Startup Framework

I’ve been holding on to this list for a while. Now that Demo Day is here, below are this winter’s YC graduates. Congratulations to all the startups. And Godspeed!

Airware (previously Unmanned Innovation)- App development platform for unmanned aircraft, drones

Bitnami - App store for server apps

BuildZoom - Reviews on contractors for remodeling jobs

CircuitLab - Circuit Design Tools

Educat.me

Errplane - Monitor your application performance in real-time

Fitsby

FlightCar - car sharing to airports

Fivetran - Spreadsheets on Steroids

Goldbely - Connecting foodies to restaurants

Infikno?

Lawdingo - Lawyer marketplace

Lollipuff - An auction site with authenticity-verified products

Medisas - Transfer patient info between shifts

Meldium - Password manager for enterprise

Microryza - Kickstarter (crowd-sourced funding) for academic research.

Misfit Labs (InTouch)

Padlet - Drag and drop collaboration tool

Paytango - Paytango links the credit cards in your wallet to your fingerprints. Use biometric ID to pay for your next coffee.

Posmetrics - Real-time feedback on point-of-sales terminals (iPad-based)

Prizeo - Raffling events with celebrities for great causes. E.g. Win a cooking lesson and meal with Jamie Oliver & Support Jamie Oliver Food Foundation. 35 Days Left.

RideWithUs.ly?

Screenhero - Screen sharing for the modern world

Semantics3 - Curated database of products and prices

SimplyInsured - Comparison-shopping on health-care providers

Strikingly - Website builder optimized for mobile

Styleup - Daily fashion emails

Swapbox - I’m not sure as to their relationship with bufferbox (can someone confirm?), but both websites go through the same pitch “Never miss a delivery again… receive a PIN #.. use that to pick up”. Either way, great startup.

Swish - Preorder Platform. May use these guys for my 2nd ebook.

TeeSpring - Kickstarter (crowd-sourced funding) for tee-shirts

Terascore - Software for schools to grade tests.

Thalmic Labs - Hands down my favourite company - Pre-order # 2079 wearable gesture device - name was inspired by the Theramin I believe. See demo vid here: http://www.youtube.com/watch?v=oWu9TFJjHaM

Watsi - YC’s first non-profit to help patients get the healthcare they need

Wefunder - Invest in startups. FundersClub?

Wevorce - Simplifying the divorce process

Wingman App?

Versal

Zaranga - Dynamic-pricing for rental properties (Think Airbnb with demand adjusted prices)

Zenefits - Software to generate employee benefits letters and packages.

10:10 hashtag #blackberry10

10:11 Alec Saunders, Head of Developer Relations Live says that this will have the biggest app catalog for any first-gen device/platform.

10:16 Thorsten Heins, CEO of RIM takes the stage

10:20 Blackberry 10 is for those want a balance between work and personal life. Switch between work and personal profiles quickly.

10:24 Thanking Dan Dodge for building the QNX platform that RIM’s adopted.

10:25 Thanking Mike Lazaridis for guiding RIM through this transition.

10:26 First-time announcement: RIM is now Blackberry:

RIM has globally rebranded and renamed to Blackberry.

10:28 Unvieled Blackberry Z10, Blackberry Q10 phones running Blackberry 10.

Tech Specs Z10: 4.2” Screen, 356 PPI

Tech Specs Q10: Physical Keyboard

10:33 Vivek Bhardwaj takes the stage. Demo of the Blackberry Hub.

10:33 Swipe to switch apps - thank you QNX. Apps and videos continue to run even in thumbnails.

10:34 “Peek” into the hub. The peek works like the side navbar on Facebook mobile and Wikipedia mobile.

10:35 Captions are now being added to the live video - resulting in some unbearable rendering and buffering lag with some audio pops and clicks.

10:37 Tweet directly from the Blackberry Hub.

10:39 Aggregates information of contacts from LinkedIn, your emails into a timeline on the Blackberry Hub.

10:41 Demo Z10 Touch Keyboard - a new way to type words with one thumb.

Swipe up uses predictive words. Swipe left backspaces on words. Swipe down displays punctuation keys. Demo on switching between French, German, English keyboards with ease.

10:44 Blackberry Balance Demo

Switch between personal and work profiles with a swipe. This is starting to remind me of the Summly News App for iPhone (a lot of swipes to learn!!)

10:48 First live call on B10. Switch between chat and video calling seamlessly. Vivek calls Andrew Blocking.

10:49: Also introducing screen sharing - an easy way to show off your photo gallery and other apps.

10:50: Blackberry Remember

Todo-list app on steroids. Integrated with Evernote.

