Starting A Startup
In the last two months, I decided with 4 of my friends, that we would transform one of our side-projects into a fully-fledged startup. It was a big decision for me (and all of us really). We’re taking the nice, calm and relaxed pace of a small side-project and catapulting it straight into the marathon world of a startup.
My Life, Our Commitment and Vested Equity
As we’re going into 2nd year in Computer Science in UCC, this seems like an almost socially-suicidal decision to make. As CEO and project manager, I’m essentially forfeiting all of my spare time to thinking and developing the project, the product and the business. After such a short time, I’ve already found myself buried in a tiny moleskin notebook jotting notes and ideas. This tiny black book feels like a bible and, for the most part, it will be, for the foreseeable future, a pocket-sized record of my adventure. I can’t describe how wonderful it is to be able to add to this— currently — tiny tome of information.
The first thing I did at our next scheduled meeting was lay out the commitment required of being part of a startup and the quality I would be demanding of people. I outlined the kind of plans I’d set for the next year, the time demands meeting those goals would require and the very true realities that I, ultimately, would become an asshole in the pursuit of perfection. Surprised by the smiles, I encouraged each and every one of them to talk to me individually about it so that we were both sure of the decision.
Since that meeting, I’ve talked one-on-one with every member of the team. The reassurance and confidence from those talks has been overwhelming, it has given me a lot of peace to see the fire burning in their irises. With that comfort, we’ll all be signing a founder’s agreement next week outlining a 4-year equity vesting with a 1-year cliff.
Vesting in terms of equity means that instead of each founder instantly getting 20% of the company, they will slowly earn that equity over a specified period of time. So, with a 4-year vested equity, you would earn 25% of 20% (=5%) after the first year, then 50% of 20% (=10%) and so on until you earn the equity fully.
The 1-year cliff then signifies that a founder doesn’t get any equity until the first year finishes. So if someone leaves after 6 months, they get nothing. If they leave after 11 months and 30 days, they get nothing. If they leave after the 12 months on the dot, though, they will get 25% of their 20% (=5% equity).
Where do I even begin?
I’ve set myself on a crash-course for startups. Currently, I am a retina on the eye of business. A lot of my business knowledge comes from secondary school which taught me a lot about how to manage a business but that feels so distant from what a startup is. There’s just such a separation between the big-business style of what I learned, to managing a 5-person team so closely and intimately. Drucker and Maslow have amazing theories but when I’m spending all my time with these guys, a lot of their motivations are my own. It’s been a beautiful experience to throw my ambitions and intensity at all of them and see that come back to me tenfold.
The start of my crash-course has begun with y-combinator’s “How To Start A Startup” set of videos on youtube. These have been highly entertaining and wonderfully enveloping. My favourite thus-far has been Alex Schultz’ talk on growth.
Another thing I’m doing is I’m reading “The Lean Startup” by Eric Ries. Admittedly, I’ve only started reading the book so I can’t really comment much on it but it has definitely been hard to put down in the moments I’ve had to fully enjoy it.
The final thing I’ve been doing is making a list of all the startup events in my city. I’ve already been to Built In Cork and that has been immensely informative about marketing and how we should approach it as students. Soon, we’re planning on attending a startup weekend and then after Christmas we’ve got a tidal wave of events we’re planning to attend — it’s going to be an adventure.
Setting Milestones
Something I did the night I made a decision was set out a deadline for the major events I imagined in my head. So all of the team woke up one morning to a notification that 4 milestones had been added to our project management software.
5th April — Viable Product
I figured giving us 6 months to experiment, explore and develop our product would be ample time. On wednesday, we met with a director (Eamon Curtin) from the startup incubator in the college and he encouraged us to take some time to try out new things and take our time with the development process as we could afford to be a little more relaxed with a product that didn’t need to be monetised for now. That cemented my decision to give us 6 months before I started introducing users to our system.
5th May — Branding/Marketing Deadline
Although we’ve started working on a lot of this already, I thought it would be good to have a month after the development deadline for us all to sit down properly and focus on how we wanted to brand ourselves as well as how we would approach the target markets we’ve decided on. I figure development will continue during this time but I’m going to be enforcing a treat-it-like-production atmosphere.
