This was a great Twitter post from @Li_x_Jiang, retweeted by @hnshah
This obviously speaks to free content and the popular “Freemium” business model, where a 2% conversion to paid services is a huge success….. 2%. That means it takes a million free users to get 20,000 paying customers. Silicon Valley may support those odds but it’s tough everywhere else.
Consider owning 15 – 20% of a much smaller universe. You do that by understanding your markets really well and solving specific problems for those customers in that market.
There are still a lot of people who pay for good music!
Jack Dorsey, Founder of Twitter, was interviewed recently on 60 Minutes. He was talking about getting his first job. It involved a bit of hacking into a website. The interviewer said, “But isn’t hacking illegal?” to which he replied, “Illegal hacking is illegal.”
Wikipedia includes this as one of the definitions of hacking: “who combines excellence, playfulness, cleverness and exploration in performed activities.”
I believe hackers, in the true sense, use their talents and skills to ask “what if?” Like anything, this can be used for good or ill.
If you have the gift, look for a problem to solve…
Just yesterday, I was having this conversation. The big question is what happens after Demo Day? So much energy is directed toward getting the pitch ready and that effort is by no means wasted. Understanding your business model and telling your story is foundational. But, as Steve Blank might say, that is all “inside the building” stuff.
One of our clients gave a great pitch yesterday. I congratulated her and then asked, “Have you sold anything yet?” The question threw her…
Your pitch is a means to an end. The end is having customers.
Here is Steve’s post: http://bit.ly/1dTFyKB
It’s true you have to create value. But much of what you have to do has been done already.
Take a look at successful business models and pricing strategies. See if they apply to your startup.
If you want to create an exceptional customer experience, look at Zappos or Apple Stores or CD Baby.
If you want a great mission statement, look at J&J and read Good To Great.
Of course test all this on with your customers. They will tell you what they want…
Interesting for a football coach to use a baseball metaphor…
The world has plenty of those who live off someone else’s effort. This is not dependent on economic status either.
Most entrepreneurs have to figure out how to create value with little or no resources. In the end, it’s probably a better scenario. But if you happen to be blessed with the resources of others, be it family wealth, friends and family, venture capital or even government grants, know that these resources were entrusted to you for the purpose of creating value. Don’t squander it.
No one owes you success. It can’t bestowed or inherited. It must be earned. A step up is a blessing.
My nephew, wore a tee shirt the other day with this quote on it. By the way, it was black with a very simple white line of text.
Entrepreneurs fail. It’s part of the deal. Those who don’t fail never take any risks. They stay comfortably in the crowd until one day, they are notified their services are no longer needed.
You need to try things that fail. You will learn more. You will find out what matters. When you find out what matters, you might change the world.
Thanks for the quote, Matthew!
You will have to let the world know about your product. The easiest and cheapest way to do that is to let your customers do it for you. They will if you delight them and solve their problem.
If your prototype is drawing a mediocre response, find out why. People don’t rave about so-so. You could release anyway but convincing people to buy mediocre takes a boat load of cash.
Delighted customers create community. People like to join communities.
Happy Labor Day!
According to CBS, it costs a quarter million dollars to raise a kid to the age of 18. Check out the cost breakdown: http://www.cbsnews.com/8301-505144_162-57598411/what-it-costs-to-raise-a-kid-$241080/
Tack on another $100k to get them through a public university. If you did a full financial analysis complete with a discounted cash flow and IRR, there is absolutely no break-even point.
But that’s not why we have kids.
“All financial projections are lies.” So goes the Venture Capital joke. They have to be believable and pass the sniff test when you tell your story but no one can predict the future, nor can we predict customer behavior. There will be a time when you must crunch the numbers, tweak the models, build the spreadsheets and analyze the scenarios.
But in the startup phase, no amount of analysis will justify the investment. That will come from customer validation so run the numbers and then, as Guy Kawasaki would say, “go make meaning”. If you find a way to ease the pain and create delight for your customers, the numbers will follow.
From the inception of your great idea, you have to put together a really good story and become a really good story teller. Great story tellers make us believe in the story. This is fundamental and why we start with it in every accelerator course we do.
Early on, there are hundreds of unknowns and there’s a ton of risk. These things don’t make for a really inspiring story. That’s where passion and belief come in. Let’s face it; you are ALWAYS selling which means you are always telling your story, even when you don’t feel like it and even when you get overwhelmed with all the obstacles.
It’s ok to share your passion. It shows your confidence and your belief in your idea. It’s what gets you the next meeting. It’s what makes people want to hear more. It makes people want to join your cause. I want to be around people who inspire me.