10:53 Vivek showing off a demo of the B10 Camera using his white Z10 phone. Tap to snap a picture. Circle gesture to focus.

10:55 Camera, photo gallery, picture editor all in one app (cough - take hint iPhone users).

10:57 Blackberry Story Maker - Like Windows Movie Maker / iMovie on mobile.

Step 1: Choose your photos.

Step 2: Choose your music.

Step 3: Add title and credits.

Step 4: Preview video and optionally add filters.

Step 5: Share this video.

10:59: Blackberry has signed up with all the major record labels and independents to revamp their music catalogue on App World.

11:00 Tom Krazit takes the stage. Announces Over 70,000 apps on Blackberry World.

Facebook, Foursquare, Twitter, Oovoo, Jetpack, Joyride.

Software committed to BB10: Skype, Amazon, Kindle, Whatsapp, SAP, Angry Birds

Also partnered with:

Where’s my Water, Where’s my Perry, Sega, Electronic Arts, GameLoft

Songza, Soundhound, New York Times

Webex, WSJ, Bloomberg

11:10 Taking pre-orders of Z10 and Q10 on Blackberry’s website and with major brand partners.

11:12 Thorsten announces Global Creative Director position created to address new markets, artists, entrepreneurs and working moms.

11:14: Introducing Alicia Keys, new Global Creative Director

Alicia describes her brief stint with iPhone as dating the new boy at the gym. And her return to Blackberry now that it’s matured and grown up - saying he’s always being there for her in work and personal life.

Thorsten and Alicia announce Blackberry’s team up with Robert Rodriguez (director of Sin City) and Niel Gaiman (author) on Keep Moving Projects for artist inspiration.

11:20 End of Broadcast.

Thanks for staying tuned.

A video should be made available on Blackberry’s site soon.

The ideas here are an adaptation of those by Paul Graham, essayist, programmer and founder of Y Combinator. Any errors are mine and unequivocal observations his.

What can we learn from Microsoft, Google and Facebook? Do they give us any predictors of what the next big thing will be?

Part of the reason it’s hard to predict the biggest winners among startup ideas is that a lot of them begin at the intersection of what seem to be a bad idea and a good idea. Venture capitalist Peter Thiel illustrated this as a venn diagram at his first talk at Y Combinator.

To internalize this, let’s take a look at Facebook’s product/market fit in 2004. Their market was students - a niche market. Students also don’t have any money to spend. And their product was a website to waste time on.

Likewise, Twitter was: post status updates online and ‘tweet’ to your friends. Seems like a bad idea.

Were these startups successful then because they were the first to market?

Well, neither Microsoft, Google nor Facebook were the first in their industry. It may seem that way because the press loves to write about superlatives. Google had Yahoo. Facebook had Friendster and MySpace. They weren’t the last either: derivative products like LinkedIn - a “social network for professionals” - haven’t seen the same amount of success as their predecessors (at least in terms of IPO).

To complicate things, user habits change. Google as a search giant trumped Microsoft’s relevance of desktop software. Whether this was intentional or not, Chromebook and Google Docs drove this change with what began as the X in Ajax - XMLHttpRequest - created by Microsoft. Facebook eventually took over search as the start of web sessions.

Social networks also stole time away from TV. Looking at past successes don’t predict future homeruns any more than reverse-engineering TV would predict Facebook. The next homerun isn’t tied to any single batter nor the bat he uses. There are, however, some statistical averages that may help us.

One predictor of success is a luxury turned commodity type businesses.

Paris and Milan are fashion capitals because of their democratization of “ready-to-wear” clothing. Louis the Fourteenth’s views of luxury pushed the importance of silk imports and artisan tailoring that merchants quickly set up shops to mass sell these products.

Fast forward to a little more recent. Aviary makes, or used to make, competing products to Photoshop and Garageband. Their goals were, and still are to democratize these tools that are expensive to the average user.

Spotify - like Napster - democratized the sharing of music so labels have less power to exert on users, in that users don’t have to purchase entire albums to listen to one or two songs of their favourite artists. More people now enjoy an ample amount of ready-to-wear clothing and music on the go.

Udemy disrupted universities by allowing anyone, anywhere to view courses given by the world’s best educators. You no longer have to attend MIT or Harvard to be taught by some of the brightest professors. (I deliberately separated a good educator from a bright professor, but that may be for another post on education reform).

Airbnb is democratizing the hotel industry. You can put your room up for rent, or book an apartment in Paris for your vacation - for the fraction of the cost of renting at a hotel.

Uber is democratizing taxi rides so that anyone can give or receive a ride.

