If you’re one of those rare entrepreneurs that has the discipline to stay
reasonably focused on what you should be working on, feel free to skip the rest
of this article with the comforting knowledge that you have my admiration and
envy.
But, if you’re like most of us, you are probably plauged at one time or
another by the “Shiny New Thing” (SNT) bug. This particular syndrome is pretty easy
to describe. There you are, minding your own business (literally) and working
on your startup. Then all of a sudden, BAM! Some shiny new thing comes along
and tries to distract you. You either get distracted, or you stay up nights
wondering if you should have gotten distracted. If you’re like me (my
sympathies if you are), you have this experience quite frequently. I think it
harkens back to our childhood days when just about any shiny new thing
would immediately grab our attention. [Hence the toy robot photo, blog image selection is not a core competency.]
There are various manifestations of this Shiny New Thing (SNT) phenomenon.
Here are a few:
1. New technology/platform/language/framework: This
applies mostly to developers. There you are coding away on your project, and this article comes
up in Google Reader about this new paradigm-driven-framework. BAM! It’s so
cool! It could change everything! It could make you 10X more productive! So,
you immediately start conjuring up ways to use that shiny new thing in whatever
you happen to be working on at this point in time.
2. New market/customers/industry: Your startup has a
market, you probably even have some of the product developed. You’re making
sales, albeit things are going a little slower than you hoped. Then, you read a
blog article somewhere and BAM! You think of this new market that you
could go after. And, brilliant technologist that you are, you’ve already
developed your existing product such that with just a few small tweaks you could
go after this new market pretty easily. In fact, the beauty of it is that you don’t even have
to give give up your existing market/customer/industry. You can do this one
too! If one market is good, two has got to be better, right?
Right?
3. New Feature/Application/Product: Your existing
product is cranking along. The few customers/users you have seem to be happy.
You’re signing up more people. You’re supporting your users.
You’re truckin’ along. Then BAM! You get this idea for a shiny, new feature or
product to add to your arsenal. You pause briefly to ponder whether the legal
services industry really needs an ERP app for the iPhone. But hey, you know
this industry really well, and your best customer has a daughter who has an iPhone. You’re
just a little “ahead of the market”, right. Right?
3. New Company: There you are, cranking along. And,
you just kind of start getting bored. Your idea was really cool and got you all
fired up in the morning. It was so shiny, new back then. But alas, it’s just
not that shiny any more. The idea is sooo last month. It’s really
hard to be passionate about it now. You’ve got to absolutely love what you’re
doing, every day, right? It’s a waste of time to stick to something that you’re
just not excited about, isn’t it? And then, BAM! You come up with this
new startup idea. It’s bright! It’s shiny! Life is good again.
So, you get the idea. If you’re like most entrepreneurs, you’ve been hit by
some variation of the above Shiny New Thing bug at some point. Unfortunately,
when you get hit with it, it’s rarely in the exaggerated, “Boy, that’s a supid thing to do, I would never do that” kind of way as the above examples illustrate. The SNT bug is usually much
more subtle and insidious than that. It’s why it infects so many smart,
rational entrepreneurs — and me.
What makes this problem a problem is that it is rare that going after the
Shiny New Thing is going to increase your oddds of success (however you define
it). Most of the time, it’s a distraction. The rest of the time, it’s usually
a major distraction. To really succeed and get things done, you’re
going to need to stick to something and get the basic machinery “working” and plug away at it. Good ideas take time. Great ideas take even more time.
Don’t get me wrong, I’m not suggesting you be stubborn about your idea, business
model, product, whatever. Far from it. I’m a big fan of the agile approach to
startups. But, there’s a difference between iterating on an existing
thing and being distracted by a Shiny New Thing.
So, here’s my advice to you the next time you see the Shiny New Thing bug
buzzing around your head as you’re trying to get real work done. Ask yourself
the following 4 questions:
1. Am I simply intrigued by the shininess and newness, or is there
really a there, there?
2. What would I need to know and what minimal questions would I need
answered to figure out whether this Shiny New Thing is worth my attention?
3. How long will it reasonably take me to figure out what I need to know?
Can I even afford that investment? How does it impact what I’m doing
now?
4. Should I go ahead and….Hey wait! As I was writing this, I just came
across another topic for this blog as a result of something on Guy Kawasaki’s blog.
Must…try…to…resist…shiny…new…thing. Oh no…it’s too…shinyyyyyyyy....[click]
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Startups, particularly those world-changing, curve-jumping, bet-the-farm kind
are a tricky business. The temptation for startups is, as Seth Godin would say, “to create average
products for average people”. The reason is simple, there’s a massive market of
average people. And, they want average products. Nothing too controversial.
Nothing that makes them too uncomfortable.
