danielstallworth asked: How are you man? A curious thought exercise in regards to Entrepreneurship: If you had $1000 to spend on staring up a business, what would you do with that $1000? (Assuming the business was already set up and incorporated, or not if that's easier) Would you seek out as many free services as possible while using it to raise more money? Or focus it on building up the product and idea first? Just interested in your thought process, the what is not as important as the order of events.
I have $1000 to start a business… how would I spend it? Here are some of the ways I would think about it:
1. Get customer feedback and make your business more valuable
Assuming that the business solves a real need for a particular market, I would focus initially on getting intensive customer/user feedback and iterating to improve. What differentiates my business from incumbents in this market, and why do my customers find my product valuable? Quite often when an entrepreneur starts a business, they have a misguided understanding of their customers and their needs. So the more you can learn about your customers and the market FOR FREE, and use this knowledge to make your business more valuable, the better off you will be. I would focus intensely on this learning phase first before doing any paid marketing. No Google Adwords or Facebook marketing campaigns yet! Total waste of money at this stage.
2. Will the business generate revenue right away?
If it does, small seed capital can really help get the business off the ground with minimal outside funding, assuming the business becomes profitable quickly. Then you can pour profits back into the business - and you have a recipe for a sustainable business. Otherwise, you will need the initial seed funding to get your business moving enough to raise more money.
3. Make a website to give your business “a place to live”
Rather than hire an expensive developer, I would use a 3rd party (like Squarespace or Tumblr) to build a simple website that showcased my business in a coherent way. High value for low cost.
The good thing about using 3rd parties that provide software as a service is that you have to worry less about bugs. The software is tried and true, and you don’t have to burn time and money trying to build it yourself. Later once your business has proven itself to be valuable, then it may be time to hire developers and build your own homegrown solution. The exception to this rule would be when you’re building a software business. But even then it is smart to leverage companies and open source software that gets you maximum gain with minimal work.
I would also use a free email marketing service like Mailchimp to build a signup form and do email capture. This will allow you to gauge interest in your product/service, while also gathering a list of people who are you giving you permission to contact them about your business. Use them!
4. Actually getting the business off the ground…
Starting a service business? I would start by doing the work myself initially, to save money on workers, and get a strong understanding of the skills and mindset your employees will need to excel at their job. You’d also gain invaluable feedback from customers about their needs and how my service meets their needs. When you focus on making your service excellent, your customers will be your biggest allies, and will tell others about your service - which is the strongest form of marketing anyway.
Digital Product? Assuming that you have the facilities to actually build the software, I would negotiate a flat rate fee with a good designer (preferably someone you know) to work on logo & website design. However before you get to this stage you should have a strong understanding of your company’s core values, value proposition, and mission. This will give the designer focus and help you to waste the least amount of time possible in design iterations.
Social products (for example) are often subject to network effects - meaning that the value of the service increases as users actively use the product. So once the product has been built and tweaked, I would use the money on marketing - focusing on driving relevant traffic to your website. It’s crucial to get the right kind users for your site or app, and if possible, ensure that viral/sharing functionality is built into the product.
Physical Product? If I were building a business around a physical product, I would use a portion of the funding to make a really nice video for a Kickstarter campaign - to both raise more money and secure my first paying customers. This is all after validating the concept, getting user feedback and really honing the product, of course.
5. Final thoughts on saving money
Resist paying for office space as much as possible… rent is expensive! Operate from your living room or basement for as long as you can - it will save lots of money.
Hiring employees is very costly. Not only are they expensive, but they introduce other levels of uncertainty and risk. (Managing them, paying them, distracting you from your vision, they may quit, etc.) If possible, reduce the amount of people you employ (if any!) initially, and get more done with less when you’re first starting out. This will save you money & heartache.
But don’t get me wrong… “people” are very valuable! It is very important to harness the energy and reach of other people to move your company along and spread business via word of mouth referrals. The feedback of your friends and supporters is invaluable at this stage - use your network as much as possible!