As mentioned in my post on location, favourable laws have allowed these recent startup growths, while in places of high regulation - taxi services and hotels would find themselves more protected from the entrepreneurial class.

You may say these ideas make the older counterparts seem antiquated. Like surgeries in the past without anesthetic.

A lot of what we take for granted - like penicillin - were discovered by accident. And some - like the iPhone - were thought of as toys by onlooking Blackberry users. Bigger corporations then tend to ignore these budding products and startups until its too late. Buying these startups early would be an admission of failure, so that’s put off to a later time - when the valuation of an acquisition is often much higher. Spending millions to acquire an idea from a bunch of twenty-year olds can then be justified with “users” and “revenue”.

But I don’t blame them. The variation in the quality of graduates makes it hard to value their worth. Much like predicting what the next largest IPO would be. And so this generation lets the market dictate their value by leaving out bosses who are proxies to the end user - albiet increasing their risk for a higher payoff.

If you wish to start a startup - one of the first things you must learn is the art of funding - assuming you are a well-versed hacker already. If not - take some time to build things that people want. Indeed this is what my co-founder and I did prior to our startup in 1999. The first reason was that no one would hire us at our age to write software. The second reason was that we didn’t want McJobs. The third - and most important - was that it was genuinely fun. A lucky side effect of developing something for ourselves was that we were not alone in wanting these products - much like Steve Jobs building a personal computer for himself, or Bill Gates programming so that the personal computer could do more useful things than arithmetic.

The first law in business therefore is to make things people want. This has been echoed several times in Paul Graham’s advice to startups. Consequently, running out of cash was our departure from listening to users and releasing features that no one wanted - a mistake that we learned the hard way.

Now on to funding - there are two main things I will go over. One is a cap table (capitalization table). The other is a term sheet. I will use Paul Graham’s story on How to Fund a Startup for the illustrations. It helps to read the essay, but in short - it begins with your uncle giving you $15,000 for 5% of your company. Along the way, you meet some VCs and hire an employee. You eventually raise more money in what’s called a Series A round. We will see how these events change your ownership and control of the company and how you divvy up these shares. We will go over what some of the terminology mean - like pre-money, post-money, common stock and preferred stock. This is not meant to be a complete guide but rather an introduction to funding for startups.

To be continued…

Location matters to your startup. There’s a reason why Silicon Valley is home to the largest number of startups, why New York’s got Wall Street, why Paris and Milan are fashion hubs, and why Nashville has a great music scene.

History

Part of these reasons stem from their historical roots. For Silicon Valley, it was the birthplace of the microprocessor. SV owes a lot of its trendsetter status to the advancements in radio and military technology as well.

New York’s access to waterways gave rise to trade auctioneers and dealers that formed the early stages of Wall Street, and eventually the New York Stock Exchange when the marketplaces were formalized.

The views of luxury goods under Louis XIV in France had an influence on Milan’s “fashion conscious”. Milan began importing cheaper silk from Asia, and several stores modernized the distribution of clothes bought from artisans by selling them as “ready-to-wear”.

For Nashville, it was the performance of the Fisk Jubilee Singers for Queen Victoria that earned them the “Music City, USA” title. In the 1920s, Nashville dominated the air with WSM and WLAC, the two biggest radio stations at the time that attracted more talent to the region.

For the remainder of this post, I will be focusing on Silicon Valley as I derive the fundamentals of location theory from the startup scene.

Laws

More recent changes in the startup ecosystem have involved deregulation of industries such as policies around hotels and taxis in San Francisco. This made room for private home rentals such as Airbnb, and ride sharing services such as Uber - both headquartered in SF. Other incentives that depend on region include tax breaks, grants and subsidies from the government [1].

Education

Stanford University and it’s accompanying Industrial Park is the birthplace of ARPANET (the backbone of the Internet) and Google, Electronic Arts, LinkedIn, Netflix and Paypal among others.

In Canada, the University of Waterloo, whom I owe much of my engineering ambidexterity to, and it’s accompanying Technology Triangle is the birthplace for similarly ambitious startups such as RIM (home of the BlackBerry) and OpenText.

However, according to the Startup Ecosystem Report, Canada still lacks the funding required for startups to reach product/market fit. As a result, cities like Toronto and Waterloo will continue to experience a brain drain [2].

Education is a requirement to fostering innovation, not just in an academic setting, but within non-academic circles. More broadly we can call this a knowledge spillover.

Knowledge Spillovers

The speed at which knowledge transfers benefits startups that are in close proximity to each other, even if they exist in unrelated domains. For example, Amazon Web Services (AWS) did not exist when Facebook was founded, but the scale required for social networks expedited the need to innovate in elastic computing. Other startups leveraged these technologies and benefited from lower capital costs.

