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How to Start a Startup Summary

Conclusion

If you are serious about starting a startup, you’ll be investing tens of thousands of hours doing it. Spending 15 to 150 hours now to learn some of the core principles could be the difference between success and wasting years of your life and hundreds of thousands (or more) of someone’s money.

Learning

Psychologist Carl Rogers said, “the only kind of learning which significantly influences behavior is self-discovered or self-appropriated–truth that has been assimilated in experience.”

Remembering

You can just watch the videos if you want, but studies say you’ll forget 50% of the material by tomorrow. And by next month you’ll have forgotten 80%. If you follow a few steps you can put the most important lessons in your long-term memory.

  • while watching a video, write down important points you want to remember
  • at the end, review each point; think about how it relates to an experience you’ve had; what examples did the speaker give; what were other details
  • now, take a blank sheet of paper and write down the important points from MEMORY (no peeking)
  • check what you wrote against your notes and if you missed any points get another blank sheet of paper and try again until you can write everything from memory
  • try to recall the points again in 1 day, then 3, then 1 week, then 1 month (or as needed)

Aha Moments

The deeper you get into the material (watching, learning, recalling, discussing with others, relating to your past experiences, creating new experiences) and researching the topics, people, and companies, then the more details you uncover and more connections you make, leading to a greater sense of understanding and mastery.

Knowing the material isn’t enough. You have to understand it well enough to know in which situation to apply each concept.

Readings

All Videos by Topic

Class Resources

Researching Startups and Founders

Bonus: Airbnb Case Study

Series

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Later-Stage Advice

Sam Altman, President, Y Combinator finishes up the series with a talk on a few topics relevant to startups after months 12 to 24. Management, HR issues, maintaining company productivity, and other mechanics to keep the company progressing to greatness.

