Things I will

tell my kids if
they become
entrepreneurs

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 Disclaimer:
There is no playbook for startups

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Things I will tell my kids if they
become entrepreneurs
Idea Competition
Team Money & Risk
Fundraising Success
Execution Tools
Market

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IDEA

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 Somebody somewhere already had your idea.

Dont waste too much time thinking youre a genius

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 Your idea is 1% of success.

Googles key idea (pagerank) was published as a public paper in 1998

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 Execution > idea

Jeff Bezos was not the only person trying to sell books on the internet.
He just executed better and faster.

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 Team > idea

A great team will pivot out of a bad idea

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 Product > idea

How you implement an idea is more important than the idea itself

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Startup = idea + execution + product + team + luck

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 Talk about your idea to as many people as possible

You will get feedback, challenges, referrals, unexpected connections

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 Great ideas have lonely childhoods.

The more disruptive your idea, the less people will understand it.

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 Good ideas can look terrible at the beginning

ex: Facebook was a social network for moneyless students

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Copycats kill excitement

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Dont worry too much about your companys name. You grow a name.
What does Amazon, Google or Apple mean anyway.

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 IDEA
Where and when

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Every new technology is an opportunity: look for gaps between
how things have been done and how they can be done

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Every asleep industry is an opportunity: do things
incumbents cant or wont do because the economics dont
make sense to them, or because technically they cant.

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Every fringe user is an opportunity: go after those who are
already behaving like everybody will behave in the future

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 Crisis are full of opportunities

Necessity is the mother of invention (and entrepreneurship).

Great startups are born all the time

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 IDEA
Vision vs feedback

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Its not the customer's job to know what they want
Steve Jobs

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If I had asked people what they wanted,
they would have said faster horses.
Henry Ford

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 Finding balance in feedback vs vision

In absence of vision rely on feedback

With a clear vision you can ignore feedback

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Conscious feedback (survey) < unconscious feedback (data)

What people say they do < what people really do

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 Friends & family might not give you truthful feedback

Beware of asking your friends whether they would pay for your service.
They will all say yes, until you ask for their credit card number.

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TEAM

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How many founders?

1 founder hard
2-3 co-founders best
4+ co-founders complicated

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 manager leader

You need leaders and managers, and usually cant be both. Make sure
you and your co-founders complement each other.

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If youre not comfortable giving equity to
someone, they shouldnt be a co-founder

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Clarify everything (cap table, salaries) on day one, especially if
youre working with friends

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Define on day one what happens if a co-founder leaves

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 TEAM
CEO duties

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 No need to know everything.

Surround yourself with people who know what needs to be known.

You are the head coach, not the star player.

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Founders duties: vision, fundraising, evangelisation, hiring and managing

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 TEAM
Recruitment

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Paul Graham: People can become formidable, but its hard
to predict who

Recruiting is one of the hardest thing there is.

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First employees are as important as co-founders

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Bad recruits can kill your project in the early days

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Hire people who are better than you

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Hire people who you would feel comfortable reporting to

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Choose employees like you choose your friends

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 Go for attitude over experience

vice.com recruits people coming out of schools with no experience,

because they have not been formatted by how things are done
elsewhere, and will want to prove themselves

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What you need to succeed in startups is not an expertise in startups.
Its an expertise in clients

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 Hire people who have options

Good people will always have multiple options on the table.

Convince them that you provide the best way to spend their
precious time. People with options are not dependent on
you as an employer, and will be more truthful

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Look for people with no ego getting in the way

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Retaining is less expensive than recruiting

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Have an extremely high bar, hire slowly

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Use trial periods for what they are: trial periods

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Fire people who are bad are their jobs, create politics, are negative

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 Fire fast

You will always take too much time to fire your first employee

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 Beware when you become a trophy employer.

You will start attracting people who want to help

themselves more than they want to help your project

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 Money is just one factor in employee motivation

Others: experience, meaning, impact, network, etc

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4 things that lead to better performance:

Fairness: knowing that you're being paid a reasonable amount

for your work so that money no longer becomes an issue.
Autonomy: controlling events in your work life by choosing
what you want to do and when you want to do it.
Mastery: excelling at a craft that you enjoy and being
recognized as a master by peers that you respect.
Purpose: feeling that what your work is helping other people
and changing the world in a positive way.
http://www.inc.com/geoffrey-james/the-true-secret-of-employee-motivation.html

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 TEAM
Managing yourself

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You are your most important ressource. Take care of yourself.

