Book Summary 42 — Do More Faster

The book is a great summary of startup advice through some real life stories of Techstars’ mentors. All the advice which startups hear, put into context by people who have actually been affected by it and lived it. (One of my ‘favourites’ being the 83(b) election, which you always hear about.)

Techstars is a global mentorship-driven startup accelerator.

Chapter 1 — Idea & Vision

Trust me, Your Idea is worthless

• We overvalue ideas and undervalue execution
• Only skilled people execute — flexible, action-oriented, mistakes can be corrected
• Don’t shelter your idea, go out there and discuss it

Start with Passion

• You choose an insanely difficult path, you will need passion!

Look for the Pain

• What pain do users really have

Get Feedback Early

• Shout your ideas from the rooftop
• Feedback is the lifeblood of any startup
• There is no point of living in fear from somebody else stealing your idea
• If it’s a good idea, dozens people are probably already working on it

Usage is like Oxygen for Ideas

• Ship it!
• Don’t fall prey to “one more thing” before releasing — just release it already
• If you are not embarrassed when you ship your first version, you shipped too late
• It’s not important by how perfect the code is, but how quickly you can revert it, that will keep the cost of mistakes low

Forget the Kitchen Sink

• Users will not adopt a service just because it has one more feature
• They use it because IT DOES ONE THING REALLY WELL
• What is the smallest meaningful thing that it solves better than anyone else

Find that One Thing they Love

• Noticed that people were doing something you didn’t want them to? Use It

Don’t Plan. Protoype!

• Nothing helps conveying the ideas better than a functioning early product

You Never need another Original Idea

• As long as you listen to your customers, you will never need another original idea

Get it Out There

• What if the users don’t like it and never come back?
• It is very unlikely you are going to offend enough people quickly enough to dampen your future growth, especially if you need a large user base

Avoid Tunnel Vision

• Execution is everything
• Passion & Vision
• Identify & understand what you have to do
• Healthy sense of urgency
• Things rarely go as planned

Focus

• Is one of the most difficult challenges

Iterate Again

• Keep iterating, but don’t forget to learn and take your experiences away even if you fail

Fail fast

• You should be happy about having a bunch of little failures along the path to success, because you’re not failing, you’re probably just not trying enough stuff

Pull the Plug when you know it’s time

• Built the business for your ego? Not the market?
• You need to be proud of what you are working on

Chapter 2 — People

Don’t Do it Alone

• “There is no way I could have gotten through that day alone”
• Ability to reflect and share thoughts on each day is the true value

Avoid Co-founder conflict

• Some questions need to be clarified upfront
• How should you split the equity?
• How will decisions be made?
• What happens if one of us leaves the company?
• Can any of us be fired? By whom? For what reason?
• What are our personal goals for the startup?
• Will this be the primary activity for each of us?
• What part of our plan are we each unwilling to change?
• What contractual terms will each of us sign with the company?
• Will any of us be investing cash in the company? If so, how is this to be treated?
• What will we pay ourselves? Who gets to change this in the future?
• What are the financing plans for the company?

Hire People better than You

• If each one of us hires people who are bigger, we shall become a company of giants
• Benefits

o You can learn from those who are better

o Skills you don’t have will challenge you to develop

o Great teams move much faster

o Knowledge grows exponentially

Hire Slowly, Fire Quickly

• Temptation 1: Hiring too quickly — take your time, the best employees are 10x more productive than the average
• Temptation 2: Firing too slowly — definitely do probation periods with 360 degree feedback

If you can Quit, You Should

• If you can’t quit no matter how hard you try, then you have a chance to succeed

Build a Balanced Team

• Find a cofounder who complements you
• Know what you’re good and bad at and get out of other people’s way

Startups Seek Friends

• In early stage startups, sale is not what is important, but relationships!
• Startups screw up a lot, if you have a solid relationship there is an allowance for failure
• Salespeople hunt pink Cadillacs. Startups seek friends.
• Find companies who care about you, want to help you — make friends!