Labour

Relocating to a region that has a high supply of talented programmers benefits startups in lower costs of employment. This means lower wage rates and higher efficiencies derived from an employee’s previous history. For example, an employee who picked up Ruby on Rails (RoR) at his last job before being laid-off brings this experience to the new startup. In a place of scarcer RoR talent, startups would have to pay a premium.

Shared infrastructure

Coworking spaces are a great example of sharing the costs of amenities such as kitchens, expresso makers, conference rooms and reception services. Infrastructure also includes high-speed internet access, postal services, highways and city transit. By sharing infrastructure, startups once again enjoy lower capital costs and a longer runway to get their business off the ground. One such example is Zappos relocating to Louisville to centralize their operations at the UPS shipping hub.

Shared intermediate outputs

By concentrating an industry at a central point and sharing intermediate outputs such as specific energy, capital and land requirements (as in the case of land zones for music studios, or specialized hardware in construction), startups can enjoy lower costs of production.

Community

City life continues to be a major attraction for graduates. Without this, suburbs continue to appeal to commuters over startup founders. While universities and research parks attract talent, amenities such as a live theatre and sports stadium retain that talent in the region.

So through favourable laws, a large pool of talent and investors, an increased likelihood of “chance meetings” with potential partners, employees and VCs, along with quicker knowledge transfers, your startup’s chances of success increase. And if you view every startup as doomed to fail, why not improve your odds by moving to a city that saves them?

Source: Startup Genome: Startup Ecosystem Report.

BetterU positions themselves as a Learning Management System (LMS) for corporations that offer courses based on popularity of topics and demand. Where I would like to see them go is adapting the courses to user’s cognitive skills. This is the path I was headed with my LMS prototype, but more so for improving conversion on landing pages. Definitely a great team to keep your eye on.

Confidence - one of the most sought after qualities of a startup founder - can be derived from two qualities: experience and ignorance. However, it seems that the two are mutually exclusive.

The first quality, experience could be analogous to working out math problems for an exam. More problems solved correlate with increased confidence. There could be an upper bound for this. There will exist a threshold where the more you know, the more you fear the unknown. That is, your expected value of the unknown increases.

Ignorance, on the other hand, could causate from the assumption of knowing-it-all for your exam, especially when you haven’t been to a single class - deliberately. Ignorance gives you an edge up to a certain level of expected easiness. Perhaps we can set the lower bound of that edge. That is, there exists a limit where you are so removed from the domain in question, that you overestimate the easiness to complete the task, while still underestimating your capabilities through experience.

First-time entrepreneurs are positively influenced by the latter quality. They venture out into uncharted space because nobody told them that it couldn’t be done. They occasionally fall, but many will continue to push through. In retrospect, first-timers often say that wouldn’t have pursued their path had they known how much work was involved. Serial-entrepreneurs have an imbalance of experience over ignorance (By the way, I feel that entrepreneurs in general are characteristic of having successive and ensuing plans in business, such that the word “serial” may be redundant. In this case, I’m referring to one with a successful exit). In a realistic-idealistic spectrum, increased experience tend toward realistic expectations of success, thereby affecting their estimation of their abilities to a point of risk-aversion.

And so, I say, to be taken with a grain of salt, to take a leap of faith in yourself when obstacles and people stare you in the face with disbelief and skepticism.

Jan 15, Zamboni Doodle

Google’s Doodle of the day is in honour of Frank Zamboni Jr. and in what I presume is in celebration of the end of the hockey lockout.

Would be interesting if they collectively superimposed the paths users took to clear up the ice - crowdsourced travelling salesman problem solution? The data would at least pose some interesting research into cognitive behaviour of Google users. How do users react with increased speedometer readouts. The odometer, on the other hand, doesn’t increment unless “tracks” are cleared. How would users react to just skidding around when penalized?

Here are the graduates of YC’s S12 batch. It was last updated on January 16, 2013 with Pixate that was accepted with YC’s experimental “No Idea” application.

In Alphabetical Order:

9GAG Humour website

Airbrite Ecommerce platform for tablets

Amiscus Friend-to-friend volunteer canvasser platform

BigCalc Fast, scalable financial analytics

Boosted Boards Electric longboards

★ BufferBox Never miss a delivery again (Note: Acquired by Google.)

Canopy Labs Optimize your lead lists to improve conversions (i.e. sort by LTV, churn risk, etc)

Circular Focus on the best stories from your friends and favourite blogs. (Note: Fork of newsblur.)

