daily articles for founders

Here are 10 quality posts from the Founder's Library:

Appsumo's failed A/B tests  

This article by Noah Kagan once again makes the point that if you cannot fail you cannot learn, and gives up, as examples, some failed A/B tests that AppSumo conducted.

Only 1 out of 8 A/B tests have driven significant change.


All of these were a huge surprise and a disappointment for me.

How many times have you said, "this experience is 100x better, I can't wait to see how much it beats the original version?"

A/B tests are one of the most effective implementations of actionable metrics, but make sure the measurement boils down to a change in a key performance indicator. Noah finishes with some tips:

  1. Focus on one priority per week, with 1-3 tests focusing on that goal.
  2. Be patient - it may take a few thousand visits or 2 weeks for a test to be conclusive.
  3. Be persistent - most of your tests will fail, but that's ok.
  4. Focus on things which are likely to get you big results.
Seed stage valuation guide  

Here's a good post by Jordan Cooper, providing some ballpark of what sort of company valuation you should look for at different stages of your company. Jordan is Brooklyn-based, so not from Silicon Valley, and yet I think it's fair to say that in most places other than SV, the scale shifts at least one notch against the entrepreneur (i.e. pre-product raises nothing and a prototype built and in the market might raise a hundred thousand pounds):

Here then, is a summary of the stages Jordan proposes:

  1. Still at your old job: $0. Quit your job before asking for investment.
  2. Pre-product: $2M. Raise $300-$700k.
  3. Prototype built and in the market: $3-4M. Raise $400k-$1M.
  4. Product in market and shows signs of growth or revenues: $variable, Raise $1-5M.
How to get your first 1,000 users  

Some good advice from Vinicius Vacanti about how to go about getting those initial users. Vinicius focuses on online methods, and so advises first getting a domain and landing page to capture interest in the form of email addresses, and then driving traffic to it by the following methods:

  • Email signatures
  • Web profiles
  • Demo videos
  • Networking events
  • TechCrunch and tech blogs
  • Hacker News
  • Facebook Ads/Adwords
  • A company blog

All good methods (except perhaps for paying for advertisement, unless you're trying to do some kind of MVP hypothesis testing which you feel is worth the expense.

It's worth remembering, also, that customer development doesn't have to happen online. In fact, the primary customer development method for a b2b business is likely to be offline, face to face with potential customers.

Toxic investment  

Kicking off the series of Founder Stories via Stef, here's a tale of the failed startup Tab by Shawn Zvinis.

It's always good to reflect back at the end of a project especially if it failed. Shawn highlights a number of reasons why his startup failed, none of which are particularly original (unfortunately), but which must have been painful to learn. I'm linking to this one because it seems like yet another startup that was hobbled by raising investment:

Key learning: try to avoid raising a single penny until you have built a working prototype and have some (any) early revenue-and in a best case, revenue that can at least pay your overheads, so you can have the upper hand when negotiating with early investors.


Our biggest mistake was listening to these investors too much, and we started focusing our efforts on how we could make Tab more investable rather than talking to customers and iterating the product. If we spent more time working on the product, the product itself would have made the company investible, rather than us jumping the gun.

My takeaway is that out of 10 key lessons learned, eight are related, directly or indirectly, to the funding, and may have been avoided if no funding had been raised:

2 . Raising too little too early: That's obviously related to funding.

3 . Building a not-so-minimum viable product: would have been avoidable if there was no funding to insulate the team from the realities of having to make money.

4 . Focusing on accelerator too early: accelerators are another step in the funding game that should be avoided in most cases. I chalk that one up as funding-related too.

5 . Going to the USA at the wrong time: would not have been possible to even consider without the cushion of funding.

6 . Starting scaling too early: according to Shawn this was kicked off by investors.

7 . Overvaluing qualitative vs quantitative: when you need to sell right away and start making money yesterday, it's impossible not to learn that adding some quantitative benefit to your customers is essential.

8 . Not generating any revenue: when you need money today, you don't talk to people who don't want to pay.

9 . Not building a financial model early enough: while "building a financial model" might be something you omit without funding, we're only talking about the theoretical financial model here. The practical one is being built every day, through actual selling and delivering.

Starting a business is hard and risky.

Starting a business with funding is harder and riskier.

Attention seeking for startups  

Here's a great post by Milo Yiannopoulos proposing some occasionally tongue-in-cheek tips for startups to get attention early on in their life, when they can't afford to spend much on PR.

Prey on a journalist's weak spot. Taking a journalist for lunch is one of the most effective ways to get coverage. It's time consuming, it's borderline immoral, but it's true. That's because we're all broke and consequently don't eat out much. Be strategic about who you approach, find our what they like (eavesdropping on their Twitter feed is a good way to do this) and drop them an invitation. There are other ways you can tickle a journo's sweet spot too: find out what their hobbies are and tailor your communications accordingly. The Jedi move is flattery: no journalist is immune to the "I love your stuff" line. Even if they don't believe it's entirely sincere, they tend to respond to it anyway.

One thing that I've learned about early startup PR is, if you're paying someone to do your PR at that stage, you're doing it wrong. As Milo suggests, be creative, be controversial, be novel and opinionated, and if you can draw in some kind of sex or celebrity angle, even better.

How to choose your startup idea  

A good set of question, by Amir Khella, about how to probe a new startup idea:

  • Which one excites you the most?
  • Which one can you do something about right now?
  • Which one can you get feedback about sooner?
  • Which one can you get done with the least amount of outside help?
  • Which one solves your own pain points?
  • Which one aligns the most with your purpose?
  • Which one would you like to work on for the next 10 years?
  • Which one is likely to remain significant a few years from now?
  • Which one do you not mind killing?

