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.
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.
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 WELL, MindVox 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.
What’s the first thing that comes to your mind when you have a great idea?
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.
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.
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:
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/
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 ranking, levels (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.
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.
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.
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.
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.
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?
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.
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.
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.
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.
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.
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 email@example.com. Peace out.
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.
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.
– 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.
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!
– 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.
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.
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.
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.