Startup School 2014

Ron Conway from SV Angel
  • How do you tell you are driven enough?
    • Are you willing to work 24/7. The company is the first in line. Once you are willing to make this commitment, then the work ethic will be a non-issue.
  • Good qualities of an entrepreneur:
    • Good communicator
    • Have to be able to excite others
    • Can educate you self on skills that you are not born with (DYI learning).
    • Your idea has to be infectious enough to find a co-founder.
  • People typically find co-founder who know each other
  • SVAngels invested 750 companies
  • When you are older/wiser: better at giving advices
  • Younger people are better pickers
  • What should people do before start a startup?
  • Startup Ideas
    • When THE idea comes to your mind, you would say,“this is it!”.
    • It’s typically based on personal experience.
    • You stop what you doing and go work on that idea.
    • It’s based around a need/idea, which can create huge companies because other people might have the same need.
    • After coming up with the idea, then startup need to find product market fit.
  • The more compiling the story is, the more excited the investors become. This is what investors are looking for: “What inspired you to start the company?”
  • Investors also observe how co-founders interact. If one does the talking while another one interrupts/questions the other, it’s a red flag.
  • Co-founders typically co-worked on the idea together to build the idea together.
  • There are single founders, but very few. YC received 1/2 applicants as single founders and few actually got accepted.
  • How do people know the idea is bad?
    • A lot of ideas, appears to be bed, are actually huge. SV angels can’t tell if ideas is big/huge, they invest in people.
  • What traits a successful founders have?
    • Rightful focus on the product to the point of being rude! This focus enables building huge company.
  • Sometimes angels are over opinionated about the founders and make mistakes on missed star founders.
  • Both angels and founders are in it for the excitement to work on an interesting project/product/solution, not for the money.
  • What do Ron not fall for?
    • Ron look for focus on the product. If not focus on the product, the an alarm goes off. For the product to be successful, the number of users will grow. (i.e. focus on the users as well)
  • What do young founder do wrong?
    • If the idea is not working, ask “what do we need to do to make it work?” i.e. too prone to be trapped in denial. Your team will recognize it before you, but they will not discuss it with you. When the founder recognize it and openly discuss it with the team, the team’s moral actually goes up because the founders actually join the understanding of the rest of the company.
Danae Ringelmann from Indiegogo
  • About Danae
    • Daughter of 2 business owners. Parents bootstrapped on their own for 30 years. Danae grew up seeing her parents having hard time to gain access to funding.
    • First job in Wall Street in investment banking. Attended a Hollywood meets Wall Street event and was the most popular girl at the event because she was the only person from a bank. Everyone at the event was hoping to find investors. A man wrote her a letter asking for money. She felt angry about how unfair the world is, called mom and mom said, “why don’t you do something about it?”. So, she tried to help organizing a fundraisers for a broadway show and couldn’t get it to work.
    • She went back to HASS business school. Started Indigogo to democratize access to capital.
  • Lesson #1: Know your WHY
    • Why are you starting this company? Why do you care so much?
    • Your WHY gets your ego out of the way
    • Your WHY gets you through the early years
    • Your WHY informs your strategy: For Indigogo it is Open, Global, Customer Happiness, Optionality
    • Your WHY attracts amazing people
    • Your WHY attracts amazing customers
    • 5 Whys exercise, keep asking why again and again, until you get to irrational and that will discover the root motivation.
  • Lesson #2: Be Intentional with Culture
    • Make an intentional effort.
    • Diversity
    • Strong Culture (See: Dave Kashen’s How to build an Awesome Culture)
    • I work at Indigogo because ….
      • Distill your Values (Based on the above response) Below is a list for Indigogo
        • Fearlessness
        • Authenticity
        • Collaboration
        • Empowerment
      • Define and revisit your behaviors
        • For Indigogo, this is “Ruthlessly prioritizes.” — Focus on high priorities and say no to everything else.
      • Operationalize
        • Hiring — alignment with the mission
        • Rewards
        • Rituals
      • Measure
        • eNPS — happiness, How likely you recommend friends working here
        • OKR Grades — productivity
  • Lesson #3: Technology is just a means, not an end.
  • Raised 40m a few months ago.
Kevin Systrom from Instagram
  • Grew up outside of Boston.
  • Love to do a lot of different things.
  • Read a book called “The New New Thing”.
  • Loves Stanford for the culture of work hard and play hard.
  • Taught himself Ruby on Rail to build app to help Stanford students to trade at end/beginning of the school year. Created “Treelist”.
  • Studied at Florence for 3 months and launched the app.
  • People’s positive response and their usage helped him to continue work on. Through this experience, he learned how to market an app to other people.
  • There is no perfect next move.