Engage Great Mentors

• Mentors are like someone who already took the same test as you and instead of it being open answer, it’s a multiple choice test where they can tell you it’s either a or b
• Make sure you close the loop when you work with mentors. They want to know what’s happening.

Define your Culture

• No Politics — everybody should be giving credit, feel comfortable
• It’s not a job it’s a mission
• Intolerance for mediocrity
• Watching pennies — make every dollar count, Scrappy Awards
• Equity-driven — everyone is building together
• Perfect alignment — strategy and vision make sense
• Good communication, even in bad times — Transparency
• Strong leadership — founder should be ‘cultural soul’
• Mutual respect — ie sales & dev need to respect each other
• Customer-obsessed — who is the customer? Build for them
• High Energy Level
• Fun — everyone builds it
• Integrity — Confidence, that cutting corners is just not acceptable

Two Strikes and You’re Out

• Screw up = deceitful, immoral behaviour, aggressive, hostile
• First screw up — confront them, forgive them and move on
• Second screw up — done with them forever

Karma Matters

• Give and Get Back

Be Open to Randomness

• Open day for random meetings
• Go with the flow
• Listen — it might be interesting

Chapter 3 — Execution

Do More Faster

• Resources are scarce at startups
• Competitive advantage is can do more faster and learn from it
• Can throw things away, because nobody cares anyway

Assume that You’re Wrong

• You have to be able to admit that you were wrong

Make Decisions Quickly

• Build something valuable, get the word out, listen to customers, iterate, repeat

It’s just data

• Stories and mentor feedback will be diverse and conflicting — it’s just data

Use your Head, then Trust your Gut

• You can’t manage what you don’t measure
• Be suspicious of your data
• Remember to measure every aspect of your business
• Measure also what you don’t expect, to look for opportunities

Progress Equals Validated Learning

• Little revenue can be better than a lot
• You need to be aware of your Unit Economics and how you can scale and for what cost

The Plural of Anecdote is Not Data

• It’s just stories, you still need to decide yourself and measure
• Anecdote -> Data -> Information -> Knowledge

Don’t suck at Email

• “I’ve got too much mail” is ridiculous, some people will have way more than yo
• Touch emails only once — reply or put it on your To-Do
• Always use your company email address with a signature — branding
• Use subject line
• 3 sentences only in email
• Ask your question as the last sentence
• Spell check
• Reply to important email straight away
• Use “unread” status
• Improve on emails if you didn’t receive a reply — why did they not reply?
• Be persistent — follow up

Use what’s Free

• Lots of free software out there
• Outsource everything that you’re not great at
• Human nature has the tendency to admire complexity, but reward simplicity

Be Tiny until you shouldn’t be

• Be scrappy, even bootstrap if you can

Don’t celebrate the wrong things

• Magic to keeping and growing momentum is knowing what to celebrate
• NOT — one-time events — funding, signing customers
• What you want to celebrate is actual progress to a repeatable business
• Ie first month of meeting weekly ship date each week, first consecutive quarter of making targets

Be Specific

• Put a date and a time on your deadlines

Learn from your Failures

• Let your failures show you what to do differently next time

Quality over Quantity

• Listen to customers, but implement the useful features not all of them

Have a Bias toward Action

• Pick up the phone and chat to customers!
• Taking an action — starting, doing — is hard.
• It requires self-discipline, get friends to help you

Do or Do Not, There is not Try

• Do It!

Chapter 4 — Product

Don’t Wait until you’re Proud of your Product

• If you’re not releasing a crappy first product, you’re late

Find your Whitespace

• Find your niche, get an understanding of your customers and competitors

Focus on what matters

• What’s the thing that matters most to make progress right now?