Guy Kawasaki, one of my favorite business authors addresses this in a recent
article titled “The Art of
Innovation”. Here’s #4 from that article:
“Don't be afraid to polarize people. Most
companies want to create the holy grail of products that appeals to every
demographic, social-economic background, and geographic location. To attempt to
do so guarantees mediocrity.”
But, my advice would be to not try and “solve for the middle” — but strive to
polarize an audience. If you’re really looking to make a big difference, you
want a group of people that passionately disagrees with your
idea/approach/business. Why? Because when you’re doing something that
polarizes, and you have a bunch people that passionately disagree with you, you
have a chance to find people that passionately agree. It is these
passionate people that help fuel the growth and help spread your idea. And
curve-jumping companies almost always have an idea that spreads at their core.
Your enemy, as in many walks of life, are not the ones that hate, but the ones
that are apathetic.
In short, have the courage to take a stand even if it means you’re going to
make some people uncomfortable or annoyed. Of course, you actually have to
believe in the stand that you take, but the idea is that if you believe
in it, push towards the edges even if it causes a big rift in your
community.
So, let’s take a look at a small, recent example from my own startup,
HubSpot. I’m using the HubSpot case because I know it well and have been on the
“inside” of (as a founder and Chief Stirrer of Pots). It also just happened
yesterday as part of our own internet
marketing efforts.
The quick story at HubSpot is simple: We believe there’s a massive
transformation going on that is causing people to move from outbound
marketing (advertising, direct mail, telemarketing, etc.) to inbound
marketing. Inbound marketing is about increasing the chances that people
that actually give a flying flip about your offering will find you. (Not to
hunt down masses of people most of whom don’t give a flying flip and interrupt
them with your message). The idea itself is not that controversial. But, this
video that we created recently is. It’s short, and sort of funny, so go watch
it and then continue.
So, here was our issue. When building this video we had to decide: Are we
really advocating that companies throw away all of their old marketing methods
(including telemarketing) so they can switch to our way (inbound
marketing)? It’s just not practical. If we asked people to do that, we’d risk
losing a bunch of prospects that just wouldn’t take us seriously. We’d risk a
bunch of our prospective customers thinking we were a whole lot of clueless.
But, we did it in anyway. Then, we went a step further. When we created the
associated blog article, we gave it a controversial title “Dude,
Cold Calling Is For Losers”. Now, not only are we making fun of people that
are doing cold calling, we’re actually calling them losers. Remember,
we have 5,000+ people that are subscribed to this blog, many of them are
marketers, and most of them likely do some sort of telemarketing.
So, what do you think? What are you doing to “take a stand” when it comes to
the vision of your startup? What was the last risk you took online? Something
that would really irritate a big batch of potential customers? Share your
experiences here. I promise, we won’t hate you.
Apologies for those that think this is article too self-promotional. I
try to keep OnStartups focused on things that I think will help other
entrepreneurs. Often, my best exampes are from my own personal experience.
Nudge me back if I cross the line.
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I’ve had a really interesting and crazy week (crazy in a good way). As many
regular readers of OnStartups.com know, I’m a huge Seth Godin fan. I’ve read
most of Seth’s books over the years and keep up with his blog. He’s even been
kind enough to comment on one of my prior OnStartups articles (“Why
Your Startup Shouldn’t Hire Seth Godin”). But, until recently, I’ve never
had the opportunity to actually hear him speak in person. This past week, I got
to hear Seth twice.
Most recently, Seth was a keynote speaker at the recent Inbound Marketing
Summit in Kendall Square, Cambridge (MIT central). Not only did I get to hear
Seth speak, live and in person, I had the thrill of getting to have lunch with
Seth and “just chat about stuff” (like getting some advice about my startup).
This has got to be the most thrilling thing that’s happened to me all year.
Very exciting. [Interesting trivia: Early in Seth’s career he worked in
Kendall Square for Spinnaker Software].
So, here are some of the ideas and insights I gleaned from Seth, that I
thought might be useful to other startup fanatics. Although the core insights
were inspired by Seth, I put my own lens/spin on it from the perspective of a
startup. All the really brilliant stuff is Seth, the mediocre stuff is
mine.
8 Startup Insights Inspired By Seth Godin
1. Resist becoming “average”.
This is my favorite insight. At my startup HubSpot, we use the geekier term
“regression to the mean” to refer to this phenomenon. Basically, the notion is
that over time, the world pushes you towards becoming more average. Often this
means doing what is “tried and true” or “proven. Or, as Seth says, “creating
average products for average people”. For businesses in general, but startups
particularly, regressing to the mean is a dangerous thing. Why? Because the
“average” startup is not successful. The only way to succeed is to
not be average. You have to go to the edges and resist the pull to the
middle.
