Читать книгу: «Startup, Please»
Startup Please
Igor Kostyuchenok
Table of Contents
Preface
Product
Summary
Founding Team
A Hacker
A Hippie
A Hustler
Funding
Summary
Selling
Summary
Hiring
Protect Your Team
Support Your Team
Loyalty
Same Values
Behavioral Patterns
Inspiration
Let Them Make Mistakes
Let Them Show Off
Listen
Gossip
Firing
In a nutshell
Title Page
Cover
Table of Contents
Preface
Startups are hard. Successful startups are even harder. Don’t let you tell otherwise. If it wasn’t hard, everyone would be a successful entrepreneur.
All successful startups are product oriented. All successful products are customer oriented, even if the initial customer is the entrepreneur himself.
Mbanq Team at Mbanq Labs Hackathon in Singapore
Startups are all about growth, explosive growth. Once your company stops growing exponentially year on year, you cannot consider it being a startup anymore – you moved into the category of established companies or you went out of business, which is way more likely.
If you hear the word startup and think FAANG and perks – you do not know anything about startups and you probably do not want to start one or work for one.
Startups are not about perks, off-sites, IPAs or gender wars. Startups are about blood, sweat and tears.
Startup is about constant grind, consistency and stamina. Startup is neither a sprint nor it is a marathon – startup is a fartlek – a long run consisting of short high-intensity intervals and short slower paced ones. Startup is about being able to fall and stand up over and over again.
If none of the above is something you can live with – do not join a startup and do not start one – you will definitely fail.
Why do people start companies then? The answer is very simple – because they cannot do otherwise. You have founders, who want to change the world and founders, who ride the current hype wave and want to make money. You have people, who cannot stand the bullshit and politics of big corporations and crazy scientists, who have been working on their idea for years and got discovered by a VC. All of them have different motivations but they have at least one thing in common – they are ready to sacrifice their time, health and their relationships to bring their idea to life.
No product is created in a vacuum. You will always have competition. The competition will be fierceful. If you want to truly make it, you have to be at the very top. Only a monopoly doesn’t need compete – don’t let you tell otherwise.
All product related things aside – startups are all about grit. If you decided to build your own product and to dedicate your life to it – expect a bumpy ride. It will be probably the best decision of your life but only if you will have the right attitude.
I hope this book will help you to avoid some obstacles on your way to success. It doesn’t represent the absolute truth, it just gives you some insights that I would love to know prior to embarking on a startup journey. I will keep it short, I promise – I know you won’t have a lot of free time on your hands. I also won’t go very deep into the startup matter. To paraphrase Leo Tolstoy: All happy startups resemble one another, but each unhappy startup is unhappy in its own way
Ok, let’s not waste any more time and concentrate on the topics that will hopefully help you to create a happy and successful startup – to infinity and beyond!!!
I would like to thank everyone at Mbanq. Without the team that was carefully assembled by Mbanq’s CEO Vlad Lounegov – I wouldn’t be able to truly experience the startup life and share with you any insights.
Here is a couple of thoughts I would like to give you on the way: – Ideas are worth nothing without execution – Your customers do not care about your tech – Startup is a marathon not a sprint – pace yourself – Timing matters but you cannot control it – You do not know how exactly your product will be used – It will be harder than you think
Product
Product is at the center of your startup. Your product is what it’s all about. When I say product, I don’t talk about the idea. Idea on its own is worth nothing. Ideas are a dime a dozen – everyone has them but not everyone is able to bring their idea to life.
Gates Sign at the Bangkok Airport
Execution is the key – that’s what startups are all about. If you cannot execute your idea, you won’t have a company and won’t make the world, hopefully, a better place.
Your product is not the heart but a brain of your startup. Without your product your company is brain-dead. Even if it looks shiny, it’s not operational.
The art of the product development is to deliver a working solution as fast as possible by keeping an eye on the big picture. Keep in mind that during the development of your product, your idea will transform as well. Don’t be too stubborn – otherwise you may get stuck and frustrated.
Products are hard, good products are even harder. They are hard to build, hard to launch and even harder to continuously improve.
Products solve problems. Good products solve hard problems. Hard problems are not easy to solve, so good products are hard to build.
