All posts by Edward

The beginner’s guide to coming up with billion dollar ideas

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I was asked this question by many users on our platform, and I guess I owe it to discuss a bit more about how to come up with ideas that will last and make your business successful.

I think people want to think of ideas, instead I like to think of problems. Each idea is an angle at solving a problem – an idea should stem out from a problem. When companies pivot or when they change their strategy, they are basically changing their approach to the same problem they are solving. The idea may change, but the problem persists. And usually having the problem in mind is a lot more empowering than having a solution in mind. When your mental state is in solution-mode, you are in tunnel vision, but when you are in problem-mode, you are open to all the possibilities to solving the same problem. This is actually the magical mental state to be in, because when you always think of the problem you want to solve, then you will always do the right things to for your startup. When you have a great problem that you want to solve, that is a seed to grow many more ideas to solve that problem.

Google also shows you how important (#1 thing to have on your mind at all times actually) it is to have the problem in mind at all times (their mission statement). Their mission is “to organize the world’s information and make it universally accessible and useful.” This is basically the “mission-statement” way of saying they want to solve the problem of the vast amount of unorganized data on the internet. And if you think about it, the majority of their products do exactly that. Everything that they do are not unfocused, but towards this single mission. They have many different products as many approaches to organize different types of data. They have Google Plus as the product to organize individuals’ data. They have Google maps as a way to organize geographical data. Their search engine, which is the basic product, is the ultimate product to organize all text/image/video data.

The problem is so important that it's the headline in their "about" page.
The problem is so important that it’s the headline in their “about” page.

Therefore, I think in many cases, we should be looking for problems we want to solve before we look for a viable solution for that problem. However, that’s what most people do. Most people think of ideas in the form of solution before problem.

That’s why in Ash Maurya’s Running Lean, he has the problem solution as the first interview you want to conduct, out of the 2 other interviews – solution and MVP interviews. The problem is really the first thing you need to figure out – whether if it’s a real problem with a sizable population.

So, how do we come up with an idea? It’s simply 4 easy steps:
1. Just live your life, no need to constantly be in idea-generation mode.
2. Observe the frustrations you have everyday, or of the people around you.
3. When you find one, then that’s a good potential problem to solve.
4. Find interviewees and start doing the Problem interview to see if this is a problem worth solving, if there’s enough people who want this problem solved.

When the answer to step 4 is a yes, then you would have a valid problem worth pursuing. However, there’s a lot more preparation work you should do before you just go on to start building your product.

To put this into perspective, here’s the story of how Craigslist, the biggest classified listings in the US, came to be.

Craiglists in their early days

In 1994, Craig Newmark was working at Charles Schwab, was a newcomer to San Francisco, and was feeling a bit left out because he couldn’t find ways to connect with others. At the same time, he also observed that people were helping each other on the internet through WELLMindVox and Usenet, so that gave him some inspirations. He soon decided that to solve his own problem and give back to the community, he would create a cc email distribution list that would send out news on local events to help people connect.

Soon, he noticed that the number of subscribers rose rapidly, and people started using the cc list for many things – like getting jobs filled, or things non-related to local events. People also gave him feedback and about what categories they wished to see in the mailing list.

The demand outgrew the ability of the mailing list, to which he then built Craigslist.org. (A side note is that Craig Newmark didn’t have much design skills, so his website looked and still looks design-less.

Craig found a real problem that he and others shared, which was that it was very hard to connect with other people to get things done. He didn’t go out and try hard to find an “idea”. He merely observed what he and others needed, and starting acting on it.

Therefore, the beginning of your startup starts with your frustration, and the passion to solve that for others as well.

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How to Start Your Startup Today if You Can’t Code

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What’s the first thing that comes to your mind when you have a great idea?

Build it.

If you’re someone who can’t code, that’s where you’re stuck. Right?

I guess even if you’re a coder and has a full-time job elsewhere, that’s probably where you get stuck too.

How to...business?
How to…business?

You’ve probably spent months or years pulling your hair out to learn how to code, or to find people who can so that they can create your product for you – but you end up being able to do neither successfully.

Well here, here’s the secret on how you can change that and start your business successfully.

The secret is that, you shouldn’t built it first when you have a great idea. The first thing you should do, is to actually just start your business. Start delivering the same solution manually that you would with a product.

YCombinator has a mantra too, which is “Do stuff that don’t scale”. This means that you should always in the beginning not think about building a product, but try to deliver the same solution that you would if you had one, and see if it actually works and if people would pay for it.

If you think about it, traditional travel agencies are just unscalable versions of travel search engines like Priceline or Expedia. The best part is that as a traditional travel agency, you’d already be able to validate your business, make money, hire people, and do all the good stuff you can do when you have real business.

However, nowadays people our generation has gotten spoiled with technology and always think on a grander scale – where the big picture is so big it’s daunting to even think about getting started.

Do it manually.
Do it manually.

Break the big picture down. Break the whole idea down and start with the minimum. That’s what I’d like to call a MVB – Minimum Viable Business. The point here is that you should do the least viable to have a business, and start making money (if possible).

The point of starting a startup is not to build a product, but to deliver a solution. People forget about that.

So, lets just say you want to build AirBnB, what you could actually do in the beginning is to ask 10 friends to let you list their unused rooms. If you can pull this off, you would have gotten the initial version of your AirBnB up, and with some revenue to help you move forward or get funding.

However, it’s important to understand that not every startup idea has a MVB version. Ideas that require you to manipulate data (Google, Dropbox, Facebook, etc.) are tech-heavy in the way that they work because of technology. You can’t deliver the solution without actually having a product. However, it’s important to know that Dropbox did get like 75,000 beta signups without having a line of code written, using a great demo video that showed people what they are trying to build.

So anyways, if you are not technical and want to build something, the best ideas are the online to offline (o2o) ideas, where you take what people are already doing offline, and bringing them online in a more scalable form. They are businesses that you can deliver the solution without a product.

Just some huge websites that are o2o – you can start any of these w/out any tech skills:

Vayable – Tours by locals
Exec – Book a house cleaning
Taskrabbit – Get help from your neighbors
Zaarly – Local service providers
Monster – Jobs site
Match – Dating website
Codecademy – Learn to code

So when do you want to start building a product? When you run out of bandwidth running that awesome business of yours.


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How to Make Users Love Your Product

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While designing a website is very much about the interface and how to “guide” your users to do what you’d like them to do or click on, a lot of it is actually creating an “experience”.

In this generation, we’ve moved from just having a usable and functional product, to a product that is not only user-friendly, but a product that connects with you – a product that you feel defines you, or you have feelings for.

Also, people don’t always do what you want them to do. Asking is not always enough to get people to do what you want them to do. How do you get them to complete their profile? or how do you get them to complete the sale on the order check-out page?


Below are a few tricks that can transform your website to an “Experience”:

1. Pictures of People: Put pictures of people on your website, and don’t just use any random looking stock images (that’ll actually make it worse). And studies show that not only pictures of people on your website convert better, but if those people in the pictures are looking towards the button or the Call-to-Action link/button you want them to click on, then that would convert even better. Read here: http://uxdesign.smashingmagazine.com/2009/09/24/10-useful-usability-findings-and-guidelines/

Baby conversion before

Compare this with the image below:

Baby conversion after
Where the baby is looking gets a lot more eyeballs than the one that’s just making eye contact with you. Turns out that e-EyeContact is overrated.

2. Mascots: Companies like Mailchimp have done very well by using a mascot that makes it really easy to remember them by, and hard to forget. Mailchimp uses well, a monkey. Twitter uses a whale. Hootsuite uses an owl. The list goes on. See more here: http://www.hongkiat.com/blog/21-excellent-examples-of-animal-as-web-mascots/

Mailchimp Monkey StartitUp


3. Gamification/Sense of Completion/Collecting Things: Human beings love to complete, collecting, and be rewarded. When you think about the structure of your website, you can think about creating gamifying elements like giving users badges when they achieve something.

