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Talk on startups and entrepreneurship context
 

Talk on startups and entrepreneurship context

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Remember to view the notes for the slides for better context. ...

Remember to view the notes for the slides for better context.

These are the slides for my talk about my experiences for the Masters Programme in Innovation and Entrepreneurship at the IT University in Göteborg.
It was held before a class of 35 people with various backgrounds (sex, nationality, experience, age), but many with deeper technical knowledge.

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  • Here is what I want you to remember from today: <br /> <br /> If you run a business, always be thinking about your business vision and purpose. <br /> <br />
  • So, I&apos;m John Sj&#xF6;lander, and I&apos;m a geek. Yes, I mean as in computer-nerd. Yes, I mean i spent my child hood in a dark room with a computer that was pretty much useless by todays standards. <br /> <br />
  • Luckily I&apos;m in good company. Because in reality the world belongs to the nerds. Ever since we introduced democracy and a free market, nerds were free to roam. And by doing that they created massive fortunes, millions if not billions of jobs, and built foundations for societies to stand on. <br /> <br /> Yes, I&apos;m holding myself to a pretty high standard. I&apos;m not saying I&apos;m as great as these guys, but I&apos;m hoping that I&apos;m getting closer by the day. <br /> <br /> So it turns out that these guys (as well as many successful people) have a few things in common &#x2013; apart from throwing the occasional barbeque using dollar bills for fuel... <br />
  • Most people know what they do. (if you don&apos;t you&apos;re likely high or drunk or both). It could be, say, "I create software." <br /> <br />
  • A few people know how they do it. If your answer is anything like "Using java.", or "With a computer", you&apos;re missing the point. How is about "what makes you great at what you do". (Whatever you do I hope you&apos;re trying to be great at it. If you&apos;re not, you might think about doing something that you enjoy more. Then be great at that.) <br /> <br /> So the answer is likely more like "by studying the best, and learning all the cool stuff that is out there". <br /> <br />
  • But VERY, VERY few people are fortunate enough to understand WHY they do it. (Right now half of you are thinking you&apos;re one of those guys, I know how this goes). <br /> If you&apos;re a programmer, I&apos;m sure you&apos;ve had one of those moments when you solve a really hard problem, and then you look at your code, and you go: <br /> "Man, this is friggin&#x2019; beautiful. I rock!" <br /> <br /> There it is. If you&apos;re a programmer, in that moment you had a glimpse of your purpose. The WHY is your purpose. Because writing good code is truly beautiful. A high that lasts for days.. <br /> A purpose doesn&#x2019;t necessarily make sense. It&#x2019;s about faith. <br /> <br /> So, why the HELL am I talking about this... It applies to companies as well. Companies need to know these things. <br />
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  • I spend my days building a company called Burt. As the CTO i handle anything tech, and recruit and organise the technology team. <br /> <br /> At Burt we create tools and services to create better online advertising. <br />
  • Rich is a tool to track online banner campaigns. Using Rich advertisers gain insigths about where were the ads visible. How many saw them? For how long? How many times? How many engaged? How did the creative perform? How good was the media buy? etc. <br />
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  • Advertisers and creative agencies use Rich to power the quick feedback loop of test, analyze and scale what works. <br /> <br />
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  • Our customers are advertisers (names), and we acquire them through partnerships with creative agencies. For people who are not in advertising, a creative agency is equivalent to an Advertising Agency. In reality the eco-system is a lot more complicated and there are media agencies, production agecies, web agencies, marketing agencies, communication agencies, etc. etc. <br /> The creative agency is usually the ones that come up with the idea for the ad. <br /> We&#x2019;ve been around for a year and a half. So far three hundred agencies have created accounts with us. Out of them, about seventy have started actually using the products. Today, three monts after launch, we have about 40 active accounts. We track 20 - 30 million ad exposures every day, and a handful of advertisers are paying for a subscription service. <br /> Burt employs seven people in three cities. Our HQ is in G&#xF6;teborg, and we have people in London (not for long) and Stockholm. We&#x2019;re looking to grow about six people in 6-9 months. <br />
  • So that&#x2019;s a quick overview of what we do. <br /> <br /> Now I&#x2019;d like to talk about how we did it. <br /> <br />
  • Burt was sprung out of a creative agency. We built the tools that we wanted to have. From first hand experience we knew that there was an opportunity in creating the tools that advertisers wanted to have. &#x201C;There&#x2019;s got to be a better way.&#x201D; <br />
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  • Very early on we studied hard and well how others successfully had done similar things. <br />
