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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If you read this blog, there's a pretty good chance you're somehow involved
in the business of software. By that, I mean you are trying to (gasp!)
make money in the software business. If that's the case, I can't think of any
better place to be this September than the Business of Software Conference
being held in Boston on September 3-4. 
Some Reasons Why You Should Be At Business Of Software
2008
1. Joel Spolsky will be there. Well, he's not just going
to be there, he's one of the organizers along with Neil Davidson, the CEO of Red Gate Software.
2. Seth Godin will be there. Seth is a brilliant
marketer. Doesn't get more brilliant. And, if you're in the business of
software, you really, really need to understand marketing. If you're not
reading Seth's blog, you should
be.
3. Jessica Livingston will be there. Jessica is the author
of "Founders
At Work", which was an exceptionally fun and insightful read. Parts of it
gave me goose-bumps (yes, I'm that strange). If you're both a software person
and a startup person, you need to read her book.
4. Jason Fried of 37signals fame will be there. Jason's on
my list of "most pragmatic entrepreneurs ever". He was kind enough to let me
interview him for my graduate paper at MIT back when I was a student. All
around swell guy. Oh, and you haven't already, you should absolutely read "Getting Real". Now it's
even free.
5. Richard Stallman will be there. Yes, that
Richard Stallman. This should be one interesting discussion.
6. Eric Sink will be there. Eric is (in my mind), the
software guy's software guy. Immensely articulate and thoughtful. Eric's aptly
named "Eric Sink On The Business Of Software" is one of the books on my startup
reading list.
7. Mike Milinkovich will be there. He's the executive
director of the Eclipse foundation.
8. Steve Johnson of Pragmatic Marketing will be there.
Steve was a big hit at last year's conference. If you want to understand why,
just watch the
video from last year.
9. Tom Jennings and Paul Kenny will be
there. Tom's a venture capitalist and Paul's all about sales. I'm guessing a
few of you are looking for capital or looking for customers.
10. People like you will be there. People that
are in the business of software.
Note, the above is not a complete list of speakers.
Oh, and by the way, I've been selected so speak at this year's conference as
well -- but please don't hold that against them.
All in all, Business of Software
2008 promises to be a great event. Something I'd travel to come see, if I
didn't live in Boston -- which I do.
By the way, if you're going to go, you can save $300 by registering before
July 22nd.
Hope to see you there.
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For those that are nauseated or otherwise troubled by gushing praise of tech
blogs, please click away now. I will not be offended.
I'm an avid reader of the TechCrunch
blog. In their own words, it's a blog "dedicated to obsessively profiling and
reviewing new Internet products and companies." If you're in the startup world,
and aren't reading it, you probably should if for no other reason than the fact
that your peers are reading it, and it'll get cited often. It's uncomfortable
when I hear someone at the office say "Hey, did you read that article in
TechCrunch about..." and because I've been stuck in meetings for 2 hours and am
too polite to read blogs on my Blackberry during meetings, I have to say,
"no...umm...I've been in meetings for the last 2 hours".
Anyways, you get the message. I heart TechCrunch.
Now, fast forward a bit, and lets talk about CrunchBase. CrunchBase is a
user-editable structured database about companies, people and products
in the tech world. It's a great complement to TechCrunch. The site is well
thought out, gets the job done and actually has a pretty good data set. It's
useful.
On to the news that drove this article. The nice folks at TechCrunch just
released an API for CrunchBase. I'm an API kind of guy. As the developer of
the reasonably popular Website Grader, a free website analysis tool, I am always
on the lookout for new data I can feed into the Website Grader algorithm to make
it even more useful. The CrunchBase API is likely going to fit the bill.
So, here are the reasons I l am bestowing about TechCrunch the
embarrassingly gushing praise:
Reasons I Love The CrunchBase API:
1. Simple Invocation: Invoking the API is simply a matter
of accessing a URL containing the company or product in question.
For example: http://api.crunchbase.com/v/1/company/hubspot.js
2. Simple Output: The data comes back in JSON format. This
is great for use within Javascript, but even for other languages (PHP, Java, C#,
etc.), it's relatively trivial to take the JSON output and convert it into some
other format. One tip for the TechCrunch folks would be to add a parameter to
the API URLs to request output in different formats (like XML). But, no
biggie.
3. No Registration, No Limits: In an uncommon show of
cluefulness, the nice folks at TechCrunch have made it supremely easy to get
started. You don't have to register, request access to an API key or developer
account, and there are currently no governors or limits on consumption. That's
pretty cool. Gutsy, but cool.
4. Communication: To top off all of this awesomeness, the
TC folks have really gone out of their way to accept input from the community
regarding the API. The blog article announcing the API has 59 comments right
now. 14 of them are responses from the TC folks -- including Michael Arrington
himself. TC also setup a Twitter account. I "followed" them, send out a tweet
and was immediately tweeted back with a response to an idea I had for improving
the API.
Having said all that, the one critical feature I think they need to add is better search through the API. But, they've already said they're looking into that.