You can also implement elements like rankinglevels (e.g. New Member, Senior Member, Guru Member, etc.) , positions, etc.

Case Study: Linkedin had a lot of trouble in the beginning to make people fill out more than just their name in their profiles. Then, they decided to come out with a profile completion bar that makes them want to fill out more. Obviously, they were wildly successful. They were able to get most people to fill out more information about themselves.

Linkedin Progress bar

Case Study 2: Nike’s Nike+ app on iOS and Android is an app that helps you track your running habit and progress. To make things “fun”, they also gave you an avatar or a doll that you can customize to look like yourself. The cool thing is that if you didn’t exercise enough, your avatar (which represents you), would get fat and that would make you want to exercise again just to keep your virtual self in shape.

Nike+ Mini

The take-away here is that you want to create an environment that encourages your users to take the actions you want them to take, because simply asking is not enough. In fact, as a manager who’s managed tens of people, the best way is not to micro-manage or “instruct” them to do what you want them to do (you can’t anyways), but to hack people’s behavior by cultivating an amazing culture, putting in an efficient structure, delivering clear communication, and creating mutually beneficial incentives to make your staff happy, prioritized, and productive – without much of your intervention.

Case Study (Mind-blowing – I can’t find the video for this one, but I’ve photoshopped an image to demonstrate): I watched this video in Tokyo once about how a Japanese boss mind-controlled all of his employees with little square stickers.

So, the story was that the stuff in the office were not being organized and put back after use. So, the boss was quite a neat freak and wanted things in order.

He first simply asked the employees (nicely) to put things back. Didn’t work. He then put in a policy of reward and punishment. Didn’t work either. In the end, what he did was he stuck on every office tool or object a white sticker with a red arrow on it pointing to its counterpart, which would be stuck on the precise location where the item should be returned after use (like below). When the object is returned to its original location, the arrow would point perfectly to the arrow on the table or on whatever piece of furniture.

The employees all responded that in the beginning they didn’t mind it much, but as time passed, it actually frustrated them that the arrows weren’t lining up. Sooner or later it became a habit and everyone was playing the “arrow matching” game in the office.

Japanese Sticker Hack


4. Mystery/Surprises: Kinder’s Surprise (Chocolate Candy) makes you want to buy a chocolate because you don’t know what you’re going to get. Actually, many websites do this. Other than mysterious, you can also be unpredictable. People like surprises.

Case Study on Mystery: HowAboutWe is a dating website where you’d post a date idea and whoever is interested can contact you to join you on that date (so dating based on mutual interests). However, while you are free to create a profile and post your date ideas, you cannot read any of the messages sent to you if you don’t become a paid member. So, they make it a mystery about who could potentially be your other half. It’d drive a single person insane if he/she couldn’t find out what they’re missing out on. Naturally, Howaboutwe is doing great, because their mystery element is off the charts.

Howaboutwe Mystery

Case Study on Mystery: HotWheels tested out having a Mystery car toy against just showing what the car is. Obviously, the mystery car sold significantly better than when they had shown the car. Even kids couldn’t handle the suspense.

hotwheel study

Cast Study on Surprise: For those of you who played Diablo 3, you noticed that Diablo 3 was a lot less addtive than it’s predecessor. Most people probably didn’t notice why, but the reason was because Diablo 3 was dropping too many rare and unique items whereas Diablo 2 didn’t drop as many. In Diablo 3, it became easy to predict when you will get a very good item, and in Diablo 2, it was actually quite hard to plan the same acquisition. Therefore, in Diablo 2, you could go on for months or even years because 1. It was hard to get great items (if you got one you’re special), and 2. You feel like if you stopped now, the next kill will drop a rare item – so you keep chasing after that carrot. Read here to find out why Diablo 3 wasn’t addictive.


5. Availability/Ego (Social Status): This is quite a well-known tactic, but also one of the best. However, what this really is, is actually just another way to stroke one’s ego. Everybody wants to be first or one of the few owners. It defines who they are. Making your service or product limited in quantity makes it seem a lot more precious and rewarding.

In fact, an experiment studied 2 groups of people that paid different prices on a product and found that while both groups bought the same product, the group that paid for the higher price enjoyed a higher level of satisfaction. Therefore, price is also an important element that creates a sense of “ego” for your customers.

Case Study: Hermes bags are perhaps the most expensive bags in the world. One usually costs over USD$10,000, and that’s if you can get on the waitlist. So, the truth is that Hermes is not a bags’ company. They are a confidence feel-good I’m-the-shit product company. They create bags that make ordinary women into superwomen. A woman is only as precious as her bag. Right?..Right?

Hermes bag scarce
If I didn’t tell you there’s only 10 of these in the world, and you’d have to be a superstar to hold one of these, would you still want it so badly?

6. Be Human (and Humorous): As mentioned, a key thing to do for your website or product is to make it seem like a “human”. If you’ve seen the Bicentennial Man by Robin Williams, you will see that in the film while most robots are seen as robots because they have no humanly emotions, the robot played by Robin Williams was different (humanly) and had emotions. Apparently, being human is so hot. In the movie, he was not only able to make 1 woman, but 2 women fall deeply in love with him.

And, whatever made him so loveable in the movie was his humor. If you can make people smile, laugh, or cry, then they will come back. They will not only come back, but bring their friends.

Bicentennial Man

Case Study: Apple is a master of emotional design and marketing. For example, the way you know if your Macbook is awake is be seeing if it’s still breathing (the breathing light at the front of the laptop). The Macbook is also a beautiful looking creature that makes people feel closely connected to them, and not just a machine that connects to the internet and serves your documents.

The Macbook makes people feel so emotionally connected, to the point that Mac users are much more likely to overlook or forgive a system malfunction than when a PC user encounters a similar malfunction.

So with that example, you can see that there’s a lot of things that are not just about designing an usable product, but also creating something that has a human touch to it. The trick here is to remind users that they are interacting with a living and perhaps humanly product. Not just a machine spitting out music, words, or images.

Macbook Breathing Light

Case Study: Google on default has a lot of dorky/cute features that make it actually quite a “humanly” search engine. It has a lot of hidden features like being able to make the interface into Startrek Klingon language. They also spend a load of time to make us laugh by creating great April fools pranks.

This is my favorite: 8-bit Google Maps

YouTube Preview Image

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How Rich People Convert Stress into Success

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Before we begin, I’d just like to mention that it’s been proven that everyone on earth is capable of resolving stress. The result of that is a happier life and healthier body. You’ll lose weight in the process too.

Stress is a killer
Stress is a killer

So…my father is a very successful orthodontist and businessman. He runs a villa resort, an orthodontics clinic, invests in real estate, and he also finds time to collect paintings and art works. Obviously, he juggles quite a bit of things at once. One day when I was crazily stressed out and was having a shitty temper day, he found the perfect timing to explain to me why all these years, I’ve never seen him stressed. It’s true, I’ve actually never seen him stressed. He’s always on top of things, and he’s always been the shoulder for everyone around him.

So, he started telling me that the way he handles stress is by actually just…handling everything that he needs to do immediately! He told me a simple truth, and it’s that people start stressing out because they keep holding off stuff they are supposed to do. And when things you’re supposed to do slowly pile up, you start feeling the stress. Dad is different. When he thinks of something he needs to do, he does it right away. That way, he is doing everything possible to get things done, even if it’s not immediately done. No matter how big of a problem you are tackling, you can always break it down to tackle things one at a time.