Clever Manage student rosters in real-time. They currently have data on 35,000+ students at 1,100 schools.

★ Coco Controller Add an analog stick/controller to your iPhone. (Note: Similar to theJoystick-it or iCade.)

Coinbase Hosted solution to your Bitcoin Wallet

Collections.me Think Apple’s Spotlight re-imagined on steroids, to search Facebook photos, Instagram and Google Docs.

Credictive Linking creatives to people impressed by their skills.

★ Crohnology The Crohn’s & Colitis Information Sharing Platform.

★ DataNitro Unleash Excel powers with Python.

Delight.io Easiest way to capture real user interaction on your apps.

DoubleRobotics Telecommuting for the 21st century. Can’t go to a meeting? $2000 gets you a double. Due to high volume of orders ($500,000 in the first week), they’ll continue taking orders in 2013.

★ Dreamforge 3d print your action superhero. (Note: First YC S12 that got my money:  You can see my design here). They also print custom cookie cutters.

Easel In-browser collaborative whiteboard.

Eligible API for eligible health insurance.

Everyday.me Record your life, and store it privately and forever (from Noodle Labs).

Filepicker.io For developers to integrate their apps to cloud storage solution. (Note:They’ve got an interesting blog as well.)

★ FlightFox Real people finding you the best flight deals.

★ FundersClub The best way to invest in startups.

GetGoing Save money on your next holiday getaway.

Grid Ever wish that your iPhone’s Notes app had spreadsheet functionality?Try Grid, a simply remarkable spreadsheet app for iPhone and iPad. (Note:And the first YC S12 startup I signed my email up for.)

HD Trade Services Automated Warehouse Receipt and Inventory Management.

★ HiMom Wanna stay in touch with your parents? There’s an app for that.

Hiptype A platform for data-driven book publishing

Hipset Music discovery platform (very much like Canada’s Tunezy.)

Hubchilla SMS social networking.

imgfave Image sharing community.

★ Instacart 1-hour delivery of groceries. (Note:Kozmo done right?)

Kamcord Video screen capture for iPhone games.

KeyChain Logistics Connecting truckers with shippers.

★Kippt Save and share interesting things you find on the web

Knowmia Aggregator of video lessons (Note:co-founded by Jonathan Kaplan of Flip video - acquired by Cisco for $590 million.)

LeanMarket Real-time bidding for advertisers.

Light Table Funded with over $300k on Kickstarter, LightTable’s a revolutionary new IDE concept.

MakeGamesWithUs A community to help you learn iOS game development, build a game and provide a channel to publish it on (taking a 30% cut of revenues).

Makr.io A collaborating meme remixing tool (from makers of Diaspora: Distributed open source social networking software)

Markupwand Takes the pain out of translating Photoshop images to HTML and CSS.

MicroEval Software for performance reviews.

Mth Sense Target mobile ads based on app history.

Parallel Universe Makers of spacebase to parallelize and scale your multiplayer game or virtual world.

Pixate Framework for designing mobile apps with CSS.

Plivo Platform to build voice and SMS applications.

Profig Full service phone system for your business.

★ QuicklyChat Walkie-talkies meet video chat.

ReelSurfer Clip videos from anywhere.

★ Refer.ly Recommend products you love and earn rewards when people buy them. Sales were $100,000 in first 3 months.

RegisterLove Wedding registries (Note:maybe team up with 500 startups’ recent Wanderable for honeymoon getaways?)

Rent.io Rent price prediction.

Scoutzie Talent scout for web and mobile app designers.

Smartasset Make smarter financial decisions.

SpinPunch HTML5 games for a billion browsers.

Sponsorfied Endorsements match-maker.

★ StatWing Insights for your company reviewed in lay-person’s terms.

Submittable Accept and review digital content and files.

StudyEdge Homework gamified. Did $1.7 million in sales last year.

Survata Research-friendly surveywalls instead of paywalls on websites.

TapIn.tv Mobile app to take videos and share them instantly.

Tastemaker Affordable interior decorating for all.

TomoGuides Mobile guide travel apps - expected to reach 120 apps by the end of the year.

Vastrm Create your own perfectly-fitting polo.

Vayable Airbnb for travel experiences.

★ ViaCycle Bikesharing for universities, cities, businesses and residents.

Virool Platform to distribute and market videos. Company makes $0.12/second.

VoiceGem Send friends a voice mail from your browser.

Zapier For developers to build integration between multiple-platforms (like yahoo pipes but for enterprise).