Sam Altman – @sama

Notes

  • 00m23s – Later-Stage Advice
  • Management; HR; Company Productivity; Legal, Finance, Accounting, Tax; Your Psychology, Marketing and PR, Dealmaking
  • Post product/market fit stage; usually around 20-25 people
  • Warning: this is for months 12-24 (after product-market fit); a waste of time until you have something working
  • 1m10s – Management
  • Establish a Structure
  • need it at about 25 employees (before then none; everyone reports to CEO; totally flat)
  • every employee should have a manager, every manager should know their reports
  • know how to change the structure, add new people – just make it clear
  • clarity, simplicity in structure most important
  • Management Structure
  • avoid the temptation to have a “coolness” via lack of structure
  • but keep it light weight; don’t need complex matrices
  • 3m22s – First instantce of an important shift in founders job
  • early stages founders #1 job is to build a great product; then it becomes build a great company
  • 3m52s – Failure Cases
  • being afraid to hire senior peole
  • hero mode – extreme leading by example
  • bad delegation – not giving enough responsibility
  • not developing a personal tracking & productivity system
  • 7m33s – Codify how you do things
  • in early stage you can just people, “this is how we do it”
  • before it gets too late, put on wiki or something; get to write law
  • Codify why you do things (cultural values)
  • 9m00s – HR
  • It can speed you up
  • have a clear structure
  • performance feedback – simple and frequent
  • compensation bands tied to performance (feels corporate but keeps things fair; save you crazy negotiation)
  • equity – be generous; your investors will give you bad advice; distribute 3-5% per year
  • most successful companies end up giving lots of stock out to their employees
  • clear career path for people
  • 12m01s – Stock and Vesting
  • keep up with refresher grants
  • structures – 6 years, pyramid vesting, continuous forward vesting
  • get an option management system early
  • 13m19s – HR continued
  • 50 employee requirements; sexual harassment, diversity training
  • monitor for burnout (not sprint anymore, marathon)
  • hiring process: full-time recruiters; internal announcements (to get feedback from current employee reference)
  • new employee ramp-up
  • think about diversity early!
  • growth of your early employees
  • 16m29s – Company Productivity
  • small teams are usually productive, but need effort as company growths
  • one word: alignment
  • clear roadmap and goals: all employees can say the same top 3 goals; keep message simple and repeat constantly
  • figure out values early: will help people make right decisions
  • be run by the product, not process; ship every day
  • have transparency and rhythm in communication: weekly management meetings; all-hands meetings (at least monthly); quarterly and annual planning; offsites (successful companies do offsite retreats)
  • The Goal: goal of productivity is to create a company that creates a lot of value over a long period of time
  • Repeatable innovation and a culture of operational excellence is the hardest thing to do in business
  • 21m25s – Mechanics
  • Legal, Finance, Accounting, and Tax
  • clean books, accounting firms, audits: when needed, with outside help
  • collect your legal documents – easy to fix now if you’re missing something
  • FF stock in the B round: FoundersFund stock that can be liquidated by founders; has turned into bad sign when founder concerned with personal liquidity
  • IP, Trademarks, Patents
    • Month 11, Provisional, International
    • Trademarks, US and international
    • Domains, misspelling, and all TLDs
  • Financial Planning & Analysis (F, P & A)
    • CFO of PayPal made FP&A model top sheet was 1500 lines
  • Consider hiring a full-time fundraiser internally: after B round in anticipation of raising for C round and doubling valuation; better usually than hiring investment banker
  • Tax structuring: get expert advice to take full advantage of tax code; such as international structuring to reduce tax cost
  • 26m35s – Your Own Psychology (as founder)
  • your psychology: it keeps intensifying: highs are higher but lows are lower
  • Ignore the haters; this will increase the more you succeed
  • Long-term commitment; long-term strategy
