How we founded AppSocially
This article is about how I founded AppSocially, which is a composite of my experiences as someone who knew nothing about startups and almost no one in Silicon Valley but was “invited” to Silicon Valley mostly because I came across a book by chance. I am writing today about my experiences and how they have led me to the starting line in Silicon Valley. Thanks to the “Customer Development” method, I not only learned how to simply verify issues with customers and products but also was blessed with an unexpectedly wonderful fate and serendipity.
1. Turnover (But, without knowing it, turning a mistake around with ideas and anecdotes)
2. A Journey of Validation (A word from my advisors. Beginning validations. Problems and potential customers were outside the building)
3. Serendipity and Miracles (an unexpected meeting, invitations, and investments)
Turnover
I jumped into the world of startups July 2009 without knowing my left from my right. I was truly starting from zero. 2 months after getting my PhD in the computer science field, I threw away my career as a researcher at a graduate school and stepped into a business world that was completely different from my familiar field.
Under the guidance of my professors, I earned my PhD and was able to continue my research when I received a grant for scientific research from the Japanese Ministry of Education. I also received offers for jobs at an national research institutes and a prestigious university.
Of course (aside from whether or not I was a great researcher), if you looked at me—from a top private university in Japan and entering into computer science which was expected, earning my PhD in the database field and also receiving a grant for scientific research—it looked like my future was destined to be a university professor. I had been given so many opportunities in both graduate school and in the laboratory, getting a job as a researcher, having the opportunity to do research publications both in Japan and abroad and going on overseas trips for international collaborative research projects. But I had the feeling that there was something missing.
It’s not that I hated my life as a researcher at the university, and I loved the process of my work as a researcher encountering problems and solving them through new methods for it was the same creative process as for an artist.
But, as I felt this sense of being out of place, I decided to quit my job at the university. I received strong opposition from all my wife’s relatives. They said that a future university professor will become a layabout after getting married and I understood how they felt. In Japan, like in many other developed nations, a risky career plan is neither culturally nor socially encouraged. This was all the more accepted when it was covered by the BBC.
A Journey of Validation
After that I passed my time doing freelance website and app plans, designs, and developments as well as print designs but I couldn’t get rid of the same feeling of being out of place that I had when I quit the university.
And that was when I learned of the starting of Open Network Lab (ONLab), which was being praised highly with words like “Silicon Valley” and “startup”. Now when I think about it, how I got to know about the event that ONLab sponsors is thanks to Mrs. Okuda, who had passed the information on to me as a volunteer on Startup Digest Tokyo.
I was given a chance and received backing as an inaugural member of Open Network Lab. After becoming independent I went from labor intensive work to gradually becoming a slave to taking risks (not meaning there are uncertain elements but that it increased the degree between success and failure) and making startups as jobs with scalable projects (here I am indebted to many that I’ve met, most importantly Miki Yasuda and Hiro Maeda).
But it wasn’t as simple as it was as a researcher in college to be successful here and even though I began to create things based on my ideas (or rather, even though I tried to make products that capitalized on my expertise and background) all I ever got were failures. When I think about it now the reason is clear as day. I knew nothing about my customers and I wasn’t getting out of the building. During this time too I couldn’t get rid of my feeling of being out of place.
My life got worse and I didn’t know what to do. I decided to go on a trip of idea validation to Silicon Valley. At the same time, I believed in the bright future for cellphones and became interested in a service like BaaS (backend-as-a-service, a service that supports the backend of mobile apps) that supported the server side of it. During that time I decided to consult with my friends and advisors Nils Johnson (founder of Beautylish) and Kiyo Kobayashi (founder of Nobot, Founder of Remotus). They spend time with my family and I would call them great friends mine.
I know Nils from ONLab and after that he has continuously given me valuable advice. His advice is like this: “It’s a huge advantage to be able to work in Tokyo. By being in Japan your chances for success are enormous. It would take a huge effort to move overseas and, since you’re Japanese, you’ve also got a network of people you have spent your whole life building. If you come to Silicon Valley you will wipe that out completely. My advice is if you absolutely want to come here then you should stay for a minimum of 1 month and if you can get better results here than working in Japan then I will help you in coming here.” Since he also has the experience of starting up a business in Asia he gave me a lot of valuable advice based on his experiences.