So, with all that I'd like to congratulate Michael and his team at TechCrunch
for an awfully with-it approach to their business. For those of you that I'm gushing like a teenager with a crush -- you were warned.
If you're a web developer and have an idea for building something cool on top of the CrunchBase API, drop me a line. I'd consider funding it and contributing it back to the community.
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I recently came across an article in Entrepreneur magazine that talks about startup
hiring mistakes. I don't know Brad Sugars (the author), but he's a columnist at
Entrepreneur magazine and has written 14 books. Though I'm impressed by the
fact that he's a published author, I disagree with several points from the
article. 
![]()
I also was a bit put-off by the statement "the good thing is that there are
some hard and fast rules startups should follow". I may not know a lot about
startups, but one thing I do know is that there are very few "hard and
fast" rules. And, those rules that are hard and fast are rarely interesting
enough to talk about.
So, here are my tips for startup hiring startups. In some instances, these
conflict directly with the Entrepreneur article -- in others, they're just
different.
1. Don't Hire Based Solely On Intelligence/Brilliance: You
interview the candidate and she has a PhD from MIT and is off-the-charts smart.
That's great. Intelligence is an important factor in recruiting for most
startups. But, hiring just on intelligence is usually a mistake. You
need at least two more things: A passion for getting things done and cohesion
with your culture. (That's a fancy way of saying that they agree with what you
stand for and "fit in").
2. It's Ok To Hire The Inexperienced: If you find
super-smart people that fit the culture and are able to get things done they may
be a great recruit -- even if they lack experience. At my startup HubSpot, we call this hiring people that
"haven't seen the movie before" (this is our way of saying: They don't have
experience in the specific role/function). We've had great success with this.
3. It's ok to hire for an undefined role: In an ideal
world, you have a nice clear job description and a role in mind for the person
you're trying to hire. And, your network is so strong and your luck so good
that precisely the perfect candidates start dropping into your lap just as you
need them. Unfortunately, most startups are not so lucky. Sometimes you get
the wrong people for the right role (the one you're recruiting for).
Other times, you get the absolute "right" people, but just have no current
openings. Sometimes, it's ok to hire these "superstars" even though they may
not fit the job description you are hiring for.
4. It's Ok To Recruit For The Job You Hate: You might be
good at a lot of things (developing code, designing things, selling, accounting,
etc.). But chances are, you may dislike some of these activities even though
you could be good at them. The good news is that there are smart
people out there who love the very stuff you hate. There's nothing
wrong with recruiting people for stuff you're either bad at or just plain don't
like to do.
If you're interested in more tips on startup hiring, I kind of like some of
my points in "5
Quick Pointers On Startup Hiring".
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The popular Boston Web Innovators Group held in Cambridge, MA is coming up
this Tuesday, July 15th 2008. Like the events before it, WebInno18
promises to be another great event. I plan to attend and might even experiment
with Twitter Blogging it on my @OnStartups twitter profile. If
you're going to be there, send me a tweet and let me know. Will look out for
you.
For one of the prior WebInno meetups, I did a quick analysis of those
attending (using the RSS data of registrants as the input) and had come up with
some Web
Innovator Cambridge statistics. I had the PHP script to do the quick
analysis developed by one of the OnStartups readers.
Thought I'd do another one this time around and identify how the make-up of
the group has (or has not) changed).
Here's the top keywords that show up in the profiles of the people signed up
so far. There are about 870 registrants for Web Inno 18 so far (compared to 792
for Web Inno 17). The event definitely seems to be growing.
| Token |
Web Inno 18 |
Web Inno 17 |
| Manager |
54 |
38 |
| CEO |
53 |
43 |
| President |
41 |
35 |
| Founder |
41 |
39 |
| Senior |
40 |
18 |
| LLC |
29 |
10 |
| Marketing |
25 |
17 |
| Director |
24 |
37 |
| VP |
24 |
20 |
| Engineer/Engineering |
23 |
15 |
| Co-Founder |
22 |
14 |
| Director |
22 |
18 |
| Development/Developer |
20 |
11 |
| CTO |
19 |
13 |
| Consultant |
17 |
13 |
| Principal |
15 |
20 |
| Ventures |
12 |
18 |
| Architect |
7 |
9 |
| Harvard |
7 |
9 |
| MIT |
7 |
5 |
| Designer |
7 |
7 |
Hope to see you at WebInno 18. If you have any doubts that the Boston area
has a vibrant Internet startup community, this should dispel those doubts. Hat
tip to David Beisel who has done a fantastic job building this up. I can
remember the early, early days of WebInno when all of us would fit around a bar
in Kendall Square. We've come a long way. Thanks David!
Hope to see you on Tuesday at the Royal Sonesta hotel. I might try to put
together an informal dinner for a few folks before (or after) the event as I've
done every time since I started going to these things. Send me a tweet at @onstartups if you're interested.
I usually limit it to about 6 people and keep it to just tech-entrepreneur types
that I haven't had the chance to chat with in a while.