When you feel stress, everything just starts to get a lot more annoying. It’s like a fractional multiplier in your life that makes everything shittier than it is. Stress also makes you gain weight, lose your hair, and get cancer (it’s the culprit of cancer). When you feel stressful, your body body becomes sick and starts to deteriorate. It’s true. Stress is the worst sickness.

So, why do people put things off? 
1. You are afraid that you cannot complete the task.
2. You are lazy and want to procrastinate. Procrastinators.
3. It’s something you don’t have the power to influence or change.

And, the truth is that all the reasons above are a result of FEAR. The first reason is pretty self explanatory. And for the 2nd reason, people usually hold things off because they are afraid of facing an immediate challenge, so they choose to procrastinate. The 3rd reason is that you are afraid to look deeper into the problem which you are trying to solve. If you are willing to look into the problem, then you will discover ways to break down the problem into smaller things you can tackle on one by one (Circle of influence vs. circle of concern). Deal with things you have power over right now, and leave the stuff you can only be concerned about till later.

Circle of Influence vs. Circle of Concern
From The Seven Habits of Highly Effective People

So, since you keep procrastinating because of fear, if you can resolve fear, then that’s also the way to eliminate stress. And the key to resolving fear, *drum roll* is to intentionally face it and embrace it.

Do an exercise now. Think about something that you know you should do, but have been putting it off because of fear. It may be that you need to start charging your customers, you need to learn how to program, you need to email a famous person, or you want to ask the love of your life to marry you. Whatever it is, you’ve been putting it off because you are afraid to carry on with it.

Now that you have that list in mind, adjust your mentality to embrace it. Re-program yourself to embrace and actually really wanting to do it. Know that facing the things you fear in life will give you the most rewards in life. You desire that shit. Okay you get the idea. So facing your fears and intentionally going head-on and solving it first will make your life a stressful and fruitful one.

Fear your fears
Face your damn fears

Now you know the mechanisms of how stress creeps into your life. Take control of your fears, and you will live a happier and more prosperous life. (sounding very much like Confucius)

PS. Also, it’s been proven that if you change your mentality about stress, your body will become healthier, and you will lose some weight in the process too. You will just generally be a better person, physically and mentally.

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How to Catch a Technical Co-founder + How Paul Graham Asked Me to Build Pinterest in 2009

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We’ve launched StartitUp for just over 2 months now, and we are now helping more than 1100 startups build and grow, and we’re growing quite fast. However, it took me 9 years and 1-and-a-half failed startups to get here.

This is a story that I’ve never told before, but I thought I should share it just to document my failures and what I’ve learned from them.

PS: the post is quite long. Will take at least 5-10 minutes of your time :) If you don’t want to read about my awesome story, skip to the end and read the summary.

Wolverine vs. Pussy Chinese Dude (on Halloween)
Wolverine vs. Pussy Chinese Dude (on Halloween). Me on the right.

In the year of 2004, I had just graduated from University of Connecticut and had just moved to Palo Alto for my first job in the bay area. At first I was pretty oblivious with the scene there, as I had graduated with a major in electrical engineering back in UConn. I was still thinking hardware, and for people who did EE in college, you know that even though we wrote programs in Matlab or something, we really didn’t understand much of “software” in terms of internet or web applications that are responsible for the popularity of Silicon Valley.

Well, being in the heart of all the innovation, I soon started my path to become a fanboy in the startup business. First it was just TechCrunch. Then it was Mashable. Then I needed Google Reader to help me keep track of all the glorious battles that are happening on the internet. I had Firefox (no longer Internet Explorer – if you know what I mean) set up to open Google Reader right after I open Firefox.

The more news and acquisitions I read about, the more that ticked my inner entrepreneur. By 2007, after all lines of ideas I’ve written up in my notepad, I finally made up my mind to do something about it. Just to let you know, at this point, I didn’t know any functional programming, but I’ve had a few years of using Dreamweaver, so I can put together shitty and static landing pages.

So, I started out with my best idea, which was an add-on to extract the conversation between people on Skype and analyze it to deliver contextual ads using Google Ads in real-time. So lets just say if you’re talking about cars, then at the bottom of your Skype window you’d probably see a BMW or Jiffylube advertisement. I was so excited, I even wrote a patent about it. I didn’t have much money so I had to write the patent myself, which later was rejected by the USPTO (US Patent Office), to which I appealed but was rejected again. BTW the process took years, just in case some of you are thinking about it.

Also, a little secret is that I left my patent printed out on A4 30 pages stapled together at the door of an important Google senior executive’s doorstep with 10 dollars (trying to be witty and humorous), hoping that my patent would be read and I would miraculously get some kind of offer or funding for it. Well, I didn’t. You just kind of start to think there’s this kind of shortcut or fairy tales where you’d just make it big. Well, you don’t.

Anyhow, soon I started looking for a technical co-founder who could make the idea work out. I asked a friend (whose username is pimpnutz) who worked at Cisco, and he was pretty interested in the idea. So the division of the work was that I would handle the front-end design, and obviously he’d do the heavy lifting. We held weekly meetings at his house and would set weekly goals for the following week. So things kind of went on like this for a few months before I realized that we actually never got anything done. My friend finally told me that he was very busy at work, and he just got a promotion and he was making enough money so he didn’t have his mind on building a startup that would be a lot riskier. The truth is, I think the balance of responsibilities was kind of off, and I could feel that it wasn’t right as well.

I really didn’t blame him, because I knew that I really couldn’t offer him anything, and he would obviously feel pressured having to do all the important work while I kind of just kept piling on features and deadlines on him. So at the end, I realized that I needed to depend on myself, just in case shtf. I finally decided to pick up PHP. I downloaded a bunch of open source scripts like PHPMyDirectory, SocialEngine, and a bunch of other clone scripts to which I tried to modify to become what I wanted to build. Well, I didn’t learn it learn it. But I already knew which part’s which and I could copy and past or edit some small stuff to make the revisions I wanted.

So after that I kind of launched a lot of things on my own, to all which I got very little traffic for, and people were using it, but I just kind of drifted away because I couldn’t grow them any further, and they would kind of grow and then they’d just die.

I’ve also bought this proxy site (nomorefilter.com) for $250, which was making about $50-$80/month through Google Adsense. So I kind of played with that for awhile, finally getting a task of making money on the internet. But then of course, I didn’t make the website, so I kind of just bought that experience.

Anyhow, I learned a lot on my own just playing with different scripts and just reading a lot of stuff, but I wasn’t really good enough to build something on my own, or attract a rock star programmer to join me and build a startup with me. I really still didn’t have what it takes to build something.

Fast forward a year (2009), and I’ve moved back to Taipei, Taiwan – my hometown where I grew up. I then begun to work on Swagly.com, which was an in-image advertising network where you can tag products in images and then corresponding advertisements on those products would show up. Again, I also spent a few weeks writing a patent for it (which was also later rejected), and I started building up a mockup of the whole website, which included the landing page, the sign-in page, the inner admin panel, the widget that you would plug into 3rd party websites using a Javascript. So at this point I kind of had the ability at least to put together what my idea is so someone could build it. However, at the point, my design skills are still far from being worthy of mentioning.

Swagly's product flow
I made this with Photoshop, and you can see how shitty it was back then.

At this point, I started looking for a co-founder again. I asked around and I found this guy who a lot of people wanted to hire, and who actually is pretty good at programming. So what happened was that this guy actually did outsourcing for companies, and he was working on a lot of projects at once, so when I mentioned about my idea, he was interested but wasn’t sure if he would have enough bandwidth to build it for me. We had a great talk, and I had put out my best sales skills and asked him to partner with me, and that it’s so much better working on his own product than slaving away for other companies.

A week passed and we talked about it more, and he agreed to work with me. However, he mentioned more of an outsourced kind of partnership where I’d pay him around USD$10k to develop this, and he would own a very small part of the company (I can’t remember, but probably like 10%?). Okay, so we started to build Swagly.