  • Founders who make long-term commitment to startup are rare and therefore an advantage; build strategy for long-term
  • Monitor burnout and take vacation
  • Guard against losing focus: a symptom of burnout
  • Ignore acquisition interest: distracting; tempting; don’t start talks unless willing to sell at low number, which might happen; big offers wil come early
  • Startups fail when founders quit: sometimes you should quit; but biggest reason is mismanaging your own psychology and quitting when you shouldn’t
  • 31m05s – Marketing & PR
  • start thinking about this once your product is working – don’t ignore it: press will not save your startup
  • don’t outsource the key messaging: founders have to figure out message of company themselves
  • repeat the key messages again and again
  • get to know key journalists: PR firms will try to prevent you from doing this; but journalists want to talk to founders not PR firm
  • 32m48s – Deals
  • business development starts to matter at this point; not only can but should have ignored early on when still building product
  • build a great product first; nothing else will matter if you haven’t
  • develop a personal connection when trying to do a big deal
  • have a competitive dynamic: BATNA (have a plan B so you have alternative in mind while negotiating and aren’t backed into corner)
  • be persistent, persistent, persistent (see Tyler Bosmeny’s talk on sales and marketing #19)
  • ask for what you want: harder than it seems; just ask for it, even if it feels aggressive or overreach
  • 35m09s – The Process: get product market fit by talking to users and iterating to close gap
  • growth curve long (several years, typically): techcrunch spike, followed almost immediately by drop-off after novelty wears off; flattened curve; dip into crash of ineptitude; long trough of sorrow (in Airbnb case it was 1000 days); then wiggle of false hope (small up/down); until eventually growth takes off
  • 36m44s – Q&A
  • Is diversity important or not based on likeness?
  • want diversity of background (to avoid limiting monoculture) but not diversity of vision; you want to hire people who get along
  • 38m00s – How to track and productivity systems?
  • one paper for goals 3 to 12 month time frame; one page for short-term goals for the day; keep list of each contact and what you need to communicate work on with them
  • 39m01s – How to fail gracefully?
  • failure common and Silicon Valley very forgiving; be upfront and ethical; if failing tell investors; don’t totally run out of money; tell people early; shut down in a graceful way; give 2-4 weeks severance
  • 40m33s – How many immigrant founders have there been at YC?
  • in last batch 41% of founders born outside U.S. from 30 different countries
  • 40m56s – Other than Valley where are good places to start a startup?
  • Valley still best but maybe starting to weaken a little because the costs are increasing; Seattle, L.A., lots of places outside U.S.
  • 41m50s – When should founders think about hiring professional CEO?
  • never; the most successful startups are run by founders; best if founder plans to be CEO for long time for sake of building great company
  • 42m45s – What are most common mistakes?
  • covered here
  • 43m12s – Is there way to get involved with YC before being funded?
  • not really; other than working at a YC funded company and then getting a good recommendation from founders; no pre-startup; “don’t need to get to know us”
  • 44m01s – What criteria does YC use to select startup and has it got harder or has it changed?
  • need to see: good founders and good idea; has always been the case; the applicant pool has grown; but the a lot of the growth has been with people who probably shouldn’t be starting startup
  • 45m02s – If there is a market you are excited about but unfamiliar with, what path do you recommend?
  • jump in and learn as you go; or, go work at a company in the space for a year or two
  • 45m55s – will investors fund fewer YC companies?
  • no; investors like funding YC companies
  • 47:07 – when should group of founders raise seed round?
  • in general, nice to wait until idea is figured out and initial signs of promise before raising money; raising money puts pressure on company; can’t be in exploratory phase; wait to raise more than $100K-$200K or not even that, until things are working you’re way better off.