I was born into the world of hacking, and graduated a startup or two. Sometimes, I wish that it were different. That the indispensable skills I learnt from sales were taught to me earlier. Sales, as I found out, had to do a lot with communication, and as proven by the mailing lists and user feedback of open source projects that gain the most momentum, an adequate medium for articulating and exchanging ideas trumps even the most elegant and functional code. And so here’s reflecting back on what I wish I told myself before I ventured out:

1. Put the product in your customer’s hands

This by far is the most important. It’s akin to employees at mall booths holding a tray,  saying “Free chocolate!!!” or a Starbucks employee asking “Hey, would you like to try our new Summer drink?”

A counter-example of this would be Prismatic. They have a wicked landing page! And a mockup of an iPad that’s analogous to holding a tray outside a store. But.. it took me 17 steps in total to attempt to try the product, and I never did get around to using it (much of it my fault):

1. Visit Prismatic’s landing page
2. Click the App Store link
3. Click Launch Application in Chrome
4. Opens iTunes
5. iTunes forces silly upgrade
6. Visit App Store on iPhone
7. Search for Prismatic
8. Click the first search result
9. See the screenshots
10. Click INSTALL
11. Enter password
12. Wrong password, Try Again
13. Accept Apple’s updated Policies
14. App is Loading…, go down to the kitchen and raid the refrigerator
15. Come back to open the App
16. Asks for Facebook Sign-in - Wha??
17. Close the App - I’ll get around to it

A perfect example of a product in the user’s hands is Lucid Chart. You visit their landing page, click Try it Now, and after closing their “3 Tips to Get Started with Lucid Chart” popup, you’re drawing. The stencils are out in the open, and the menus aren’t hidden. Click Save, and it asks you to Sign up. It doesn’t cost me anything to sign up for their Trial, and I wouldn’t want to lose my work, so I Sign up.

2. Present one option

This includes the groundwork required to A/B test and measure your conversions. Read my previous post on how Choice leads to paralysis. I understand that the following has to do with price-discrimination mostly, but when presented the choices:

• Basic, Pro and Team account from Dropbox
• Open Source, Hobbyist, Early Adopter, Professional account from Upverter (now changed)
• Basic, Professional, Enterprise from Hubspot
• Premium, Unlimited, Spotify account from Spotify (unfortunately not available in Canada)

customers gravitate towards the lowest willigness-to-pay *unless* you introduce them to the benefits of your product early, which brings me to the next point.

3. Speak benefits not features

When the iPod launched, it wasn’t advertised as 5GB of space, but as 1,000 songs in your pocket. Customers wouldn’t pay for more “GB” unless they knew what that meant to them. Some marketers I’ve pitched Hubspot to, picked the Enterprise account for its “A/B testing” feature, but upon further questioning, admitted that they didn’t know what it meant.

4. Core incompetence

What you don’t know could hurt you. Stay up to date in your industry and with competing products. I often lurk on competitor sites to read their user reviews and what really grinds their gears.

To snoop on competitors and user demand, I google “bug fixes” or “feature requests site:<competitor’s-web-site.com>”

That’s how you know what your customers want before they tell you. Because getting feedback isn’t the easiest part of the product development process.

5. Listen

Sometimes you may sell on the wrong points. This goes with measuring everything like I mentioned earlier. Google Analytics will tell you exactly what doesn’t work as you expected.

6. Address objections early

Never ever ever - I repeat - ever put your competition down. As part of developing my prototypes, I try out my competitor’s. Trying out their products puts me in a better position than most to critique them. But resist that urge. There is no entitlement to bashing on their products in being an expert. It’s a turn-off when people sell to me based on how bad the competition is. While the competitor’s shortcomings may have been your motivation to produce a great product, sell me on how good your product is. [See If I was your cloud provider, I’d never let you down].

Know your objections before they come up. This comes from practice. Two most common ones are:

• I have Competitor Option A and B available to me
• Your product is too expensive

To those I respond with - “You’re right.” And they are. Our products may be expensive to some. The other options are available. Mentioning how your product is better doesn’t help once they’ve already raised their points - you are now on the defense. Hitting the weak points before the objections come up - now that’s your Golden pitch. This comes with belief in your product. I’ve never once sold a product that I don’t believe in. And customers see this as genuine. At first, I had walked away from closing deals only to see customers return after shopping around. And then I realized, time permitting, help your customers shop around. When I do find a better product, a better price, I help my customer buy it from our competition - even helping them finish the transaction at my site. This has always led to long-term relationships and referrals. Sometimes, the add-ons that customers end up buying from you may have a higher profit margin, and lower maintenance and support costs.

