Video from Business of Software : Everything I Know About Startups

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Video from Business of Software : Everything I Know About Startups


Earlier this year, I had the opportunity to present at the Business of Software conference held in Boston.

Here’s a video of that event.  Though I was a bit off my game (not enough sleep), people did seem to find it interesting and/or useful and the presentation was highly rated.

I’ll watch it along with you and add some notes to this article later today.  Enjoy (and please leave your comments and criticims).  Would love to hear them.


1.  Your idea can suck.  Just get started.

2.  You can be in the middle of nowhere and still build a great business.

3.  Not having cash breeds good behavior.  It’s helpful to have constratints.

4.  In defense of the modest outcome:  You don’t HAVE to build the next Facebook.  Modest liquidity events are highly under-rated.

5.  “I’m a complete introvert.  It’s not that I don’t like people, I just don’t like beind around them a whole lot.”

6.  Something’ changed here.  You don’t have to spend a lot of money to get your message out there.

7.  The real issue with VC is not the cost of capital (which is high), but how hard it is to actually raise it.

8.  You have to go through the 12 flaming hoops of venture capital.

9.  All the time you should’ve been spending solving your customer’s problem, you use to start to solve the VC’s problem.

10.  Write a blog, not a business plan.

Hope you enjoy the presentation.  It was a great conference and I had the pleasure of meeting with many of you there.  Look forward to the next one.

Posted by Dharmesh Shah on Wed, Nov 05, 2008


Great talk, Dharmesh!

posted on Wednesday, November 05, 2008 at 1:24 PM by Ilana Davidi Reeves

I like the point about cash constraints - a great example is George Lucas' Star Wards before he was filthy rich and after ....

posted on Wednesday, November 05, 2008 at 5:12 PM by Dobes Vandermer

Let's see if I can apply these nuggets of insights to my situation, 
1) we are building another project management tool ScrumPad 
2) We are in Richmond, VA and Dhaka, Bangladesh... 
3) Still bootstrapping... 
4) ScrumPad is not a game changing idea... 
5) Well I am not an introvert, but... 
6) Still trying to figure that out... 
7) & 8) Not looking for VC funding... 
9)Made it easy for customers to provide feedback.. 
10) Doing blogs, but need to get traction though. 
Agree that tracking customer activities give insights. We are using Google Analytics as well as custom activity reporting. This helped us discover some usability issues early one. However, we have not been charging for our product. We plan to do so soon. 
I don't agree with Jason Fried about working in isolation. I believe software development is at its best when collaborated in person in the same room. However, I agree about "under doing." 
Thanks for sharing the video of the event. I would like to go to this event next year.

posted on Thursday, November 06, 2008 at 12:52 AM by Syed Rayhan

Hey Dharmesh--great prezo, and a pleasure to chat with you briefly about software startups/learning product management... great conference too!

posted on Thursday, November 06, 2008 at 2:16 AM by Jeff Widman

This is hands down the best video I've seen this year. 
As a VC Analyst, I can definitely say you're spot on with everything you said. Even regarding business plans. They are just not worth the time. 
I launched a startup last week called VentureDig. 
VentureDig is twitter for entrepreneurs and VC's. 
VentureDig was launched last week without a business plan, executive summary or capital. Just $6.95 for a host and launch.  
Have I taken a coding class in my life? No. 
Have I ever sat in a classroom and been taught to write html, css or php? 
No, I youtubed, learned, and made it happen. 
Are there bugs? Yes, some formatting errors.  
Still, it's better than an idea stored in my head. 
Already over 1,200 hits 
visits from 63 different countries

posted on Thursday, November 06, 2008 at 11:27 AM by scott

A great post and video, thank you so much for sharing - I think you are truly "spot on" with much of what you have said and it inspires me to continue pushing through my early bootstrap phase and get something out there fast.

posted on Thursday, November 06, 2008 at 12:32 PM by Josh

I love your idea about creating a CHI (customer health index). I've thought about doing something like that but the way you put it into the context of life time value was very helpful. Some times it's hard to figure out what to measure and try to optimize. You put it into focus: Life Time Value = Price * Months with Service, and Months with Service is what your development should be primarily focused on. Thanks for the tangible advice!

posted on Thursday, November 06, 2008 at 1:37 PM by Justin

Great presentation! I loved the 'no business plan' remark.

posted on Thursday, November 06, 2008 at 1:40 PM by Fred Wiersma

For a guy who claims he does not do presentations well .. you do presentations well. 

posted on Thursday, November 06, 2008 at 5:29 PM by Brian Dunbar

Dharmesh -- great presentation! 
Why did you wait for 2 months before publishing it? 
It's noticeable that you are nervous, you don't repeat questions that audience asked, but other than that -- very good. 