  • Bias toward action. Movement and progress will help you. Learning will also help. Every little experience you have can contribute toward your future initiative.
  • If you plan to do a start-up, “it’s all going to be fine”.
  • He was working as a marketing job at Google. Go to where the people are.
  • Joined NextStop and the job prepared him for his next job/startup.
  • Combinatorial Entrepreneurship – a technique to use combination of terms to brainstorming.
  • Nicole is his girlfriend
  • Took 8 weeks to build the first version of Instagram.
  • Hiring before you need people
  • Be relentless You have to be your own advocate. No one is incentivized that your idea is going to work.
  • At the time of launch, their server was underpowered.
  • He felt lucky to be at the right place, right time.
  • Values: Community first (Your users are your greatest asset. If you take advantage of them, they may go away.)
Reid Hoffman from LinkedIn
  • After sold off Paypal to eBay, Reid took 3 weeks off and started working on LinkedIn
  • First thousand users was easy, using invitation. Linkedin added the feature to allow users to upload their address book to check who else are on LinkedIn.
  • Open capital market: 5x more competition, not just capital, also talent, noise, etc.
  • Ideal time to start company is during downturn
  • How you break the noise is a problem. Do something that is contrian, not airbnb for dogs.
  • Every valuable startup has weeks or months where the confidences goes down.
  • Raise more money than you need to make a milestone. If you raise too much capital, it can impact the sharpness of your operation. If you need 10, raise 15 or 20, but don’t raise 50. It’s the market that gives you the time, not the money. LinkedIn raised 4.6m. Identified goals for the next round of funding while raising for the current round.
  • Misconception: “Network equals network effect” The more nodes are in the system, it makes the system more valuable and harder to leave. Just having a network does not mean you have network effect.
  • A great idea:
    • Can it reach millions people
    • Is this what the world should be
    • When 2/3 of the people said that your startup idea is stupid is an indication that you should start.
  • Bitcoin: Is it the first or last crypto currency? Bitcoin is adding more wallets per week than others.
  • Recommend book: Peter’s Zero to One
  • The role of gov: It create the legal structure, edu env, finance law for the startup community. We need to make the gov better.
  • Entrepreneurship can be learned. Gov can help facilitate this.
Jan Koum from WhatsApp
Jim Goetz from Sequia Capital
  • Jan came from Ukraine, majored in computer science. Dropped out of college to join Yahoo for 9 years. Learned how to scale Yahoo from 500 servers to thousands of servers. WhatsApp has about 20-25 employees to manage the servers that serve 400 million users.
  • Jan never thought about starting a company, just want to build a product, just wanted to build a messaging app. In Jan 2009, Jan bought an iPhone. At the time the SDK came out and he tried to build an app, not a messaging app initially. Later, he pivot to messaging. In the Summer 2009, he was able to launch an initial version of WhatsApp.
  • Jim pointed out that Jan focus on end-users and ignore other people.
  • Jan made the decision to support Windows/Nokia 5 years ago, which paid off when those users migrate to Andropid/iPhone and still use WhatsApp.
  • Jim pointed out the level of focus Jan had on users and products is tremendous and ignored investors. At around 100 million users, Jan started to hire customer support staff.
  • Use fee to slow growth, so the company can focus on building infrastructure, making sure server is fast and customers are happy.
  • Jan prefer not to be in the press, which can be a distraction to the employees.
  • Jim said that the company had no marketing and encouraged Jan to hire a marketing team and respond to TechCrunch request.
  • Jan wanted to have the simplicity to use phone number and tap into the address book as the social network.
  • Jan tried to remove features that only 1% people use and that still has millions of users.
  • Erlang – enabled WhatsApp to scale, clustering, sync across servers.
  • WhatsApp helps people to stay connected.
  • WhatsApp always grew internationally.
  • Jan focus on how to grow and make the product successful, rather than focus on the financials.
  • During the early days of the company, Jan wanted WhatsApp to be on every smartphone.
  • Jan wanted to do the following in addition to be on every smartphone:
    • How to make the app startup faster
    • How to make the app more efficient and other little details.
Eric Migicovsky from Pebble
  • Eric studied industrial design. He wanted to see who called/text him while he bicycled and made a prototype by himself. After that, he went back to last year of his school, entered pitch competitions and won a competition. He also had funding from parents, who thought that was cheaper than grad school. In Waterloo in 2008, Blackberry was popular. So, Eric created a prototype that only worked with Blackberry. He worked with an industrial designer to create the first real watch.