So during the development, it was pretty hard for me and him because he had a lot of stuff he had to do for his existing customers, and as a startup, we couldn’t really wait for bugs to be fixed, or when we just needed a new small feature quickly. Also, I originally had envisioned the advertisement to appear IN the picture as a mouse-over popup, but my co-founder mentioned that it was too difficult or too much work for his team and we’d rather just deliver the ads in a widget box at the bottom of the image. Well, I thought okay, as the MVP that should be fine. So due to me not being able to do more on that end, I had to agree to the external widget that took up more of the publishers’ real estate (which customers don’t want).

So what happened was that we spent like 3-4 months building a demo that wasn’t scalable. Something we could only use to show to people, but it wouldn’t be good enough to deploy to customers. I actually didn’t know the app was so inflexible until we had gone into details of their reporting. My bad too. Having no choice, I decided to ask the team to scrap the demo and restart the whole project to make it into something that’d scale. I did this because I actually was sorta already talking to customers, and we had this validated and we needed a working product, no longer just a demo.

After another 3-4 months we had something sub-par but at least we could show it to the customers that I have been talking for months. So actually at this point, I was doing a lot of customer development. I was actually talking to MySpace, MTV, and some major entertainment blogs on partnerships, and most of them were pretty excited about using it, because they knew they needed a way to monetize their images, or just simply monetize.

Swagly even got onto Techcrunch on an occasion when they came to Taiwan and picked out only 6 teams. So that really helped us too. However, we got thousands of visitors that week, but the traffic quickly dropped off, leaving us with a forceful disappointment. We even had many investors call us who were interested in investing in us, but I turned them down because I was a firm believer of bootstrapping until proven product. Bad decision on my part as well.

So okay, the product was ready, and I called all the customers again, and they were excited to see the product. We passed the products over to the customers to ask them to test it out. They liked the idea, but there were many thing they wanted changed before they could use our widget/plugin. So I had sent the request back to the team, but then the team was too busy working on other projects that would actually make them money, so my customers had to wait. The wait took weeks, and even though I had kept the customers updated weekly, by the time we had the features fixed, they were pretty lukewarm about the idea already. So okay, I lost all of my customers as they saw we really couldn’t respond fast enough.

I never brought this up to my co-founder or the team because I thought this really was what I chose to do, and I didn’t have the skills to build a product of this scale. It was really my fault.

It’s okay I thought, my then co-founder and I got an invitation to go interview with Paul Graham at YCombinator in 2009. They gave us 15 minutes, and it was just me talking even though my co-founder was there because his English wasn’t good enough to be helpful in the interview. So I think PG actually liked our team, but he was very doubtful about the idea (he was right). He even asked to speak to us again for a 2nd round, an opportunity that nobody else in the room got. The 2nd time he basically told us that they like us, but asked if we were willing to pivot and work on a project that could let people post stuff that they like on their personal catalog and show it to people because it somewhat overlaps with Swagly, and we could use our existing database and program to build that. Pinterest anyone? There you go. PG asked me to build Pinterest in 2009. To my utter stupidity, when he asked me what I felt about that, I responded that I obviously felt a bit disappointed that we had to change our idea, but if possible we’d still like them to reconsider our idea for the bootcamp.

Later in the evening, we got this email from Paul Graham:

“I’m sorry to say we decided not to fund you guys.  It was a hard decision, because we liked you a lot.  The problem was that we didn’t buy into your vision of having users tag stuff in their personal photos, and when we tried to talk you into the alternative plan of more deliberately organized shopping guides, we could tell you weren’t really into it.  We’ve learned it doesn’t work to push people to do things they’re not genuinely excited about.  But we definitely thought you have the qualities to be good founders, so we’d like to hear from you again in the future if you have new ideas or continue to evolve this one.”

(Actually, as I went back to the email to copy and paste it, I realized that PG had intentionally formatted the width of his email to be narrower than the usual full width so it’s easier for people to read. Wicked.)

At that time, I was like…oh well, what does Paul know, and then I kind of went home happy that it’s a good thing that I didn’t go join an incubator that didn’t see how awesome my idea was. Boy was I wrong. Well, I later learned that you should always be open-minded, and always be open to pivots. Also, ideas are bullshit. It’s really the details and executions that the team brings that really contribute to the success. Fuck me.

Okay, so we went back to Taiwan, and I was running out of money. I was already quite sick of the whole Swagly situation where I had no control over it, and I was just kind of waiting for things to happen. I decided to shut it down, and just cut my losses after about a year and a half of being a complete retard.

I picked up a new job (2010-2011) at famous server manufacturer, a competitor to the company I was working for when I first moved to the bay area. Anyhow, at this point, I was more modest (I still need to work on that), and I was learning a lot about cloud server infrastructure on the job, and I even built a 2-node cloud cluster in my room using Eucalyptus that was basically the same as what Amazon’s AWS cloud hosting is using. I also had time and gathered my patience to learn PHP with CodeIgniter as the framework. I also read a couple of books on Java, and Ruby on Rails. I was really learning more than ever. I also became a SEO Jedi by learning from this SEO black hat/white hat master who owns one of the most popular SEO forum on the internet.

So actually during my venture with Swagly, I actually just came up with the Lean Startup Methodology on my own too. Obviously I didn’t call it anything, but in short, I knew the right thing to do is the direct opposite of spending a shit load of money to hire a bunch of engineers to build a product that you don’t know if people want. So, at that point (2011/2012), I was actually quite well-learned. I spent years doing sales and management. I finally know how to code, and I do a decent design using HTML/CSS/Bootstrap. I know how to build a startup from ground up, and I could bring traffic via SEO or growth hacking.

During the years of working at the server company, I also mentored a few companies, where Pinkoi, etsy in Taiwan/Asia, is the most notable startup that I helped, and who was generating more than 100,000 uniques per month.

At this point I think I was ready to start again.

In 2012, I picked up the position as the CEO of National Division over at Groupon Taiwan, and I did that for about 8 months before the entrepreneur urge took over me again and I decided to leave and build a group dating website. I was pretty close with some of my direct reports, and I would share my startup ideas with them. So one day Harry, a sales who later became my close friend, told me that his brother (Yitao) is also thinking about building something too, so I quickly scheduled something with him to see if there would be a good match. So just to mention, at this point I already have a semi-working prototype of this group dating website that I built from scratch using PHP.

Anyhow, we sat down and we both had the same end goal in life, which is helping people succeed and revolutionizing education. Yitao wanted to help people in Taiwan learn English because he feels that that’s the barrier to learning for Taiwanese people, as the best content are all in English. For me, I have always been a shitty student because I never thought the kind of education I was getting was suitable for me. I believe that everyone learns differently, and all are all meant for different things. I don’t believe in the education system that we have in place now, so I want to help people discover what they want to do, and help them get there.

Anyways, we ended up partnering up.  I would be the CEO, where I would do all the front-end design, marketing, content-creation, SEO, growth hacking or what not, and Yitao, the CTO, would handle all the back-end programming and IT administration. That works out pretty well. We first built the group dating website (hellolets.com) for the Taiwan market. Anyhow, the problem was that while people LOVED the group dating idea, most users couldn’t get their friends to wing them.

After that, we decided to pivot into a dating website just like HowAboutWe, where the singles can post event ideas and other singles who are interested can contact the event creator to go on a date. We then encounter the notorious problem of the growth rate of horny guys > growth rate of female users, where the guys would just spam every girl on our website to have one-night stands. That was a problem because the rate of horny guys scaring away our female users away is much higher than the rate of our Google Adwords campaign or our blog is bringing in new female users. We were growing a lot of users, but to be honest we wanted to solve the problem of girls being spammed. We could do it by making users pay, but Taiwan users are usually quite frugal and would just resort to another website where they can continue their spamming.

