How to ask for introductions ✶
Elad Gil on how to ask for intros:
One of the key things you learn when building a consumer product is to make things as easy, streamlined, and friction free as possible for your users. When asking an angel, advisor, or other person to make an introduction for you, the same rule applies. The structure below saves a lot of pain & back and forth for you, as well as for the person being asked to make an introduction on your behalf.
(...)
By spending a little bit of time up front you can make life dramatically easier for the person doing you a favor / offering an introduction. It also increases the likelihood dramatically that an introduction will actually occur and yield a follow-on conversation.
Elad rips into a couple of templates (good and bad intros) to show how it should be done. As someone who has frequently both been asked to make intros, and asked others for intros, I can only agree with his approach.
Make it easy for people to help you, and they're much more likely to do so! Worth also consulting this article, this presentation from Founder-Centric, and the "Reaching Out" section of this article for additional perspective (thanks Sal for the suggestions!).
If you read this far, you should follow me on twitter here.
Swinging for the fences ✶
Dan Shipper on swinging for the fences:
For a long time I accepted the "leave school and raise money" argument because I assumed that "swing for the fences" and "scale as quickly" as possible were inviolable tenets of company building. But it turns out they're not inviolable. They're not even tenets. They're just a common way of thinking about how to do a startup.
Common (and successful) in the valley. Almost everywhere else, it's deadly. Paraphrasing Paul Graham, "Somehow, it's as if most places were sprayed with [swinging-for-the-fences] startupicide."
Dan continues by analysing why he's not interested in homeruns:
And so my goal is this: to be able to do those things sustainably, for the rest of my life.
[...]
Now let's get back to homeruns. Homeruns by definition aren't sustainable. They're not predictable. Sometimes you hit one, but most of the time you don't. That part of things is mostly out of your control.
And:
What I'm spending my time doing now is this: learning how to build a real business. And by real, I mean a business that has money coming in the door from day one. Businesses that make money can be started in any investment climate. They don't go out of style.
If more startup founders subscribed to that philosophy, I think everyone would win - more businesses, more jobs, more value creation, more opportunities fulfilled, and so on. Of course, that's not the Valley philosophy, but then that philosophy is not the only game in town, and shouldn't be.
If you read this far, you should follow me on twitter here.
Firing yourself, again and again ✶
I often quip that my job as founder of the business is to get myself out of a job. Here's Joel Gascoigne's rather lengthier, better supported argument for that idea:
Having thought about the concept of firing yourself further in the last few weeks, I've come to a key realization: if you're doing something yourself as a founder of a post-product/market fit startup, you're probably not doing it well.
The way I see it is that if you are doing a task yourself alongside juggling all the other duties you naturally have as a founder, you have to make compromises. To put things into perspective, the areas we've identified as key tasks at Buffer currently are: Product (web and mobile), Engineering, Marketing, PR, Customer Support, Partnerships/BD, Admin, Growth, HR, Recruiting and Investor Relations. There are probably more, too. As CEO I have to have all these things in my head, and oversee half of them directly. As COO Leo oversees the other half.
With this much to think about, anything Leo and I are doing directly ourselves right now has to be done only ‘partially'. We both look for the 20% of the work which will get us 80% of the benefits, and can't do much more than that for everything we're working on.
That's exactly how I function, and that's exactly why I try to pass anything I do with to someone else in the company as soon as I'm aware that I'm doing it more than once: because as long as I'm the one doing it, it'll always be a 20% rush job.
If you read this far, you should follow me on twitter here.
How to find a designer ✶
Sacha Greif provides some solid advice for how to find and select a designer. This is something that many startups hit up against at some point in their life, since most startup founders are not professional designers - and, at the end of the day, there is a clear qualitative jump between what you can throw together yourself in a pinch and what a seasoned professional can produce.
Sacha's tips focus on finding freelancers, and cover where to look for designers, how much you should pay, how to pick the right designer, how to select a designer that has the skills you need, the use of multiple designers, and how to get the designer started.
Very much worth a read if you're thinking of hiring a designer for some aspect of your startup.
Test your startup ideas for $20 ✶
In the theme of validating and invalidating your business ideas, here's another approach.
Explain that your brother has a crazy business/product idea, and that he's about to get a 2nd mortgage on his house, raid his 401k and quit his job. His wife is a nervous wreck, afraid that they'll lose their house and retirement fund, and he's hit your parents up for seed money that they really can't afford to lose. Your parents and your sister-in-law have come to you for help to try to talk him out of his hair brained scheme.
Suggesting that it's your brother's idea is a good move, because people will often avoid giving negative feedback in person. With this approach, however, you'll really elicit all the negative feedback they can come up with.
How Jason screwed up his Google acquisition ✶
After that the communication fell silent. I resisted contacting Jonathan or David because I didn't want to appear too eager and I figured I was in a fairly strong position since they needed what I had and there didn't appear to be any other serious competitors in the space.
(...)