  • Even though our specific problem and solution haven&#x2019;t been done before, the different parts of the problem has almost always been solved by someone else. <br /> Parsing enourmous amounts of log files: Google Analytics, Omniture, Etc. <br /> Iteratively designing a Business-to-business UI that&#x2019;s nice to use: 37 signals. <br /> Statistical modeling of advertising data: Nielsen. <br /> A/B testing: Performable, KISSmetrics. <br /> Scalability: AppNexus, Bit.ly, Facebook. etc. <br /> <br />
  • Apart from this, very early on we also took to actually talking to people about our problems. It will surprise you how often startups don&#x2019;t do this at all. <br /> <br /> Companies tend to show a facade that convinces you that they&#x2019;ve solved everything and have no problems. In reality, this isn&#x2019;t the case. Everyone&#x2019;s had troubles, and when they started they had NO idea about how to solve them. So, we&#x2019;re never ashamed to admit what we don&#x2019;t know, and we&#x2019;re always eager to know more. <br /> <br /> So we&#x2019;ve travelled extensively, and have had the opportunity to actually meet with many of the most interesting companies in our space. We&#x2019;ll talk to them about how we did things, and they&#x2019;ll share tips on <br /> Through this we&#x2019;ve gained a LOT of business and technology knowledge. <br /> <br />
  • From a technological standpoint, there are two things that we try to be the very best at. (Best data) We collect the best, and most comprehensible data set about online ads. Using this high-fidelity data set, we do the very best analysis of the data. (Best analysis) <br /> <br />
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  • This creates value for our customers in two ways: (Deep insights) First, we can answer a broad range of questions, and are not limited to answering &#x201C;how many clicked&#x201D; types of questions. We&#x2019;ll tell you how moving from the second to the third ad-view impacted user engagement. <br /> Secondly, our data and analysis can be trusted. This is important because of loss in data fidelity over transformation steps. Imagine that your data is 90% accurate and you have five transformation steps to answer a question on the data (Session transformation, purge outliers, data flattening, modeling, analysis). Your result will be less than 60% accurate. No one will trust you. <br /> And people are funny. If they identify one data point in a report that&#x2019;s fishy, they think that all data in that report is fishy. <br /> So it&#x2019;s REALLY important to have trustworthy data. <br />
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  • That is, if you&#x2019;re a techie. If you market your product early, and get people excited, you get a chance to hear what people are excited about. By getting early access to your users and customers you can build what they want, and not what you want to build. Us techies are phenomenal at building stuff that people don&#x2019;t want. <br /> <br /> Since I&#x2019;m a techie, I can&#x2019;t give you that much advise. I&#x2019;m just saying it&#x2019;s much more important than you think. &#x201C;Build it, and they will come.&#x201D; is a myth. <br />
  • Say that you&#x2019;ve got your customers excited. How do you keep them excited? <br />
  • First, talk to them. Listen well and PROPOSE (don&#x2019;t build, yet) solutions to their problems. A sketch or a powerpoint slide that shows the concept is often good enough. If they seem happy with the solution first build the most basic feature that actually works. <br />
  • Also, be careful about how you listen. You want to find your &#x201C;earlyvangelists&#x201D;. Early adopters that evangelize your product. Many startups listen to the HIPPO &#x2013; Higest Payed Person&#x2019;s Opinion. He/she is rarely right. Neither is the people who talk the most. <br /> <br />
  • Frequently we get suggestions for often obvious product improvements. We often respond with &#x201C;we don&#x2019;t have that, but when you need tell us, and we&#x2019;ll do it for you&#x201D;. Funnily, there are rarely actual requests for these things. So why is this? People want to be smart. Often you&#x2019;ll talk to someone who&#x2019;s overwhelmed with how cool a thing you&#x2019;ve built. So they spot something that they think will be needed, and they&#x2019;ll point that out to you, so that they can be as smart as you. Don&#x2019;t fall for that. <br />
  • You&#x2019;ll want to spend 90% of your time with the 10% of the features that people use the most. Really, really polish them and make them exciting to use. <br /> <br /> Listen well to your users, back what you build up with data and spend your time well. <br />
  • An important trend in the world of tech startups is the LEAN startups, a methodology that stressed extensive use of Customer Development. At Burt we try to use this as a method of finding our way to a scalable business. <br /> <br /> I won&#x2019;t spend too much time here, since it&#x2019;s really a topic of hours and hours of lectures in itself. However, I thought you should know it. <br /> <br />
  • The LEAN startup is fronted by Eric Reis. In mid 2008 he started a blog called Startup Lessons Learned. It was about insights he had gained at his second (first successful) startup IMVU. Eventually the blog following turned into the LEAN startup movement. <br /> <br /> It&#x2019;s inspired by agile software development, extreme programming and the LEAN process as defined by Toyota, and extensively used in the manufacturing industry. <br /> <br /> The basic idea is to iterate quickly on insights from Customer Development. The quicker you can iterate, the quicker you find your way. <br />
