Archive | October 2014

Business Strategy and Monopoly Theory

Peter Thiel, founder of Paypal, Palantir, and Founder Fund describes business strategy and monopoly theory for startups.

Notes

0m52s – competition is for losers
0m57s – outline
0m58s – # Capturing Value – X and Y% are independent variables
3m50s – Perfect Competition
4m37s – Monopoly
5m38s – # Lies that people tell
12m48s – Narrow markets
13m28s – # How to Build a Monopoly – start small and monopolize
18m42s – # Last Mover Advantage – order of magnitude better (massive delta), network effect, economies of scale, branding
27m55s – # History of Innovation
33m00s – Success Cases, vertically integrated complex monopolies (capital intensive)
37m01s – # Psychology of Competition
42m25s – # Q&A
42m45s – find true size of market
43m10s – how does google excel at software effects (network effects ad words, proprietary technology of search algorithm, economies of scale of storing data, and google brand)
44m33s – lean startup and risk
46m46s – google, facebook last in their field (search, social network) but first in 1 key dimension (page rank, real identity)
47m58s – competition recap

Additional Reading

Series

Advertisements

Building Product, Talking to Users, and Growing a Startup

Adora Cheung, Founder of Homejoy, describes how to build a startup product and focus on user feedback to get the proper market fit. She stresses the importance of immersing yourself in the industry to the point of working with established companies to learn the ins and outs to become a domain expert while at the same time identifying efficiencies. Adora explains the concept of the honesty curve when getting feedback from users and why charging for a product will get you higher quality feedback. She ends by getting into the numbers of paid growth and the concept of pivoting.

Notes

01:28 – have lots of time on your hand; avoid context switching; immerse yourself
02:30 – * n00b approach
03:30 – * problem (what is it? how does it relate to you? verify others have it)
04:10 – pathjoy
05:20 – * where to start? (learn a lot. become expert; identify customer segments; storyboard ideal UX)
08:40 – get in shoes of customer at all angles; be obsessed collecting data and researching
09:50 – identify customer segments and optimize for them
11:00 – what is ideal customer flow from discovery through closing feedback
11:50 – * what is v1? (MVP; simple product positioning; this is not the hard part…)
14:00 – * first few users (you! your friends, family, co-workers; online communities, HN, reddit; local communities, mailing lists; niche influencers, mommy bloggers; cold calls + emails; press)
17:47 – * customer feedback (support@ very important; surveys ok but interviews better; quantitative: ask why, why, why; beware of honesty curve)
20:38 – NPS net promoter score (how likely to recommend)
21:16 – honesty curve (for free ask friends; for paid ask strangers)
23:53 – * v1 feature creep (build fast, but optimize for now; manual before automation; temporary brokenness > permanent paralysis; beware of frankenstein)
26:40 – perfection not necessary at this stage don’t worry about every edge case
27:10 – listen to feedback but don’t build it right away (ask why rather than pile features on)
28:00 – * s is for stealth, and stupid (someone will steal your idea, there is a first-mover advantage, … just launch it already)
29:27 – * ready for a lot of users? (learn one channel at a time; iterate working channels; revisit failed channels; key=creativity)
32:56 – * three types of growth (sticky; viral; paid; key = sustainability)
33:56 – * sticky growth (good experience wins; clv + retention cohort analysis important; repeat users buy more and more)
34:40 – clv & cohort analysis
38:53 – * viral growth (WOW experience + good referral programs; 1 customer touch points; program mechanics; 3 referral conversion flow)
39:20 – have good referral program
40:50 – $10 for $10
41:39 – * paid growth (simple: clv > cac; advanced: clv(ijk) > cac(ijk); payback time + sustainability
41:43 – * paid growth examples (sem, display ads; facebook ads; group on/daily deals; street marketing; b2b sales; direct mailers)
46:39 – * the art of pivoting (1. bad growth; 2. bad retention; 3. bad economics)
49:55 – * Q&A
50:00 – getting customers to switch

Additional Reading

Series