2. Communicate Directly With Your Customers
You’re the founder/CEO/president/whatever of the company. You’re doing your
best to work on the company, intead of in the company (just
like all those business coaches said you should) . You may think you’re really
important to the business. In fact, you may even be really important.
It doesn’t matter. TALK TO YOUR CUSTOMERS. Whether you’re in the backroom
writing the next Facebook/YouTube/Google/whatever or you’re more of an
operations/finance person, you need to be have direct conversations with your
customers/users. There is no substitute. For startup people, this is not
particularly hard advice to follow (because someone has to talk to the
customers, and there’s only two of you in the company, so there’s nowhere to
hide). But, you’d still be surprised at how often people avoid direct contact
with the customer. No, not you of course, but your co-founder. For a
great example of a successful startup that talks to customers, look to Jason Fried from 37signals. He actually
reviews and responds to customer support emails. He’s a awfully busy guy too.
And, he’s got over a million users. What’s your excuse again? [Note to self:
write an article with notes from meeting with Jason Fried last week].
3. Let Your Users Talk To Each Other
Online communities are all the rage. But, too many of them are started
because companies want to “build a community to establish ourselves as a
thought-leader and promote rich interaction amongst our team and our
customers.” Blah, blah, blah. It’s fine that you want to be a thought-leader
and at the center of your universe. It’s great that you want to start a “rich
dialog”. But, provide some mechanism for those that inexplicably find your
offering “interesting” (hopefully interesting enough to actually pay you) to
connect with each other. Give them easy, convenient ways to connect to each
other and then get out of the way.
4. Start a Freakin’ Blog
Yes, I know. You’ve been meaning to do it. But amidst the writing of code,
and raising of funds, and meeting of minds and all the hundred other things you
have to do this week, there’s just no time to write. Heck, it’s just you and
your buddy Joe, right? And besides, you kicked off that
bobandjoeblog.wordpress.com a few months ago, wrote about some stuff, and only 4
people read it. It just wasn’t worth it. You have a business to grow! But,
you promise you’ll make the time. Someday. Once you get done with this
product-release/funding-round/support-nightmare/pr-event/whatever you promise to
try the whole blogging thing (again). I’m here to tell you that you need to
make the time. But, don’t listen to me. Here’s Seth Godin: “You’re forgiven
if you don’t get it…it’s easy to write the whole thing off…here’s what to do if
you still don’t get it: Start a blog.”
5. Stories Spread, Not Facts
Sure, I get that your shiny new startup with it’s shiny new software written
in a shiny new programming language is going to change the world. I get that.
But I, like most people, don’t want to hear about product. I certainly don’t
want to tell other people about your product. But I love a good story,
and I’m guessing others do too. If you want your idea to spread, stop focusing
on the facts, stop focusing on your offering and start focusing on your story.
Make it genuine. Make it interesting, and as Seth would say, make it
remarkable.
6. Beware The Need for Critical Mass
I’m going to lead with a quote from Seth on this one: “Failing for small
audiences is a loud cue that you will fail even bigger with big audiences.” Too
often, startup founders talk about how they are pushing to get to “critical
mass” and how “economies of scale” are going to kick in. That’s all fine and
dandy. I get it. I’ve been in the software industry for a long time. But, is
it absolutely, positively necessary to get to some “critical mass” before your
business starts to make any sense at all? Is that mass all that critical? Does
it have to be?
Can’t you make some kind of business out of something that looks a bit like
this:
Mass You Have < The Magical Mass That Is Critical
Why do so many startups have these mythical, magical numbers (“once we hit
1,000,000, users rainbows are going to spontaneously pop out of nowhere and
magic fairy dust will fall out of the sky and make our financials look sooo much
better”).
7. They Didn’t Call It the Industrial Gentle Change
It was a revolution, and like all revolutions, it’s neither gentle nor
comfortable. If you’re building a startup that really is going to
revolutionize something, you’re going to have take some chances and
make some people uncomfortabale.
8. You Have To Start
To do anything, you have to start. You can’t wait for the perfect
situation. The perfect idea (which doesn’t exist), the perfect business plan,
the perfect timing, the perfect market, the perfect investor, whatever. You
need to get going.
I’ll close with this quote from Seth during lunch: “I’m impatient
and shamelessly unafraid of failing.”
I’ve got lots more Seth nuggets and pearls of wisdom, but that’s all we have
time for right now. I need to get back to working on the next alpha version of
Twitter Grader.
So, what do you think? Did any of the above insights resonate with you? Any
you just don’t agree with? I’m not qualified to defend them, but that’s never
stopped me before.