According to Marty Cagan – the founder of the Silicon Valley Product Group has the best definition of a successful product – the best products exist on the intersection of following qualities: – Valuable – Something that our customers will choose to use – Usable – Easy to figure out how to use – Feasible – Buildable using the technology stack and skills we have – Viable – Workable for our stakeholders within our budget, legal, ethical, and reputational constraints
Summary
Idea alone is worth nothing
Your idea will change when you start executing it
Good products are hard to build
Launch early
You can launch multiple times
Founding Team
If you’re long enough in the tech business, you should have heard a tale about 3H that every startup needs. In order for a startup to become successful it needs 3 founders: – a Hacker – a Hustler – a Hippie (they call it Hipster nowadays but don’t follow the crowd)
If you think about this setup for a bit, this constellation will definitely start making sense.
Let’s see what every one of those 3H actually entails.
<img style=“width=”100%” src=“./assets/founders.jpeg”/> Mbanq Founders at the Mbanq Labs Hackathon in Singapore
A Hacker
Let’s start with the easiest one. A Hacker is your CTO – someone who will build the product, someone who cares about building cool products, someone who understands how to spend time efficiently.
Some tend to spend too much time over optimizing the early stage product. Scalability doesn’t matter when you didn’t find your product fit yet. When you over optimize too early in the process, you’re wasting at least double the time by not executing on your idea, losing time on unnecessary bells and whistles before having found your product market fit.
As you may know, startup is all about the execution. The faster you can execute, the higher are the chances of your startup to become successful.
So a hacker should know how to cut corners in a smart way. There is a huge difference between your MVP and your final product.
Building products is hard, building valuable products is even harder – that’s exactly why every hacker needs a counterpart – a hippie.
A Hippie
Who’s a hippie you may ask. If you are too young and don’t know who Steve Jobs was, I pity you and recommend you start getting to know about him.
Up to this date, I personally consider him to be the best product person ever – you can argue, I don’t care.
So, if you haven’t seen The Lost Interview yet – do it now, you won’t regret it.
One of the questions Steve was asked is Are you a hippie or a nerd – so when the best product person of all time considered himself a hippie, we can assume that a hippie is your CPO.
A Hustler
This one is almost as clear as a hacker position. Your hustler is your Head of Sales. A very important person on your team. Don’t be disillusioned – build it and they will come is a fallacy. In the world full of similar products and never-ending competition, you need a hustler who will sell your product to your customers and your idea to the investors.
This is the person who knows and believes in your product and help a hippie to find the best possible Product/market fit.
Funding
When I was setting up the Mbanq Labs accelerator in Singapore, I had a chance to talk to many founders and consult a lot of startups.
What was striking to me, besides their eagerness to build their products, is how hard it was for them to clearly articulate the idea of their product in one sentence.
Daniel Ong giving a speech in front of startup founders
Startups are all about the speed of execution and iteration. If you don’t have enough financial resources to hire a team to execute on your idea 24/7 for the next 3-6 months, your best bet is to find like-minded people and start working on your pitch-deck.
Do not see your pitch-deck as a means to an end but rather as an exercise that you will have to do every couple of months to review your product and its position on the market. You’re doing this work primarily for yourself and not for a potential investor. You need it more than anyone else.
It’s not about you having a detailed execution plan, because assuming that things will go as planned is clearly a delusion. Once you start executing, you will see how rapidly your plan will change.
Your pitch-deck should show that you’re able to plan for short- and mid-term, analyze the current situation and build your product without completely losing focus.
The goal of the pitch-deck is not to have a step-by-step plan for your product/company for the next 12 months but rather to show a potential investor that you thought about: – product/market fit – your market – more often than not you’ll start in a certain location and will later expand your product to the bigger market – growth potential – how and where are you planning to grow – competition – who’s your competitors and how your product is different/better – funding amount – you should know how much funding you need and what you will spend it on
Don’t forget that there’s no formula for success – but there’s one for a failure.
I recommend to any startup founder to register at Signal and create your brief. The guys at Signal did a great job at providing the questions any founder should have answers to. Signal also gives you the opportunity to create briefs targeted at certain investors.