So we’re like fuck this, and we pivoted into Hellol.com, which is a singles pinboard where you’d play matchmaker and pin your single friends onto the board or introduce friends from within 3 degrees away to each other. Singles can just come here and get to know someone too. The cool thing about this is that since everyone you see are someone that you are somewhat connect to, most people would probably not try to spam.

Anyways, fast forward. One day I was just kind of thinking about what else we need to do for Hellol in able to validate, grow, and just do all the right things. I had all my bookmarks open, and Evernote open. I was looking through all the notes and realized that it’d be really nice if we had this kind of guide where it ordered everything chronologically in a way where you’d can follow the guide and get the most solid advice and tricks to build and grow your startup. I told Yitao about this, and we were just both super excited about this because naturally, this is actually what we both want to do. Helping people succeed and empowering everyone to be the best version of themselves, which is exactly what being an entrepreneur is.

Summary is: So, at this point, I’d like to say that while it didn’t work out with my first startup, I’d say that I have learned to be a solid entrepreneur from all the things I did wrong in the past. I’ve taken everything I’ve learned in the past + learned everything I could from all the best startup experts and applied them to StartitUp – which I really hope can help those that are just starting out or trying to get back on their feet.

Successful startups are the result of a series of failed attempts. Angry Bird was Rovio’s 52nd game. It took Pinterest 2 years to get where they are now, and it took JK Rowling 7 years to write Harry Potter. If you’ve faced failures, do not fret. Failures are just the process of getting there. If you are determined, it’s about when, and not about if.

Anyways, sorry for the long post, but I hope you enjoyed it. Now, as someone who’s gone through many failures and have learned it the hard way, I’d like to make a few points.

About finding a technical co-founder:

First of all, I am in no way suggesting that you cannot be a lone founder who doesn’t know how to code. We’ve seen enough founders like that succeed to know that it is doable. The problem with my case was that I didn’t communicate correctly, and I had the wrong expectations. I probably should have found a full-time tech co-founder when I had the MVP build, and was already talking to all these huge companies for partnerships.

Second is that while I am in no way suggesting that you need to code to become successful, but you could try to learn some so that when you are talking to your co-founder, you can let him/her have a piece of mind when you know what he/she is talking about. You should also be able to give good technical advice when he/she is stuck. Coding is cool. Sitting in front of your laptop is lame, but creating something is cool. Coding has become so easy now, and the interwebs has everything you need to learn how to become a coder. Ruby on Rails or Bootstrap are so easy they should be illegal!

So, I’d say, if you want to learn, use the Michael Hartl’s Ruby on Rails tutorial. Don’t use it. Just read it, get the general idea. Ask a friend to help you. Sometimes having a friend explain to you what’s what will make your learning 10X faster. And if you want to program something, don’t follow the tutorial. Actually start coding on your project, and just read the parts that you need. That’s the proven best way to learn.

Therefore, the secret to catching a good tech co-founder is not to find or try to convince them, but to attract them. You need to have the skills that compliments them, or also be a coder that they can depend on as well. The important thing is not to think you’ll get lucky and land an awesome tech co-founder that will do all the work for you. Look to be good at front-end design, or marketing, or just something that can be a big contribution to the startup.

We’re here to help startups around the world succeed, and we’d are trying to be as helpful as possible. If you need anything, please let me know! at ed@startitup.co. Peace out.

Update (4/25/2013): Read this post on how to build a business as a non-technical co-founder.

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12 Essential Startup Traits of Successful Startup Leaders

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Sometimes the key to building a successful business is not about what you do, but who you are. It is who you are that drives you to do what you do. Today we’ll reveal 12 essential traits that powerful leaders share.

Jeff Bezos the awesome entrepreneur
The awesome entrepreneur

1. Be open minded – Entrepreneurs and smart people can be close-minded at times, because of ego. However, one needs to understand that succeeding at a startup has little to do with being smart, but a lot to do with being able to understand what customers need, and having a insatiable curiosity. Listen to people, and learn.

2. Don’t keep your startup a secret – Talk about your idea as much as you can. Don’t be afraid to share your idea with other people. Nobody will steal your idea. You are risking too much for not getting early feedback from people. Startups die because of not not getting enough feedback to learn and grow. You should always worry about getting More people to know about what you are doing. Not less. The details are what makes it work or not work.

3. Stop developing features when stuck – When stuck, many startups feel that it’s just because they lack features, so they mindlessly keep developing features. When stuck, ask customers and ask them what they think. It’s better to fine-tune your primary feature and have more people use it then trying to come up with “side” features to drive usage.

4. Investments has nothing to do with your success – Like the stock investor. A company many people invest in doesn’t mean it will succeed. The success of a startup has nothing to do with investments. In fact, 76% of the startups that were acquired in 2012 did not get any funding. In fact, when you get money from investors (not incubators), it’s very easy to fall into a pressure loop.

5. Your early hires will make or break you – If you do hire, the early hires are so important. This cannot be stressed more. If anyone on the team feels something wrong in the gut, then do not hire the candidate. Google hires this way. If anyone on the team feels something is wrong, they don’t go forward with the hire.

6. Decide everything on growth – If a feature or problem that requires building has nothing to do with growth, then put it on the backlog. When you put all the focus on growth, what you need to do suddenly becomes very clear.

7. A startup is a long journey – The untold stories of Angry Birds, Pinterest, and Twitter are that they all were operating close to 2 years before they became marginally relevant. It’s very very seldom that a startup comes out with a feature that suddenly delivers overnight success. If you have already validated your problem and solution, then stick with it. Conserve money, because this is a marathon, not a sprint. Do not pivot too early thinking the solution is wrong. It could be that you are not getting to the right customers, you don’t have friendly onboarding features, some tweaking is needed, or one of many reasons.

8. Be realistic – There are many success stories like one by Mint, or legends like Steve Jobs. We can all read their books, but the truth is that their experience has limited upsides to our abilities to perform in a startup. Success is based on luck, timing, the idea, the team, the connections you have, etc. So it takes time to get all of those together.

9. Communicate – Everything should be organized and communicated. If you have a co-founder, make sure everything is transparent with him/her. Make sure the responsibilities are established, and the amount of resoures from all parties are understood. Co-founders are like your spouses. Work the relationship like a marriage. You guys will argue, but always understand that everyone just want things to work out. So never hold grudge and let the other person know why you want to do or say something.

10. Be curious – What people call intelligence just boils down to curiosity. – Aaron Swartz. Entrepreneurs are stapled by their massive CQ (Curiosity Quotient) instead of IQ. When you are curious, you are powerful.

11. Never let it get to you – During your startup venture, many things will go wrong. You will just make too many mistakes, because every startup does this. You might send out a mass email with mistakes, hire the wrong people, have a huge bug in your product. The point here is that, you’re the only one making such a big deal of it. Learn what you did wrong, and move on.

12. Failing is not shameful – Failing is a part of being an entrepreneur. Most successful startups you have heard of have failed many times. The one you hear about is probably their like 4th or 5th project. Failing is great, because you can learn a lot of things about what you did wrong so that next time you will do better.

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The Perfect Pitch to Get Funded

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This pitch template is derived from one of the top incubators/accelerators in the world, Techstars. You can watch some of them here to get a feeling of how they’re like. Before you go on with filling out the template, please read the information below carefully, as they contain the difference between a winning pitch and a boring pitch.

The Perfect Pitch
The Perfect Pitch

Things to follow:

1. Keep your pitch under 5-7 minutes. This is a industry standard.

2. Your pitch will take a lot of practice and effort to perfect. Incubators spend months preparing startups for the final pitch, so you can imagine how important it is. After you have a product and some traction, the pitch is the only thing between you and the money.