7. It takes 1% to ruin it

I’ve sorta mentioned this in another post, but it only takes one customer (or one comment on Hacker News) to spoil the party. It sucks - but now you know who isn’t your customer. If it’s 1%, move on, rather than trying to please everyone, and if it’s a higher majority of complaints, own up and apologize. Business goes hand in hand with trust. When you screw up, don’t try to hide it.

8. Ask

Finally, ask for the sale. Often, hackers don’t do this because they don’t want to seem pushy. On the contrary, not asking a VC to invest is like saying to them: “I don’t have full confidence in my product” or “I don’t care if you buy in or not.” Obviously, that’s not what you’re thinking, but that’s how it comes off to them. Now there’s no substitute for what practice can do; and as I mentioned in yesterday’s post (Power of One): Bezos needed 60 asks to raise $1million to get Amazon started.

So What Now?

You’re only as good as your last. So make it easy for your customers to give you feedback, and apologize when you screw up. It’s hard to regain lost trust, so be sure to announce product improvements and be transparent in your losses and gains. And after the Techcrunch of initiation, what is your conversion rate?

Strength in numbers.

For everything that you do, ask yourself:

1. Does it make the world better off?
2. Does it make the world worse off?

I recently joined a fraternity, which not unlike some others, was based on one man’s vision to change the world. Our mission was to bring positive change to local communities through charitable work. That got me thinking about Bill Gates and Steve Jobs - classic examples most referenced by business books and techies alike - on how the power of one man’s vision have spawned off an entire industry and culture. Of course, for Jobs it was his vision of the personal computer. And for Gates it was his vision of a programmable computer for hobbyists that led to the development of the BASIC interpreter for Altair.

Positive Change

The thing is none of them did it alone. Jobs had Wozniak, Gates had Allen and a lesser known Harvard student - Monte Davidoff - wrote some of the routines for the interpreter. Jeff Bezos’ hired Shel Kaphan as his first employee before Amazon.com launched. Bezos also attended 60 investor meetings to raise $1 million to get Amazon started. In the end, that was 22 investors leading up to the launch of Amazon.com and 151 employees leading up to the IPO.

Negative Change

So if you can say that these visions led to exponential growth rates in technology, is it possible to wreck havoc by an equivalent ill-tempered vision? The answer, based on Adrian Chen’s unmasking of Reddit’s biggest troll last month, was yes - one man’s vision - under a protective umbrella for free speech - destroyed the lives of those whose privacy he invaded. Reddit - a website where you can submit links and post pictures can spread laughter, good intentions and knowledge, or alternatively - spread negativity, hatred and public defamation. I won’t dwell on the gory details (you may investigate this yourself) as I am not here to argue ethics or the freedom of speech. My point here is this - the Reddit troll did not do it alone. According to Gawker, he was “well-connected” and “close with a number of early Reddit employees.”

Responsibility

I thought about the “power of one: strength in numbers” philosophy for the duration of writing my book. With 10 readers I was happy; with a 100 I now had a responsibility. When Reddit pivoted from what could’ve become Just-Eat’s $700 million business, one HNer said that “[PG]s advice must have cost them a fortune.” I couldn’t help but pause on this for a couple minutes  and think we have a responsibility to our fans, to our readers, users, family, significant other and all those around us. Take a minute to ask yourself if what you’re doing, the company that you’re building, and your actions in general:

1. Does it make the world better off?
2. Does it make the world worse off?

This summer I launched a book after applying to YC S12 and getting my startup vetted by some SV founders.

Since then, I’ve been approached by some in the HN community on how I went about the publishing and designing my eBook. So here are some of the lessons I learned the hard way:

1. If you had to write in Microsoft Word, save in .doc [not .docx]

While LaTeX has previously been my favourite to write in, Microsoft Office’s been installed on all the machines I use (school, work, home). And since creativity strikes me at odd times, I wanted to be able to move my files back and forth and edit them with ease. Opening up .docx files in older versions of Office stripped apart footnote formatting and had other quirks. TextEdit, NotePad, and Notes on iPhone held out till I had to get to formatting with illustrations and typesetting. My first manuscript was actually an HTML page as I had planned to release it as a website. I may go this route on my next book.

2. Publish to PDF using third-party tools:

While I use Microsoft Office 2011 for Mac, Office 2007 at home, and Office 2010 at school, they have all produced files with some artifacts or the other.

I used two online tools that produced smaller file sizes, but still didn’t flatten my PNGs. SVGs were a mess though they worked great on my blog. So I had to render the images to JPEG on lowest compression. FreePDFconvert turned out to be the winner in file conversion. But on the next run, I may leave my manuscripts in HTML and use PrinceXML.