  • By Mid-2009 and 2010, he were able to show a watch to people. 2009 is still early for 3d printing. By end of 2009, Eric launched the product publicly. One week before the actual launch, he sent to crackberry, a blog, about his product. On Oct 10, crackberry featured “First Images: BlcakBerry Watch is FOR REAL”. It caused a wave of excitement. On the following week, Eric followed-up to all media sites and everyone post again about the new product.
  • The company was based in a garage. The founders went back to the Waterloo University to build the first 500 units. Around this time, the company applied to YC. End-users had great product enhancement. Eric moved to Mountain View after joined YC.
  • The first version of the watch didn’t show current time. So, he launched firmware upgrade a week later.
  • In 2011, the company released a SDK. Within 2-3 months, over 100+ apps became available for the watch.
  • Initially the watch did’t work with iOS. After received feedback from the initial launch, the company was really to build the next iteration to wok with the phone.
  • He spent one month to talk with investors and couldn’t get funding. So, the company turn to Kickstarter and it changed Eric’s life. Eric reach his initial fund raising goal within two hours and raised millions of dollars in one month.
  • The company had 5 people when starting the Kickstarter project. None of them had prior experience on consumer electronics. They went to China to start working on the manufacturing.
  • Apple started moving this space. Google is going into this space.
  • Pebble tries to build a watch that is open, hackable, inexpensive and has a community.
  • Watchface generator for pebble enable Pebble customers to create watch faces.
Live Office Hours
  • 4 types of office hours:
    • Group office hours: For helping founders to understand the tempo and issues
    • Individual office hours: Similar to the office hour on stage at Startup Schoo, helping the founders with their challenges by helping them to figure out heuristics of solving problems rather than telling the founder what to do. Founders should go into this office hour with a specific agenda/problem. Partners do not want to go over the same challenge over and over again over multiple office hours.
    • Company office hours: Google, Amazon and other companies come in to help the founders with technical problems.
    • Investor office hours: Helping companies to get ready for demo day
  • is data storage company and launched public beta on Monday that runs on Android. is open-source and extensible. is trying to implement RedHat/Mongo DB business model.
    • YC Partners recommend them to get as many people to sign-up, get feedback, explore for-fee support, build the community.
  • is a mobile app for building shopping list with location-based and price comparison features. Kuona has 11,000 users, mostly in Mexico. $0.1 to $0.2 for cost of user acquisition. Kuona is trying to make money from brands.      Kuona provided targeted advertising and analytics for brands. Kuona’s challenge is stickiness to grow the users.
    • YC Partners recommend to focus on growing the users. Once Kuona has users, brands will follow.
  • UtilityAPI solve data problems for solar and utility company to help them solving customer acquisition challenge.
    • YC Partners are not very clear about UtilityAPI is when looking at the web site.
Andrew Mason Detour/Groupon
  • Andrew was a developer before going back to grad school. In 2006, he received an in-bound $1M offer for him to drop-off school to work on a start-up, The Point. He started in 2006 and about one years later pivot into Groupon.  Groupon was started as a side project in parallel to The Point. The Point had about 1000 visitors everyday, but the traffic would reduce. The Point product wasn’t working and the investors wanted to take their money back.
  • Andrew had a hard time to motivate his team to work on Groupon. So, he hacked a WordPress web site for the first coupon deal, which is a 2-for-1 pizza deal. After a couple weeks, it was clear that they were up to something. If this continuous on the same growth rate, Groupon would be the fastest growing company.
  • In the early days, they would use a FileMaker database to create coupons and use to open emails. First mover advantage made a difference for Groupon. Groupon was built in one-month, easy to start. Scaling was difficult.
  • Groupon was adding people so fast that it was hard to maintain a global value system. One area Groupon did well was that they identified an unit for each city and use a playbook to repeat it over and over. Groupon expanded after received funding in 2009 and at that point, they knew they need to figure our their international operations quickly and expand ASAP as clones pop-up.
  • If Andrew do over again on acquisition, he would make sure that values would align before doing the acquisition.
  • Yahoo approached Groupon to make an offer to buy the company for $2B range. Andrew didn’t want to sell at all and did not sell to Yahoo. Andrew approached Google and that went well. The board decided that given the growth was going off the charts, it didn’t make sense to sell. Andrew also didn’t want to sell. A business is an opportunity to inject an idea in the world.
  • Going to public is awful. At least 10% of your time will be nothing to do with building a great company. The incentive to think short-term is very strong. Andrew think it’s bad for entrepreneurship. Andrew would recommend to put off going to public a long as possible.
  • Andrew is starting Detour, a location aware audio tour. Detour has 90-day company goals.
  • Values — The principles that you follow religiously. Examples: start with customers and work backwards. The difference is having the courage to have this convention and see it pay off.
Michelle Zatlyn CloudFlare
Matthew Prince
  • 5 years ago, Michelle and Matthew were in the audience’s seats.