posted on Thursday, November 06, 2008 at 5:32 PM by Dennis Gorelik

I have watched your idea about the bootstrapping. very good points...especially with google adwords versus the organic search

posted on Friday, November 07, 2008 at 12:27 AM by Rasik Jain

Great talk Dharmesh, 
Definitely some useful information to think about. I'm on my 5th startup currently.. 
I thought it was interesting what you were saying about SEO vs. PPC..  
I lead the SEO team for a search marketing firm, so I tend to agree with you, but our PPC team has done amazing things for our clients. I think the problem with PPC is that you get so many people that simply don't understand how to run a campaign, so they end up dumping money into adwords to try and get the results they've heard about.  
And regarding SEO, the thing that I've seen so many clients not understand, is that yes there is an up front investment that can be significant to establish yourself at the top, but once you get there it takes time and money to maintain your position. Especially when you get into the more competitive verticals, rankings fluctuate day to day anymore with the way the algorithms work. 
But thanks for sharing your insight on startups! Much Appreciated!  

posted on Friday, November 07, 2008 at 2:04 AM by Kenny Hyder

Some advice... 
I stumbled across your site some months ago and really liked your information. I like that it's not just filled with the fluff that most bloggers add just to have daily content. However, I check back regularly to see if you've updated and I am usually disappointed to find the same articles. So, my advice is to add more content. You are gaining an audience of people that value your opinion and outlook. You should take advantage of that. Otherwise, most of us will begin removing your URL from our bookmarks. I only have so much time to read my blogs each week. I don't have time to waste checking empty links. I know this sounds mean, but it's just an admonition to keep up the good work- on a regular basis :)

posted on Friday, November 07, 2008 at 8:03 AM by Jeremy

Great talk. Been following onstartups for a while, Nothing really new in way of content for me. But reaffirmed and revitalized me. Thanks. We struggled for a while about getting it out there. I am embarrassed about ParentProxy. But we are going to make it happen. Oh, the one thing I did pick up is, charge as soon as possible, that is when you really get the valuable feedback. Also liked to hear about the numbers you tracked and how they were useful for you. 
Take it easy, 

posted on Friday, November 07, 2008 at 9:30 PM by Christian Pearce

I'm working on a startup website right now and this video was really helpful. Thanks!

posted on Saturday, November 08, 2008 at 1:23 PM by Ahmed

Great video. Finally get to see Dharmesh live.

posted on Sunday, November 09, 2008 at 5:25 PM by jaytee

Hi, we are from Rio de janeiro, just starting a new way to watch videos online. For fun and why not, to conquer the world. It was seen in 142 counties on the first 3 months. Thanks for the knologe. We will try to put into practice over here. 
Hope you 
Greetings fro brasil, 

posted on Monday, November 10, 2008 at 8:11 AM by Bruno Pinaud expected...a great preso and tons of valuable information. Some of the best info out there on building a business. Keep up the great work...John

posted on Tuesday, November 11, 2008 at 9:37 PM by John Hopper

Great presentation. Really liked it. My core team pretty much has similar fundamentals as outlined by you and was happy to know that someone as experienced as you advocates such philosophies  

posted on Wednesday, November 12, 2008 at 8:32 AM by Amit Desai

Loved your talk. Regarding the debate modest exits vs. swinging for the fences: I don't believe it is a choice between a large and a small payout but a choice between ramen noodles and filet mignon. 
With my last company, I was swinging for the fences - and although the company hasn't exited yet, it is on the road to providing a good to excellent return to the venture capitalists. Problem is: I have been diluted down to only a few percent and therefore even a great outcome will not make me a big fortune. This is by no means an exception but rather the rule. Statistics (excluding the dot-com boom) show that at the time of IPO founders of venture-backed companies own around 1-2% of the stock and make around 1-3 million from the IPO.  
But I am by no means complaining: I got to draw a salary (albeit 30-40% below market) and lived in the second most expensive city in Europe. So I was, on occasion, able to afford a filet mignon. 
Now I have a new start-up and I'm trying to keep more equity, but that means: no salary and more ramen noodles.  
So why am I choosing ramen noodles? Because I believe the knowledge gained from spending the VCs money last time around has increased the expected outcome of my new venture.

posted on Wednesday, November 12, 2008 at 8:15 PM by Bettina Hein

Bettina: Thanks for stopping by. 
I could not agree with you more.  
I really identify with the ramen noodles analogy (it's an acquired taste which I acquired reasonably successfully). However, I am partial to the Indian version of this, which is sold under the brand "Maggi" (shout out to those readers that know what I'm talking about).

