Hear, hear! I concur, a downturn is a very realistic time to start working on something, especially if you do not require outside resources other than team members. While others bemoan the frigid VC environment you can be starting on an empire.
From my experience I would reorder things though to be 1, 5, 4, 2, 3 (I'm more an inventor/do-er than a MBA entrepreneur).
I'd listen and then start building something to get feedback on. Then only after I've confirmed there is real potential would I spend the time and focus on building a team and business plan. I've found you can waste a lot of time on building team and plan before knowing you have a product people want. You can lose a year or more with nothing to show. Putting product first, does require the founder to be able discern and develop a product into the testing period.
The exception on early team members is co-founders - which I completely agree with you - are near-critical. Anyone willing to work for free for a year to 2 and willing to stick by a company for the next 2 to 5 to 10 years is the best way to spend your equity ever ;)
Another way to get product down early without team building is contractors, who in downturns are happy to work at reduced rates (I know I was ;)
Andrew, it's a pleasure reading your bullish stanceon the opportunity a downturn provides. I wrote a blog entry at our Dogster, Inc. blog on the coming year entitled VC Gloom Means Entrepreneur Boon. Starting work on Dogster.com in 2003 made all the difference.
andrewhyde
· 1 year ago
Good call, especially on the order.
You are so right about contractors being more available and cheaper. Same goes for advertising buys.
Great post as well!
Grant Blakeman
· 1 year ago
I love the spin on step 5. It's so important (especially in the web realm) to just build it. Get people using it. And work alongside them. Starting to understand their business and how your product interacts with it will be more valuable than any sort of one-way feedback.
I've been doing that with one of my sites for a while now and it has been invaluable. The eventual public release will be much better because of it. We've even identified new business opportunities we hadn't seen before.
andrewhyde
· 1 year ago
Sites like UserVoice are helping with this as well.
I like the spin as well :)
Denis
· 1 year ago
Equal stock split is not always a good idea. Check out this artricle (not affiliated):
As to your question, if I could go back to my earlier self I would have told me: 1. Run the ads before building the product 2. Build A/B testing into everything you do 3. Imagine that 10 users call for support every day. How do you design software to minimize the calls and address remainign ones as quickly as you can?
andrewhyde
· 1 year ago
Link goes to a 404 page.
Very interesting and useful advice. You can't say enough about A/B.
First time I have seen that link, very interesting way to do it.
Josh Hug from Shelfari was a big advocate of this, in how he did it himself. I hear a lot of '80/20 split because I had the idea' theology, that is what I am getting away from.
yorgos.athens
· 1 year ago
great posting! I wish I were at asw to meet you! for now, I'm just listening and reading... oh, and dreaming :)
Awesome post, Andrew. You're obviously packing away a ton of great learnings working with TechStars and your own startups.
My only quibble is that a six month plan is way too long. It's great to plant a flag in the ground in terms of long-term goals, but as a brand-new startup you're unlikely to accurately predict anything beyond 60 to 90 days out.
It's all about listening, as you wisely listed in your first point in the this article. If you set a 90-day plan you'll take 90 days to launch. If you launch a 180-day plan you'll take 180 days to launch. The longer it takes you to launch, the longer it takes you to start listening to your customers. And as soon as you start listening to them, your remaining strategy goes out the window.
andrewhyde
· 1 year ago
I would agree with your assessment of shorter goals. I get caught up in too many short term goals myself, and after 5 months look up and wonder what I spent all my time running around doing.
Yes, all about listening, and Gnip is rocking it.
scott_miller
· 1 year ago
great post. working on a new startup now and just so happens that my process is very similar. spending lots of time interviewing customers. next step will be launching a blog aimed at the target market. theory is to get to know the customers and their wants intimately before going too far down the prod. dev. road.
andrewhyde
· 1 year ago
Finding the first batch of customers is really tough, but also fun.
All the best!
Adam Sheppard
· 1 year ago
My co-founder and I are former Microsoft veterans and recently formed a research and development lab named 8ninths.com in Seattle
We'll be launching our first site in December. The advice above pretty much echos the approch we've taken and just wanted to weigh in and let you know we enjoyed your post.
Our founder blog is at http://8ninths.com and this is where we share our insights on what we find cutting edge and interesting on the web.
why is it that you think that when there is a down economy it's the perfect time to start up? i'm just curious to know. good post.
andrewhyde
· 1 year ago
Less competition, you really have to focus on your product and it is the best time to hire.
Those are a few at least.
Brandon J. Mendelson
· 1 year ago
Build cash. Build cash. Build cash.
Too many people jump into business without the funds to support it.
andrewhyde
· 1 year ago
In the same mantra:
Spend less. Spend less. Spend less.