5th July — Refined Product & User Feedback
We have roughly two months to hand-recruit 60–90 users to test our product and help refine it. Something a lot of startup speakers really emphasise is a “tight feedback loop” with your users and that’s something I’m going to focus on a lot from now until we launch. Although I haven’t fully figured out how to implement that kind of feedback loop, I’m sure something will strike us along the way.
5th November — Launch
This is the only deadline I’m not sure about. 5th of November is just an arbitrary date, there’s no real business reason to pick that date. The long gap between the last milestone and this one does give me the opportunity to approach some of the local colleges about maybe promoting the product and it gives us more time to assess what we’re trying to do and how we’re doing that.
Growth, Retention and How To Get It Up
“Retention is the single most important thing for growth.” — Alex Schultz
Every customer has a value and a lifespan. Our goal is to figure out those two quantities. A Customer’s Lifetime Value should always be greater than the Customer’s Acquisition Cost. I mean, it’s an incredibly simple concept. It’s one I’ve encountered personally as a freelance web developer — Your costs have to be less than what you’re getting. That’s not the hard part. The hard part is figuring out how you value that customer. In the beginning, this is probably going to be challenging as we have no long-term data to base our claims on but a lot of it really comes down to how the product grows.
Sticky Growth — Retaining your users
Sticky growth is all about retaining your current users which seems counter-intuitive to the whole “growth” part of the title but it’s a legitimately good strategy. You try to gain a good customer base that come back again and again to your product. They should be consistently using and paying for your product. Something very beneficial to look at here would be a Retention Cohort Analysis.
Viral Growth — Organic Growth
Viral growth is just growth through word-of-mouth and people spreading your product. It relies mainly on a really good product and how you encourage sharing. Some things to focus on:
- Customer Touch Points — Where are people being prompted to share their experience or your product?
- Program Mechanics — How you incentivise sharing. Possibly referral rewards with money or services?
- Referral Conversion Flow — How you convert referred users to lifetime users.
Paid Growth — Inorganic Growth
Paid growth is growth achieved through paid advertising. This one is more akin the traditional avenues of marketing I’d been taught in school but with a bit more a modern twist what with Google Adwords and Facebook Ads being major players in this game nowadays.
Find A Target Market
Something I was told early on is that student startups often choose a student-oriented target market and that one of the major pitfalls was that they didn’t have a student-driven product. A kernel of advice came from Sabrina Dent while we were at Built In Cork: you can create a face for your company and then use facebook’s targeted advertising to figure out which target market it would suit best. Although it sparked a large discussion amongst the panel, it’s something we’re going to be trying in the coming months to determine whether our chosen market is one that fits our product well.
Marketing Is Good — Built In Cork
The night we went to Built In Cork, Donal Cahalane (DC; Head Of Marketing And Growth at Teamwork.com) was there to speak about marketing. The projector wasn’t working so a lot of the talk was done straight from DC’s mouth which gave everything a much more informal feel; It felt much more comfortable than any of the talks at the Web Summit.
“Being caught without your slide deck nowadays is akin to being caught without your business cards — it’s unforgivable” — DC
A key point, DC drove home again and again was “know your message” and always have it on-hand. Some advice he gave the crowd was to sit down with people and outline what your message should be and how it should sound. Then, you should create a 30 second, 60 second and 5-minute pitch for all scenarios and distribute it to everyone in the company so that they can reword it and make it sound natural for them.
Those distinct quantities of time got me thinking about how we had been describing our product so far. We had a one-line description but once we ventured into describing anything else, suddenly we were off on tangents about simplicity and distribution. That just isn’t what we need so a large part of what we’re currently discussing about our brand is how do we make it succinct and to the point.
“Always pitch in public”
The second third of DC’s talk came down to presenting both to a crowd and to an individual. He started with “No matter the opportunity, you should always pitch in public.” and then went on to advise us on some tips when when we were presenting.
In secondary school, I had been told before my Oral Exams that “you lead the conversation”. I never really understood that until that night in the Kingsley. For some reason, it just clicked that teasing details about your company and never answering them would make judges and spectators inherently inquisitive about what those details were. Honestly, it sounds very obvious now that I’m writing it down. A point I see repeated in many startup-related publications is the fact that a lot of running a startup is common-sense but then there are a whole rake of things that run counter-intuitive to what you’d expect.
