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Startup Lessons

Alex Schultz's Fantastic Lecture on Growth

YCombinator and Sam Altman have put together a tremendous resource for entrepreneurs, product managers, product marketers, etc... they have made available a series of lectures around YC's "How to Start a Startup" course and it is truly excellent. Not only are the topics spot on - and relevant to all aspects of founding, building and growing and business - but they have phenomenal leaders giving their talks.

I will ultimately do a couple of these posts - but wanted to start by embedding Alex SChultz's talk on Growth. Alex is an old colleague from eBay, a friend, and an absolute wizard of growth mechanics, product marketing, user scaling, etc. That's what he does at Facebook and has been doing it (very successfully) for quite some time there.

This is a must watch video - Alex has an ability to distill complicated numbers, tactics and ideas into something that is very clear and actionable. And again, it is relevant far beyond the earliest-stage companies.

[youtube=https://www.youtube.com/watch?v=n_yHZ_vKjno&feature=youtu.be]

Keys to Boostrapping Your Startup.

Earlier this week, I spoke on a panel about the keys to bootstrapping a startup. The audience was a mix of current and soon-to-be entrepreneurs; some bootstrapping by choice and others by necessity; some who see bootstrapping as the dream and others as a means to venture financing. It's a subject near and dear to my heart since I bootstrapped beRecruited alongside Russell Cook from our Duke dorm room and our spare bedrooms (while I was at eBay and he was at Microsoft). Even in hindsight, I wouldn't have done it any other way as it proved to be the right thing for the business and for us... which is a bit ironic since I am now in the business of making investments and often challenge bootstrapped entrepreneurs to think about whether investment is what they *really* want and need (sometimes is, sometimes isn't).

I wanted to give a quick recap of the themes I discussed. And you can read more from my 2008 post "Bootstrapping Your Startup – 12 Rules of Bootstrapping", which is one of the most read / visited posts from this blog.

Be efficient. Be lean.

From my 2008 post - and it remains the most important aspect: "Sounds obvious. Sounds easy. But it’s neither. As a bootstrapper, you’re short on time and money. That means that efficiency is key. Before engaging in any single task, ask yourself (and/or your team) if this is worthwhile and priority #1."

Revenue is king. Profitability is better.

This is a key difference with venture-backed companies, who often aren't advised to focus on revenue early on - rather, they focus on growth and usage. Bootstrapped companies usually do not have that luxury and have to focus on self-sustainability. Of course, that means that revenue (and profitability) are king.

And when you get there - that buys you the ultimate luxury: optionality. You are in the luxurious position of choice: continue to operate, fund and accelerate the business, or exit the business. Profitability affords these choices.

Understand business financials, levers, potential scale.

To reach profitability, you must have a deep understanding of the business. You are likely resource constrained - so each task, priority and function comes at the expense of something else. It is a constant balancing act. Furthermore, this is how you gain an understanding of the next two points:

1) what the key business levers are and how you can accelerate growth with funding 2) how big the business can become... which is how you determine whether funding makes sense

Spend money on key business levers.

Within reason, you must open the marketing floodgates to understand: what works, whether it scales and what you might need (partnerships, people and/or investment). I commonly see pitches where entrepreneurs have very efficiently spent very small amounts of money - but they have no understanding of whether that scales (amount of efficiency).

Understand the consequence of investment / capital.

If you are in the luxurious position of considering whether to continue bootstrapping or take on investment: congratulations, optionality is your most valuable asset. There are obvious benefits to taking on investments: the two most obvious being:

1) you can accelerate growth more freely (and therefore grow your enterprise value) 2) you bring more partners and thinkers to the table

However, there will be considerations you didn't have before and you have to think through the consequences: How big is the opportunity? How big can this become? What's your long-term goal: scale, ownership, financials, etc? Are my goals in line with the investors'? How does dilution weigh against outcome and exit opportunity? Are the investors my ideal business partners? Comfort with adding partners, board members, equity holders, etc?

Most importantly: can you achieve your goals with or without investment? Ultimately that determines the answer.

Designing for Mobile: 7 Guidelines for Mobile Apps & Mobile Web

Note: this article originally appeared on TechCrunch: Designing for Mobile: 7 Guidelines for Startups to Follow As an investor, I’ve seen hundreds of mobile application pitches. And as a consumer, I’ve downloaded hundreds more – some out of curiosity and others in the hope that I’ll find something so useful and exciting that I’ll make room for it on my iPhone’s home screen. From both perspectives, I am rarely excited by download numbers. What gets my attention is engagement: how frequently an application is used and how engaged those users are. This ultimately is the barometer for an application’s utility and/or strength of community. And if either of those two factors are strong, growth will certainly come. Just ask Instagram, Evernote, LogMeIn and others.

Creating great mobile experiences requires dedication to building product specifically for mobile. It sounds obvious, but it’s so often overlooked. Mobile users have different needs, desires and environments; and as the application creator, you have different opportunities to create utility and engagement. With that in mind – and with the help of my former eBay colleague and Dogpatch Labs resident, Rob Abbott (founder of EGG HAUS and Critiq), we’ve put together 7 design guidelines to consider when building for mobile.

Just like the presentations on leveraging Facebook (both on-Facebook.com and off-Facebook) and Twitter, success comes from building meaningful experiences that are honest to the native environments.