Do you really have to choose just one though? Pick several, and apply Hypothesis Driven Development to all of them at the same time, in parallel (a lot of the process is waiting time anyway). Whichever one gets to the point where it takes over your whole day first, is the one that wins.

Deploying like a pro  

This is a good overview of basic deployment practices that any self-respecting startup should have in place, namely staging servers, source control, and automated deployment workflows.

If you aren't lucky enough to work at a company that has good engineering in its very DNA, you're likely to not know much about them.

My main quibble with this would be that you don't have to work at a top tech company to know this stuff. Anyone in the Rails community, with its emphasis on testing, obsession with git, and Capistrano, will be aware of all those concepts.

Many corporations, like banks or consulting companies, which are not strictly technology-focused, will also be very well acquainted with these practices, and many others that help deliver robust software (which is not to say they're always applied rigorously).

That said, if you have any doubt about staging servers, source control or automated deployment workflows, read the article.

If you ever feel alone in this...  

I have never suffered from depression. I used to feel pretty miserable as a kid (which perhaps is comparable) due to generalised bullying, but there was never a chemical imbalance side to it.

However, particularly in view of recent suicides in the tech scene, it is great to see people with that sort of experience stepping up and offering a helping hand. Darius Monsef:

I haven't thought about killing myself in 20 years, but I've been there. So if you're ever so depressed and stressed out, and you think you're alone. You're not. I've been there. It can get better and i'll bear that burden with you. Send me an email with the subject, "I feel alone in this" and you'll be the next email I write or the call I make.

Beyond that call to action, the whole article is worth reading for a reiteration of something I've discussed in several of my talks:

A person who is $50k in debt has a very hard life. They have no budget for luxuries or means to try and improve their life. They eat the cheapest foods and aren't able to travel. A person with $0 debt, but $0 savings has a quality of life worlds different. They may not have luxuries, but they have way more comfort and abilities to improve their life. Somebody with $50k in the bank is again dramatically better off than somebody with $0… And the quality of life dramatically increases again when you have something like $500k in the bank. That person is able to enjoy high quality foods, travel, live in luxurious comfort and use their capital to try and make their and those close to them lives better. A person with $5M does enjoy a higher quality of life, but not as dramatically better… they might fly in chartered planes vs first class, or drive a $120k car instead of a $70k car, but overall their quality of life is similar. And the increase in quality of life dramatically tapers off as you get to somewhere like $50M. I've personally experienced most of these levels of wealth, and while I haven't yet experienced the very top levels I've spoken to friends that are there and generally they agree.

I've never been $50k in debt (I think my max was about £12k), but I am now slowly but surely climbing up on the other side, and I couldn't agree more. From a personal standpoint, money is a hygiene factor. How much soap can you use?

There's only one good reason to accumulate more money than that, and it's that it can be traded for influence to make things happen. Bill Gates is giving us a great example of what you can do when you have mind-boggling amounts of money, that you can't do with just a few millions. But that's a different goal than wanting to make billions for yourself, which, in my opinion, is both incredibly unlikely and not particularly worth the effort.

There are many more points (and a great slide) in the article. Go read it.

Dealing with conflicts in your business  

Would you believe it, startup founders are human beings, and face the same kinds of difficult human issues that the rest of the world faces.

The techniques that Dr. Jared Scherz outlines work for situations other than those found in startups. They work, in fact, for many difficult situations. In particular, stepping outside your immediate situation to look at it objectively is a powerful technique for dealing with conflicts.

So take a moment and step back before reacting to people or situations. Ask yourself what is going on inside you to trigger your feelings. Consider what is driving the actions or inactions of others around you. Scan the team to see how people are working together and what the underlying causes are for problems. Base your responses on what emerges through your awareness to prevent impulsive decision making. As the CEO you are responsible for attending to the processes of your startup, not simply executing a wonderful product or service.

Worth a read if you feel you could use a primer in how to deal with conflicts in your business.

Avoid over-design  

Great article from Smashing Magazine's Alex Komarov, about a common mistake in iOS apps: over-design.

Probably the oldest, yet extremely popular design problem is overdesign. Designers of iPhone applications often tend to disregard common design and usability conventions by offering users slick and shiny user interface designs that go way beyond their standard look and also way beyond their claimed functionality.

Why make things look, feel and work complicated and why do designers like to re-invent the wheel? The answer is simple: they want the application to be different; look different and stand out from the crowd. Unfortunately, a different look isn't necessarily helpful for application's usability and functionality.

One of the best things about iOS, from a user point of view, is that there is a standard "look and feel" that is very clear, clean, aesthetic, and useable. Redesigning it is a lot of work, and you're unlikely to do as good a job as Apple did.

As Alex points out, standard input fields can be styled in ways that respect your application's branding without reducing the application's functionality.

Does the same apply to Android apps? Web apps? Desktop apps?

Yes, to a more limited extent. On Android, there is less of a "standard look" (which I would argue is a flaw of the platform), so unique-looking apps will not look out of place. On iOS, they stand out like a sore thumb.

On the web, again, there is less of a "standard". That said, there are still standard web controls, forms, patterns, etc, and straying too far away from them will confuse and therefore lose users.

Finally, on the desktop, it really depends on which OS you're talking about. Mac OS has as much design integrity as iOS. Windows is a hodge-podge of different style (even Microsoft can't keep it straight). Linux is a complete free-for-all, with themeability rated higher than usability.