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I came across a great article today by Jason
Calacanis on the topic of PR for startups. Jason Calacanis is founder and
CEO of Mahalo, but you probably would better know him as the the guy behing
Weblogs, Inc. In any case, he’s accomplished, and knows a thing or two about
getting visibility for a startup.
I’ve always thought of myself as being really different from Jason (note:
I’ve never actually met him). He seems to be the classic extrovert and seems
capable of really putting himself “out there” for his startup. Though I don’t
think of myself as lacking in passion, I just don’t have the gumption he
does.
In any case, If you’re involved in a startup (particularly if you happen to
be venture-backed), the article is worth the read. However, the original
article is over 4,500 words and on the off-chance that you’re lazy like me, here
are some of my favorite points from the article:
1. “My philosophy of PR is summed up in six words: be amazing, be
everywhere, be real.”
2. First time I’ve ever the heard of the term ceWebrities. clever. With
regards to these ceWebrities, “these overnight successes are 10 years in the
making.”.
3. “Be the brand…you must be in love with your brand and
inspired by your brand’s mission to have any hope of getting press.”
4. “Be everywhere…every single night I would go out and
meet folks in the internet industry…while other folks went home to their
families, I went out and made a family.”
5. “Your job is to transfer the enthusiasm you feel for your brand to
everyone you meet.”
6. “Always pick up the check — always…everyone remembers
who picked up the check”.
7. “Set a goal of creating deep relationships with a small number of folks
as opposed to running around trying to trade business cards with as many folks
as possible.”
8. “Be a human being. The best way to get PR is not to
sell someone on your company or product — it’s by being a human being.
Journalists hate being pitched…journalists and bloggers are, in fact,
humans.”
9. “Before meeting with a journalist, it is your job (as CEO) to read their
last five articles in full…”
10. “Your job as the CEO/founder is to create direct, honest and personal
relationships with journalists.”
11. “Attach your brand to a movement.”
12. “PR is, by definition a reflection of what you’ve done. When a startup
hits, it’s not one thing that does it, it’s typically many things working in
concer.”
I'd summarize the advice and change the 6 words of advice to: Be amazing, be passionate, be human. What's your 6-word version?
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I’ve been thinking a bit this past week about startup teams and what makes
them work (or not work). Most people that are in and around startups will
readily agree that recruting the best team possible is critical
to success. This leads to statements from startup pundits that look a
lot like “get the best people possible.” Far be it from me to argue against
this kind of sage advice. You should get the best people possible onto
your startup team. All things being equal, who wouldn’t want to recruit
the best people possible?
However, the phrase “best people possible” is a bit too vague for my tastes.
The question is, what makes a given team member the
best? Are they the smartest ones? The ones with the most
experience? The ones with the greatest skillset for a given role? The
ones with the most domain expertise? For purposes of this discussion, I’m going
to “merge” all the things that makes a given individual really, really good into
something I’ll call “Capability”. You can feel free to make Capability a
function of whatever attributes (intelligence, experience, skills, etc.) as
suits your taste.
So,
Capability = How well the person can do the job
Now, this article isn’t really about capability. It’s about a somewhat
orthogonal concept that I’m going to refer to as Confidence (or
Trust). By confidence, I don’t mean how much confidence they (the
candidate) have. I mean the degree to which the rest of the team
believes a person has the required capability.
Confidence = How strongly people believe in a person’s
Capability
My argument is this: The best people to recruit into a startup are
the ones that have the optimal mix of capability (can get the job done) and
confidence (trust from others that they’ll get the job done). Even with lots
and lots of capability, if there is moderate or low confidence, the individual
will be second-guessed, undermined, and ultimately just plain ineffective. Even
if they would have a bunch of good decisions, it’s not really going to
matter, because they won’t get to make that many, and the ones they do make
might not “stick”. Unfortunately, this kind of team dysfunction does not jump
right out at you, it creeps in when you’re not looking. Everyone has the best
intentions. A quick (totally made-up) example: “Billy’s a great web design and
UX guy…and he’s been lobbying for this simplified design to replace the $25,000
website we created last year. Sure, he goes to all the conferences and stuff,
but does he really get that sorts of people come to our website, not
just customers?”
So, you ask, why would people making the decisions ever hire folks that they
didn’t have confidence in anyways? Isn’t that stupid? What’s the point talking
about that? I’d respond with two things: First, confidence is not a
binary thing. It’s an analog thing. There are degrees of
confidence. Second, confidence may start out being really high, but can be
chipped away at as time goes.
Now that we have some of the baseline behind us, here are some thoughts on
capability and confidence when it comes to startup teams:
Capability vs. Confidence
1. How did we find this person? Certain sources of
referrals engender more confidence than others. Did your co-founder bring the
person in? Is she your niece, once-removed?