So, getting inspiration from the Signal’s brief questions, let’s talk about a perfect pitch-deck and what information it needs to provide: – Business Category/Sector – you have to know whether you’re planning to sell you product/service to the customers or other businesses: B2C, B2B, B2B2C etc. and what is the market for your product from the technical point of view: FinTech, CleanTech, FoodTech etc. Your product can play in multiple categories – Current Stage of Your Company/Product – Pre-Product, Pre-Revenue, Post-Revenue – Team – Crucial topic. You’ll have a lot more chances to get funding, and let’s be honest, to build your company if you have a team of like-minded people working towards a common goal. To learn more about a perfect team, head over to this article on my blog Perfect Startup Team – Your Company Brief – description of your company in one sentence. Come up with a plausible explanation of what your product does. Don’t use the sentences like: Airbnb for yachts or Uber for bicycles – Market – how big is your market Why do you think it can get big. Ideally your product will create its own market so that you can dominate it right from the start – Business Model – briefly explain how you’re planning to make money – Timing – many products fail due to entering the market too early or too late. Please, explain, why do you think now is the right time for your product: technology shift, legislative shift, behavioural shift? – Traction – if your product already has some traction, add this information to your pitch-deck. Include the information about the user base growth and the revenues. If you are working in a B2B area add the information about the contracts closed and current and projected revenues. Even if you just have an LoI signed with some prospects, mention it in your deck. – Founder/VC-Fit – if you’re targeting a certain VC person or a fund, you should convey here why you think it’s the right VC partner for your startup.
What I personally find very important when I review the pitch-decks is how little attention founders pay to the business and technology part of their decks. They often do not know, how is their product different to their competitors or how they are planning to make money.
Please also don’t forget that it always makes sense to validate your idea. You don’t have to build the complete product to do it – there’re ways to validate it either prior to building it or during your MVP phase.
Don’t try to create a perfect MVP and don’t spend time prematurely scaling it. You will be amazed how much load a regular tech stack can handle. Most of the startups will never achieve the scale they’re optimizing their products for.
Summary
Condense the idea of your product in one sentence
Know your business model and your market
Know your competition but build your own product
Timing is crucial
Choose a VC that believes in your idea and your team
Selling
First thing you have to understand is the products don't sell themselves. Build it and they will come – never works. You will have to do marketing for your product or service.
If you want to successfully sell your product or service, you should sell a story.
Singapore Business District
People are egocentric, social creatures who value their status in society. Every product that contributes to their value will get high attention. This way products can move from being used to solving problems to becoming status symbols: Rolex, iPhone, Tesla. The products that moved into the status symbol category will yield the highest earnings for the product provider.
It’s not the only status symbol category that needs to sell a story though. Ultimately every product should. You don’t sell flight tickets – you sell freedom to travel. You don’t sell the possibility to book an apartment or a hotel, you sell the dream of being local in a new place or to live a luxurious life for 3 days a year etc. etc.
If you think this pattern is only applicable for the consumer products, you are wrong. Absolutely the same is true for the B2B sector. Every company wants to be better than its competitors and they are ready to pay the premium price if you will sell them your product the right way.
In order to sell your product, you must truly know your customer and push the right buttons.
Build up a loyal community of early adopters – people who trust you, will participate in the early tests of your product and give you an honest feedback you can use to improve your product or service. Offer your early adopters community special deals on your products or services – nurture and engage with your community.
Selling a product is as important as building it. You not only have to sell your product to your customers but you often you have to sell it to your investors as well. Thus your Head of Sales must both know your product in and out and believe in your idea and support it fully.
Summary
Sell a story not a product or service
People are ready to pay more for a status symbol
Build a loyal customer community. They will help you to grow your customer base (see Apple, Tesla)
Learn to sell your idea both to your customers and your investors
Never stop promoting your product
Hiring
Everything written below is highly influenced by my personal experience and talks that were given by the people I’m following.
Teams of Startup Founders
Protect Your Team
A good leader always protects his team from other teams and other leaders (higher management).
A failure of your team is your failure
A success of your team is their success
Support Your Team
What to do when one of your teammates decided to leave – support her, even if it’s hard for you. When you see that people cannot grow further in your company or in their position, if you cannot give them the chance to grow – support them, even encourage them to leave. You’ll get a loyal person in another company/team.
Loyalty
Don’t expect people to be loyal to your brand. People should be loyal to the team they belong to, not to the brand.
Same Values
The team and the leader should share the same values. Whenever you hire a new team member you should find out what she is ready for and what she’s not. Try to hire people, not robots. The people who leave the workplace at 6pm sharp regardless of the current situation at work are as bad as the ones who put work before their kids or family.