3. Format your page size to the 6x9 octava format

Most books like the Zappos: Delivering Happiness, and Malcolm Gladwell’s have had several editions (with varying typographic styles, covers A/B tested against the market). They all have been published in one size - making the export easy when I go hardbound. 

TL; DR:

In order of what I think is most important:

1. VC’s interests should align with yours. Marc Gingras of Tungle.Me (acquired by RIM) spoke at SproutUP in September on this one - that he referred to as the pyramid of product development - iterating and user acquisition being the first pillar, while marketing / promo being the upper tier. Some VCs try to gun for this before finding product/market fit - this can be deadly*.

* Speaking of deadly - too little, and too much funding can work against you. Read PG’s 18 Mistakes that Kill Startups.

** Tom Preston-Werner of Github spoke at Startup School 2012 on aligning investor interests as well. [Video]

2. Accreditation. To my Canadian readers, definitions found here: [PDF] National Instrument 45-106

3. When was the Venture Capital firm founded?

4. What is your background?

5. May I speak with other founders you’ve invested in?

rajibedi:

Investors should sit in the hot seat, too. Who you decide to take an investment from can have a huge impact on the future success, or failure, of your company. When the ball is in your court, dribble, don’t pass right away. Ask these 10 questions to a VC and some of them will feel the burn. 

Read More

What choice really means to you as a startup founder or a student - is more distractions. For example, you can choose to spend your time on:

• Catching up on TV shows
• Designing business cards
• Reading Hacker News
• Doing anything but work

The age of information has spawned off a new age of distractions [1]. The choice of a 5-channel TV led me to wonder if our professors would have been in other careers if they had more distractions. Do you ever find yourself asking: ”Where does all my time go?”

Economist John Stuart Mill once said that with more choice, comes more freedom. More freedom for us translates into more happiness. Barry Schwartz from his talk at TED said that when he shopped for a pair of jeans 10 years ago, they came in one type. Those weren’t the most comfortable, but you’d tolerate them. Now with our array of choices from low-rise to boot-cut, we could spent hours picking a pair to try on and take home. However, with an ill-fitting pair, the blame passes off the store onto us. They gave us more choices! Couldn’t we have just picked one that fit well?!

Remember this while you’re developing your next product, pitching to a VC, or selling to a prospective client:

More Choice != Freedom != Happiness

More Choice = Paralysis + Dissatisfaction

_____________________________

[1] Quora: Do you think we live in an age of information, or in an age of distractions?

Loving what Dreamforge has done so far using WebGL and 3D printing. They’ll be adding more models and poses soon. I ordered mine (extra jacked to grate cheese with) the second they went public - $16 for a 2.5” model.

I do not have anything to lose by posting my summer 2012 application to Y Combinator. Although embarrassing, I feel there’s a lot I’ve gained since this process began, so I hope that it benefits those reading this.

If you liked this, you may like my new book Ice Cream Startups

For each founder, please list: YC username; name; age; year of graduation, school, degree and subject for each degree; email address; personal url, github url, facebook id, twitter id; employer and title (if any) at last job. Put unfinished degrees in parens. List the main contact first. Separate founders with blank lines. Put an asterisk before the name of anyone not able to move to the Bay Area.

(redacted) University of Waterloo (BASc – Hons. Systems Design Engineering)

Please tell us in one or two sentences about the most impressive thing that each founder has built or achieved.

With no prior sales experience, I hustled my way into a top 1% sales rank for 3 months running among 500 sales guys in my district, while working for a major electronics retailer in Canada – grossing anywhere from $100-500 a day, enough to pay off my student debt. Ask me how I did it?

Please tell us about an interesting project, preferably outside of class or work, that two or more of you created together. Include urls if possible.

Age of 13, co-founded Gerix to provide frontpage/dreamweaver-knockoffs, hit counters, apache-server clones and misc bravenet.com-like widgets for small business owners, acquiring 60+ users in first hour of launch. Venture lasted a year, taught me my 3 rules since: 1) Watch your cash, 2) Listen to users and 3) back up constantly.

Where do you live now, and where would the company be based after YC?

Live in Oakville, Ontario (40 minutes west of Toronto). The company would be based in SF, bunking with my cousins.

Are any of the following true? (a) You are the only founder. (b) You are a student who may return to school when the next term starts. (c) Half or more of your group can’t move to the Bay Area. (d) One or more founders will keep their current jobs. (e) None of the founders are programmers.

(Answering yes doesn’t disqualify you. It’s just to remind us to check.)

Yes

Please tell us something surprising or amusing that one of you has discovered. (The answer need not be related to your project.)

I think vulgar fractions aren’t really that vulgar. And monotonous transformations can on the contrary, be quite interesting.