WHOA!!!! I can’t belee dis… haha
When Mike and I started Instagram nearly two years ago, we set out to change and improve the way the world communicates and shares. We’ve had an amazing time watching Instagram grow into a vibrant community of people from all around the globe. Today, we couldn’t be happier to announce that Instagram has agreed to be acquired by Facebook.Every day that passes, we see more experiences being shared through Instagram in ways that we never thought possible. It’s because of our dedicated and talented team that we’ve gotten this far, and with the support and cross-pollination of ideas and talent at a place like Facebook, we hope to create an even more exciting future for Instagram and Facebook alike.It’s important to be clear that Instagram is not going away. We’l be working with Facebook to evolve Instagram and build the network. We’ll continue to add new features to the product and find new ways to create a better mobile photos experience.The Instagram app will still be the same one you know and love. You’ll still have all the same people you follow and that follow you.You’ll still be able to share to other social networks. And you’ll still have all the other features that make the app so fun and unique.We’re psyched to be joining Facebook and are excited to build a better Instagram for everyone.Best,KevinCEO, Instagram
For any consumer application, email is an important tool to drive engagement. Last year, Fred Wilson went as far as calling it “Social Media’s Secret Weapon.” After optimizing the Hunch weekly recommendation emails for a few months last summer, I thought it might be useful to share some of the key lessons we learned to increase user engagement in emails and acquire new subscribers.
As background, while Hunch had transitioned from a consumer destinations site to more of a B2B approach (that eventually led to an acquisition by eBay), we found that sending weekly emails with personalized product recommendations was an effective way to showcase our technology and drive interesting partnerships. So we wanted to make them good. We ran countless A/B tests on groups of 10,000 users to see what worked best. For each test, we tried to constrain by cohort and keep all other variables constant. Below are a few things we learned along the way:1. Previews in the subject line are key - People get numb to receiving the same subject lines every week, so if you can send a user something different from what they received last week, you’ll get a better response. But probably more importantly, by offering users a preview of the content of the email you’ll increase the chances you’ll catch their interest and get them to open it. Results:Subject Line 1: 33% Open RateSubject Line 2: 40% Open Rate2. People like clicking on their own name - People like what is familiar, and nothing is more familiar to you than your name. It grabs their attention and calls out that this email is just for them. You’ll notice that Amazon does this on nearly all emails. Results:Subject Line 3: 44% Open Rate
3. Picture quality is important - Moving from Layout 1 to Layout 2 (shown below) boosted our click-through rates by 16%. It’s true across the web, but we were surprised by the strong effect that switching to large, high quality pictures had on engagement. Results:
Layout 1- 18% Click-out, 1.5% unsubscribe, 1.90 clicks per person.Layout 2 - 22% Click-out, .9% unsubscribe, 2.44 clicks per person.4. Editorial should not be overlooked - A/B testing is great for fine-tuning a strategy (climbing higher up the same hill), but often the greatest increases in engagement come from talking to customers and attacking the problem from a different angle completely (climbing a different hill). So, I asked our users what their favorite emails were, and what they loved about them. One consistent piece of feedback was that the best emails had some element of editorial (there’s a reason Groupon employs hundreds of writers). Adding editorial means that each time a user opens an email, they get a human voice talking to them. That is powerful.Editorial is easy to overlook for a technology company because it isn’t particularly scalable. But that doesn’t mean it isn’t important. So, we developed a method where we chose the best recommendation descriptions for each item, using a combination of software and human judgment. We then included not just a title and picture, but also a description of why this recommendation was being made. As you can see from the results below, this was one of our big innovations in increasing engagement with these emails - people loved the descriptions. Results:Layout 3- 28% click-out rate, .7% unsubscribe, 2.64 clicks per person.5. Faded screen overlays are effective - We experimented on the acquisition side by asking people to sign up for our weekly emails on the Hunch website. At first we just put a bar across the top but eventually moved to a faded screen overlay (You’ll notice that Fab.com does this a lot).It’s hard to argue that these overlays are anything but an annoying user experience. And this test does not take into account long-term usage of the product, which may be effected by this method. But, the facts were clear - it works (and yes we did check the database to make sure the emails we captured were real). Results:Top Bar - .18% conversion to email signupOverlay - .99% conversion to email signup6. Clear messaging lowers the perceived cost of signup - I’d heard anecdotally that with Facebook Connect adding the messaging “We’ll never post to your wall without your permission” increases conversions by 50%. So I thought I’d apply the same principle to our email capture on landing pages. In fact, adding, “We hate spam too and you’ll never see any from us” to our popover increased conversions by 21%. Results:Popover - 1.20% conversion to email signup
Final Note: Everyone’s product is unique. You’ll notice if you do a quick Google search for “best time to send emails,” the advice is all over the place. The best time to send an email for a content startup sending news articles might not be the best time for an e-commerce company. It’s important to run small tests to find what’s right for your product. But hopefully the above lessons we learned will help you get started.