On the other hand, I was introduced to Kiyo through a colleague from ONLab and then after that we co-organized the event StartupTokyo together and I always received a great deal of valuable advice from him, since I started off as an entrepreneur. When he asked, “Why don’t you leave tomorrow?” I replied, “I’ll come back and think about it.” He continued, “if you do then you’ll lose a week! A week for a startup is as valuable as a year. If you don’t buy it then I will buy it instead.”
The result of this being that I myself decided to buy my own ticket. Before asking my wife for permission. My departure was a week after. When we left Denny’s late at night the only things I had on me were a huge amount of anxiety, an unvalidated idea, and a one-way ticket from Tokyo to San Francisco.
Their advice weren’t just ideas and opinions but also clearly showed me the importance of getting out of the building (to where the customers are) and validating customers and ideas.
I prepared quickly after that and, though I was on the plane, after I arrived I hadn’t done enough planning on what kind of validation to do. The only image I had was having prospective potential customers look at my products and asking if they would want it or not and all I could think about to prepare was p some nice slides or demonstrations.
Riding on the plane I thought for a while, and after I considered validating it in one way I made the layouts for the slides for my presentation. I decided to have a break and took out my iPad. I looked at the list of books I had bought but hadn’t read yet. What I discovered then was a book that would completely change my life.
It was a Japanese book called “The Entrepreneur’s Textbook.” I had thought of myself as an entrepreneur. I had bought it after it was recommended to me by VC in Tokyo and then forgot about it without realizing the value of what was written inside. “Do I need a textbook now?” I wondered for, while groping in the dark, I had learned from my friends around me and my advisors. I began to turn the pages with the sense that I’d try to “review” what I had put into practice.
Even now I remember what happened next vividly. The scales didn’t stop from my eyes. I couldn’t help but want to get out of the plane (though I gave up since we were 10,000 meters in the air).
With this book I was introduced to the “Customer Development” methodology. It was written that this book was for entrepreneurs who couldn’t scale their projects without crossing the chasm with their ideas taking precedence. All the problems of entrepreneurs that were written in the book were completely applicable to me. On the other hand, it clearly described the kind of state I was in and the next steps that I should take from there. While on the plane I barely slept and became utterly absorbed in the book. I agreed with it over and over again and read through it at least twice while taking notes for things that related to me. When I touched down in San Francisco the uncertainty of my future hadn’t changed but there wasn’t a shred of uneasiness left from when I had departed Tokyo. I understood how to find my answers and how to clearly validate my customers. I now knew exactly where I should be and what I should do.
I couldn’t help but enjoy myself everyday after that. First I put my ideas on a single PDF page. Then I put that on my iPad and went out to meet “potential customers” every day. I was a young man that no one knew from Tokyo and a nobody in Silicon Valley but I would tell people, “I’m doing customer development and would like for you to hear my story” and most of the time in Silicon Valley people would say, “OK! So what step are you on the 4 steps?” and then they would kindly listen to me and give me their feedback.
I would bring along MVP when it was hard to meet with them. MVP is one tool for the customer development methodology , which stands for the minimum viable product. With MVP I sketched an outline of my product and list several of its functions. This is how I put Custoer Development and Lean Starups into practice and is called “LeanUX,” which I had learned from Janice and Jason Fraser at the Luxr workshop I participated in when before.
All those I met gave me all kinds of feedback like “What a great product!” “For xxx reasons my company doesn’t need this feature (pointing 1 feature on the PDF)” “I want these functions and will even pay for them right now” “If these functions are like this then I want them” or “I want to use them right away if it only costs this much.”
There were also people who suggested to me, “How about changing the tagline to this?” or told me about other companies with similar products and the complaints they had with them or told me about websites, media, communities, events, and conferences where specialists with certain expertises met. There were also people who introduced me to relevant specialists even though I was just a young man from Japan who didn’t know them at all.
