On Startups

A few notes I’ve taken during the last few weeks from various sources, excluding the topic of product-market fit.

General

• All you need is solid market research, the ability to focus on a niche, the ability to question assumptions by testing with users and customers, and enough money to survive until that pays off.
• Is there a demand? If there are no competitors, maybe they all failed?
• What are competitors’ weaknesses that are dealbreakers?
• Is there a barrier to competition? How to compete and adapt when others join?
• Patents are like bullets, unrealized potential when you don’t have the money to pay for the gun—a court battle. You sue, expect the company to pull a dozen patents out of their hoard and counter-sue a dozen times over. That’s what patent hoards are for.

Initial plan

• From The Pmarca Guide to Startups:
  • A startup’s initial business plan doesn’t matter that much, because it is very hard to determine up front exactly what combination of product and market will result in success.
  • No battle plan ever survives contact with the enemy. It is therefore much more important for a startup to aggressively seek out a big market, and product/market fit within that market, once the startup is up and running, than it is to try to plan out what you are going to do in great detail ahead of time.

You’ll know you have an idea when you:

• Have some reason to think a customer exists and demands better than what they are getting. This supposition may be flawed, it changes nothing. If you can not articulate the reason, it doesn’t exist.
• Acknowledge competition. This holds true no matter if you have invented something (really) new. People are making due, right now. Nobody is asking for the automobile; they’re asking for a faster horse. So get a grip—there are no inherently awesome ideas.
• address both market demand and competition with a value proposition showing your differentiation, competitive advantages and barriers to competition. Singular is acceptable; plural is recommended.

MVP

• MVP is for market traction, not user acceptance. We’re on a quest for insights.
• The difficulty: we decide what’s minimum, customers decide what’s viable.
• Don’t get too busy building your MVP to the point where you forget to challenge your assumptions.
• An MVP is viable. This means it must try to tangibly solve real-world and urgent problems faced by your target customers. So it’s not about figuring out the smallest collection of features. It’s about making sure we’ve understood our customers’ top problems, and figuring out how to deliver a solution to those problems in a way that early customers are willing to “pay” for. If we can’t viably solve early customers’ primary problems, everything else is moot. That is why an MVP is about validated learning.
• People think of MVP as simply the smallest collection of features to satisfy customers. The problem with that approach is it assumes we know ahead of time exactly what will satisfy customers. But the odds are that when it comes to a startup product, we don’t—even if we’ve served those customers for years with other offerings.
• The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.
• Customers don’t care about your solution. They care about their problems.

Testing

• People often lie on surveys, unwittingly.
• Ask “what would happen immediately after any proposed experiment or market test?” If it was not an unequivocal commitment to purchase, then the so-called validation is null and void.
• Ask what you want of whomever you want. Then ask to buy. If they say, “No,” crumple up all the positive comments.
• A/B testing could be used to eliminate assumptions, but you’re only as good as your B version allows.

Metrics

• No vanity metric, focus on actionable metrics.
• Actionable metrics answer these questions:
  • How do you gain or lose revenue?
  • How do you gain or lose customers?
  • What are the key functions and benefits that people are coming to you for?

Branding

• Brands run on coherency. And the less money you have the more coherent your messaging across media channels must be.
• You want everything you do to tie back to your brand message. That’s invoices. That’s policy. That’s guarantees. That’s pricing. And that’s hiring and how you answer the phone.
• Everything pushes a single concept with laser focus.
• Stanford guidelines for web credibility:
  • Make it easy to verify the accuracy of the information on your site (ex. Citation, reference, source material).
  • Show that there’s a real organization behind your site (ex. Physical address, listing membership).
  • Highlight the expertise in your organization and in the content and services you provide.
  • Show that honest and trustworthy people stand behind your site.
  • Make it easy to contact you.
  • Design your site so it looks appropriate to your purpose.
  • Make your site easy to use—and useful.
  • Update your site’s content often.
  • Use restraint with any promotional content (ex. Ads, offers).
  • Avoid errors of all types, no matter how small they seem.