Behavioral Patterns
People don’t change. They also behave the same at work as they do with their family. See how your teammates behave. If your teammate treats his family badly the same will happen at work. Don’t kid yourself.
Inspiration
You cannot inspire people. Your goal should be to hire inspired people. If you hire the ones who love what they do, they’ll already be inspired by themselves. The best thing you can do is to not kill their inspiration. Communicate honestly with them. They should know why you think they shouldn’t do certain things. But bear in mind if you already tried something and failed it doesn’t necessarily mean it won’t work next time with different people.
Let Them Make Mistakes
You have to let them make their own mistakes. Mistakes are the best source of learning – that’s just a nature of learning. If you make all the decisions for them, they won’t grow and will leave sooner rather than later. If you let them make their own mistakes they will grow faster by order of magnitude.
Let Them Show Off
Let your people the chance to show their accomplishments. If you see a team where only the leader is known for the work done, it means he is afraid of growing people stronger than him. A leader has to be sure that when he quits, there are two people who can take his place and do a better work than him.
Listen
Whenever you have to make a decision, hear everyone’s opinion before announcing your own. If you announce your opinion/solution first and hear a better one afterwards, it might get hard for you to accept it. It can lead to an irrational decision just because your pride didn’t let you take someone else’s opinion before yours.
Gossip
Don’t allow or participate in any gossip inside of your team – it will tear your team apart. Even worse, when you have a confrontation between two strong personalities inside of your team – you’ll have to fire at least one of them.
Firing
Contrary to a popular believe, firing people is at least if not even more important than hiring them. You will make hiring mistakes, there’s no way around it. Sometimes you will hire people because you really liked them and were enamored by them. Some of those hires will work out, others won’t.
Once you realized you made a wrong hire, do not hesitate to part ways with this person. You’re the person in charge now. Nobody else will do it for you. Yes, it sucks to bring bad news to people but the longer you hesitate the harder it will get and the more damage your company will experience.
The outperformers on your team are the ones you should take care of in the first place, and they will definitely see wrong hires. If you don’t correct your mistakes, you can start bleeding your best people.
In a nutshell
If you have absolutely no time on your hands, that’s a chapter for you. That’s the essence, the gist.
Trust your gut – your first feeling is very often the right one. Don’t dismiss it. Even after a very comprehensive analysis mistakes will happen. I’m not saying, you shouldn’t do your research but always take it with a grain of salt.
Know your product – know your product and be able to concisely articulate your idea to the audience, be it your customers or investors. Avoid using sentences like Uber for boats, or Airbnb for airplanes. Even if you think it explains your product really well, it doesn’t make you look good.
Hire for a task not for the time – not every hire will be able to transform with your company and thus stay with you for a longer period of time – that’s ok. Don’t hold on to people. Some people will perform really well, whenever you’re starting out but will struggle really hard when there’s the time to introduce some processes. Others won’t be able to work in a chaotic environment but will perform certain tasks really well. Choose the right people for the job in any particular point in time.
Fire people – don’t be afraid of correcting your hiring mistakes. There will be mistakes. Do your best to explain to people that it’s not their fault but yours. Not correcting a hiring mistake may cost you your company (remember John Sculley/Steve Jobs story).
Promote your product – contrary to popular believe build it and they will come doesn’t work, full stop! Even if some companies claim, they have never promoted their product – that’s bullshit. Once you have a somewhat working product that has value – start promoting. Use all available channels, use your personal contacts, use everyone in your network.
Launch early – don’t wait until you will have a perfect product. You can get into the loop of constant change. There will always be something you won’t be happy about. Launch as fast as possible. Remember Reid Hoffman: If you are not embarrassed by the first version of your product, you've launched too late. The feedback you will get from the first customers will blow your own testing out of the water. Also, keep in mind that you can launch your product as many times as you want.
Ignorance is a bliss – a little bit of ignorance definitely helps in starting a company. It’s a hard but a rewarding journey that lies ahead of you and you cannot even imagine how hard or frustrating it will get and it’s a good thing! Keep believing in your idea and continue working on it.
Age doesn’t matter – but being young helps. When you’re young, you don’t have a lot of obligations, so you can dedicate yourself to your startup.