Additional Reading

Series

Sales and Marketing and How to Talk to Investors

Tyler Bosmeny, Founder and CEO, Clever
Michael Seibel, Partner, Y Combinator
Qasar Younis, Dalton Caldwell, Partners, Y Combinator

Tyler Bosmeny – @bosmeny
Michael Seibel – @mwseibel
Qasar Younis – @qasar
Dalton Caldwell – @daltonc

Notes

  • 0m11s – Tyler Bosmeny – Sales & Marketing: $0 – 1 Million
  • graduated withs statistics major, went to work for startup doing sales
  • started Clever with 2 cofounders to build product for schools
  • Clever: app platform for schools; 1 in 5 schools use; started 2012
  • sales key piece for growth of Clever.com
  • 1m38s – The Mystique (of sales): charming, well connected, perfect lines, golfers
  • 2m15s – The Reality: you are the salesperson, build or sell; pick founder to own this founder passion trumps sales experience
  • “build or sell, nothing else matters”
  • passion for idea and deep industry knowledge trumps sales experience
  • 3m28s – The Almight Funnel: prospecting, conversations, closing, revenue / promised land
  • 4m16s – The Mission (prospecting): find the innovators (2.5%); it’s a numbers game; reach out to > 100 companies; top 3 methods (your network, conferences, cold emails)
  • conference: go to where your users are
  • cold email: key is to not write too much
  • 7m30s – conversation: get on the phone and listen; best sales people spend more time listening than talking
  • ask questions: why did you take my call today, what is your solution today, what would your ideal solution look like
  • find out what prospect needs and understand their problem
  • Uber conference (https://www.uberconference.com/) will email you log of who did how much speaking
  • 9m37s – Religious Follow Up: boomerang for gmail
  • need to have unhuman willingness to followup and drive things forward
  • best case looks dismal; repeated no responses; constant back-and-forth; even from people who want to buy product
  • your goal should be to get people to a yes or no as quicly as possible; 1,000 maybes are difficult to deal with
  • be ambitious but focus on right prospects (getting to no better than long dragged out maybe)
  • 11m30s – Closing Traps: Redlines: final step is to send them an agreement; YC has open sourced their template; don’t quibble over minor points
  • 13m50s – Closing Traps: 1 More Feature: usually a polite pass; building it will not get you the sale; either: sign a conditional agreement, or wait to hear demand from more customers
  • 14m45s – Closing Traps: Free Trials; early on you need commitment, validation, and revenue; free trial gets you none of this; instead offer a 30 day cancellation period on an annual contract
  • once you’ve done enough sales, aks what can be scaled
  • 16m39s – Looking Forward: 5 ways to build a big business; flea, mice, rabbits – marketing; deer – inside sales; elephants – field sales (by Christopher Janz)
  • know where your customers fit and how much it costs you to sell to them (flea, mice, rabbits, deer, elephants)
  • 19m07 – Michael Seibel – How to Talk to Investors
  • Before the meeting (Michael); During the meeting (Dalton); After the meeting (Quasar)
  • pitch: simply describe company and then ask for money
  • 30 second pitch: this is your goto for any opportunity
  • 2 minute pitch: this is for people more interested, investors, employees
  • don’t need pitches longer than that (more opportunity to say something listener doesn’t like)
  • 21m44s – 30 second pitch
  • what does your company do? simple and straight-forward; assume no prerequisite knowledge; one sentence (mom test)
  • how big is the market? second sentence; look up simple numbers for market size (investors need general idea of potential)
  • how much traction do you have? (e.g. we launched x months ago, we are growing y% month, we have z users, revenue, etc.) if too early for numbers show how quickly company is moving (founded jan. beta by march, launch july)
  • 24m30s – 2 minute pitch
  • clear 30 second pitch (see above)
  • unique insight: secret sauce, competitive advantage (aha moment, 2 sentences; what will kill competition; what don’t other know)
  • how you make money: 1 sentence; don’t run away from questions (we’ll do this, that, says nothing); be clear and concise
  • team: call out accomplishments that have made money; how many founders (2-4 ideally); how many technical v. business (50/50 or more tech); how long have you known each other (at least 6 months professionally or personally; all working full time; how you met); 2 sentences (the more you talk about a bad thing the worse it looks)
  • the big ask ($$$): you have to know what you are talking about; are you raising on a convertible note or safe; what cap of safe is; how much money raising; what is minimum check size (use some jargon)
  • that’s 2 minute pitch; let them talk
  • 29m42s – When to Fundraise: Ideally at higher part of growth line but real world is at lower end of growth line
  • typically want to have traction, which is point of strength
  • want to be in position of strength, which happens when investors are asking to give you money; that is good time to go fundraising
  • if investors aren’t asking about giving you money, you should be doing things to get noticed; stealth mode doesn’t get the word out
  • have plan to launch and grow without getting lots of money; don’t want to be in position of we can’t do anything until you give us money–puts power into hands of investor
  • pitch to investors should sound like “this things is moving; we quit our jobs and are working full-time; if you want to jump on great; if not there are lots of angel investors”
  • show you have fully committed team working fast
  • 31m58s – How to setup investor meetings: warm intros; think parallel; 1 team member
  • pass on intro from someone who has passed on investing with you; that is kryptonite
  • fundraising is a sprint not a marathon; schedule all meetings in the same week
  • when setting up meeting schedule 3 weeks out and all investors on same week
  • one team member should be invested in fundraising full-time
  • 34m00s – Dalton & Qasar – investor pitch role playing; example of bad pitch
  • 38m45s – analysis: void common mistakes: make sure listener understands what you’re working on; know your numbers; for market size ideally build bottom up analysis; you should understand something that is counter intuitive; your team should be uniquely suited for this business; drive the conversation to a conclusion
  • know numbers; don’t name drop big company names that aren’t even related
  • 39m50s – investor pitch example of good pitch
  • 45m39s – analysis: Hallmarks of a good pitch
  • capture interest, tell an interesting story, engage with the listener
  • demonstrate insights and command of the market, passionate not dismissive
  • collaborative meeting more than an interrogation
  • actually ask for money
  • 46m53s – After the meeting
  • follow up (any response other than a check is a “no”)
  • work on creating deal heat (supply / demand)
  • due diligence on investors; know who you are selling part of your company
  • know when to stop (addicted to fundraising)
  • build your company – fundraising is not the end goal