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  • Customer Development is the process of getting out of the building, discover (Customer Discovery) your clients problems and needs, getting feedback on your sales efforts by Customer Validation to discover and refine a repeatable sales process, Customer Creation for creating product drive and market, and Company Building on transitioning from the startup phase to the scalable business. <br />
  • Read a lot more on this subject at http://www.startuplessonslearned.com/ and http://steveblank.com/ and in the books. <br /> <br />
  • I just wanted to take a minute to address some of the more and less common &#x201C;Truths&#x201D; about company building, and my take on them. <br />
  • Firstly, money solves nothing. In reality it creates new problems. What will you do with the money? How long does it have to last? How do you spend it? etc. Money raises the bar, creates some limited room for you to act in, but imposes a lot of expectations. Raising money is necessary evil. <br />
  • Funnily, people don&#x2019;t solve anything either. Of course you need people to get things done. But more people means more overhead. So you&#x2019;ll spend less time on what you did before, and more time managing people, communicating values, visions and expectations, solving conflict, correcting mistakes, etc. <br />
  • From anyone and everyone who isn&#x2019;t involved in the everyday business you&#x2019;ll often hear &#x201C;Doing X will solve everything&#x201D;, or &#x201C;If we just Y then we&#x2019;ll be a huge success&#x201D;. I&#x2019;m talking advisors, mentors, board members, on and off consultants, customers, investors, etc. etc. <br /> Don&#x2019;t. Ever. Believe. Them. <br /> There just isn&#x2019;t a quick solution to anything. The solution is to get your hands dirty and work hard. This is the startup business, it&#x2019;s supposed to be hard. That&#x2019;s why so few do it, and so few succeed. <br />
  • For the same reason, getting the RIGHT people for your company is a matter of make or break. So you need people who are driven, smart, and gets things done. In any organisation, the difference between a good and a great programmer is an order of magnitude. In startup, you&#x2019;re so strapped for cash and time that this is absolutely essential. There is just no time for correcting people mistakes. In fact, for a startup, bad programmers kill the company. (It&#x2019;s the difference between Spotify and Voddler). <br />
  • As your company grows, the best skill to acquire is learning how to prioritize. Running a startup inherently means that you won&#x2019;t have time for everything, and you can&#x2019;t be everyones friend. That&#x2019;s normal. Having a clear vision will GREATLY help you understanding what you need to spend time on, and what you can omit. And you&#x2019;ll drop a lot more stuff than the stuff you actually do. <br />
  • So, why did I start talking about vision and purpose, and then didn&#x2019;t mention it much? <br />
  • In a startup, speed wins. Startups is about making decisions faster than anyone else. New York venture capitalist Fred Wilson (investor in Twitter, Foursquare, Tumblr, Zynga) has said that &#x201C;If I have a choice between a person that makes one decision right every day, and another that makes a hundred decisions and gets 51 right, I&#x2019;ll always choose the latter.&#x201D; <br /> <br /> How do you make 100 decisions every day? Having a clear vision will help you greatly. A startup is like a series on 100 meter sprints. The mission is like &#x201C;Go that way, really fast.&#x201D; If that&#x2019;s what you do every day, you&#x2019;ll rarely have time to think things through well. You&#x2019;ll have to think quickly, and act on gut feeling. Your vision is basically a tool for your gut feeling. Decision come down to choices. What choice fits in best with the vision? Go with that one. If you&#x2019;re wrong, you&#x2019;ll manage to change it later. <br /> <br /> I might add. Back your gut up with LOADS of data. But it&#x2019;ll still boil down to gut. Data can tell several stories. <br />
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Talk on startups and entrepreneurship context Talk on startups and entrepreneurship context Presentation Transcript

  • John Sjölander @jsjo Startups and entrepreneurship
  • Context: These are the slides for my talk about my experiences for the Masters Programme in Innovation and Entrepreneurship at the IT University in Göteborg. It was held before a class of 35 people with various backgrounds (sex, nationality, experience, age), but many with deeper technical knowledge. Before the talk I also added this context: “Anything I say today about companies apply to Venture Capital-fundable companies. That is companies that sell a part of their company stock to a Venture Capital fund (not a private investor, or any other investor) , in order to accelerate their business. The way Venture Capital works will significantly change how the company is expected to execute, and the deal structure is just very different from other investing.”
  • A clear vision A sense of purpose
  • What
  • How
  • Why
  • Why How What
  • Rich Metrics that matter.
  • Google Analytics is hugely popular but doesnʼt work for advertising.
