“Be careful whose advice you buy, but, be patient with those who supply it. Advice is a form of nostalgia, dispensing it is a way of fishing the past from the disposal, wiping it off, painting over the ugly parts and recycling it for more than it’s worth.” – Baz Luhrman
On September 26, 2009 I attended the StartupDay conference organized by Seattle 2.0. The speakers were successful in the Seattle startup scene, and dispensed advice that was very valuable as I considered creating a startup of my own. Now that I have a blog I can finally post the notes.
- Don’t quit your day job. (This was not what I wanted to hear)
- Don’t just create a product, but a business (a revenue engine).
- Need a way to generate income while working, or at least some revenue within the first ~6 months. Some presenter did consulting on the side.
- Don’t get venture capital or you’ll have new bosses to answer to.
- Minimize regret.
Why do a startup? (Hillel Cooperman – Jackson Fish Market)
- Quit Microsoft with two others and started the Jackson Fish Market.
- They do consulting for part of their week to support their creative pursuits.
- Goal should not be the money.
- Don’t quit your day job.
- Quitting and getting venture capital creates a time limit.
Why do a startup? (Josh Petersen – The Robot Coop)
- Solve your own problems (e.g. Basecamp originated from a group of web designer’s needs)
- Select bias = looking at the winners without considering the losers. There are many failed companies that we don’t see when we look at winners.
- Bezos’ model is “regret minimization framework“. Will you regret not building it? Will you regret not trying? Minimize regret.
- Ask yourself: what if it works out? Do you want to run that company?
Co-founders & advisors (Colin Wong – Sharein.com)
- Most important thing in a startup relationship is trust.
- Partners should complement each other, not be identical.
- There is an equation for determining equity, with three variables: Opportunity cost, investment, and salary. So if employee A and B walk away from $100k salaries, equity is 50/50. If employee A also invests $100k, equity is 66/33.
- I spoke to Colin and asked him how he finally decided to leave a secure job at Google. His answer: he sold his stock so he was all set. D’oh.
- Self fund your project.
- Cash poor = better decision making earlier.
- Must generate cash to pay the bills.
- Don’t get VC. There are strings attached. And if you’re leaving your job because you can’t stand answering to your boss, VCs are even worse.
- start with 1 year of $$$
- Focus on doing, not planning.
Funding through angels or VCs (T.A. McCann – Founder and CEO of gist.com)
- I spoke with TA at lunch. His advice to me was not to quit Microsoft, but to work nights/weekends. Don’t quit until you at least evolve your idea to the point that everyone you pitch it to is interested, OR find another way to have an income while developing it.
Naming & Branding (Kelly Smith)
- (No notes)
Building the Product (Dave Schappell – founder/CEO of teachstreet)
- SIMPLIFY: get it out the door.
- Use a rigurous A/B testing methodology to make decisions, not HIPPO (highest paid person’s opinion)
- Waterfall vs. SCRUM development (2-4 week dev cycles). Now using ‘pods’, which are 1-week cycles.
- Start blogging immediately when starting a project to increase page rank after launch (write entries based on top related keywords).
User Experience & Metrics (Alex Berg – UI of Wetpaint.com)
- Design on paper. Recommends Axure for prototyping software.
- Establish relationships with power users.
- Hires set the company culture: be very selective.
Acquiring Customers & Marketing (Mike Mathieu – founder of Frontseat)
- There is a difference: Feature vs. Product vs. BUSINESS
- A business is a revenue engine.
- Audience vs. Customer. The customer is who is paying – deliver features for them over the audience.
- Diversify traffic sources. Don’t use your own money.
- Overall: pick a customer, build a revenue engine.
Networking & Partnering (Shelly Farnham)
- (no notes)
Advertcraptizing: Where’s the silver lining? (Ben Huh – CEO of Pet Holdings)
- Runs the blogs that are the most high-traffic startup in Seattle and one of the top internet traffic sites.
- Realistically, it takes 18 months to make advertising revenue off your site.
- Even if you have a lot of traffic, you have to establish yourself which takes time.
- Advertising pays you 30-90 days after serving, so cash flow is a problem.
- To make $1M/year from a $1CPM, you need 1 billion page views/year. Need minimum of 500k/day.
- To sell to advertisers, you need to be top of mindshare in your niche.
Closing Keynote (Rich Bartin, founder of Expedia and CEO of Zillow)
- Told the Expedia story. Was a 26-year old product manager at Microsoft for the travel section of the encarta CD-ROM. He told Bill Gates his project was stupid since people couldn’t take the software with them on trips, would quickly be out of date, and the travel books market isn’t big anyways. So he showed him the online system used by travel agents and said he wanted to make it available to everyone. He got funding, spun the company out of Microsoft to raise marketing money through an IPO, and the rest is history.
- Need a passion for changing the world – people will laugh at you.
- Power to the people.
- Focus on high CPC areas (those that demand the most $ from advertisers)