:)
Billy
· 1 year ago
Nice tips. I have been thinking along these lines of late, and currently struggling to form the right team for the project.
andrewhyde
· 1 year ago
Organize some events, like Ignite or a BarCamp, let people know you are looking, work on smaller projects.
Timothy
· 1 year ago
Some very good points. Nice post.
I am actually in the process of starting up a company, and this was very helpful.
andrewhyde
· 1 year ago
I'm glad I could help! Best of luck with it!
DoubleDad
· 1 year ago
I'm in the process of putting together a webapp (in the project management space) and I agree that assembling a strong team is key. While I also agree that building your product (or application) alongside your customers is key, so is having a strong starting point. We're putting forth a lot of effort into the initial design for the first release so we can avoid as many design flaws as possible. This way we can minimize the impact (read "cost") of future enhancements. Also, if you don't start with a strong basis, you won't be able to engage your customers because they'll lose interest too quickly.
What is everyone's experience with offering "deals" to your first few customers to generate interest and start relationships to help improve the product? Do you try to give the product away for free in exchange for a collaborative relationship?
michy2
· 1 year ago
As moderate-income and younger workers feel the pinch of money and time spent commuting, more large employers need to recognize alternative arrangements to recruit and retain these employees. According to a new survey by the Urban Land Institute, 69% of the larger companies (those with 100-plus employees) believe a long commute time increases employee stress, but 55% reported a lack of affordable housing near their location. The vast majority say this lack of affordable housing has a negative impact on retaining qualified entry-level and mid-level employees. And 58% say a lack of affordable housing has resulted in losing employees, at least in part to long commute times, as moderately priced housing is often located far from large employment centers. ---------------------------------- mike
All Comments
From my experience I would reorder things though to be 1, 5, 4, 2, 3 (I'm more an inventor/do-er than a MBA entrepreneur).
I'd listen and then start building something to get feedback on. Then only after I've confirmed there is real potential would I spend the time and focus on building a team and business plan. I've found you can waste a lot of time on building team and plan before knowing you have a product people want. You can lose a year or more with nothing to show. Putting product first, does require the founder to be able discern and develop a product into the testing period.
The exception on early team members is co-founders - which I completely agree with you - are near-critical. Anyone willing to work for free for a year to 2 and willing to stick by a company for the next 2 to 5 to 10 years is the best way to spend your equity ever ;)
Another way to get product down early without team building is contractors, who in downturns are happy to work at reduced rates (I know I was ;)
Andrew, it's a pleasure reading your bullish stanceon the opportunity a downturn provides. I wrote a blog entry at our Dogster, Inc. blog on the coming year entitled VC Gloom Means Entrepreneur Boon. Starting work on Dogster.com in 2003 made all the difference.
You are so right about contractors being more available and cheaper. Same goes for advertising buys.
Great post as well!
I've been doing that with one of my sites for a while now and it has been invaluable. The eventual public release will be much better because of it. We've even identified new business opportunities we hadn't seen before.
I like the spin as well :)
http://www.andrew.cmu.edu/user/fd0n/35%20Founde...
As to your question, if I could go back to my earlier self I would have told me:
1. Run the ads before building the product
2. Build A/B testing into everything you do
3. Imagine that 10 users call for support every day. How do you design software to minimize the calls and address remainign ones as quickly as you can?
Very interesting and useful advice. You can't say enough about A/B.
Josh Hug from Shelfari was a big advocate of this, in how he did it himself. I hear a lot of '80/20 split because I had the idea' theology, that is what I am getting away from.
for now, I'm just listening and reading... oh, and dreaming :)
Think big!
My only quibble is that a six month plan is way too long. It's great to plant a flag in the ground in terms of long-term goals, but as a brand-new startup you're unlikely to accurately predict anything beyond 60 to 90 days out.
It's all about listening, as you wisely listed in your first point in the this article. If you set a 90-day plan you'll take 90 days to launch. If you launch a 180-day plan you'll take 180 days to launch. The longer it takes you to launch, the longer it takes you to start listening to your customers. And as soon as you start listening to them, your remaining strategy goes out the window.
Yes, all about listening, and Gnip is rocking it.
All the best!
We'll be launching our first site in December. The advice above pretty much echos the approch we've taken and just wanted to weigh in and let you know we enjoyed your post.
Our founder blog is at http://8ninths.com and this is where we share our insights on what we find cutting edge and interesting on the web.
You can subscribe at http://tinyurl.com/5zwz7d
Thanks!
Adam.
Co-Founder, CEO
8ninths
Those are a few at least.
Too many people jump into business without the funds to support it.
Spend less. Spend less. Spend less.
:)
I am actually in the process of starting up a company, and this was very helpful.
What is everyone's experience with offering "deals" to your first few customers to generate interest and start relationships to help improve the product? Do you try to give the product away for free in exchange for a collaborative relationship?
----------------------------------
mike
Link Building