Additional Reading

Series

Legal and Accounting Basics for Startups

Kirsty Nathoo and Carolynn Levy discuss the important legal and accounting basics for startups. They cover topics such as keeping the legal structure simple and standard, staying organized with paperwork, being fair and forward-looking about equity, vesting, stock, financing terms, hiring, firing, and to overall following the rules and taking things seriously.

Notes

  • 38s – Founders don’t need to know the mechanics of starting a startup… in detail. There are basics that are important to know, though
  • 1m16s – Knowing basics can help you avoid a lot of pain
  • startup as a legal entity, protecting assets, hiring employees, etc.
  • 2m50s – What kind of entity?
  • Delaware corporation; keep it simple
  • fax docs to become corp in Delaware or at least shell of company
  • 5m41s – Be organized: future due diligence requirements; humdrum reality of running a startup
  • titles of CEO, president, and secretary required
  • documents to assign inventions, IP
  • think: am I doing this as an individual or as agent of co.
  • YC often uses clerky.com to set up Delaware corp
  • Keep your paperwork organized
  • 8m16s – Equity: Allocation, Purchasing, Vesting
  • 8m25s – Allocation: Execution > Idea (ideas = 0); how much for each founder?; look forward not back
  • Ideas are important but they have zero value; no one has ever paid $1 Billion for an idea
  • YC prefers founders be equal or nearly equal. Large variance among founders is red flag- lots of unanswered questions
  • Look forward: are all founders in it 100% and for the long haul; whole team is necesarry for execution
  • Among YC ultra successful companies, 0 of them had 1 founder with disproportionatly high share allocation
  • 11m18s – Purchasing: paperwork alert; 2-sided transaction
  • You as an individual buy shares from the company; shares in exchange for cash, ip, code to the company
  • Restricted stock: vests over time; 83B election crucial – no way to undo mistakes with this
  • 13m48s – Vesting: vesting is earning the right to permanent ownership of the shares over time
  • Vesting = restricted stock = shares that are subject to forfeiture
  • In Silicon Valley, standard vesting period is 4 years with 1 year cliff
  • 1 year cliff means founder owns 25% after 1 year (0% before 1 year); then stock vests monthly up to 100% to 4 years
  • If founder leaves early they get their vested shares and company buys back unvested shares at same price founder purchased
  • Vesting: why have vesting?
  • Reason for vesting: protect other founders if a founder leaves; skin in the game, startups are hard
  • Single founder should have vesting too; because of skin in the game, investors like seeing it; and set example for employees
  • Vesting aligns incentives among founders; investors don’t want to put money into company where founders can walk away at any time and still have a big ownership stake in company
  • 18m00s – Fundraising: Logistics, Investor Requests; Company Expenses
  • 18m40s – Logistics: priced v. non-priced rounds; paperwork alert!; potential dilution
  • priced means valuation has been set
  • seed round – price not set; any other round (series A, B, etc) means price has been set
  • not setting price most straight forward, fast way to get money
  • convertible notes or safes: note says investor is paying $X now and in return has right to receive stock at a future date when price is set by investor in a priced round; at the time that paper work is set, that investor is not a shareholder
  • seed stage investors typically will have valuation cap on company, which will mean their investment will be able to buy more shares in a future priced round than someone investing at that stage
  • 21m40s – downsides of taking investor cash:
  • if you raise $2 million on safes with a valuation cap of $6 million, then those investors will own about 25% of company; add to that 20% that incoming investors will want and that leaves founders with 55% – maybe good or bad deal depending on what you need and can get
  • investors should be sophisticated (i.e. accredited); have money to invest and they understand risks
  • keep it simple; raise money using standard documents (clearky); sophisticated investors; understand future dilution
  • 24m25s – Investor Requests: board seat; pro rata rights; advisors; information rights
  • board seat: most cases want to say no
  • advisors: (lots of people want to give advice; very few actually give good advice); investors should want to help company without requiring additional shares (handouts); advisor is not “paid” title
  • 27m01s – Pro rata rights: right to maintain percentage ownership in a company by buying more shares in the future; way to avoid dilution
  • as founder, you need to know how pro rata rights work because pro rata rights might mean they face greater dilution
  • 28m17s – information rights: monthly status reports good and encourages; monthly budget or weekly updates not ok
  • in addition to type and amount of financing, there are additional details that need to be negotiated and agreed upon
  • 29m08s – Company Expenses: what is a business expense?; keeping track of expenses
  • spending invesor money: should be able to justify every expense to investors as legitimate business related expense
  • keep receipts in safe place for accountants
  • don’t go to Vegas on investor’s money
  • 32m34s – Doing Business: founder employment; hiring and firing; legitimacy
  • Founder Employment: founders are employees of the company and must be paid wages/ salary; founder breakups
  • setup payroll service; minimum wage
  • avoid problems: pay payroll taxes; pay yourself; pay your co-founders
  • 35m24s – Hiring Employees: paperwork alert!; consultant vs. employee; equity for employee
  • Contractor v. employees: in both cases they will assign IP to company; but form is different and method of payment; distinction is important for IRS.
  • Contractor: sets own hours; determins how to accomplish goals; employer does not withhold taxes but will provide form 1099 at end of tax year
  • Employee: company pays salary and will withhold taxes; end of year they get W2 for taxes
  • Even when paying employee with stock, must still at least pay minimum wage
  • When have employees need to have workers compensation insurance
  • need to see proof that employee is allowed to work in USA
  • must use payroll service provider (like zenpayroll) and understand basics of employment
  • 40m22s – Firing Employees: fire quickly, communicate effectively; pay wages/salary/accrued vacation up to point of termination
  • do what is best for company, quickly; make clear statements, face-to-face with 3rd party present
  • Eliminate physical and digital access; repurchase unvested stock
  • 42m33s – Legitimacy: know your key metrics; balance sheet & income statements; tax returns
  • 43m00s – Biggest Take-Aways: keep it simple, use standard, stay organized; be fair and forward-looking about equity, have vesting; stock doesn’t buy itself, do the paperwork; be savvy about financing instruments, terms, investor requests; founders need to get paid; employees must sign documents to assign IP to the company
  • key metrics: cash position, burn rate, when cash will run out, be able to talk to investors
  • be legitimate corporation: follow rules and taking it seriously
  • 44m30s – Q&A
  • How do you find an accountant and when do you need one?
  • Bookkeepers categorize and record income / expenses; CPAs will prepare taxes; do need CPA withing 1st year to handle taxes. Finding one is tough–recommendations for professionals used to dealing with startups
  • 46m10s – How to incorporate and when need to hire a lawyer?
  • Can incorporate for few hundred online (clerky); when to hire lawyer depends on type of business: HIPAA, privacy, investers, etc. Clerky can help with standard documents
  • 47m30s – What are your comments about raising funds with crypto-currency?
  • very product specific no general advice; banks will struggle with newness

Additional Reading

Series

How to Design Hardware Products

Hosain Rahman, founder of Jawbone, talks about Jawbone’s process for developing products, combining hardware, software, and data insights.

