Yesterday, September 24 2011, I had the pleasure of attending MIT’s 2011 Startup Bootcamp. In its third year, Startup Bootcamp brought an inspiring and thoughful collection of speakers who have had a variety of startup successes.
Ten speakers presented a variety of viewpoints, insight, and food for thought.
It was a mixed bag – yes, there was unnecessary focus on vanity metrics and the rah-rah of startup theater. Breathless celebration of hockeysticking uniques and of flying around to court VCs makes for good TechCrunch articles. Like it or not, that’s an inculcated part of startup culture.
But if you get past the Hollywooding and the Silicon Valley adulation, there were gems of solid advice, grounded in experience, on hiring (Paul English of Kayak), data-driven product development (Naveen Selvadurai of foursquare), optimizing your life for personal growth (Drew Houston of Dropbox), identifying underlying social and technological shifts that enable new products (Charlie Cheever of Quora, Patrick Collison of Stripe), negotiation (Alex Polvi of Cloudkick), the importance of on-the-ground and unscalable product development tactics early on (Nathan Blecharczyk of Airbnb), earning and answering to the responsibility of finding your own way in the world (Anthony Volodkin of Hype Machine) and how important it is to empower yourself in perhaps the largest disruptive theme of our time by learning to code (Patrick Collison of Stripe).
Paul English, CTO and co-founder of Kayak.
Recruit a diversity of success.
Paul spoke on three kinds of recruiting: companies recruiting new hires, companies recruiting investors, and job-seekers recruiting companies.
When you’re recruiting, look for success, regardless of the kind. In fact, look for a diversity of success. Paul once hired an olympic rower, and a chess grandmaster, and couldn’t be happier with these decisions. Find people who operate at the top levels of excellence.
Some companies have a “no assholes” rule – at Kayak, they have a policy of “no neutrals”. Like Charlie Cheever, who later discussed the importance of hiring people you have high-bandwidth communication with, Paul encouraged building a team of people who are fully engaged: “intense and in-your-face – in a good way.”
Leah Culver, CEO and co-founder of Convore
Show up, say yes.
Leah told an lighthearted and likeable story of her journey from big state school CS major to Silicon Valley startup founder. Full of serendipity and luck, she shared stories of driving a UHaul from her native Minnesota out to the Bay Area (picked not primarily for its burgeoning tech scene, but for how much better the weather is), getting started with Instructables, and bumping into Pownce co-founders Kevin Rose and Daniel Burka at a party.
Have a good story to tell the press – you don’t have to tell people the ugly, dirty truth.
Another of Leah’s pieces of advice was a common thread through the talks – that of consistent applied effort. “Show up,” she said – in places with a critical mass of startup people, such as Silicon Valley – and “say yes” to opporunities that come your way.
Andrew Sutherland, founder of Quizlet
I didn’t just rush it on my parents that I was leaving MIT. It took two whole weeks.
Andrew shared his story of inspiration for an online learning tool. When he hacked together a prototype to help study for a French III class in high school and subsequently aced the test, he knew he was onto something.
Andrew discouraged market research – “If I had googled for online flash cards, I would have found other sites, that were not as good, and I wouldn’t have made Quizlet. Now, we’re 10x the [volume] of our next competitor.”
This phrasing raised some contention. I would reframe his advice as: focus on your own products rather than on the competition, and don’t be discouraged by incumbent players; rather, recognize them as a validation of the market space, and proceed to out-execute them.
Naveen Selvadurai co-founder of foursquare
At first, go with your hunch. Later, with data.
Naveen worked for Lucent and Sun in college. This was important – it was real-world learning. Seeing engineering culture, doing code reviews, shipping real products. Sun had an open culture of learning where you can dive into other products. “How’d they build Solaris? File systems?” Just sign up for the mailing list.
Naveen shared seven pieces of distilled advice:
- Keep good company.
- Make something that people want.
- Build around an atomic action.
- Seek mentors early.
- At first, go with your hunch. Later, with data.
- Balance unknowns with knowns.