  • CloudFlare is building better Internet, faster, more secure, load balanced, Cisco as-a-service. 3000 people sign-up everyday.
  • There is no silver-bullet to how to get started.
  • Sharks and misquotes: Matthew worries about sharks, which only kills about 10 people per year. While misquotes kills hundred of thousands of people.
  • For the first year, the founder built the product and open private beta. The founders knew the products wasn’t ready yet. They signed-up 10 friends and took all 10 down to improve it before bring them up again.
  • Matthew asked their customers to donate servers. 70% of the customers responded and donated non-working machines. So, the founders build their first CloudFlare server with these donated parts. While picking-up the servers, Michelle asked customers for their feedback.
  • Matthew and Michelle have different skills and trust one another.
  • As a startup, your momentum is your asset.
  • When you hire someone, you can have two schools of thought: 1. high title, 2. low title. If Matthew had to do this over again, he would give engineer title to everyone. On the first board meeting, everyone has VP title.
  • Diversity: The number of their team members with prior web infrastructure experience is very small. Many came from adjecent industry. By not having the in-industry context, it opens them to explore out-of-box thinking.
  • Work on big challenges, work on hard things. It’s going to be hard no matter what you do. If you end-up protecting the democracy in HK, it matters.
  • Average time to IPO is 8 years.
  • Do pick something that you are willing to put your sweat, tear, and blood into.
  • Having other people you trust and value can really help to cope with the ups and downs of entrepreneurship.
  • Surround yourself with the right people, board member, employee, etc.
  • When looking for investors, make sure their vision is aligned with the founders. Once you take money from the investors, it’s hard to undo.
Hosain Rahman from Jawbone
  • Jawbone started with a customer problem, which led the company to voice recognition. Jawbone invented a noise cancelation technology. Then Hosain tried to talk with device manufactures, but no one wanted to integrate the technology with their device. DARPA funded the company for battle field technology. At the time Jawbone had 8 engineers and moved to SF in 1999.
  • If you believe what you have is right, then stay in that course. That’s why Jawbone was taking the un-conventional funding source from DARPA. The funding enabled Jawbone to productize the technology. Hosain eventually decided too make their own hardware device after not getting commitment from potential licensee partners. At the time, around 2002, there were not many prior hardware start-ups. Jawbone started to think seriously on design in order to make the product great. Jawbone launched the first headset product.
  • Hosain got a chance to meet Steve Job and received brutal honest feedback on many flaws the product had due to all the compromises that the founder made due to other constrains. Hosain sent Jobs a thank you letter showing his appreciation and the time for the honest feedback. The initial product wasn’t successful, the investors kicked the founders off the board and wanted to shutdown the company. This failure taught Hosain a lot. He realized that paying attention to details and resolved the issues is important. He went back to re-work on the next product using another DARPA funding and no salary for two years.
  • Hosain got a deal with Cingular/AT&T. However, the company had no money to get the customs to release the product. The company found an investor to get the needed funding, to get the product in store in-time for Christmas. With this overnight success, Hosain had to start building the company growing from 6 employees. After the launch, some of the units were breaking. Jawbone tried to focus on the customer, send apology letters, refund and work through the issues.
  • In 2011, Jawbone had to start building software from scratch. It was hard to have both hardware and software people work in a way that the whole thing work well together to solve a customer problem.
Emmett Shear from Twitcch
  • For the first start-up, the team had not so good idea and unable to stay focus for more than 5 weeks. Emmett was able to generate 6 startup ideas in a year an half. As a result of working on several startup ideas, Emmett was becoming a better programmer.
  • Second startup-up idea was to build a reality TV show around Justin’s life and got support from YC. The team was able to get the funding before they were able to deliver the result. Then the company hired 4th co-founder, Kyle. 4-person co-founder can be a bad idea, but it worked for the team. This startup got the attention of the whole country. Then, the company open-up the platform to enable anyone to broadcast live TV show. The team had a lot of down-time and learned how to scale the platform. At some point, the team couldn’t figure out why they are not growing. By 2008, the team tried really hard trying to make money. The company had two ideas for growing: 1. Mobile 2. Gaming. So the company setup two teams working on two projects, one on gaming and one on mobile. Emmett led the gaming project. At that time, 5 years into startups, Emmett felt a light bulb went off. Emmett learned how to talk to users, which is one key skills for building products for users.
  • 4 moth later, he launched Twitch TV. Emmett talked to the users, broadcasters, to learn more about them. For startups, don’t do a business development deals. It’s only useful for bigger companies.
  • Don’t Give Up — Emmett took 3 tries. If you don’t love it, then you won’t be able to make through. It took Emmett 8 years.

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