious gap in 100,000 to 1,000,000 range in Canada • Angellist.coSaturday, 19 January, 13
  • 37. Raising is Hard • There are outlier stories, but those come from established people or teams with crazy traction • Takes months • “Traction trumps everything”Saturday, 19 January, 13
  • 38. Other Funding Sources • SR&ED • IRAP • CMFSaturday, 19 January, 13
  • 39. Exiting • Get Acquired • acqui-hires • technology • strategic • IPOSaturday, 19 January, 13
  • 40. Working for a Startup • If you’re not a dev, you’re gonna have a tough time • If you’re a dev, you’re gonna have to adjust expectations • Right after a company raises money is a great time • Hire slow, fire fastSaturday, 19 January, 13
  • 41. ...more reading • Thoughtbot Playbook • Hacker News • Paul Graham Essays • 4 Steps to the epiphany • The Lean Startup • 500 Startups BlogSaturday, 19 January, 13
  • 42. Questions?Saturday, 19 January, 13