Some great tips to remember:

1. Most importantly: Postureconfidence, and passion is actually worth more than the content itself. 80% style, and 20% content. Lean forward toward the audience when you speak. Use the POWER POSE – spread your arms out, and let them feel the power – scientifically proven.

2. Great pitches start out with a personal story that they can relate to.

3. Make your language succinct and precise – with keywords that resonate with the target audience. Use the UVPs (unique value proposition) and benefits you’ve developed through our guide.

4. Make your presentation extremely easy to understand. Each slide should only have 1 message and 1 thought.

5. The more images in your presentation the better.

6. Create credibility at the beginning of your pitch. People may listen to you, but they are not absorbing what you are saying until you tell them why you are the right person to do the job. Tell them your experiences, expertise, and passion if that will help them trust you.

7. Be as specific as you can. Don’t give the audience rough estimates, or broad ideas. Tell them exactly what you mean. How many days, how much money, how many people, etc.

8. Despite only given 5 minutes, you need to speak slow, because that puts more gravity onto what you’re saying.

9. Make eye contact with the audience. Scan through them and look at each and every one of them in the eye.

10. If possible, always include evidence for validation, traction, or position feedback. When you present these, you immediately win over their attention and trust.

11. (SECRET SAUCE) – End your sentences with words sounding downwards.Most people talk like they are asking a question. That makes the audience feel that you are not confident. When you sound the words downwards, it sounds more certain and they will believe what you are saying.


THE PITCH

Introduce the Team

This part is actually very important, but most people actually tend to skip this section. In this step, by introducing you and your co-founders and your company, you are able to help the audience feel like they are more familiar with you, or they know you, and it makes them feel more comfortable hearing what you have to say.

Things to say:

1. I am X, and I am here with my co-founders Y, and Z.

2. We are X (Company), and our mission is to help Y around the world do Z.


Give them an Overview

This is also extremely important, but one of the most overlooked section. This section is important because you give them an outline of all the information you are going to give them, so when they do get it, they will be able to connect the dots.

Things to say:

1. We are making product that does X.

2. Then we’re going to let you know why our customers are so excited about our solution.

3. We’ll also let you about the market opportunity, where we’re at now, and where we are going.


Describe the Problem

Over here you need to describe the problem in layman terms so that everyone in the audience can understand. Even if your problem is a commonplace one, you shouldn’t assume that the audience knows what you are talking about. Or, even if they know this is a problem, they don’t know how big of a problem it is.

The goal here is to help them relate to it, and let them know how HUGE and painful of a problem it is, and people are begging to have it solved. Also, many problems are illustrated using stories, as stories activates people’s brains. Tell stories!

Things to say:

1. What are the problems. Point them out step by step.

2. How long this problem has been around. Is it a new or an old problem?

3. Mention how it’s been around and no one has solved it. Mention a bigger picture of what the problem causes.

3. Mention your target customers. Include a picture of the target customer, and give him/her a name.

4. Tell a story of the target customer’s day addressing how the problem plays a role.

5. Describe how that problem intervenes with the customer’s life.

6. How painful is that problem?. Is it time wasted? Money wasted? Pure frustration?

6. Emphasize so that the audience can relate to it and feel how bad it is.

7. Use the right keywords that yor target customers resonate with. People’s brains are wired to respond to keywords, and not descriptions of the keywords.

8. People listen to stories, not features or benefits. Stories will help them remember your brand.


Size of the Problem

Most people will not know how big of a problem it is before you tell them. Tell them why they should care by letting them know that this is a problem that affect tens of millions of people, and not 100 people.

Things to say:

1. According to study, there are X people in Y country/world that has this problem.

2. Here’s the data to back it up. (Optional)

3. If you ask 100 people out of the X people, at least Y% of those will tell you they have this problem.


The Solution

Now that you have imprinted the pain into the audience, now is the time to let them know that you are here to save the world. In this section you tell them a high level of the pitch of how your solution solves the problem. Mention some of the benefits that addresses the problems, and then go into a short demo user case.

Also another thing is that often times the best way to make your solution relevant and understandable is to put it into perspective of how much time or money is saved because of your solution, because in the end those are usually the things any product does.

Things to say:

1. Tell them how your solution solves the problem.

2. Mention 2-3 benefits of your solution that strengthens your claim.

3. Transition into your demo, showing them how it actually works. Only show the process of the key features. The shorter and more to-the-point the demo is, the more powerful it is, as th audience can immediately see how easily your solution can solve the problem in question.

4. If you don’t have a functioning demo, use mockups to put together a demo.

5. Use a video or screenshots. Do not depend on the internet working for you.


Who Has This Problem?

Now that they know what the problem is, the size of the problem, and your solution. It’s now to go into who exactly has this problem. You want to also explain the buyers’ motivations and their economics.

Things to say:

1. “Our customers are X, and these are the people who waste Y hours and $Z daily because of this problem.”

2. “These people have already been spending $X on alternatives hoping to solve their problems, but they have not been able to.”

3. We are planning to price our solution at $X.


Competition

Every company has competitors. You cannot possibly imagine people will believe that such a big problem doesn’t have a solution yet.

However, at this point, since you’ve been following the flow strictly, you have their attention and they will hear how you are different and better than the existing alternatives. If possible, explain how your customers are currently using the alternatives, and how much time or hour they are wasting.

Things to say:

1. Quickly go through the alternatives.

2. Describe how they have been going about solving the problem wrong.

3. Tell them something you know that they don’t know

4. Then explain how your solution is different and better.


Traction

This is actually where you really close the deal. This is where you get everyoe excited. Before this, everything you’ve said before are all according to you. If you can show your traction, then you can easily back up everything you’ve said in the last few minutes. Once you show screenshots or any evidence of customers approving of your solution, whether by purchase, by endorsements, or by feedback, your crowd will know that your solution is real, and are ready to throw money at you.

Things to say:

1. Have you already gotten users? how many?

2. Show proofs of how customers have validated your solution. Either by screenshots or other evidence.

3. (Optional) Show that users love your solution, and make it obvious they couldn’t find a solution elsewhere.


Market Opportunity

Now that you have them in the zone, let them know how much money exactly can you make from this venture. Let them know of the bigger picture. Include real research data so they can believe you (If you haven’t already provided this in a section before this). Your estimates should be very realistic. Do not inflate it, as your audience can call you out easily.

Things to say:

1. How big is this market? Site source of the data.

2. Perhaps use existing companies and the market share they own as a reference point.

3. How big of that market can you own.

4. How much money do you plan to charge.

5. How much revenue does that translate to.


Present the Team

Investors often care about the team way more than the idea. You’ve already presented to the public how you are going to solve the problem. How you are going to tell them that your team has the capability to execute what you have covered.

Things to say:

1. Show pictures of the team.

2. Introduce roles and previous experiences for each of the co-founder. Try to emphasize the experiences of skills each co-founder has that addresses building this solution. Mention years of experience.


Tell Them What You Need

Usually pitches are about trying to get funding. However, here you should also include what kind of help you will need in the next step of your company to grow. Usually startups find a lot of help when they openly discuss about what help they will need for your startup.

Things to say:

1. How much money are you raising, how much have you raised, the timeframe for raising it, what is that funding going to cover, and for how long is that money going to cover.

2. Ask for help on early adopters, mentors, industry insight, introductions, referrals, etc. Basically ask for anything that you need. It’s very likely someone in th crowd will have something for you.

3. Other action items that may interest the crowd.


Close it With Style

At this point, we’re basically done with the presentation. So, here is a very important section you want to deliver to help the audience remember when they wake up next morning, or when you call them a few days later to ask for some help. Here you summarize everything you’ve said in the last 5 minutes so they can remember it in a memorable way.