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Behind every entrepreneur is a solid partner / family / assistant

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 Seek support from people who have been / are entrepreneurs

Your friends working at large companies wont be able to relate to what

you will go through.

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FUNDRAISING

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 Never ask investors to sign NDAs

Sends a message you dont trust them. Dont send your pitch to people
you dont trust in the first place

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Raise only what you need, as late as possible

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Be honest about your past. Good investor will say if youre smart,
those mistakes you made wont happen again with my money

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Dumb investor: money
Smart investor: money + network + visibility + experience

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Fundraising is a milestone, not a success

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 Be confident, not arrogant.

When asked how he recognises good founders, this is what Y Combinator

president Sam Altman says: Good founders become more humble as they
get more successful

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EXECUTION

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Work hard

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A startup CEOs challenge is to define whats
the Most Important Thing (MIT)

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You cant decide how long its going to take

They say its usually 10 years

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 Do every possible job, especially the client facing ones

The founder of Craigslist is still doing user support. Steve

Jobs was famous for randomly answering clients complains.

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Focus is one of the most important thing there is

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 Opportunistic strategic

You can either pursue every opportunity - in which case youre not really
deciding where youre going - or have a clear strategy and reject
opportunities that dont fit in. Opportunities will take you somewhere
fast, strategy will take you somewhere far.

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 Employee effort entrepreneur effort

Running 16h a day working for yourself is less tiring than

spending 8h on a chair doing a job you hate

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EXECUTION
Growth

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Either you fail, or growth becomes your number one problem

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In many ways the startup journey is a downhill spiral of the CEOs quality
of life by adding constraints - users, customers, investors, etc.
Noam Bardin, Founder, Waze

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Let people control the ressources and priorities.
Let them know how success is measured

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Make people feel like they are in startups inside a larger organization

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Recreate diversity inside teams (designers + writers + programmers)

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 Make sure people dont have to grow into leadership roles

Large companies are filled with specialists who got promoted

to management positions while having no such skills.

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MARKET

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Peter Thiel: You want to be the last mover, not the first

Google is the last search engine. Facebook is the last social

network (for now at least).

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 Find a small market inside which you can have a monopoly

Amazon started with books, expanded to commerce in general. Lending

club started with peer to peer loans, now expands to lending in general.
Uber started with taxis, will expand to everything related to
transportation.

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There are more opportunities now than ever (finance, health,
insurance, industry, transportation, logistics). The digital
revolution is just starting.

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 Dont be ahead of your time.

Answer a simple question: why now?

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COMPETITION

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Competition means there is a market

Rejoice!

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Worry about a competitor only when they have a superior product

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Dont worry about competition from big companies
They are not reactive, slow, and complicated.

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Google/Facebook/Amazon/Apple could do this in 5 minutes

True. Just didnt happen with Airbnb, Uber, Zenefits, Dropbox,

Snapchat, Square, Pinterest, Spotify, Jawbone, Box, Lending
Club, Evernote, Eventbrite, etc

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Google/Facebook/Amazon/Apple will launch a similar service and kill you

Google buzz (2010) to compete with Twitter (2006) = shut down

Google Knol (2008) vs Wikipedia (2001) = shut down
Google+ (2011) vs Facebook (2004) = partial shut down
Google keep (2013) vs Evernote (2008) = 10M vs 100M+ users
Facebook Slingshot (2014) vs Snapchat (2011) = sling-what?
Amazon Wallet (2014) vs Square (2009) = shut down

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Even young companies can get complacent quickly
(Skype should have been Whatsapp)

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No candle-maker has become a bulb manufacturer, no
carriage-maker has become a car producer, and the post
office did not invent the email.
Marc Giget
http://perspectives.pictet.com/2013/06/19/interview-with-prof-marc-giget/

Radical innovation rarely comes from incumbents

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The real problem is standing out

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Build the right media mix

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 Evolve your mix over time

t=0 t=1 t=2

Earned
Paid
Owned Owned
Owned Paid Earned

Earned Paid

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108
MONEY&&RISKS
MONEY RISK

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People who don't pay you will treat you like shit
People who pay a lot will show a lot of respect

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 Dont disregard money.

Money is a form of validation.

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 Money cant buy happiness.
But it can buy freedom to pursue your projects

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 Entrepreneurs have more job security than employees

The 85k employees company I was working for in 2001 shut down in
one week because 20 guys had shredded some papers in Houston. As an
entrepreneur, I can work on week-ends, call my contacts and ask for
business. Employee does not control anything. Entrepreneur does.