DC went on to talk about how you should present yourself to people one-on-one as well as when you’re networking (This was also something Eamon Curtin from Ignite spoke to us about). No one cares about the features of your product, they only care about how it benefits them. It’s a good idea to ask about what problems the person might have and then ask about what kind of things they’d need in a product that solves this. This exchange not only allows you to ride in at the end with on a white-horse, it also allows you to source ideas and feedback you probably wouldn’t have gotten by launching into your spiel of how great your product is. In the latter situation, it’s easy for people to feel guilted into liking what you have to offer and it makes them less likely to actually offer any valuable information. It’s also just a nicer experience to be eased into a conversation rather than bombarded with marketing.
T-Shirts. T-Shirts Everywhere!
There’s a visual side to your company’s identity. A good and easy way to represent that is with t-shirts. People are in a constant need for clothes and what better form of advertising than on people? Turn your fans, your team and yourself into a walking billboard for the company. It’s a form of practical advertising that will not only promote your business and what it sells but will also serve to keep you warm in the winter months and stylish during the summer!
It’s Okay to Not Know Anything — Web Summit
Overall, the Web Summit was fairly underwhelming as an event. There was a lot of sound and fury but little of any substance. A lot of the more interesting talks appeared during the School Summit (Secondary Schools) and the Student Summit (3rd Level Students).
But one of the most inspiring and reassuring talks of the whole event was a panel with fellows from the Thiel Fellowship. One of the questions posed to them was what kind of process they took when they started a new venture. They were all very quiet for a little while and then William LeGate spoke up with “I don’t know”. He went on to describe the fact that he has absolutely no clue what he’s doing when he’s starting a new venture and that that was always made it appealing.
From there, Riley spoke about how he goes into meetings with big pharmaceutical companies with no real knowledge of what you’d expect someone working with cancer to know. This admission to a lack of knowledge was the exact message that convinced me that running a startup was what I wanted to do. What had always deterred me from the idea was that absence of expertise I thought I needed to start and run a business. To see 3 very successful people around my age admit they hadn’t a notion every time they started again, was immensely motivating.
The Team
Mervyn Galvin
Mervyn is the confident, charismatic salesman of the group. During the Web Summit, he acquired a fictional media pass for the college magazine “Motley” and later that night went to an invite-only dinner. Then he proceeded to interview Enda Kenny and Paddy Cosgrave “for the magazine”. His relentlessly intuitive sense for conversation and his acute knowledge of current events makes him the perfect fit as our Sales Officer.
Matthew Claret
Matthew has a critical, abstract way of thinking. Although he’s grounded a lot of his interest in video games and Unity, Matthew’s got a wonderful sense for product design and logic. Armed with a sweet taste in style and a 3-dimensional mind, I believe he’s a perfect fit as our Marketing Officer.
Bobby Murray
Bobby is a dedicated and hard-working member of the team. Bobby’s also shown a lot of interest in video games with other projects such as a shoot ‘em up and a text-based RPG but he’s got a keen eye for assessing the strengths and weaknesses of a design. I can’t vouch for him enough as our Design Officer.
Colm Cahalane
Colm has always been a partner-in-crime for many of my projects. Born from a drunken discussion about how we could apply foursquare to prostitution one night at a friend’s birthday party, Colm and I have created many projects such as StalkerPlus and Discover North Korea. Colm’s got a sharp mind for branding and design as well as being entrenched in what’s current in the Computer Science world. As someone with a great intellect and lots of practical experience when it comes to programming and project development, Colm is firmly grounded as our Technical Officer.
Me — Evan Smith
I’ve been working as a web developer since I was 16. I’ve worked for companies like Demonware and Granite Digital. I’ve got a lot of experience managing finances as a freelancer, dealing with clients and attracting business as well as networking. An example of one of my larger projects would be UCC Sports (A wordpress multisite network with a results, fixtures and events module that also had to be available via a REST API). I’m not really sure what the others have seen in me but somehow I’ve been voted Project Manager and CEO of NativeNote.com.
What will we do tonight, Brain?
The last couple weeks have been an amazing experience learning about the world and tribulations of creating a startup. It’s honestly exciting and enthralling, I can’t describe the adventure unfolding in my head. We don’t know what the future will hold but when Eamon Curtin asked us what we wanted from this company, the first two words out of my mouth were “World Domination”.