2. Who has the most confidence in them? Is it the person
that introduced them? Someone that will be working with them? One of your
investors? One of your advisors?
3. How important is confidence for this role?
There are certain areas in your startup where folks need to have a fair
degree of discretion. For example, regardless of how smart and passionate the
founders might be, if you hire a professional UX designer, you have to let them
do their thing. Debates are good, but whoever is the best qualified to make the
decision should make the decision.
4. Who on the team loses the most if they don’t work out?
Yes, I know, everyone loses when you lose a team member. But, who is
impacted the most?
5. Is the eroding confidence justified? Is it possible
that a bad hiring decision was made? Did people expect a degrree of capability
that just did not get delivered?
Some though (but important) questions.
Closing words of advice: When recruiting team members make
sure someone on the team will go to bat for the person when things are
shaky. You need a trusted member (like one of the co-founders) to help
objectively assess issues of eroding confidence — and help restore it if
needed. Otherwise, things go into a downward spiral and nobody wins.
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I just got back from Y Combinator Demo Day, Summer 2008. For a startup
fanatic like me, it’s hard to imagine a more fun use of a few hours. I got to
watch 20 back-to-back, rapid-fire startup demos. 
Here are some of my initial reactions and thoughts on the newest cohort of YC
startups. Note: Like most OnStartups articles, this article focused on the
entrepreneurial perspective (not the investor perspective). The folks that
should (hopefully) get the most out of this are the YC startup founders
themselves.
Notes From The Y Combinator Summer 2008 Demo Day
1. Best Cohort Yet: Overall, in my (highly subjective)
opinion, this is the best batch of YC startups yet. I think I have a bias
(which has been tempered over time) for startups that have demonstrated some
thinking around things like monetization and revenue, and that might be
influencing my thinking. The current cohort, on average, seemed to have a
stronger emphasis on not just making something people want, but something that
will yield revenue, and (gasp!) profits. Good stuff.
2. Presentations were better than what I’ve seen in the
past. More fluid, more polished, more effective. My hat’s off to all
the YC startup founders that presented today. You guys did a great job! Having
said that, it’s not a totally fair comparison. You guys do have the advantage
of many more YC founders before you that you can learn from. I’m guessing that
Paul, Jessica and the rest of the YC crew are also getting better and better at
nudging you in the right direction when it comes to Demo Day presentations.
3. Tip: Use your precious minutes: The Y Combinator team
did a great job keeping things moving, and I think the format of Demo Day works
well (6 minutes per presentation, no audience questions). One quick tip for the
presenting team: If you are doing the presenting, you should begin with your
message even while your team member is setting up. Don’t wait for the
slide deck to come up on the screen. Don’t shift the focus to your buddy who is
switching out the cabtes and stuff. Don’t wait. Just start delivering
your message. In your preparation, come up with introductory
remarks that don’t rely on your first slide being up yet. When you only have a
precious few minutes, 30 seconds counts.
4. Don’t use gender stereotypes: This one’s going to be a
little touchy. A few of the startups today used examples and screenshots that
were um, a little too “gender-stereotypical” (that’s a semi-polite way of saying
they were too far down the spectrum towards being sexist). I can understand and
appreciate that most of the YC founders are young males in their 20s. But, my
advice would be to resist the temptation to use scantily clad women in
demos. It’s both inappropriate and sub-optimal.
5. Answer the question you know people are asking
themselves: Once you start doing presentations a lot, you begin to
realize that there’s a “pattern” to the kinds of quesitons people have in their
heads. The same themes recur. Do what you can to make it as difficult
as possible for people to dismiss you because they’ve got that one big
“obvious” question/objection/whatever. For example, I thought the Fliggo team did a smart thing by closing with
this nugget: “I know you’re asking yourself, how are these guys going to make
money…I’m glad you asked…”. You don’t necessarily have to answer the “how do
you make money” question (though that’s not a bad thing), and you don’t even
have to frame it as a quesiton. Just try and address the most obvious things
people are likely to wonder about.
6. Tip: If you’ve got traction, share it earlier in the
presentation: There were several startups that had pretty impressive
early traction (like users and revenues). They didn’t talk about this until
later in the presentation. I’d suggest possibly getting this message out
earlier in the presentation, because it will grab people’s attention
and cause them to listen more intently to the rest of your story. Imagine an
opening sentence that is something like this: “Hi, we’re XYZ. We launched just
a few weeks ago and we’re getting some encouraging early evidence that we’ve
built something people want…Here’s what we’ve learned from our 14,000 users…”.
I’m not suggesitng you use that exact sentence, just a thought. When dealing
with investor types, remember that folks have short attention spans and you’re
best served by grabbing them as early as possible with
something they care about.