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21st century job security = network + reputation

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 Employee vs (successful) entrepreneur - salary evolution

money entrepreneur

Entrepreneurs laughing
employee

Employees laughing

time

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 SUCCESS&&FAILURES
SUCCESS FAILURE

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Success is multidimensional
Money
Fulfilment
Experience
Independence
Impact
Status
Network
Family
Legacy

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Money is a consequence, never the objective

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Zuckerberg could have sold Facebook 500 times. His motivation is not money.

Facebook has had countless offers: an unnamed investor offered $10 million
in June 2004, Friendster was interested in a purchase, Google offered to buy
or partner in the summer of 2004, Viacom offered $75 million in March 2005,
Myspace wanted to buy in spring 2005, News Corp (Myspace's parent
company) wanted to in January 2006, Viacom came back in 2005, NBC was
also interested soon after, Viacom again made an offer of $1.5 billion in
2006, Yahoo offered $1 billion in June 2006, AOL also considered $1 billion
soon after, Yahoo came back again at the end of 2006, and finally Google
offered $15 billion in 2007.
http://www.zdnet.com/article/mark-zuckerberg-was-planning-to-sell-facebook-in-july-2004/

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 Media buzz is completely disconnected from success

Journalists just dont have time to look at the real numbers.

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People always underestimate the role of luck

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122
Life is a marathon, not a sprint

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The only way to last is to be ethical and respectful

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Compromising with your values is dangerous

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You won't be good when you go against what you like

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Sometimes you win, sometimes you learn

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Good decisions come from experience
Experience comes from bad decisions

