I did the opening presentation at MIT's Underground 2008 event yesterday for
student entrepreneurs. My hat's off to Albert Park and his colleagues for
organizing a great event. We need more of this kind of stuff in the
Boston/Cambridge area to bring student entrepreneurs together with others.
Here are some quick notes and points that I made from my presentation. My
favorite part about it was the fact that there were no PowerPoint presentations
allowed. When the organizers told me that, it made my day. [For
reasons, see "Why I Hate PowerPoint"].
Note: If you were at the event, please note that I didn't get to all of
these points during my talk (just wasn't enough time), but this is all the stuff
I wanted to say.
Some Ideas for Student Entrepreneurs
1. It's alright if your idea is sort of crappy: Most
startup ideas start out kind of crappy. The good news is that once you get
started, you'll start learning more and your ideas will get better. But you
have to get into the game and start doing things in order for your idea/startup
to get better. Don't sit on the sidelines waiting for the perfect idea. Get
started early and improve the idea.
2. Don't try to raise VC funding too early: Most student
entrepreneurs (or recent grads) with early stage companies should not try and
raise venture capital. The odds of succeeding are low and for most, it'll be a
waste of time and energy. Instead, work on the product/offering and work on
finding some great people you'd love to do something spectacular with.
3. If you do hit the VC circuit...remember that there are
two possible outcomes: One. You spend months being miserable and depressed
instead of doing what you love (working on the company). Or two, you spend
months being miserable and depressed and you get some cash.
4. Modest goals are just fine. Too many folks think that
startups are all about buying your ticket in the $1 billion outcome lottery (and
be the next Facebook or YouTube). You don't have to do that. I think it's
sub-optimal for a first-time entrepreneur. Look for successive wins -- even if
they're modest. The only people that tell you that you have to build a huge
company are VC investors. The reason is that they need all of their
entrepreneurs building gigantic businesses (so that at least one or two will
actually do that and give them the gains they need). The example I used: If
this is your first company (you haven't had a "liquidity event" yet), then
shooting for a 10% chance at a $50 million outcome (E.V. = $5 million) is much
better than a 1% chance at a $1 billion outcome (E.V. = $10 million). The
reason is that for you personally, the value of the extra millions above a
certain point diminishes quickly. Trust me.
5. Find Your Co-Founders: Student entrepreneurs are in a
unique position in their careers where not only are they starry-eyed optimists
(we all should be), they're around other starry-eyed optimists. Find
the best and brightest of these folks and start something. Join
up!
6. You don't need a business plan: Nobody cares about
business plans. Investors won't read them. They take a lot of time. Just work
on the idea, work on the team and work on getting customers (or understanding
why you're not getting customers).
7. Don't overestimate the risk: If you're just about to
graduate (or have recently graduated), you might tend to overestimate the actual
risk in a startup. Sure, it's not going to pay you what you'd get at a big
company, but the odds of you not being able to find some job later, if
things just go horribly are pretty high.
7. GET STARTED NOW: It doesn't take much effort to get a
company started (though granted, actually growing one successfully is
non-trivial). But, the first step is really, really easy and there's no reason
not to take it. Your best lessons, ideas and opportunities will start showing
up after you've started a company. So go do it.
That's it. If you made the event, thanks for coming. If not, hopefully the
above notes helped. In either case, I encourage you to join the two startup
communities I (loosely) manage online and connect with other folks (you might find your co-founder there):
LinkedIn: http://linkedin.onstartups.com (7,000+
members)
Facebook: http://facebook.OnStartups.com (900+
members, but more features)
Looking forward to connect with you folks. And Albert, if you're reading this,
hit me up to be one of the sponsors next time. It's a good cause that I'm
passionate about.
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I'm going to be giving the keynote presentation at an upcoming event
organized by and focused on student entrepreneurs being held on the MIT campus this
Saturday (May 3, 2008) from 12:00 - 4:00 p.m.. Student entrepreneurs from MIT,
Harvard, Babson, Olin and Boston University and other Boston area academic institutions will gather to talk about startups.
I could not hope for a better group to interact with.
If you're in the Boston area, you can check out the event (and RSVP) at the
Facebook event page for Underground 2008. It's free and open, but seating is limited
so please RSVP on the Facebook page so the organizers can plan accordingly.
Having been a student entrepreneur myself, I'm a strong proponent of current
students and recent grads starting companies. I wrote about this in an earlier
article titled "Why Student Make Great Entrepreneurs".
One of my points in the earlier article was the value of the network students
build (or have the opportunity to build). Personally, I'm not a particularly
social guy and networking is one of my weaknesses, not my strengths. But even
then, I've ended up working with over a dozen people that I met during my
undergraduate days (University of Alabama, Birmingham) or my more recent
graduate school program at MIT. If I could turn back the clock, I'd make a
concerted effort to try and connect with even more of my academic peers --
regardless of how uncomfortable it might have been to hang out at "networking
events".
The Boston area has some of the best academic institutions in the world.
Even then, I don't think we're yet doing enough to encourage student
entrepreneurs. Scott Kirsner, who writes for the Boston Globe, recently wrote
about this on his blog in an article titled "How Do We Better Connect Students to Boston's Innovation
Economy?" Scott's been doing a great job himself helping interconnect the
Boston entrepreneurial community. He was even nice enough to post recently
about the upcoming Underground 2008 student entrepreneur event mentioned
above.