- Always be recruiting.
On the last point Naveen shared the four stages of foursquare’s hiring strategy:
- Hire friends
- Hire friends of friends
- Use an external agency (but they didn’t find this valuable)
- Hire an internal fulltime recruiter.
It needs to be someone’s job to think about recruiting, seven days a week. Additionally, as a founder, you must always be recruiting.
Charlie Cheever, founder of Quora
Work with people you have really high-bandwidth communication with. Understand how the other person is thinking.
Charlie shared great advice on early-stage tactics. Start with few users (Quora started with fewer than fifty) and a low-cost MVP. Foster the community by hand, be high-touch and, if your business builds on user-generated content, be prepared at the beginning to build a lot of it by yourself. See how the experiment goes, and then take the learning from that experience and apply it to your MVP.
He shared the importance of collecting metrics early on. With Quora, they actually stored the entire webpage for every visit for every customer, so that they could go back later, having identified trends or formulated hypotheses, and see the site as their users saw it.
They noticed a set of high-engagement users, looked at these users’ expereinces, and found that they had all used Facebook connect. Running with this, the team spent time focusing on improving their social experience.
Charlie also left the audience with good food for though:
What wave enables your product? Why is now the right time to build it?
For foursquare, it was GPS-enabled mobile phones. For Quora, it was that “normal” people were comfortable sharing things online, and that the web was turning into a mess; with Google turning up more content farm results, people were moving onto safe harbors of organized information like IMDB and Wikipedia. The timing was right.
Drew Houston, co-founder of Dropbox
Get out of your comfort zone. Learn a little about a lot.
“Everything big starts small” – Drew’s original perception of startups was that of Tolkien’s Mount Doom. His original strategy to build a successful startup was to be overwhelmingly prepared – nab an MIT CS degree, get a few years’ exerpience working for small companies and big companies alike, come back for a PhD, maybe an MBA.
He then related a story from Dropbox’s origins: Drew had just settled into his seat on a Chinatown bus from Boston, in which he could usually get in several hours of undisturbed work. He popped open his laptop, and searched his pockets for his ever-present USB thumb drive. “Shit.” Realization set in just as he visualized, in his mind’s eye, the thumb drive sitting on his desk at home. “Like any good engineer with a problem to solve, I opened my editor.” Drew then wrote the first lines of what would eventually become Dropbox. Today, his company has a multi-billion dollar valuation and “stores more files than Twitter stores tweets.”
Drew exhorted the audience to learn about a broad variety of topics: sales, marketing, finance, accounting, product design, psychology, influence, negotiation, organizational design, management and leadership, business strategy. Buy books (“today we have this amazing thing, Amazon”), dip in, find mentors, and surround yourself with smart people.
Wrapping up, Drew shared his advice for success:
- Take on more than you’re “ready for.”
- Maximize how much you learn per unit time.
- Stack the odds in your favor. Surround yourself with great people; you are the average of your five closest friends.
- The fastest way to learn about startups is to join one.
- Starting a company is one of the best ways for engingeers to change the world.
Alex Polvi, founder of Cloudkick
No matter what number they offer, pause, count to 10 in your head, and then act as disappointed as possible.
Alex spoke on negotiation, specifically about his experience of his company Cloudkick being acquired by Rackspace.
- If a VP of Corp Dev says “strategic” to you, they are talking about acquisition.
- Acquisitions are a bit like romantic relationships: you often get the most attention when you’re looking for it the least. Once you are involved with one party, others can sense it. You somehow become more desirable.
- Once you have a term sheet from one prospective buyer, you have great leverage. When others call you up, you can very quickly get to hard numbers.
The best negotiation position is one of truth. Build something of value that people want, and your position is irrefutable.
Alex also discussed the importance of taking care of your team, and the people around you. Upon acquisition, he fully accelerated all employees’ options – whether they had been with Cloudkick for four years or four weeks, they were all fully vested and could share in the company’s success. It was important that the acquiring party, Rackspace was on board with this – and they were. Rackspace wanted the new team members to stick around not because they were waiting to vest, but because they wanted to be there.