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The point is the journey

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TOOLS

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131
132
The Value Proposition Canvas
Value Proposition
Products & Services
List all the products and services your value proposition is
built around.
Which products and services do you offer that help your
customer get either a functional, social, or emotional job
done, or help him/her satisfy basic needs?
Which ancillary products and services help your customer
perform the roles of:
Buyer
(e.g. products and services that help customers compare
offers, decide, buy, take delivery of a product or service, )
Co-creator
(e.g. products and services that help customers co-design
solutions, otherwise contribute value to the solution, )
Transferrer
(e.g. products and services that help customers dispose of
a product, transfer it to others, or resell, )
Products and services may either by tangible (e.g. manufac-
tured goods, face-to-face customer service), digital/virtual
(e.g. downloads, online recommendations), intangible (e.g.
copyrights, quality assurance), or financial (e.g. investment
funds, financing services).
Rank all products and services according to their
importance to your customer.
Are they crucial or trivial to your customer?
Copyright Business Model Foundry AG
The makers of Business Model Generation and Strategyzer
Produced by: www.stattys.com
Copy or outperform current solutions that delight
your customer?
(e.g. regarding specific features, performance, quality, )
Make your customers job or life easier?
(e.g. flatter learning curve, usability, accessibility, more
services, lower cost of ownership, )
Create positive social consequences that your
customer desires?
(e.g. makes them look good, produces an increase in power,
status, )
Do something customers are looking for?
(e.g. good design, guarantees, specific or more features, )
Fulfill something customers are dreaming about?
(e.g. help big achievements, produce big reliefs, )
Produce positive outcomes matching your
customers success and failure criteria?
(e.g. better performance, lower cost, )
Help your customers better sleep at night?
(e.g. by helping with big issues, diminishing concerns, or
eliminating worries, )
Limit or eradicate common mistakes customers
make?
(e.g. usage mistakes, )
Get rid of barriers that are keeping your customer
from adopting solutions?
(e.g. lower or no upfront investment costs, flatter learning
curve, less resistance to change, )
Rank each pain your products and services kill according
to their intensity for your customer. Is it very intense or
very light?
For each pain indicate how often it occurs. Risks your
customer experiences or could experience before, during,
and after getting the job done?
Customer Segment
Help make adoption easier?
(e.g. lower cost, less investments, lower risk, better quality,
performance, design, )
Rank each gain your products and services create according to
its relevance to your customer. Is it substantial or insignificant?
For each gain indicate how often it occurs.
Gain Creators
Describe how your products and services create customer
gains.
How do they create benefits your customer expects, desires
or would be surprised by, including functional utility, social
gains, positive emotions, and cost savings?
Do they
Create savings that make your customer happy?
(e.g. in terms of time, money and effort, )
Produce outcomes your customer expects or
that go beyond their expectations?
(e.g. better quality level, more of something, less of
something, )
Pain Relievers
Describe how your products and services alleviate customer
pains. How do they eliminate or reduce negative emotions,
undesired costs and situations, and risks your customer
experiences or could experience before, during, and after
getting the job done?
Do they
Produce savings?
(e.g. in terms of time, money, or efforts, )
Make your customers feel better?
(e.g. kills frustrations, annoyances, things that give them
a headache, )
Fix underperforming solutions?
(e.g. new features, better performance, better quality, )
Put an end to difficulties and challenges your
customers encounter?
(e.g. make things easier, helping them get done, eliminate
resistance, )
Wipe out negative social consequences your
customers encounter or fear?
(e.g. loss of face, power, trust, or status, )
Eliminate risks your customers fear?
(e.g. financial, social, technical risks, or what could go
awfully wrong, )
Gains
Describe the benefits your customer expects, desires or would
be surprised by. This includes functional utility, social gains,
positive emotions, and cost savings.
Which savings would make your customer happy?
(e.g. in terms of time, money and effort, )
What outcomes does your customer expect and what
would go beyond his/her expectations?
(e.g. quality level, more of something, less of something, )
How do current solutions delight your customer?
(e.g. specific features, performance, quality, )
Pains
Describe negative emotions, undesired costs and situations,
and risks that your customer experiences or could experience
before, during, and after getting the job done.
What does your customer find too costly?
(e.g. takes a lot of time, costs too much money, requires
substantial efforts, )
What makes your customer feel bad?
(e.g. frustrations, annoyances, things that give them a
headache, )
What would make your customers job or life easier?
(e.g. flatter learning curve, more services, lower cost of
ownership, )
What positive social consequences does your
customer desire?
(e.g. makes them look good, increase in power, status, )
What are customers looking for?
(e.g. good design, guarantees, specific or more features, )
What do customers dream about?
(e.g. big achievements, big reliefs, )
How does your customer measure success and
failure?
(e.g. performance, cost, )
What would increase the likelihood of adopting a
solution?
(e.g. lower cost, less investments, lower risk, better quality,
performance, design, )
Rank each gain according to its relevance to your customer.
Is it substantial or is it insignificant? For each gain indicate
how often it occurs.
Customer Job(s)
Describe what a specific customer segment is trying to get
done. It could be the tasks they are trying to perform and
complete, the problems they are trying to solve, or the needs
they are trying to satisfy.
What functional jobs are you helping your customer
get done? (e.g. perform or complete a specific task, solve a
specific problem, )
What social jobs are you helping your customer get
done? (e.g. trying to look good, gain power or status, )
What emotional jobs are you helping your customer
get done? (e.g. esthetics, feel good, security, )
What basic needs are you helping your customer
satisfy? (e.g. communication, sex, )
Besides trying to get a core job done, your customer performs
ancillary jobs in different roles. Describe the jobs your
customer is trying to get done as:
How are current solutions underperforming
for your customer? Buyer (e.g. trying to look good, gain power or status, )
(e.g. lack of features, performance, malfunctioning, )
Co-creator (e.g. esthetics, feel good, security, )
What are the main difficulties and challenges Transferrer (e.g. products and services that help customers
your customer encounters? dispose of a product, transfer it to others, or resell, )
(e.g. understanding how things work, difficulties getting
things done, resistance, ) Rank each job according to its significance to your
customer. Is it crucial or is it trivial? For each job
What negative social consequences does your indicate how often it occurs.
customer encounter or fear? Outline in which specific context a job
(e.g. loss of face, power, trust, or status, ) is done, because that may impose
constraints or limitations.
What risks does your customer fear? (e.g. while driving,
(e.g. financial, social, technical risks, or what could go awfully
outside, )
wrong, )
Whats keeping your customer awake at night?
(e.g. big issues, concerns, worries, )
What common mistakes does your customer make?
(e.g. usage mistakes, )
What barriers are keeping your customer from
adopting solutions?
(e.g. upfront investment costs, learning curve, resistance
to change, )
Rank each pain according to the intensity it represents for
your customer.
Is it very intense or is it very light.?
For each pain indicate how often it occurs.
strategyzer.com
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135
The best way to predict the future is to invent it.

Alan Kay

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 Thank you:

Sam Altman, how to start a startup

http://startupclass.samaltman.com/

Hugh MacLeod, cartoons drawn on the back of business cards

http://gapingvoid.com/

Strategyzer, helping CEOs operate like surgeons

http://www.strategyzer.com

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 Get in touch

@laurenthaug
ch.linkedin.com/in/laurenthaug

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