posted on Wednesday, November 12, 2008 at 10:40 PM by Dharmesh Shah

I must agree with what has been previously said. I think your presentation was the most engaging one that I've seen in a very long time. It provided a breadth of straight forward and sincere information on very important topics to people like me (someone who's doing his first real start up). You seemed very honest and candid about everything and I learn more by watch than I have by reading post after post over the last several months. Good luck with HubSpot and thanks for the words of wisdom!

posted on Thursday, November 13, 2008 at 3:27 PM by Dan Delphin

Dharmesh, great information. Thanks for being so open. I'm on my 3rd self funded startup and it's going very well. We continue to reject investors and your presentation really helps explain why Equity Finance is not always the best option. 
Arif Gangji

posted on Friday, November 14, 2008 at 1:26 PM by Arif Gangji

I'm finally so glad to hear someone say that business plans are useless. I always thought it didn't serve much purpose but in business class the preach it as a mandate for starting a company. 
This video was quite insightful and I sat through the entire thing. 
I especially like the discussion on getting the product out there as soon as possible. It's a mistake I seem to have made but hopefully can bounce back from it. 
I also like the background on because it's my favourite blog and I like what hubspot does (website grader, twitter grader, etc).

posted on Saturday, November 15, 2008 at 9:15 AM by Damian Madray

Great presentation Really appreciate the insights and your sharing this. Couldn't agree more on the organic marketing point. 

posted on Saturday, November 22, 2008 at 6:49 PM by Robert

I was there; great talk, and extremely high content, even compared with the other great speakers at the conference. 
Thanks for sharing the video.

posted on Friday, November 28, 2008 at 11:06 AM by Jason Cohen

Great presentation Dharmesh. It was nice to hear your story as an entrepreneur. 
I agree with every point you've made except the PPC. If it's done right, PPC is a very valuable online marketing venue. 
Since your product is HubSpot, it's understandable to push SEO over PPC at your presentation though. 
Good luck with your current and future projects. 

posted on Tuesday, December 09, 2008 at 4:15 AM by Ahmet Kirtok

I am so happy that I was able to discover this brilliant video. It's truly a must-watch for any entrepreneur operating in the "internet space". Also inspired me to write about the obsolete nature of business plans:

posted on Tuesday, December 23, 2008 at 2:56 AM by Kevin Pruett

Just be aware when you make your busines plan avaliable. Better to make your beta avaliable. 
Once we did anounce our plans and a biger competidor almost released his version of our plan before us. 
Have fun. Money comes.  
Greetings from Rio, 

posted on Tuesday, December 23, 2008 at 6:56 AM by Bruno Pinaud

Thanks very much for your openness and honesty in your talk. I can't tell you how encouraging it was to listen to, on many levels.

posted on Sunday, January 11, 2009 at 7:53 AM by Mark Breiter

Thank you for posting this video! its much more interesting being able to watch a presentation rather than reading it. Thats cool that you went to school in birmingham, i am currently in school at UA in Tuscaloosa and working on my 2nd startup. the 1st one was kind of more practice more than anything. Anyways i just discovered this site but i would love to see something about how business majors can start tech companies, for instance how to find a tech cofounder for your startup or any other possible ideas that could help us in the online industry.

posted on Wednesday, January 14, 2009 at 1:25 PM by John

Video is dripping with inspiration - love it.... keep them coming!

posted on Tuesday, January 27, 2009 at 8:57 PM by Matt Brown

Excellent coverage of my  
1-yr gruesome journey and  
yet still lean-mean and  
no-external funding. 
I am in a dilemma: Our product is a bit discontinuous (didnt want to 
use the word 'revolutionary') and  
we have done focus-group-based survey (no friends and 
family) and we got very good 
results and did fine tuning of the 
s/w product based on the feedback. We have one big 
potential customer who is 
interested in a limited beta-trial but is painfully  
slow in moving forward. Again it is centered around 
the "market risk" and we are 
resource strapped to engage 
other potential beta-partners.  
My Q: When should I realize  
"probably my product sucks" 
and move on? What are the 
I am in a deep restrospection mode :(  
Pls do post your feedback or 
e-mail me.. 
Thanks a zillion in advance. 

posted on Monday, February 16, 2009 at 3:36 PM by JJ

Hi Dharmesh, 
Nice talk. If you can visit Avial and give me your feedback. 

posted on Tuesday, March 03, 2009 at 12:32 AM by Affo

Hey Dharmesh--great prezo, and a pleasure to chat with you briefly about software startups/learning product management... great conference too!

posted on Tuesday, July 21, 2009 at 3:56 PM by sohbet

Video is dripping with inspiration - love it.... keep them coming!

posted on Tuesday, July 21, 2009 at 3:58 PM by yonja

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