What I learned through this process was the real issues for our “potential customers,” the value proposition that our product could support, who is a specialist in this field, and who are people that would become members for my advisary board. Every night I would delete from my PDF what my “potential customers” said were unnecessary features on my “sketch” and then add to it a sketch of the feature that would solve it and then changed the order of the points they thought were valuable to my features list, changed the tagline every other day, and did the “A/B test” for the value proposition. This was from the advice of “Get Out of the Building” Steve and Ian McFarland, who I met in Tokyo (and who later became the advisor for my company). Ian said to me, “The best way to reduce development costs is not to write codes. There’s a lot you can validate before then!” And, finally, it took about a month of refining my solutions before everyone I met would say, “Wow! I want that—I’ll pay for it right away!” Just the other day I met with over 200 CEOs, CTOs, VP Marketing, VP Growth, and product managers with only my single page PDF file on iPad. Though I digress, I have also become good friends with many of them.
In conclusion, the idea I had before coming to the US was that I didn’t understand how I had (in most cases) nothing for the people who I had thought where my potential customers. But, at the same time, (another) issue that they shared became clear to me. In short, the cloud service I was to offer socially for the backend of cellphone apps was not needed since they hire a Rails engineer (as a backend engineer). But a shared issue all of them had was cellphone app marketing and getting users. They weren’t really finding any effective methods outside of paid advertising that cost a lot to get customers. To most “potential customers” this method has an unusually high cost and so to solve this there are the “growth hackers” who make full use of their creativity and technological strength and solve the problem of getting users and being profitable in exchange for advertising expenses.
I made contracts with some of the businesses I met from this process and the rest of my stay I started revamping my product with my colleagues who were still in Japan, borrowing a desk from the companies and listening to the fine details. And I left behind in Silicon Valley an agreement to make the product, come back, and also get feedback from them periodically through Skype once I return back to Japan.
I still clearly remember the first contract I got. He was an experienced entrepreneur, introduced to me by the brothers Andrew and Marcus. We met at a meetup. I talked to him about our “solution” and he smiled and said right away, “I’d definitely use it.” He continued, “there’s no reason not to use it, right? We use it and you being profitable equals us also being profitable.” And I still hear over and over again what he said after that. “Many people more experienced than me helped me get to where I am now. I would be happy to help you. I just want you to also do the same one day for someone like you are now. Welcome to Silicon Valley!”
Although it’s taken more time than I expected, I am developing my products while constantly catching on to customers’ issues in the middle of the many changing markets and continue to fix them up.
When I returned to San Francisco again in the fall I received a ton of great feedback from the people I met from when I was doing my spring validation. “It’s now something that we really want! You are on the truck!”
There was one more wonderful byproduct of the customer development process. This was meeting the growth hackers. Once I started to introduce this wonderful encounter in Japanese there was a huge response ranging from book publications to receiving offers for opportunities to give lectures on the subject to talking over the nationwide radio station hosted by the most prominent violinist in the world!
I had just asked Steve recently how important gorwth hacker is, and he told me, “the growth hack way of thinking is great. Because customer development and lean startup permeate through Silicon Valley culture, which means you can turn around fast validations with a small number of people since it’s necessary that your engineers also come to an understanding with your customers.”
Serendipity and Miracles
The feeling that I was missing something after earning my PhD came from my experience of being happy by making others happy with the things I made. When I was an undergraduate I would do impromptu barbecues on campus, Halloween parties, or drive-in theaters by playing movies on the wall of the school building. I was praised highly for these and received orders from the university to run a university-authorized homecoming day party and then, after that, was one of two people chosen as a “Young Leader” from SYLFF and granted a scholarship that paid for graduate school.
As Steve said to do, while continuing to meet with experts who are leaders of the business world and potential clients, I also became friends with them, they became our advisors and investors and then recommended to me other investors. If I hadn’t followed Steve’s words on customer development nor if I had started without knowing anything about business or startups, nothing might have happened to me who came to Silicon Valley from Japan. I would have never been invited to the 500 Startups program by Dave McClure and George Kellerman and I would have never gotten fund-raised from angels in Silicon Valley. And I would have never been blessed working with the Japan’s foremost growth hacker and top iOS developer, nor would I be participating 500 Startups’ accelerator program. I was invited to this town and starterd running from the starting line. And it’s all thanks to my family, my friends, and those who have supported me that are too many to write here.
Before finishing this story, I should mention my new friends in the bay area who helped me so much, by letting me use their couch during my stay for 9 weeks. I can’t name all of them (who are more than 9 friends for warm 9 couches during that 9 weeks) here. They are now my best friends in town. Thank you.
Yusuke Takahashi
Founder and CEO, AppSocially