7. Memorable sound-bites are not just for TV: I’m
generally not a big fan of over-preparing for presentations (more often than
not, sounding natural is more important than sounding polished). Having said
that, some clever, funny, well-crafted sound-bites thought of in advance and
added to the presentation are a good thing. They’re particularly good for
bloggers and media types that might cover you. For example, the PopCuts folks had this great snippet: “The
only way to get famous on BitTorrent is to get arrested.” Simply
brilliant.
8. Audience participation/engagement works: A couple of
the startups were able to work their demo such that the audience was “involved”
in the demo itself. Although this is hard to do, it’s valuable. It also helps a
lot when you get audience members to do something (instead of just sit
there and listen).
That’s all I have for public consumption. However, I have notes from each of the
presentations. If you were one of the startups that presented today and want
my quick thoughts or feedback, feel free to email me.
I just noticed a great summary write-up of today’s event on Scott Kirsner’s
Innovation
Economy blog. If you’re not yet reading Scott’s blog, you should be.
Best wishes to all the Y Combinator startups. It was great to see you all
and chat with many of you at the close of the event. Knock ‘em dead next
week. In the meantime, some closing advice: Get some sleep!
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I have been tracking Y Combinator (a
new kind of venture firm for early, early stage startups) for several years.
They have a distinctive approach to the early-stage funding process and have
funded some interesting companies. YC is in the news again because of Google's
recent acquisition of Omnisio, a YC investment.
Thinking back on several years of YC history, I dervied the below list of
companies that I would have funded had I had the opportunity to do so. I tried not to cloud my judgement with hindsight (that is, I'm not just picking the ones that ended up being successful). Also,
note that these are not what I think to be the best YC companies — just
the ones that I’ve thought about in the past.
1. Reddit: I remember the day I first
encountered Reddit. They were presenting the product at one of the early Web
Innovators Group meetings. I was still a grad student at MIT at the time, and
went to the meetup with a few of my classmates (we were working on a paper about “Web
2.0” for one of our classes). Interestingly, Kiko (remember them?) was one of
the other companies presenting that evening. I’ll be honest and admit that on
the first evening, I didn’t quite “get reddit” (the category of social news was very
new at the time). But, reddit showed up on my radar pretty quickly a little while later. I
noticed a bunch of traffic coming to OnStartups.com (this blog) through
reddit.com. It caused me to take a second look, and I’ve been following them
ever since. I don’t know Steve Huffman that well (he might actually be even
quieter than I am), but Alexis is about as nice a guy as you can find and has a
weird, quirky creativity that is magnetic. To build a successful startup, it
helps a lot if people actually like you.
2. Xobni: I met Adam Smith for lunch at a
Thai place in Coolidge Corner (Brookline) a long, long time ago. Long enough
that it was before the exceptionally talented Matt Brezina joined as
co-founder. Even back then, I liked Xobni for one simple reason. It complies
with my notion of “the problem you solve should be ugly, the solution should be
beautiful.” There are few things less fun to develop these days than desktop
applications for Windows. It’s ugly. What’s even uglier is developing desktop
software that has to integrate as a plug-in to something else — like
Outlook. That’s one ugly problem. Further, the fact that millions of
people still use Outlook made it in an interesting commercial opportunity.
Plus, I really like Adam. He’s super-smart and listens. [Matt, I like you a
lot too, but I didn’t know you back then and I’m trying to talk about my early,
early thoughts on the company].
3. Pairwise: I saw the pairwise guys
present at the YC Demo Day (the big day following months of furious coding
that is the core of the YC experience). Of all the companies in that cohort
that presented, I liked Pairwise the most. It appealed to my data-driven nature
and they had something that I felt had commercial opportunity. More
importantly, unlike many startups, it seemed they were actually
thinking about the “how do we make money” part very early in the
process. I haven’t kept up with Pairwise much since then, and they haven’t
written on their blog since November, 2007 — so I’m guessing things didn’t take
off like they had hoped. Regardless, I thought the guys were great and the idea
was a good one.
4. Wufoo: I’ve been dealing with the
frustration of web-based forms for a long, long time. It’s a common enough
problem that lots of people try to solve it by creating a “form builder” of some
sort. It’s an appealing problem to try and solve (unlike what Xobni is doing,
it’s a fun problem to work on). We even built one as a part of our landing page application at HubSpot (not
because it is fun, but because it is a necessary part of what we do). Back to
Wufoo. The thing I like about them is that they are exceptionally good
at the UI/UX thing. I’m not a designer myself, and don’t play one on TV, but I
know great design when I see it. I also know how hard it is to do
right and how rare it is to find people that have that gift. What’s even rarer
is the notion of great UI/UX design talent intersected with a strong business
sense — which the Wufoo folks seem to have.