Anthony Volodkin, founder of Hype Machine
Venture Capital? You do not need anyone’s permission to make stuff.
Anthony shared the perspective that VC or angel investment can be very important, but it’s not for everyone. “I don’t want to shut something off because the math doesn’t work. For people to not remember it. That would make me sad.”
Anthony’s vision was a question: while people with cool friends can get interesting music recommendations from that network, what about people without cool friends? He knew that there was great taste and insight being shared by music bloggers online, and sought to aggregate and distill it. “I didn’t want to miss anything.”
(If music startups are your thing, Anthony couldn’t recommend highly enough Dalton Caldwell’s talk from Startup School 3 on music startups.)
Find your own way.
He started Hype Machine from his dorm room. He didn’t take investor money. This gave Anthony and his team the freedom to run the company as they pleased.
“We wanted to travel,” he said – so they packed their bags and hung out in Berlin for a month. It was cheaper than they would have thought, “about six thousand dollars,” and incredibly fun. But if they’d had VC money? “No way,” Anthony imagined an advisor’s response, “we thought you were, you know, going to be working sixteen hour days. Now you want to go to Berlin and maybe work?”
YCombinator? TechStars? Just fucking make something.
Anthony exhorted: it’s okay to have a different process. Don’t discount investment and the accompanying advisors, but don’t go blindly down that most celebrated path. With a different process, it’s easier to stand out, to be differentiated. You can always get money if you are making something great.
You have to have a vision, you have to be able to execute that vision.
Nathan shared a 2008 pitch deck for Airbnb (then AirBed&Breakfast) – the first time this deck had ever seen the light of day. Tiffany Kosolcharoen posted photos of the slides on her blog.
He highlighted its strengths – it had a problem statement, and had a bottom-up business projection by analogy to CouchSurfing and Craigslist. He was also quick to point out its weaknesses – it involved hand-wavy notions of unlikely major player partnerships, and touted top down projections (“If we can capture 2% of the $1.9B travel booking market… imagine!”) that are quick to raise doubt from savvy adviors or investors.
The company was accepted into Y Combinator’s Winter 2009 class. YC companies are supposed to be heads-down; but at Paul Graham’s behest, the cofounders zeroed in their market focus to just New York and hopped redeyes back and forth every few weeks. They met with their initial supply-side renteres in bars, and chatted about how things were going. As the team refined the product and identified sticking points, they could be on the ground to help optimize listings. They’d go with people into their homes and take high-quality photos. They found that the initial asking rates were a little too high, so they asked their listers (after a few drinks) to lower their prices. Things clicked, and soon they had handled $250,000 in bookings of which they collected 10%.
Fast-forward to the YC W09 Demo Day, and although at that point Airbnb has already accepted Sequoia investment, they had prepared a Demo Day deck. Gone was the hand-wavy top-down projection and partnership hopefulness, replaced with a quarter million dollars of demonstrable traction, a tight initial market focus, and a tight, clear problem statement.
Like many of the speakers, Nathan stressed the importance of finding quality mentors.
Patrick Collison co-founder of Stripe
It is impossible to motivate great people by something that is merely going to be profitable.
Patrick’s talk was an excellent finish to the day. He delivered an essay full of engaging stories – I sincerely hope it will be posted online in full.
Patrick’s story was of his trip from hardcore Lisp academic to startup founder. Along the way, he developed one of the first iPhone apps, an offline Wikipedia, before the SDK and App Store, by debugging ARM assmebly. He shared the touching experience of getting emails form users whose lives he had changed; from bringing the world’s knowledge to villages in rural Peru and Ghana to delivering the freedom to browse Wikipedia without overisght to people behind the Great Firewall of China. At nineteen, he co-founded and sold an online action tool, and is currently working on a new payment startup, Stripe.
The anthropological story of the last twenty years is that software is taking over the world. Even if you’re a traveling violinist, you should learn how to program. Do all you can to ensure code is not a foreign language.