This talk was very specific to one company’s process for operating. It shows the level of detail and expertise that goes into the whole process of developing a product.


Hosain Rahman – @hosain

Notes

  • Overview
  • 33s – Beauty and Engineering in service of a better life
  • Jawbone Products: wireless headset, wireless speaker, wearable health tracker
  • Internet of Things: everything has sensors, connected, but not organized
  • think about where things are going
  • need organizing principles; less about things and more about actual user
  • world is moving to user at center of internet of things with wearables
  • complete platform requires: hardware, software & services, and data
  • 6m32s – Everything is a system: hardware, sensors, algorithms, applications, service, science and data insight, api partners and signals
  • 7m18s – How we create: exploration, early validation, concept, planning, development, continued innovation
  • guiding principles: vision, brand, strategy
  • Exploration: dreaming, futuristic, science project-y
  • Early Validation: like proving your thesis
  • Concept: big human-centric concepts
  • Planning: no turning back, sobering, tradeoffs
  • Development: laser focus, craftsmanship
  • Initial Launch
  • Continued innovation: learn from users, evaluate, start over
  • 10m10s: Exploration
  • building and tinkering; driven by personal passions; use tools of hackathons and data and insights
  • involves R&D, Engineering, Product Experience, Product management
  • staff acts as a sounding board
  • required to move to next phase: meets $50,0000 investment test
  • 11m28s – Early Validation
  • checking for concept robustness, dev leadership meetings drive it; use scientific method, data and insights
  • Hypothesized “whys”: why are we doing this, why does this need to exist, etc
  • involves R&D; staff prioritizes concepts and approve budget
  • require to move to next phase: fits vision; feasible to make now; business viability; early experience
  • 13m05s – Concept
  • Defining the “whys”; driven by R&D concepts
  • use storyboards, interaction models; user research; pitch videos
  • involved: LEAD: product experience; engineering; project management business case
  • required from staff: imagine what’s possible, determin if an idea has merit
  • required to move to next phase: highly resolve whys and differentiation; strategy (from competitors, other products in family); prodocut roadmap
  • 15m19s – Planning
  • making a plan, validating feasibility
  • driven by quarterly forecasting
  • tools: early prototypes, functional briefs, data and insights
  • involvement: LEAD product management; engineering; product experience; sales and marketing; finance: capital
  • required from staff: make key trade-off decisions; sign off on plan to move forward
  • required to move to next phase: prioritized features, functionality, and minimum bar; business plan and product roadmap
  • 16m27s – Development
  • making a plan; quarterly forecasting, early prototypes; LEAD: PM, users making key decisions around trade-offs
  • required to move to next phase: design sign-off; engineering (hardware & software) sign-off; hosain sign-off
  • 16m39s – Continued innovation
  • deepening and broadening engagement, creating more value for users
  • driven by retail calendar, sprint cycles
  • tools: feature briefs, UI screenshots, data and insights
  • LEAD: product management, product experience team, engineering, sales and marketing
  • staff: provide guidence on goals and strategies; be the final approver for Jawbone worthy output
  • 18m11s – the framework: creating rich, continuous & signature experiences
  • whys, themes, pods, hero/sidekick experiences, features
  • 18m55s – Why’s
  • ask questions then use as guidepost, do we meet it
  • what is user problem that once we solve users can’t live without?
  • Jawbone Jambox product cycle: bluetooth speaker
  • state now, future, going forward
  • Jawbone is experience company: how pieces come together
  • Experience framework becames guide post for team to follow and validate decisions
  • Research, insight, concept, design and build
  • Whys: a list of consumer problems to solve
  • Principles: the Jawbone approach to solving those problems
  • Hows: Proposed solutions to the problems presented as experience scenarios
  • Whats: Requirements that have to be included in the product to execute the solutions
  • User interviews: don’t ask would you buy this/ use that; instead ask about current behaviors and how they live
  • Up24 product example
  • 24/7 engagement; understand & act in moment; actionable insights; progressive & contextual tagging
  • track + understand + act
  • Users we design for: profile, percentage of total, big needs
  • Hero Experience: real time understanding + smart actions
  • 32m43s – Q&A
  • How do you consider features and tradeoffs?
  • Have to think across entire experience not just product silo; with big companies have to force communication
  • 35m33s – How does system think work?
  • Think about how all the pieces fit together across the entire system.
  • 36m30s – What goes into different versions of same product?
  • There is grand unified vision and everything fits together or will
  • 38m11s – What goes into graphic design?
  • Wanted to convey certain theme and feeling; all part of same process
  • 38m58s – How does thinking and process change after launch?
  • Take new information and data after release and take back to exploration face as new set of problems, challenges, opportunities; but sometimes don’t always need to go all the way back, but just back to planning or development and skip over steps
  • 41m30s – How does process change as number of employees change?
  • 500 employees now, very distributed, get to talent; always work at getting better at communication; up3 has daily 2.5 hour call
  • 43m25s – How did you decide to expand?
  • Expanded product line, geography; some deliberate plan, some opportunistic based on specific case
  • 44m50s – Why don’t make headphones?
  • Desire to enter space with product order of magnitude better than existing; sometimes market not ready; sometimes technology not ready
  • 45m30s – Are you running Jawbone as software or hardware company how is different?
  • Very new, no model to base it on; try to best of everything and put it together