5. Disqus: Of all the startups from YC
that I’ve seen, I feel like I understand Disqus the best. Having been a blogger
myself for some time, I get the notion of centralized comments and the
tradeoffs therein. This is why I met with Daniel Ha — coincidentally, at the
same Thai restaurant in Coolidge Corner where I met Adam Smith. (Yes, I’m a
creature of convenience and the place is 2 minutes from where I live). Daniel’s
one of those entrepreneurs that makes a great early impression. He’s clearly
smart, but also recognizes there’s stuff he needs to learn that’s going to
increase his odds of success. I like the general notion of Disqus (always have)
and even back then, there was some early evidence that folks were going to use
it. Disqus is also one of those companies that likely benefits most from an
association with YC and Paul Graham.
6. RescueTime: Tony Wright (the
founder of RescueTime) probably doesn’t even recall this, but he and I first had
online contact years ago. He reached out to me way back then as a
reader of my blog and reported a problem with the commenting system. Since
then, Tony and I interact sporadically (mostly through each other’s blogs).
Tony’s one of those guys that I’d bet on simply because he has an uncanny knack
for how the startup game is played. Intersect that with an interesting idea
that could get massive appeal, and you have a great startup.
So, there you have it. 6 Y Combinator startups that I probably should have
been more aggressive about investing in. But, that’s not my style.
My best wishes to all the Y Combinator founders. Particularly those that are
working away furiously on their products in preparation for demo day coming up
soon. I hope to see/meet many of you there.
By the way, if you're not in YC, but you're a superstar web developer (take 5 minute quiz) and looking for a fantastically fun startup gig, I'm recruiting for HubSpot. Just drop me an email. I'm easy to find.
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You remember 1999, right? It was the day of the sock puppet and crazy, CRAZY
marketing strategies. By the way, before going too much further, I will confess
that I actually bought pets.com shares back in the hey day. Why? Because
everyone was doing it, and my wife and I thought the commercials was creative
and funny. Granted, my "due diligence" bar was lower back then, but I'd
understand if many of my colleagues would revoke my angel investor license just
for that.
But I digress. Today's article is about new ways startups are using to try
and attract attention and -- wait for it -- eyeballs! A software company in
Cambridge, MA is running a "viral marketing contest" whereby they are giving
away a total of $50,000 for bloggers, videographers (basically anyone with
a video camera) and others into the "new, new marketing".
Here's the article:
Insanely
Brilliant or Just Insane? The HubSpot $50,000 Viral Marketing Contest
Now normally, I'd be having a jolly old time making fun of this startup with
references back to every lame attempt at "marketing" we saw out of dot-com
startups back in 1999. There's just one problem. It's my startup
that's doing the crazy stuff! Yep, that's right, my startup HubSpot, which recently raised $12 million in
venture funding is giving away $50,000 of that in a viral marketing contest.
I figured once people get wind of this, many of my friends, colleagues and
bloggers are going to send me emails saying, "Dharmesh, what the hell?".
Actually, I might get an email from an investor or too as well, because we
haven't run this by them yet. I figured I'd try and pre-emptively answer some
of the inevitable questions.
1. Why do it? Well, it's kind of simple. We've been
having great success with attracting leads (and closing customers) through our
blog and other online channels. Some of our most successful marketing efforts
have been blog articles that went viral on social media sites like digg and
reddit. Last week, we tried to do a rough economic analysis and estimated the
value to us of leads generated from these successful pieces. It
was high. So, there's opportunity here. Plus, we don't like spending
too much money on AdWords. It pains us.
2. Why not just do it ourselves? Well, frankly, because
developing viral content that spreads like wildfire is a tricky business. We
have a team of great folks writing content all the time for our blog (including
me), and sometimes we hit it out of the park. But our guess is that there are
folks much more talented than us that are capable of producing
remarkable content (as Seth Godin would say). We figured it's worth a
shot trying to draw those people out.
3. If it works, it could work big. We're at a stage now
where experimentation is reasonably cheap. Instead of getting stuck in the rut
of turn this dial a bit, flip this switch a bit, and crank out the customers --
we'd like to look for some non-linear growth opportunities.
Oh, and if you're a VC reading this (particularly one of our VCs), we're
doing the same thing in marketing that you do when looking for investments:
Pick projects that have potentially huge impact, even if they are a bit whacky
and high-risk. If we do a dozen of these crazy projects, if just one wins,
we're golden! Champagne and chocolate-covered strawberries for everyone!
So, what are your thoughts? Is this genius or desperation? Would love to
hear your comments.
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Warning: I'm about to go on a bit of a rant. I usually only reserve these
kinds of articles for when things really irritate me, and this is one of
those times. I'm generally a patient, considerate person, really I am.