See this as Steve Job’s “One last thing”. As insignificant as this is, this is how Steve Jobs makes everyone feel that magic.

There are a few ways you can close:

1. Go point by point to summarize the whole presentation in a succinct and memorable way. Try to put in all the main points. For instance if you have traction, then always mention traction as one of the points.

Example:

“So today we talked about 3 things.

1. We talked about how 85% of startups are failing, and they are failing for many reasons that can be avoided.

2. Our step-by-step guide has proven to solve this problem for many of our startups, and we’re continuing to grow at a fast speed.

3. We’ve already gotten 1000 startups within 1 month, and we are still quickly growing with 30% of registered startups going through our guide and seeing results.”

2. Explain the problem again, then the solution. Put all of that into perspective and a memorable way. End it with an invitation to contact you and your contact information.

Example: “So, for these last 20 years of internet startups, we’ve seen more than 85% of startups fail. If you want to start a startup, it would’ve been very frustrating to get all the right resources and tools. It also would’ve been really hard to know what to do, how you do them, when you do them, and what else you can do.

That time is over. StartitUp is the definitive startup guide with all the resources and tools you need to build a successful startup. StartitUp puts every entrepreneur or wantrepeneur at the same level and knowledge as the guys who have been doing this for years.

If you’d like to learn more about our guide, or if you’d like to contribute to the guide. please contact me at ed@startitup.co

Other tips:

1. Communicate passion and drive. Tell them you guys have been growing, customers love us, and you think you guys are going to make it huge.

2. Invite the customers to speak to you after the talk.

3. Leave your contact information – phone + email.

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To Charge or Not to Charge & Your Pricing Strategy

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This is probably the #1 dilemma startups encounter in their early stages. This is such an important strategy not only because you want to make money, but because charging adds perceived value to your product almost immediately. But on the side, in many situations, keeping your service free will help you acquire users a lot quicker. However, this first depends on what type of startup you are operating. In this article, we will help you determine whether or not you should charge, and how you should charge.

To Charge or Not to Charge
To Charge or Not to Charge

Type of startup
1. SaaS (software as a service)

If you are operating a SaaS, then we can assume that your startup can create immediate value for the customer. You don’t depend on users to help create your content, (Unlike social networks, dating websites, eCommerce marketplaces, etc.) you create your own content, and the customers can achieve what they want with your service no matter if you have 1 user, or 1 million users. And since the operation of your service doesn’t require user-created content, user growth is not your #1 priority when you are thinking about the value of your service. However, having a lot of users definitely do give you a snowball effect of referrals, which in turn gives you more users and thus revenue.

Example: Mailchimp – They are an awesome email newsletter service where you can upload the list of your users, create beautiful email templates, and immediate send out an email campaign to everyone on your list, and later be able to get details reports on open rates, click rates, demographics, who unsubscribed, etc.

Mailchimp - an example of a SaaS Service
Mailchimp – an example of a SaaS Service

Pros:
– You don’t depend on users to create content in order to make your service usable.
– You provide value on day one.
– You can charge on day one.
– You can charge by subscription/month, and not by per transaction or advertisements.

Cons:
– Need to create content yourself.
– Usually less users/traffic than community-based websites.
– Lower barrier to entry – service or content can be easily duplicated by competitors.

2. Community-Based Websites/App – Social Networks, Marketplaces, Forums, or any service where the value is user-created content

I doubt anyone would use Facebook if it didn’t have any users on it. I’m sure nobody could shop at eBay too if there weren’t millions of sellers and products on eBay. If you are operating a community-based website where the value and content of your website is created by users, then it’d make sense to keep it free and try to upsell your users on value-added services or products that they would be interested in. Or you can start charging them after you have reached critical mass to make your service more valuable. It’d be very hard to charge users to use community-based websites because if you make them pay in the beginning, then they would not be willing to join, and thus participate – which is the core of any community website.

Community-Based Websites
Community-based websites

However, this is not to say you should never charge for it. There are cases where dating websites kept it free in the beginning until they had a lot of singles in their database to make it attractive enough for people to use. They then started charging people for it because they already had enough users to keep the service going, and they made sure that their service helped people find dates.

Charging for dating services is very popular because it’s the best way to prevent users from spamming each other. By not making it free, dating websites filter out users who are just spamming for 1-night stands and keep the good ones that are committed to finding true love. So as you can see, you can also charge the users in your community if you have a good reason for it, and you have enough users to keep it going. In this case, charging users actually became a mandatory feature that made their platform possible, otherwise all the users would leave because they would be receiving inappropriate messages from spammers.

Therefore, charging is also a great way to filter out half-assed users and keep the ones that are serious about your service. In other words, the users that you lost after charging, could be ones who actually don’t need your service. Pricing is such a badass strategy!

Pros:
– Once users start joining, the snowball effect is obvious, so you can somewhat lay back and let the ecosystem work and grow on its own.
– Generally you have a larger user base to monetize.
– Economy of scale creates a high barrier to entry and unfair advantage.

Cons:
– Without users, the service is not usable
– Monetization choices relatively limited compared to SaaS – advertisements, virtual goods/money
– Cost of acquiring users is very high
– Some communities can be hard to manage.
– High server cost because there’s a lot more traffic.
– User loyalty is lower.

How to charge:
So, if you are operating a Saas, you can pretty much start charging with the 30-day free trial package. The users who don’t end up paying are just the curious ones who signed up to check it out, but probably really never had any use for it. So, don’t see it as you’re losing users, but as “filtering” out incompatible users. 

If you are a community-based website, there isn’t really a norm on how services should charge. There are many that have monetized on plans like 14-day or 30-day free trial with monthly subscription, no trial – charging on day one, by transactions, by advertisements, etc.

Pricing Strategy
Pricing Strategy with a “Decoy” Plan

Also, the price of your service will also affect how customers perceive value in your product. If you have a great service that competitors are charging for $99, but you are charging for $39, then customers might think you have an inferior product – even if your product is better. However, that’s not to say you need to match what your competitors are charging. The trick here is to study how your competitors are charging, and create different tiers of pricing plans where you highlight the plan you want to sell (like the one above, which even has a $199 decoy plan on the right – which is just to create comparative perception that the other plans are really cheap).

Charging and the price of your service not only adds perceived value, but it also makes customers more serious about your product since they paid for it and feel the need to make use of it. This leads them to use your product more often, which helps them realize the value that your product creates for them, thus becoming a long-term customer. This also creates enthusiasts that help you evangelize your product, which leads to more referrals and users. As you can see, pricing is actually an important product feature than just a pricing strategy.

See the links below to get more tips on how to structure your pricing strategy.

Our Pricing Strategy Tutorial:
http://startitup.co/guides/742/pricing-page-optional

Some pricing strategy articles I think are great:
KISSMetrics Pricing Strategy
http://conversionxl.com/pricing-experiments-you-might-not-know-but-can-learn-from/

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SEO Explained in 2 Minutes

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(This is an article I wrote years ago. Just thought I’d share it here)

Those of you who that are just starting out and want to know more about SEO or online marketing, I can feel your pain.

Companies nowadays create products and then become confused about how to market their products, or who their potential buyers are. A rule of thumb is, you create your company and product around your main SEO and marketing strategy. I will walk you through this.

The reason why SEO is so important is not because it uses shady tricks to place your website on the first page of Google’s search results. The reason is because to do good SEO, you must have a very clear scope of what your company does, who your customers are, what they look for, and how to find these customers. Don’t these information answer to any company’s core philosophy?

If you’ve read a book called the Art of SEO by the founder of SEOmoz, you will see that he now equates SEO to online marketing, and online marketing equals to marketing, so SEO = Marketing.