If you're a student entrepreneur, UNITE! Connect with your peers --
particularly those not in your immediate circle or discipline. You'll be
thankful you did.
If you're going to be attending this Saturday's event, leave a comment and
let me know (or grab me at the event). If you have topics you'd like me to
cover during my presentation, let me know what's on your mind.
Also, if you're looking for online networking with fellow entrepreneurs, I encourage you to request access to the OnStartups Group on LinkedIn or join the OnStartups Facebook group. It's a great way to find entrepreneurs in your area or at your school.
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I've been invited to speak at the upcoming Business of Software conference in
Boston (my home town!) on September 8, 2008.
As such, I've been thinking a bit about the business of software. I do this
regularly because my day job (and most of my night job) is running a software
business in the area of internet
marketing.
more info: Business of Software Conference
There are a ton of great speakers scheduled for the conference -- and then
there's me. Other folks that will be there include Joel Spolsky (who is
sponsoring the conference), Seth Godin, Eric Sink, Steve Johnson, Richard
Stallman, Paul Kenny, Jessica Livingston and Jason Fried. It promises to be a
great conference and I'll do what I can to not bring down the average quality
too much.
If you're planning on making it to Boston for the conference, please reach
out.
Meanwhile, here are somewhat pithy thoughts on the business of software.
Pithy Insights on The Business Of Software
1. Software businesses are not a low-cost play. You're probably better off
producing great software somewhat expensively than producing average software
somewhat cheaply.
2. Great software is produced by great people. Mediocre people don't ever
accidentally produce great software that makes millions of dollars.
3. Programmers have not been, and never will be, commodities. If you think
this way, I'd quit now.
4. Pricing software is hard. More people charge too little than charge too
much.
5. If you're charging really small price-points, consider going to
a freemium model (some version for free, the upgrade is paid for). The free
version is a great way to get some distribution and customers.
6. Just because people should buy your software doesn't mean they
will.
7. One of the trickiest parts about a software business is figuring out the
right level of services to sell. If the answer seems blindingly clear, you're
not thinking about it hard enough.
8. It's getting harder and harder to make money on pure software innovation
(i.e. lines of code and the product itself). Increasingly, business
innovation is what companies are using to drive differentiation and better
margins.
9. It's a great time for software startups. Capital costs are very low
(infrastructure, systems software are getting cheaper every day). And,
distribution is actually possible with some creative marketing on the internet.
Tiny companies have a shot at reaching big markets.
10. There are still people that believe massive spec documents and months of
planning will produce working software that users are going to be delighted
with. I feel sorry for these people. Think agile, folks!
11. Make sure you're deciding correctly between a horizontal offering and a
vertical offering. Horizontal offerings are tempting because of their potential
scale -- but they're much harder to execute.
12. Programmers often like to build platforms, not applications. But,
building a business around a platform takes lots of good strategic thinking (and
often a fair amount of capital and/or luck).
That's all I have for now. More on this particular topic in a later
article. I'm on vacation today, so didn't have enough time to really dig
in.
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Brian Halligan (my co-founder at HubSpot, and MIT classmate) and I are scheduled to speak tomorrow to the "New Enterprises" class at the MIT Sloan school tomorrow.
New Enterprises (or more fondly known as 15.390) is a course focused on entrepreneurship. Both Brian and I took the course while grad students at MIT -- though during different terms. HubSpot was kicked-off, in part, during the New Enterprises class in Spring 2006, so the course has particular significance to us.
The focus of our talk tomorrow is supposed to be "sales and marketing for startups" (a topic that we both happen to be passionate about). However, we're also planning on weaving in some other topics that we think should be fun and interesting (like raising capital, founder dynamics, etc.) As it turns out, Howard Anderson and Ken Zolot (the guys that teach the course) are not going to be in class tomorrow, so Brian and I have the whole class period to do with what we want. The students are at our mercy. <diabolical laugh here>
In any case, if it turns out that you are a current MIT student and are taking 15.390 with Anderson and Zolot this Fall, please leave a comment and introduce yourself. For the rest of you, I'll plan to write a quick summary post about what we talk about later this week, in case you are curious.
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I am scheduled to speak at a Mass. Technology Leadership Council event this week. The topic of the event is “Web 2.0 – How Will It Impact Your Business?”.
If you plan on attending the event, please leave a comment and let me know. Feel free to grab me after the event and say hello. (I’m finding more and more people in the Boston/Cambridge area that are OnStartups readers).
Registration fee is $80
Tech Trends Forum: Web 2.0 - How Will It Impact Your Business?8:00 - 11:00 a.m.
Foley Hoag Emerging
Enterprise Center
Bay Colony Corporate Center
1000 Winter St, Ste 4000
Waltham, MA
Web 2.0 encompasses a whole collection of tools, architectures, interactive styles and cultural characteristics. Are you wondering:
- What is different about Web 2.0?
- How will Web 2.0 impact my business?
- What tools and technologies enable the new Web 2.0 capabilities?
- Are you using or enabling mashups?
- What old problems can be addressed differently and more effectively in the Web 2.0 world?
- What new business opportunities does Web 2.0 offer?
Details of the event can be found here:
http://function.masstlc.org/programs_new/event_single.cfm?eventid=724
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