Here's the source of the most irritation I've felt from a technology article
in a long time (and this from BusinessWeek, a major brand that I respect):
Beware
The Hype For Software As A Service
I actually hesitated to even include a link to the article, because you might
be tempted to go read it. But it has to be done. It's kind of like when you
smell something really awful that's been growing in your refrigerator.
Then, you give it to your spouse and say: "Hey, check this out -- can you
believe how bad it smells?"
Disclaimer: I work for a tiny little startup that provides marketing software as a service. So, I guess
I could be biased. I'm not wrong on this one, but I could be biased.
Back to the article. Here are some of the issues I had:
1. SUVs Suck, So SaaS Must Too: The author does some
strange build-up in the opening paragraphs using "SUVs are cool" and "cell
phone causes cancer" as examples. The point? That both of these are/were
surrounded by "hype". And, we should always beware of hype. Think of the
children! I'm already irritated. For the record: I don't think SUVs are
cool. Oh, and these inane examples are what drove me to the title of this article. Fight fire with fire and all that.
2. SaaS Is Cheaper: The article tries to refute the "myth"
that SaaS is cheaper by providing this cogent argument: "Most service providers
charge each user by the month." There's no discussion of the economics of
installed software, drive-by sales in enterprise software, or the cost of
capital for small businesses. Hey, those SaaS vendors charge monthly, so it
must be more expensive. Right? That must be why Salesforce.com has
been so successful -- they just charge more than Siebel.
2. SaaS Reduces Hardware Investment : It refutes the
"myth" that SaaS requires less hardware investment by arguing that although you
don't have to pay for all the servers and stuff, you still have to pay
for fast access to the Internet. Here's the quote: "Sure, the SaaS providers
deal with the servers, and all the Windows headaches and patches and builds and
versions and whatever. That's their problem. But you still need fast access to
the Internet." The rest of this particular argument just gets worse from
there. Now, I'm really irritated.
3. SaaS Is Quicker To Setup: Yep, this is a myth that is
"busted" too. The example provided: "It's kind of like assembling furniture."
The author provides as evidence that SaaS is not easier to setup, the fact that
he's got a lopsided bookcase in his den. This "proves" that little theory about
SaaS being quicker to setup, wrong. Sure, setup costs for SaaS can be high
(based on level of customization), but on average, SaaS offerings are
simpler and quicker to get going on.
4. Data Can Be Secure In SaaS: The article argues that
data backup and reliability in SaaS is a myth. Once again, we have extreme (and
in one case totally unrelated) examples offered as proof. Yes, data security is
always a risk, but I'm not convinced that the risk is any higher for
SaaS than businesses (especially small businesses) than running the software on
your own servers, sitting in your closet somewhere.
If you think I'm being overly harsh, please read the article. I dare you.
And, if you do go read it, please don't forward it around to your colleagues.
Sometimes, you don't need validation that the thing in your refrigerator really
does smell that bad.
End of rant. Back to our regularly scheduled program next time.
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Today's big news
from TechCrunch is is that Google is in the final stages of acquiring digg
for about $200 million. Makes sense to me. Particularly given some of Google's
recent experiments having social voting in their search results pages.
I'd been thinking about startup acquisitions earlier this year (and started
keeping a side list of deals I thought should get done). Just as an
amusing exercise. ![]()
The 5 Tech Deals That Should Happen
Disclaimer: When I say should happen, it's not a prediction, just
something that I think makes sense.
1. Facebook should
acquire Twitter: Let's
face it, back in the early days, some of us wondered how Twitter was different
from an enhanced version of Facebook status updates. I think the two products
would work well together, and Facebook has the resources to help Twitter get
over some of the current platform stability issues.
2. Google should
acquire FriendFeed:
This would be a bit similar to the FeedBurner acquisition (although FriendFeed
is nowhere near as far along). Google gets a good product that can further it's
social networking stuff.
3. Microsoft should
acquire Xobni: This one's
already been talked about before, and almost happened. It should happen.
Xobini's got a great team, Microsoft needs some new energy in the Outlook
group.
4. Intuit should
acquire Freshbooks:
You may not have heard of Freshbooks, but it's a cool company with a cool
product for invoicing. Intuit needs a much better web offering, and the
Freshbook folks have great design and are great entrepreneurs.
5. Ning should acquire
Mixx: Ning is growing, but
needs more "best of breed" style social networking apps. Mixx is brilliantly
executed and more and more people want/need some type of focused social news
product as part of a larger social network or community.
So, what do you think? What's your vote for the acquisitions in the
remainder of 2008 that should happen? Leave 'em and debate 'em in the
comments.
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