While on the phone I took the opportunity to ask him the burning question of why I had never heard back from them in regards to the acquisition of Preezo. I had developed my own theory which was that since Google acquisitions were known to be primarily about talent and not technology, a one-man show like Preezo would represent distinctly less value and ultimately more risk for them than if it was, for example, a team of five engineers. However, according to Jonathan that wasn't the reason as at all. It was simply that they were so busy during that time that the deal just fell through the cracks.
I gave a presentation recently at an HNLondon meetup. One of the key lessons I tried to get across is "don't be afraid to follow up".
People who do important things are almost always very busy. Everyone wants their attention, and even with the best will they don't have the time to keep track of every interaction they're involved in. In my experience, such people never get annoyed at you for following up - in fact, they almost expect it of you. The fear that "people will get annoyed at me for following up" is unfounded.
So never be afraid to follow up. The worst thing that might happen is that your email is ignored. The best thing that might happen is that you get what you want, or even more.
If you read this far, you should follow me on twitter here.
Running a business vs building a product ✶
Elad Gil writes:
As the CEO, you need to keep your eye on the underlying product and business fundamentals of what you are doing. If you can not keep focused on the business side you must hire someone who will. Otherwise there is a reasonable chance your company will die. The two most common ways for a startup to die are founder conflicts and running out of cash. Running out of cash is often avoidable.
This is why I often advise people who want to play the startup lottery but have no business experience to try building a profitable bootstrapped business first. You learn a lot from running such a business that is just as essential when running a funded business.
Failing in an interesting way is hard. If you fail at the basics of running a business, you've not failed in an interesting way. If you fail because of some predictable startup issue like a founder conflict or building something nobody wants, you've not failed in an interesting way.
Failing in an interesting way means avoiding all those obvious traps and failing for some reason that is actually challenging and unforeseeable - for example, a smarter, more aggressive competitor stole your lunch, or if a political event simply made your product unsellable - those are interesting ways to fail.
If you read this far, you should follow me on twitter here.
How to become a must-have ✶
Great article by Mark Richards, proposing a technique for identifying tough, valuable problems that could make you a lot of money:
The value of a problem directly correlates to the time people will take to tell you about it.
Time and time again we find that if busy people, who fit your target customer profile, are willing to give you valuable time simply to discuss a particular problem, with no clear promise (yet) of a viable solution, then you have an important problem. The kind of problem a startup, with limited resources, no brand, an incomplete product and a small team can actually sell into.
Worth reading the whole article. I'll keep an eye out for more good stuff from Mark, he seemed to be planning a follow-up to this, though it hasn't been posted yet (the article is from September 20th).
Bill Barnett at Stanford comments how so many startup pundits fail to learn when observing failures. Indeed, not only are the lessons learned often lost, but also the opportunity to use others' failures as one of the fastest sources of actionable information.
Unfortunately, most observers skip the logic part. It is mentally easier to jump to the "obvious" conclusion: If the business failed, the business model must be wrong. Full stop. You can easily tell when this skip happens. The person will name an example as if it were a reason. Is online grocery delivery a viable model? No: Webvan. Is internet search a viable business? No: Alta Vista.
These examples are data, not logical reasoning.
Wannabe investors and startup advisors are particularly villainous here, often heard retorting loudly against future billionaires in this way.
John Mullins has a more constructive approach to analyzing these failures. He separates them into analogs and antilogs:
There are companies before you who have done something like you want to do that you can copy from, and others who have also done something similar, but that you choose not to copy from. These are your analogs and antilogs respectively. The process of going from Plan A to a plan that will work is to begin with these.
For instance, when Steve Jobs of Apple decided to get into the music business that eventually completely changed Apple as a company, he had a whole range of analogs and antilogs he could refer to. Sony Walkman had sold over 300 million portable music players, so he knew there was a demand for portable music. Also, people were (illegally) downloading music from Napster, so he knew that they were open to downloading music online (as opposed to buying CDs). Jobs also had a key antilog, which was Rio, the first mp3 player that had a terrible interface and was rather clunky.
Not only does this mean you have a plethora of data available to analyse and learn from, but it also points you to better sources and advisors.
You'd be surprised how many of these founders are happy to share lessons learned from their failures with you, and how much faster this can be than talking to customers or running your own experiments at first.
Talk to 10 customers and run a few experiments, and you could still be barking up the wrong tree in the wrong forest. Talk to a founder who's been-there-done-that, and you'll be more like a bloodhound on the scent.
If you read this far, you should follow me on twitter here.
Why VCs do what they do ✶
Dan Shapiro uncovers some of the reasons why VCs act as they do:
VC behavior sometimes looks insane, but generally it's just sound economics. It's crazy but true: if you know how a VC gets paid, you can pretty much read their mind.
Key points covered:
- VCs don't want to take any risk
- They want you to take more money
- They raise big funds even though smaller ones perform better
- They're not interested in quick, profitable exits
- They'll block profitable sales
- They invest gregariously
Worth a good read to understand the economic incentives of (most) VC firms.