  • Drill down to see detailed information on individual sites and ads.
  • See where ads were placed and where they could be seen.
  • Exposures, reach and performance by location.
  • < tag > Ad server Embed in Flash. Wrapper integration
  • MAKE speed speed speed LEARN MEASURE
  • ”AGILE ADVERTISING” The process of being quick learn, adapt and improve.
  • Advertisers as customers Agencies as distribution 10+ billion tracked ads 20-30 M / day 40 active agencies Repeat pay customers
  • Do’s and don’ts.
  • Vision and purpose
  • To change how online advertising is created, measured and valued.
  • Learning
  • Learn from the best.
  • Learn from the best. Talk to everyone.
  • Focus
  • Know what youʼre good at, and do that really well.
  • Know what youʼre good at, and do that really well. Buy everything else.
  • Marketing is the hard part
  • Build something people want
  • Befriend your customer.
  • Befriend your customer. Find your earlyvangelists.
  • Befriend your customer. Find your earlyvangelists. Listen smart.
  • Befriend your customer. Find your earlyvangelists. Listen smart. Spend your time well.
  • The LEAN startup and Customer Development
  • Started by Eric Reis.
  • Started by Eric Reis. Popular with tech startups.
  • Started by Eric Reis. Popular with tech startups. Emphasizes Customer Development
  • http://www.startuplessonslearned.com http://steveblank.com
  • Juggling a company
  • Money solves nothing.
  • Money solves nothing. Neither does people.
  • Money solves nothing. Neither does people. There are no quick solutions.
  • Money solves nothing. Neither does people. There are no quick solutions. Your team is everything.
  • Money solves nothing. Neither does people. There are no quick solutions. Your team is everything. Prioritize, prioritize, prioritize.
  • Iterate quickly
  • VISION AND PURPOSE IS FOR GUT
  • Thanks! http://twitter.com/jsjo john@burtcorp.com
  • Q/A session after the talk: (paraphrased after the fact) Q: How do I start a company? What about legal complexity. A: I don’t really know about any other countries other than Sweden. Maybe a little bit about the US. In sweden it’s fairly simple. The easiest way, if you don’t want to do all the paperwork yourself, is just to go out the the many companies that sell incorporated limited companies, and buy one. It’s about 110K SEK (€11K) for a company worth 100K. For US companies Y-combinator provides boiler plate standardised documents for starting tech companies. They’re very good.
  • Q: But we need a company to sell, right? A: No. Absolutely not. You need a company to send an invoice. Selling is a lot more. The first sell is always the hardest sell. So why waste all the time with the legal if you might fail anyway? Nah – the way to do it is; 1) Build something very basic, but sellable. 2) Negotiate the sell. 3) Fail? Goto 1) 4) Success? Goto 5) Start the company and send the invoice. You *don’t* need a company to sell. So just claim you have a company. No one is going to check that up.
  • Q: What about having a name? A: I wouldn’t care about the registered name. But I’d make sure I had the domain. And who cares about registered name anyway? So get the domain, but don’t worry about the legal.
  • Q: If I have three options/ideas for starting a company, how do I research/choose which one to go for? A: I’d think about: 1) What do I feel passionately about? You’re going to stay in this for the long run, doing it for years. It better be fun. 2) Can I build something that provides actual value? 3) Is there (or will there be) a big market for it? You don’t have to KNOW the market size. But you have to know it’s potentially big. And If you can do something that’s really useful there, and that you enjoy doing it: Go for it! If nothing fits, throw them all away. If all fits, roll the die.
  • Q: But large companies do market research and write business plans before they launch products, don’t they? A: Yes they do. And that’s because they’re scalable businesses. You’re not. Anyone who will tell you, as a startup, to write a business plan is just plain wrong. They’re not stupid, they just don’t have any experience from a startup. Business Plans are for describing how to solve known problems with unknown solutions. The thing with a startup is that both the solution and the problem is unknown. You’ve just not discovered what the exact problem is. If you had, you’d be a scalable business and not a startup. Then you can write your business plan. Steve Blank (mentioned in the talk) has written an excellent book called “The four steps to epiphany.” He writes about how you grow your startup into a profitable company.
  • Q: What if there is a dominant player in my market. How do I get past that? A: I wouldn’t worry about that player. I’d worry about the other guys that was my size. Firstly, the dominant player is actually going to move slowly. You’ll be much quicker. Secondly, you’re not competing with them from start either. No-one is going to think about wether the should meet either you or Google. They just don’t. So don’t worry. And once you’re competing with Google, that’s a whole other world. Worry about that then. Lastly, the dominant players need the small fast moving companies. The new way to innovate and evolve is buying smaller companies.