Additional Reading

Series

How to Run a User Interview

Emmett Shear, Founder and CEO of Twitch talks about the importance of interviewing users to find out what they want and what features you need to build.

This talk covers important topics regarding getting user feedback through face-to-face interviews. The talk becomes more relevant if you realize their first startup faltered because they built a product in a competitive space without talking to users and then went on to build a product for themselves with Justin.tv that, after talking to users, pivoted to Twitch.tv, which was sold to Amazon for $970 million.


Emmett Shear – @eshear

Notes

  • First startup was Kiko calendar with Justin Kan out of college
  • didn’t listen to users, weren’t calendar users; built nice product but eneded up selling company on ebay
  • 1m10s – 2nd startup: Justin.tv; they were own user; reality tv show around Justin Kan’s life
  • building startup for 1 user only works if that user representative of large group
  • Justin.tv was good for very specific use case; didn’t have expertise to broaden appeal
  • pivot: mobile and gaming
  • for gaming went to users and talked to gamers and broadcasting
  • ran large number of user interviews and used data for next 3 years
  • built division to talk to users continually
  • determined broadcasters were most important people
  • who you talk to as imporant as what you ask and what you pull away from it
  • 5m56s – interactive portion: who would you talk to for these startup ideas?
  • notetaking app (college students with different majors; college IT administrators; parents)
  • get familiar with people important to success of startup not just the most obvious users
  • 12m21s – User interview with student
  • 16m20s – review: not asking about features or user workflows; drill down to get sense of real problem
  • talk to extremes of people; 6 or 7 similar people will probably run out of new material
  • if building new product to replace existing solution what would be one thing to add to improve it
  • class example: what one feature would you add to google docs?
  • merge; postit notes in google docs
  • if can build quickly and validate then do that, otherwise draw workflow and show to ask
  • just asking about a new feature or product isn’t enough; they will say yes but might not buy
  • hack together bare minimum to test; browser extension; find way to cheat
  • find people who will pay and that validates it; money test
  • 25m40s – Twitch feedback
  • talking to existing users can be tricky because these are people already using product and willing to put up with shortcomings
  • compare groups of people
  • Twitch talked to broadcasters on competitor products
  • Listened to broadcasters on competitor solutions because these were people with problems big enough not to use justin.tv
  • 30m03s – talked to non-broadcasters: why people not using any solution; to expand market
  • combine interviews and sort through feature requests into goals
  • In past with Justin.tv spent lots of time looking at raw data and analytics; good but without talking to someone doesn’t tell you precisely where to go/ what to do
  • 34m55s – Q&A
  • 35m01s – # What is most common mistake?
  • Don’t show them your product and put things in their head. Instead ask what they need. Asking specifically about pet feature. “Would you pay for feature x?” Talking to who’s available rather than finding right people, even if it’s hard.
  • 36m32s – # How hard is it to get buy in by company?
  • Get interview and then back up your position. Actually showing interviews. Video record so don’t interrupt with notetaking and you can play recording for rest of company.
  • 37m34s – # Do you recommend face-to-face over email or text only interviews?
  • Want to avoid non-interactive feedback. Skype or in-person better to get better feedback.
  • 38m40s – # What about user interviews in international markets?
  • Hard problem. Twitch works better in English speaking countries as a result.
  • 39m46s – # What channels do you use to reach people to interview and do you ever compensate them?
  • Onsite messaging when on another website and invite them to skype call. Get to know people at events. Tend not to compensate. Never had trouble getting people to talk.
  • 40m57s – # Do you use onsite user feedback tools?
  • Getting feedback online for existing products/features very useful to iron out kinks but doesn’t tell you what to build in first place.
  • 42m06s – # Did you focus on a particular type of user to interview?
  • Yes, focused on people using competing products. Those people aready used a service so goal was to find out what would get them to switch. Easier than trying to create new behavior. Needed quick win.
  • 43m10s – # What about game publishers and industry?
  • Game publishers or established players typically won’t talk to you as a small startup. As Twitch grew, game publishers more willing to talk and more important to talk to now. Pool of people you talk to will change. Keep talking to new people.
  • 45m11s – # How do you give good user feedback as a user?
  • Get user to ramble and talk about their life to get a picture of who they are and why they want what they want.

