Startup Thoughts

Thursday, December 29, 2005

How to create wealth

This is an awesome article by the genius writer and entrepreneur Paul Graham.
Some points important to remember are:

1. Difference between wealth and money. Anyone can create new wealth: something which people need. Especially programmers , where they can still compete with the big industrial organizations, unlike other individuals. Invidual programmers still have a big edge
2. You can be much more productive in a startup and get rewarded accordingly. In a big company, your effort gets averaged out and is difficult to measure.
3. Productive programmers are worth a LOT . They can create new and great wealth in couple of weeks.
4. Startup is like compressing the whole working life into a few years. Working individually you could be upto 30x times more productive than in a standard corporation environment !!

A programmer can sit down in front of a computer and create wealth.

5. A job is nothing but working towards something which people want. Think of the end-to-end connection.

6. Really important for creating wealth is Measurement and Leverage....Leverage means your decisions have big impact including the possibility of big failure. You are in a vital role for the organization.

7. A small group affords both good measurement and leverage. Startup means some really hard working people getting together. Its a super star group rather than a small village.

8. What's the leverage: Technology. A small leap in technology affects a large number of people. Wealth gets multiplied by the number of people who use it.

Big companies have a hard time developing new technologies: they are slow and less efficient. Startups are at an advantage to climb fast in technological.

Also understand what is your barrier to entry ? What will prevent a big corporation from just copying over your stuff ?? Explore the hard terrains where your competitors will have a hard time.

9. Startups can be all or nothing proposition.

10. Acquisitions : The biggest selling point is number of users.
Think of a startup as an optimization problem to get more number of users.... . That is the most important measure of any startup. Number of customers.

11. A big reasons nations advanced is that they allowed people to keep their wealth. There was stong incentive to innovate.

4 Rules for the Practical Entrepreneur

An interesting point he makes is that a distinction amongst visionary and practical entrepreneurs.
Visionary have a dream and will follow it until they succeed wildy. Crazy perseverance and diligence until it works.

1. Which market ?
You can enter an already established market where there is a clear need . Or you can create a new market but the hard part there is that you have to persuade the customer to use the new technology.

Are you competing with a clear dominant player in your field. if yes than you got lot more explaining to do to the consumers by you are different/better.

Lot of fragmented players also do lot of marketing creating awareness about the service without your money. If the need is very clear and promoted by others , it is automatic advertising for you. You don't have to convince the customer about the need for your product.

2. B2B is better than B2C ??
Companies have more money to spend and you have to sell less copies.

3. Very clear and simple revenue model.

4. Use the product daily yourself and do good product research to understand how can the product be improved.

Advertising Creativity

The apple think different ad is very amazing. It spurs and moves people by emotion.
How can we stir emotion in people and leave a lasting impression.

9 Business Selection Criteria

A very interesting article by Fabrice Grinda.

Some very important points to keep in mind:
1. Is the market size $1 billion potentially ? Quantify the size...
2. Be very clear on the business model . Have a good sense of the gross and net margins before we start the company.
3. Can you become a top player in your region ??
4. Is it a rapidly growing market ? It garners more media, customer attention.

Barriers to entry can be both technical and business based.

More women on the Internet than men

It was very interesting to read that number of women have overtaken number of men on the internet today.
We have to think about how can we make the service more appealing to the women crowd :by making it cute, homely and friendly. Good color selection and an interface which the women will love.

Monday, December 26, 2005

The economics of online storage

Excellent article by Nik of omnidrive about the cost dynamics of providing any service which involves user's data storage.
Main costs are disk, incoming/outgoing bw.

However, depending on the service and context, these three costs can vary dramatically. Forget gmail. When you have public sharing along with rich media, the costs are very different.

To be sustainable , you must charge the users for extra storage.

Sunday, December 25, 2005

Kawasaki : The father of evangelism marketing

Sales is rooted in what's good for me. Evangelism is rooted in what's good for you. Evangelists spread the word because they truly believe that the product is good for the other guy, not because they have something to gain.

Think how can you make your product/service invoke that kind of feeling ?

* There are user groups who use your services and products. What can you do to catalyze that ?

* Evangelism is about bringing good news. ( Billy Graham's school )

* The whole marketing philosophy should be evangelistic...not a part of the marketing budget. It will influence everything: the ad on the radio, print or trade shows...., engineering , tech support

Kawasaki Interview at Management consulting news

Most important traits in person : 1. Fast chip inside the brain 2. Love for what they are doing.
Don't be 1. Arrogant 2. Long Windedness

* I like stuff that will change people's lives quickly and directly--that you and I can buy in stores or online in less than a year. I like to read proposals that catalyze fantasy--that make you think, "I would love to buy one of those or use that service."

* So if you want to make it rain, have a great service. The rest is easy.

Guy Kawasaki's interesting series on startups

1. Make Meaning

People who are successful weren't motivated primarily by money. They wanted to create meaning, create something they themselves wanted to use. So don't be a greedy bozo. Be a pioneer and try to change the world by offering something life changing.

Three ways to do that 1. Improve the quality of life. 2 Right the wrong. 3. Perpetuate something good.

2. Make mantra not mission statements. 3-5 word statements which describe what you do and energize people

3. Jump the curve , not just 10-20 % better.

You have to reboot your brain and thing something drastically different and bigger. Like over ordinary bookstores.

Kill the cashcows : don't worry about creating conflict and effecting existing products

Create passionate products, which may even piss of some people. Don't try to make everyone happy with mundane stuff

E.g. of Tivo : some people hate it.

4. Don't be a typer , be a prototyper !
Don't depend on MS Office, depend on your development tools !

You need soul mates : someone to go along with in the journey. Don't be solo !

5. Be unique and of value to customers.
Being good only in one direction is a mistake.

You provide a unique product or service of high value to the customer.
E.g. Fandango


It is amazing, big companies have seperate people working as evangelists to promote their products/services and create a culture around their products.
Marketing and persuasion are very important aspects of creating anything new.

Audicious Thoughts

These areas also need to be worked out well before we ever launch Audicious

1. We need an elegant user interface, smth like Google Analytics / Other sites ( see html templates site ). Eye candy but simple
2. We need a good marketing strategy before we launch it. How will it spread and gain accepetnace ? What about word of mouth ? How will that spread ?
3. What about customer retention ? What can we do to make them coming back ?
4. What patents can we file ?
5. Positining statement. What do we want to be seen as ?