Read all of the startup presentations: - Leveraging Facebook for Startups: Part II, On-Facebook - How to Leverage Facebook for Startups: Part I, Off-Facebook - 14 SEO Tips for Startups - How to Grow Your Brand on Twitter. 5 Overarching Guidelines. Tons of Examples. - How to Create an Early-Stage Pitch Deck

7 Guidelines to Great Mobile Design

Leveraging Facebook for Startups: Part II, On-Facebook

Note: this article originally appeared on TechCrunch: 10 Ways to Leverage Facebook for Startups: Part II, On-Site Part I: Off-Facebook Strategy Part II: On-Facebook Strategy

Yesterday I discussed how to improve user acquisition, activation and activity by building Facebook directly into your web experience. There is of course another half to the equation: leveraging Facebook.com to expand your reach and engage your users. On-Facebook success is less product-heavy than success off-Facebook, although they both ultimately aim for the same outcome: engagement. While it is as much an art as a science, if you optimize for engagement and continually test your way across Facebook’s myriad of products – you may well find yourself sitting alongside The Rock (Facebook’s best personality?) and Spotify (terrific example of being a platform first-mover).

As a startup, you may not reach the scale Spotify or the brand / reach of Starbucks (27 million fans) – but this guide will help you think about strengthening relationships with your fans, expanding your fanbase and unifying your off-Facebook experience with your on-Facebook presence.

View more presentations from Ryan Spoon

How to Leverage Facebook for Startups: Part I, Off-Facebook

Note: this article originally appeared on TechCrunch: 10 Ways Your Startup Can Hook Into Facebook, Part I: On The Web Part I: Off-Facebook Strategy Part II: On-Facebook Strategy

Having already covered how startups can use search and Twitter to find customers, here’s 10 steps for finding people on another key marketing platform: Facebook Facebook has evolved from a social network into the fabric with which much of the web is constructed: identity, product, data, experience and so on. Even if you chose to no longer use it as a social destination, you would still find immense value in it through your every-day web usage: registration, personalization, sharing, interaction, etc.

This is of course a huge opportunity for consumer-focused startups. Facebook plays a core role in touching each step along the standard product / user funnel:

- Acquisition: virality, referrals, paid traffic - Activation: conversion paths from new to active users - Activity: user engagement and retention

Below is a slide presentation with five ways to think about leveraging Facebook to affect those three steps on your web experience. Tomorrow I will share five ways to find success on Facebook.com.

View more presentations from Ryan Spoon

14 SEO Tips for Startups

Note: This article originally appeared on TechCrunch (“14 Steps to Successful SEO for Startups”). For startups, it is dangerous to entirely separate product and marketing – both strategically and organizationally. A great product isn’t overly useful without an audience. And a great marketing strategy can’t save a poor product. Product and marketing have to coexist.

So when imaging, building and eventually launching your product, it is important to also hone the marketing strategy. There are five core channels:

- Paid marketing (SEM, display, affiliates, etc) - Social & viral marketing - Search engine optimization (SEO) - Partnerships & business development - PR

For early-stage companies, advertising at scale is expensive and consequently difficult. Furthermore, PR and business development become easier efforts as the company matures. So where does that leave you as a resource-constrained startup?

Marketing needs to come from the product itself. Last week I explored the role that social and virals play. And while the tech world is fascinated with social media and major platforms like Facebook and Twitter, we shouldn’t overlook the role of SEO (and consequently Google). Like Facebook and Twitter, SEO is another opportunity to expand your funnel and increase your audience — without an advertising budget! Also like social, SEO is far more effective when built directly into the product (“from the ground up”). Here are 14 guidelines for thinking about SEO.

View more presentations from Ryan Spoon

How to Grow Your Brand on Twitter. 5 Overarching Guidelines. Tons of Examples.

Note: This article originally appeared on TechCrunch ("5 Ways for Startups to Grow Their Brands on Twitter”). Last week I began an effort to answer those questions I get asked most frequently, starting with how to create an early-stage pitch deck. Today, I address the next most popular question: how best to grow your brand on Twitter? Twitter is the ultimate marketing platform. But the scale of Twitter is so extraordinary (250 million tweets / day) that it is actually quite easy to get lost in the noise.

Separating yourself from the masses really begins with the recognition that Twitter is first and foremost a platform for conversation. If you believe that, you avoid the mistake most brands make: treating Twitter as a mechanism to push content rather than create engagement.

And once your goal is to foster conversation and engagement, you can follow these five guidelines:

1. Listen. 2. Be authentic. 3. Be compelling. 4. Find the influencers. 5. Extend off-twitter and onto your site.

In the below presentation, I breakdown these core themes and provides examples of people and companies successfully using Twitter to drive engagement and grow their brands.

How to Create an Early-Stage Pitch Deck

Note: This article originally appeared on TechCrunch ("How To Create An Early-Stage Pitch Deck For Investors"). It is the first in a series of posts / decks that I will be doing on those questions I get asked most commonly. Of course we will start with the question I get most: how to create a great pitch deck!

When raising capital, a combination of your company’s product, vision, team and execution are what ultimately attract investment. And while the pitch deck is ultimately less important than vision and product, it exists to convey both elements and get investors hungry for more.

Like other investors, I come across hundreds of pitches each month — some in person, others in email; some as PowerPoints, and others as full-fledged business plans. Your goal is to craft a deck that is both:

- crisp: succinct enough that it is easily digestible (in person, email, etc)

- and complete: thorough enough that it conveys the big vision and current traction

I looked back on many of the pitches I reviewed over the last couple years (good and bad) and compared it to public pitch decks of familiar, successful companies like Airbnb, Foursquare, and Mint. The output is this guide to creating an early-stage pitch deck. It’s intended for companies seeking seed and series A investments.

There are five core themes followed by a suggested structure:

1. Have a great one-liner 2. Know your audience 3. Keep it to 10-15 slides 4. Beware of the demo 5. Expect the deck to be shared

And remember: it’s the story and the conversation that is important – not the imagery and colors. If you can convey the passion that drives you (and your users / customers!), you will have created a powerful pitch deck.