The other day I stumbled upon a post by Naveen Selvadurai of foursquare entitled “being in the right place at the right time.” It inspired me to write, as it helped me to connect my professional interests and my musings on the relationship between location and “destiny.”
Here’s a quote from Naveen’s post:
“No matter whether you believe in fate or free will, they both affect many paths in life: from the college we go to, to where we live, to the jobs we take and to the people we run into and with whom we become friends and lovers. but i think the most powerful of these factors is location – where we are now and where we choose to live. i think that location, more than anything else, is a powerful determinant of which path one will take in life.”
- Naveen Selvadurai
For some time now I have been reflecting on the significance of location in our everyday lives. On the micro level, I am enamored with how mobile location-based services are revolutionizing the way people interact.
I love the thrill of discovering, navigating, and sharing my adventures with the world. Mobile apps like Instagram, foursquare, Path, and Sonar delight me, as they connect me with others around the unexpectedly remarkable moments I experience from day to day. While Sonar empowers us to meet the people around us who are most socially relevant, Path and Instagram allow us to capture and coyly share intimate glimpses of our lives.
Because the confluence of “occurrence” and “location” creates a unique event that will never happen again in the same manner, it seems of utmost importance to capture special moments when and where they happen.
On a greater scale, location plays a big factor in who we are and who we will become. At times I wonder, “Do I need to stay in NYC long-term to pursue my startup dreams in the mobile / location space? Would I be just as well poised to do so if I moved to Austin, TX, where my girlfriend wants to move, and where I’d be closer to my family?”
Now, there’s something very special about NYC… everyone knows that. The feverish bustle, the density of consumers and businesses and the 24/7 grind that goes on here seems to be the perfect agar for my petri dish.
But my girlfriend is quickly losing interest in the fast-paced life, and both my immediate family and her family live in Texas - quite a ways from New York City. Austin, as an alternative, is considered by many to be a tech mecca of the South, with events like SXSW, and the offices of giants such as Google, Facebook and Apple. However, despite these boons I’ve heard from various sources that Austin may be a challenging place to start certain types of companies.
Rene J. Pinnell, CEO of Forecast, an Austin-based mobile startup that allows friends to share where they’re going, once told me that while Austin is very beautiful and vibrant, it may not be the best place for early-stage social media tech startups. Its cultural differences and the type of investors it attracts are a few reasons why many Austin-based startups find themselves relocating to San Francisco or NYC.
Additionally, Austin does not have the same urban density / media profile that New York does – a factor that potentially made Gowalla less competitive with foursquare. Such a spatial difference would certainly affect users’ behavioral patterns – but to a detrimental extent?
In the end, I try to trust God to help me make these types of decisions, but I can’t help but wonder the role that my location will play in my professional future. I do know, however, that while I am here, no matter how long or short this may be, I plan to take advantage of New York with the fierce urgency of now.
