-question: how many of you want to start a company after school? -in 99’ (when i was at biz school) every hand would have been up. Times have changed. -I’m here with serial entrepreneur Michael Cerda to talk about ‘Patterns of Startup Success’ -Patterns of Startup Success is a bit of a misnomer, though, because most of these patterns were learned through lot’s of error. -I think we have an interesting format today because we’ll talk about out generalized experiences over the last decade but we’ll relate them to Michael’s current company Cc:Betty which is hot off the funding press.
-Vision is a big word and in the earliest stages of a company i think of it more as a perspective. -Your perspective is built from a set of experiences and can have an enormous impact on your outcome. Take Yahoo! vs. Google for example. I worked for Yahoo! for 4 years and still can’t tell you what their vision is but Google’s vision, ’To organize the world's information and make it universally accessible and useful.’ is well known. The translation is Yahoo is valued at $20B and Google at $124B as of last week. -Michael, how do you approach the vision question at the beginning and what were the most important takeaways going thru this part of the process?
-Most products fail because they never find an audience...not because of technical challenges. -The challenge when you’re just an idea on a piece of paper is you’re only hypothesizing who your market will be. You’re only guessing that the market really sees your product as a need. You’re only hoping that they will pay for it when you ask them to take out their wallet. -To compound the problem...if you’re building ‘experience’ based products like Twitter it’s difficult to determine the need upfront but ‘problem’ based products like Salesforce.com makes the task easier. -Bottom line, discovering the needs, wants and passions of your audience is a never-ending process. Just like software development, audience development is never really done...audience development -Michael, what were your most important take aways during this part of the process?
-This sounds like a no brainer...you want to get to market to test your assumption. -The tough part is understanding the minimum set of features that the customer will accept. -This means the initial product may be crappy. -Michael, what were the biggest takeways in going thru this part of the process?
-This sounds like it runs counter to the previous thought ‘get to market quickly’ but it’s not. -It’s a matter of where you place focus. In developing your v1 focusing on frictionless first-time usage and instant gratification...this allows users to experience your product...and not discount you on things that are not core to the experience. -Michael, you thought a lot about this with Cc:Betty? What were your insights?
-What can i say here. Make sure you know your business model. -You can make spreadsheets say anything so don’t over-estimate -Michael, any words of wisdom here?
-After finding an audience, finding distribution is the #1 problem that most startups face. -Chasing an audience is super difficult. Online there are only a few ways to grow an audience...SEO, SEM, viral features or integrations with products that have the audience. -Michael...you’re an expert in finding audience...how did you think about the problem with Cc:Betty?
-Once your product is out, you need to start speaking and understanding your customers. -The question is which ones do you listen to? -Bottom line...listen to the customers who use your product the most...and develop based on their needs...not everyone else. -Michael...any words of advice?
-Startups don’t have a lot of $ to spend on marketing so they have to make every dollar count. -Buzz marketing is key and the biggest bang for your buck will come from the bloggers. -A happy customer is the greatest endorsement so don’t forget the heavy users either. -Michael, can you provide a few early launch strategies?
-Startups on the web these days start very small so every hire is critical. -A great hire can move you light years ahead...a bad one can sometimes set you back irreparably. -You want to hire rock stars but can’t always afford them...in these cases replace passion for experience. -Michael?
-The word doc business plan is dead. Ok, I said it. No one reads them. -Instead, put together a deck with 10 slides that tells your story. -Michael, you’re a master at this, tell us how you think about the ‘pitch’
-Funding has never been more difficult for seed startups. -Michael, you’re just coming out of the experience...what lessons have you learned?
-Michael: make sure to expand on ‘what is Cc:Betty’
Patterns Of Startup Success
Idea to Funding
Develop a perspective on where you are going
Know what makes your audience tick
Differentiate on that knowledge
Audience development is never-ending
GET TO MARKET QUICKLY
It’s the best market research
Build the minimum set of features
The product might initially be crappy
Focus initial product on instant gratiﬁcation and
frictionless ﬁrst-time usage
THE BUSINESS MODEL
Keep it simple