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The reasons so many people hate (or intensely dislike) Microsoft are
plentiful and for the most part, pretty easy to understand. If you were to ask
around, reasons cited would centralize around too much power, lack of
innovation, stifling creativity, being "closed" and generally products that on
average, fail to delight customers. If you're one of those that hates
Microsoft, I'm sure you have your reasons. Many of us love to hate
Microsoft.
And, of course, lots of us love Apple. We love
Apple in that sheepishly adoring way that causes us to want to run our fingers
lovingly over our favorite Apple product when nobody is looking just because it
makes us happy. Happy in a good way, and not in that weird, twisted kind of
way. It's an innocent love. All sunshine and daffodils. 
But, I'm going to argue that though we will likely continue to love Apple for
a while, there may come a day we hate doing so.
Why might we hate to love Apple someday?
One simple, fundamental reason: Apple cares too much about customers, and
the customer experience -- and not much about the community. Apple has
become a benevolent dictator. They'll invest lots of time, energy and
money making their products great and their customers "happy". But, at their
core, they want it to be them that delivers that happiness -- not
someone else. Third-party developers are a necessary evil.
There's a reason for this: Apple (rightly) thinks that a phenomenal
experience is created by closed, proprietary systems by companies that control
the boundaries and edges of product design.
Great experiences are created when the experience designer can dictate and
control as much as possible. The iPod would not have been great if the hardware
were designed by one company, the device software by another, applications by
another, etc. The iPod was exceptionally great because Apple controlled it
all.
This is why the original Apple computers had such a better
experience than the IBM PC. On the IBM PC platform different companies
built the hardware, OS, apps, devices, etc. Lots of creativity -- but
understandably, lots of crap. And lots of complexity for the user/customer.
So, Apple likes control. But this advantage of control only goes so far.
Eventually, users will come to value something more than the delightful
experience. Might be performance of an individual component (larger storage),
lower price, wider selection of add-ons, etc. (Maybe even replaceable
batteries, less confining DRM, etc.)
Now, thanks to Apple, millions of consumers are enjoying technology like
digital music that would likely not have done so without Apple's fanatical focus
on solving for ease-of-use and experience. But, now that we're there, will our
love of Apple endure?
And, if we do continue to love Apple, will we hate ourselves for doing so
someday? Maybe. Maybe not.
The insight for startups? Some of the biggest innovations and market successes come from companies that are total control-freaks and fanatically focused on solving the problem. Often, the problem is best solved by an uncompromising purity of approach.
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The Seinfeld fans out there will clearly recognize the reference to "the
opposite" episode. Basically, George tries to change his life by going against
his natural instincts and doing the exact opposite. [For the fanatics out
there, I think this is Episode #86, aired May
19, 1994.
Here are a couple of clips from the episode:
George : Why did it all turn out like this for me? I had so
much promise. I was personable, I was bright. Oh, maybe not academically
speaking, but ... I was perceptive. I always know when someone's uncomfortable
at a party. It became very clear to me sitting out there today, that every
decision I've ever made, in my entire life, has been wrong. My life is the
opposite of everything I want it to be. Every instinct I have, in every of life,
be it something to wear, something to eat ... It's all been wrong.
Jerry : If every instinct you have is wrong, then the
opposite would have to be right.
George : Yes, I will do the opposite. I used to sit here and
do nothing, and regret it for the rest of the day, so now I will do the
opposite, and I will do...something.
---
As it turns out, this "do the opposite" strategy works out for George.
Things start working out for him. By going against his natural instincts, he
ends up doing things "right". He's noticed. He comes off as being
different.
So, what does this all mean for startups? Well, I've found that often "doing
the opposite" (zigging when others are zagging) can actually work. Conversely,
if you take the tried and true path of others (like your competitors), in your
best case scenario, you kind of wind up where most startups wind up -- in an
unhappy place. Why not try to be different?
A few examples to mull over:
A Startup Doing The Opposite
VC funding negotiation: Tell the VC: "We don't know what
the pre-money valuation should be. You have a better sense than we do about
this. We're not looking for the highest "price". We just want a fair deal and
a board member that is not a jerk. You seem like you're smart and not a
jerk.."
Recruiting early employees: If you're just looking to make
a lot of money, this is probably not the place. Sure, we're going to give you
some options but nobody knows what those are going to be worth (including the
founders and the investors). We all work our butts-off and make less money than
we could likely do otherwise. We all must have some sort of genetic flaw that
makes us do this. If you have that genetic flaw too, you'd probably enjoy it
here.
Early customer conversation: Yeah, the software kind of
sucks but we use it ourselves and it does do useful things. Why am I charging
you to be a beta tester? Although your input is priceless, we think it just
distorts the relationship for you to get it for free. If you're a paying
customer, we're going to kill ourselves to make you happy.
The idea is to be honest, direct and surprise people by taking an approach
that they're not used to seeing. A lot of times this may fall flat -- but lots
of things fall flat anyways. Why not try it?
By the way, each of the examples above are based on reality from my own startup adventure.
So, next time you're in a situation go against your instincts to "spin"
things and be super-sophisticated. Just do the opposite!
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