Can’t stop the #hustle.
After studying international development in Latin America, undergoing a number of various corporate experiences and graduating from college, I have officially launched myself into the NYC tech startup scene. Thanks to my dear friend John Exley(@johnexley), a fellow startup geek and Hashable (@hashable) intern, I am now working at YouNow (@younow), a new social platform for user-generated live video that allows users to broadcast live and curate content in a fun, game-like fashion. As Operations Manager at YouNow, I work alongside our CEO Adi Sideman, and am able to touch all non-technical parts of the business – which is to say, everything but the physical product itself. It’s a tremendous experience, and is preparing me to launch my own startup one day… but I’m missing one thing:
In my opinion, it is the single most significant thing holding me back from starting my own company. There are obviously many elements that go into building a successful business, but in an increasingly technological world, having negligible technicalunderstanding will make you practically insignificant.
Fred’s post takes inspiration from Douglas Rushkoff‘s latest book “Program or Be Programmed: Ten Commands for a Digital Age”, postulating that “in the emerging, highly programmed landscape ahead, [one] will either create the software or will be the software.” Didactically, and with less of an alarmist tone, Fred encourages the nontechnical to get technical.
I think this quote pretty much sums it up:
“Dennis Crowley claims to be a terrible programmer. And yet he and Naveen built the first version of Foursquare together. Their third team member was Harry and Harry’s first job was to rewrite all of Dennis’ code. Dennis is the kind of technical I’m talking about. Learn how to hack something together so that you can get people interested in your idea, your project, your startup. If you can do that, then you have a better chance of success.”
- Fred Wilson, AVC
Fred’s thoughts only further confirmed for me the feelings I had already been having. You see, I’m an idea guy… always have been. I’m someone who lies awake at night, feverishly excited about the possibility of creating something that can change the world. Inspiration has never been my problem, fortunately.
Unfortunately, however, inspiration in and of itself simply isn’t enough to make one’s world-changing idea a living, breathing thing. My problem is my uncertainty… I’ve always seen the value of learning new things, but because I am unsure of which path I will take, and am constantly inspired by new things, I find myself unwilling to focus on mastery, instead caught up in another whimsical dream of what could be. For this reason I have resolved to learn how to code, as a means of making my startup ideas come to life.
While the hard skills I will acquire from programming will be a tremendous catalyst to realizing my aspirations, my determination to learn how to code is much deeper than that.
It is about:
Instead of being spontaneously capricious, being assiduously dedicated to accomplishing my goals.
Enduring and pushing to achieve success, rather than navigating to another “possibility” of success when perceiving potential failure.
Having enough certainty and self-confidence to trust myself and believe that my dreams are worthy of pursuing whole-heartedly.
Turning possibilities into realities.
Apart from being a dreamer, I am also someone who is capable of great output once I put my heart and mind to something. Knowing this… I guess it’s time to just buckle down and GIT UR DUN.
On that note… I will stop writing and proceed to learn the beginnings of Ruby.
I love the thrill of discovering, navigating, and sharing my adventures with the world.
Mobile apps like Instagram, foursquare, Path, and Sonar delight me, as they connect me with others around the unexpectedly remarkable moments I experience from day to day. While Sonar empowers us to meet the people around us who are most socially relevant, Path and Instagram allow us to capture and coyly share intimate glimpses of our lives.
Because the confluence of “occurrence” and “location” creates a unique event that will never happen again in the same manner, it seems of utmost importance to capture special moments when and where they happen…
To read more of my blog post, click here.
perspective is an important thing.
it can be the difference between distinction and defeat.
perspective allows you to find the good in the not so great and is able to squeeze drops of motivation out of the driest medium.
having it is like being perched on a ledge with bird-of-prey vision
but getting it is really just a matter of wanting it.
experience is helpful, but not required
perspective lets you make smart decisions.
without it, you make dumb decisions…
and you may or may not gain perspective.
- Dorian Dargan 10.31.2011