What is SEO

To explain this, SEO includes:

1. Onsite Keyword Optimization: Populate your page with targeted keywords that your customers care about. These will have to be relevant to your products. By doing so, this will also help optimize the conversion rate on your website. Also, it’s proven that customers’ buying emotions are triggered by keywords. If you use the right keywords, which are ones acquired after research, customers are much more easily converted.

Furthermore, your targeted keywords will also help Google or any search engine understand what your website is about, and the search engines will show your website to users that are searching for those or related keywords.

This is just also like in the real world. When you talk about what you know (and you seem like you know what you are talking about), that’s what people will know you as, and will refer to you when someone asks about something you can help with.

How do i do this?

Let’s say that you are operating an eCommerce store that sells motor oil, and you want potential customers to find you. To do this, you can write up each of your page’s content containing keywords or keyphrases that your potential customers search for (which would require research. Use Google Adword’s Keyword Planner Tool to find out what your users are thinking about/searching for).

keyword-planner

For instance, when a customer is searching for motor oil to purchase, the query that they input into Google search might be “best synthetic motor oil”. Knowing that’s what they search for, you can use such keywords in moderation on the page (not necessarily the home page) that you want Google to relate that keyword to. So, in fact, each page on your website could be optimized for different keywords. Many people create separate pages for different types of buyers.

Also, each website should have a portfolio of keywords that you target. If you are small, start with 5 or so keywords. You can target 1-2 short tail ones (2-word keyphrases), and 3+ long tail ones (2+ words keyphrases). When you have more budget and manpower to create more content with other keywords, then you can start expanding your keyword portfolio.

2. Manual Backlinks: You must go to the places where your customers frequent, and participate in discussions and provide links to your solutions when applicable. This is done in forums, twitter, blogs, and social networks. This is kind of like social customer service. This is also now a part of growth hacking. By creating backlinks on different channels, you not only better your site’s SEO, you also trickle users to your site using those same backlinks.

Note (Updated 11/22/2013):

When you write your response on these platforms, make sure you are not spamming your targeted keywords as your links’ anchor text (the text of the link, like this -> this is an anchor text). Back in the days, people would spam keyword anchor text (like this -> best synthetic motor oil). Since Google’s Humingbird update, Google are now penalizing excessive backlinks with keyword anchor text. Back in the days, Google used to give a lot of SEO juice to backlinks containing targeted keywords, so many sites abused that, which resulted in a lot of low quality websites making it to the top of Google’s search results.

If you think about it, it’s pretty unnatural to write links’ anchor text using keywords. What’s more natural is using your company’s brand name as the anchor text, like StartitUp or startitup.co, instead of Start your online business. However, that’s not to say that you can’t. It’s beneficial for you if you do it in moderation, for instance if you want to use the title of a blog post as the anchor test. The % of backlinks with keyword anchor text should be the minority of your backlinks.

3. Content Marketing: You should provide insightful and easy to understand material such as podcasts, videos, white papers, simple tutorials, or blog articles to help your customers solve their problems. If you are successful in providing authentic and original content that helps your potential customers, other websites will in turn link back to your website, increasing your website’s merit and authority in the eyes of Google Search Engine.

Not only will Google trust you more, this will give you Thought Leadership or Mind Share points so that when your customers are thinking of a solution, they will think of you. This is also called Content Marketing. Every big corporation or successful startup follows this. In fact, many believe that content marketing is now the best method to do SEO. The keyword tips given in #1 should be used here as well.

4. Page Rank: You should get external websites to link back to your website. This tells Google that your website is popular and trustworthy (PR – Page Rank), because when a website links back to your website, it’s kind of like someone’s talking about you. The more people talk about you, the more popular you are. The more trustworthy your referrer, the most trustworthy you are. Also, the links and their anchor text that they use to link back to your site or pages also matter. The “merit” ecosystem is just like what it’s like in the real world.

There are a lot more details points, but the 4 points above easily points out why SEO is not only important, but has also replaced marketing in our modern world. Also, if you do these 4 points well, you would have already covered 90% of your SEO efforts.

If you’re interested in learning more about SEO, do shoot me an email at ed@startitup.co.

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Why Did We Build The Step-by-Step Startup Guide?

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So one day, we’ve just begun brainstorming for Hellol.com, and while we were preparing, I was feeling pretty frustrated. It was frustrating because we were just kind of doing things or thinking of things as they go. We have to do everything all over again. We have to remember what we did right, and what we did wrong. Coding and all is all quite easy. Yitao does the back-end, and I do the front-end. However, what’s really hard is all the other stuff. How do we validate our MVP again? Where can we find our early adopters? How should we create our interview script? How about content marketing? When and where do we launch our MVP. The list goes on.

I’ve done it before, but where did I put all my notes again? I have a bunch of bookmarks of great articles from the internet and notes I’ve taken while reading great startup books by Eric Ries, Ash Maurya, or Steve Blank, but they’re just all scattered everywhere. I’ve read and saved great growth hacking trips from people like Mattan Griffel, Noah Kagan, or Andrew Chen. And while each piece of information is great, starting a startup is requires knowledge from all of those experts.

Information Overload
That’s what I feel like when I’m going through all my bookmarks and Read Later saves.

Also, we needed a way to keep track of what we’ve already done, and what else can we do to make our startup more awesome. We didn’t know if all the tricks and knowledge I’ve saved are still current. All those frustration piled up and that kind transformed into an idea. 

So…we have a few problems here:

1. We do know how to start a startup, and the team does have prior experience to building and growing startups, but most of our actions are more like reactions, and not proactively planning on action items before we realize we need something.

2. We do have these knowledge and tips saved somewhere, but we’d have to look at them separately. Also, the collection of them is not organized, and most of the knowledge are macro, not micro. They focus on telling, not showing. We needed action items that can give us immediate results (for things like Growth Hacking, getting early adopters, or getting feedback, etc)

3. We have no way to know which stage we’re at, or where we should be at. We don’t have a way to track what we’ve done, and what more we can do to improve.

4. Startup knowledge gets outdated quickly.

5. It wasn’t easy to just get a bunch of early adopters to test out your service or give you feedback on how you can improve your startup. Yes there is reddit, hacker news, quora, or what not, but most of them are not for this purpose.

So I said to Yitao “I wish we had this step-by-step guide that we could follow to help us do everything that’s right to building a startup. Lean startup shit, and it’ll have all the tricks to growth hacking and stuff.”

Enter StartitUp. So we decided to make something that we would love to use ourselves. Therefore, we ended up creating a startup guide, with constantly updated step-by-step action items collected from the best startup masters, where a startup can track their own progress, and get feedback from a community of other startups. We also want to make this guide free, so we can get the best information to entrepreneurs everywhere. We want this guide to help people succeed. Starting something you are passionate about is just about one of the best things anyone can do in their lifetimes…except for Ice Cream and perhaps sex (I love Ice Cream so much it’s a pronoun for me). The point is, we want people to be happy. Yitao and my dreams are to help people get the information they need, in the way they want it.

Ok, so other than that…I think it’d be interesting to discuss about why we think we’re qualified to create a guide that claims to be the ultimate startup guide. The truth is, we don’t necessarily think that we are. We’re just the guys who consolidates and organizes all the best startup knowledge from the people who ARE the shit, and organizes them. However, that’s not to say we’re not at all qualified. We’ve build and failed with startups before, and while we haven’t had a hit startup, we have learned a lot from the mistakes we’ve made, and we definitely have learned from that.

Jimmy Wales of Wikipedia doesn’t know every single history in the world, but he collected all the information and made a platform that made it possible to create the most complete encyclopedia in the world. Like Jimmy Wales, we’re merely consolidating and creating a platform to collect the best startup knowledge. And we’re creating the Ultimate Startup Guide.

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