Additional Reading

Series

How to Manage

Ben Horowitz, Founder of Andreessen Horowitz and Founder of Opsware discusses the management technique of considering perspective of employees and all stakeholders in decision making.

The talk covers a single management topic, which allows him to go into more detail. He uses the example of Toussant L’Overture, leader of the Haitian slave rebellion and his unorthodox leadership style.


Ben Horowitz – @bhorowitz

Notes

  • 2m46s – Agenda: Demotions, Raises, We evaluate a Sam Altman blog post, History’s greatest practitioner
  • 3m15s – Do you Demote or Fire?
  • Scenario: executive working hard, well liked, good culture, but not world class at his function
  • Options: fire or demote (or?)
  • Players: you, exec, every other employee
  • need to understand what it means to fail; what is required to maintain your equity
  • 8m35s – An Excellent Employee Asks You for a Raise
  • Your Perspective: want to retain them; good work so “fair”; they will like you
  • Employee’s Perspective: happy
  • Every Other Employees’ Perspective: Unfair that I didn’t get; I did better work; Maybe I should quit
  • Cultural Conclusion: every employee has a fiduciary responsibility to their family to ask for a raise
  • Right Answer: evaluation process; all the right inputs; run as needed; no raises outside process
  • 15m53s – Evaluate a Sam Altman Blog Post – vested options 90 day window to purchase
  • for example, 10 million in options may require $2 million to purchase
  • Quick History: up until APB opinion No. 25 stock option counting
  • Your Perspective: want to be fair; don’t want employees locked in; want to reward people who are staying
  • Perspective of Employee who Leaves: I worked for shares and should get; did you tell me truth when you hired me; if fired, got screwed 2nd time
  • Perspective of Employee Who Stays: is it smarter for me to stay or leave; are my colleagues being treated fairly; does my loyalty matter?
  • Situation Analysis: employee turnover in Silicon Valley around 10%; SV companies dilute at 6-8% per year when private for employee comp; if employee doesn’t exercise it goes back into pool
  • Two Alternative Cultural Statements: we value strait-forwardness and fairness; we value growing the company
  • 26m40s – History’s Greatest Practitioner: Toussaint L’Overture
  • Toussaint’s vision was end slavery and make Haiti first class
  • What to do with defeated enemy forces? Incorporate generals into slave army.
  • What to do with defeated slave owners? End slavery, slave owners keep land but pay salaries, lower taxes on plantation owners.
  • Conclusion: It’s not your perspective or the perspective of the person that you are talking to at the moment that matters. You must consider the people who are not in the room. They are the company. They are the culture.
  • 37m40s – How do you go about firing executive and notifying company?
  • It was failure at some level, you have to be honest. Number 1 cause is made hiring mistake in matching employee to company or role. Preserve their dignity when talking to rest of company.
  • 40m15s – How to deal with stress of CEO?
  • Keep your focus on what you can do not what happened to you or could happen.
  • 41m51s – How did Toussaint get generals to work for him?
  • Generals were shocked they weren’t killed and changed allegiance. Toussaint learned from Julius Ceasar.
  • 43m22s – How do you get people who were against you on your side?
  • Show them a better way. Mission has to be elevated. Have to be better.
  • 44m25s – How your VC firm built culture differentiated from other VCs?
  • Founder/inventor is special so we will build company and help founder/inventor into role of CEO. Partner’s are former founder/CEOs; build network that experienced CEO would have.
  • 46m47s – How to put yourself in other people’s shoes?
  • You have to pause yourself to think it over, not just answer off the cuff to avoid even little mistakes. “Kimchi prolbem”: the deeper you bury it the hotter it gets.

Additional Reading

Series