Obsess over metrics

• Culture of feedback and measured analytics
• Make money and make users happy
• AARRR metrics (Acquisition, Activation, Retention, Referral and Revenue)

Avoid Distractions

• Define a achievable and worthwhile goal — don’t stray

Know your customer

• Ask for feedback! Always

Beware of Big Companies

• Overinvesting in relationships, too much time and attention and fell short of expectations
• Find the real decision maker
• You cannot create a need

Throw things away

• Be scrappy, reinvent and don’t be afraid to let things go — that’s your advantage

Pivot

• Learn how to survive and don’t be afraid to pivot if that’s what’s necessary
• Always be ready for it
• Ensure that everybody understands

Chapter 5 — Fundraising

You don’t have to raise money

• Maintain complete control
• Working capital problems, but possible

There’s More than One Way to Raise Money

• Friends & Family
• Angel investors (groups, superangels)
• Customers
• Partners
• Grants

Don’t forget about Bootstrapping

• Manage your expenses

Beware of Angel Investors who Aren’t

• Angel groups can be dangerous
• Fake angels might want to jump onboard as employee or consultant
• Hard negotiators, also bad
• Ask how long they have been funding, how much in last 12 months
• Talk to startups they have funded, check he actually invested

Seed Investors care about Three Things

• People, Products & Markets (mostly People)
• Is the market big enough?
• Does the product win over people?
• People (passion, determination, intelligence, agility, clarity, empathy, leadership, working smart, team dynamics)

Practice Like You Play

• Fundraising is a full time job
• People want to invest in winners, winners are confident, confidence comes from practicing like you play

If you want Money, Ask for Advice

• Keep them in the loop, money might follow as they were part of success

Show, Don’t Tell

• Pictures, Videos, Demos much better!

Turn the Knife after you Stick It

• Make them feel the pain of the customer and make it keep going
• 20% of emails end up in spam
• If just 1% is not delivered they lose $14M
• 7% of their emails are in spam
• There are thousands of companies just like that

Don’t Overoptimise on Valuations

• Early stage investors ask for 20–33% of money to keep the team motivated and to make profits themselves

Get Help with your Term Sheet

• Get good legal counsel
• Returns & Control! — Venture Deals book

Focus on the First One-Third

• Instead of raising all the money, focus on the first third, the rest will follow with all the ‘maybe’ investors

Chapter 6 — Legal & Structure

Form the Company Early

• Limits personal exposure
• Lock down IP
• NDA with contractors
• Decide who owns it

Choose the Right Company Structure

• S-Cop — if you’re not going to raise money, better tax, but only one class of shares allowed, you can convert that in a C-Corp later
• C-Corp — best for startups
• LLC — not shares but membership units, works well with limited number of owners, conversion is hard

Default to Delaware

• Has the best documented cases for company law and best for board of directors
• Easy company processes and everyone knows it

Lawyers don’t need to be expensive

• Pick the right lawyer, someone who has done it hundreds of times before
• Discuss budget with counsel upfront, do non-legal work yourself
• Work to develop good relationship with Partner, he might become Mentor (for free!)
• Just in time — just do what is required now
• Get agreement and draft done early with all details

Vesting is Good for You

• You earn your stock over time
• It protects you from other founders leaving early

Your Brother in Law is probably not the Right Corporate Lawyer

• Get a real lawyer

To 83(b) or not 83(b), There is no Question

• Do it within 30 days of getting your shares or you will pay a lot more taxes when the company gets acquired

Chapter 7 — Work-Life Balance

Discover Work-Life Balance

• Spend time away
• Life dinner (be there in person and mind)
• Segment space (office away from living)
• Be Present
• Meditate (or do meditative stuff — sports, read etc)

Practice Your Passion & Follow your heart

• Life is to short to be stuck in a career that does not fulfill you

Turn Work into Play

• Make your hobby work

Get out from Behind your Computer

Stay Healthy

• Exercise
• Eat well
• 7h+ sleep
• 1/week step out and think big picture

Get Away from it All

• take a break, nobody is indispensable, practice social interactions and fun