startup dna

Startup DNA The formula behind successful startups in Silicon Valley

Startup DNA The formula behind successful startups in Silicon Valley

About me

Who I'm not...

● I'm not Paul Graham, Reid Hoffman, Dave McClure, Marc Andreessen (sorry)

● I don't own a company

● I'm a "rank amateur"

What I offer is a different perspective: "from the trenches"

Who I am

● Had front row seats at very successful startups: LinkedIn, TripAdvisor

● Wrote a lot of code:Monetization, Platform, Infrastructure, Apps

● Created a few programs:Hackdays, [in]cubator, engineering blog, open source

These are my personal observations on a few traits that make startups successful.

Outline

1. Make excellent mistakes

2. Speed wins

3. Boyd's law

4. If you can't measure it, you can't fix it

5. Distribution

6. Sharing

Outline

1. Make excellent mistakes

2. Speed wins

3. Boyd's law

4. If you can't measure it, you can't fix it

5. Distribution

6. Sharing

"Make excellent mistakes"

Dan Pink [1]

The road to startup success is paved with failure

Failed projects

● Answers● Events● Tweets● Github● Countless other experiments that never

made it past a "dark launch"

● Wave● Buzz● Labs● Health● Knol● Catalog● Video● Answers

The Pivot

● Started as a way to share images in Game Neverending, a massively multiplayer online game.

● Rewritten to focus on photo sharing

● Acquired by Yahoo for $35m in 2005

● Started out as burbn, an HTML5 mobile app for location-based social networking with photo sharing as one of many features

● Completely rewritten as a photo sharing focused native app

● Sold to facebook for $1bn in 2012

Twitter

● Started out as odeo, a site to create and share podcasts

● Struggling to stay alive, they held a hackathon. Jack Dorsey proposed the microblogging concept (originally, text message only).

● 500m users and $10b valuation in 2012

"Timing, perseverance, and ten years of trying will eventually make you look like an overnight

success."Biz Stone [2]

The Failure

Richard Branson

● Virgin Clothes failed● Virgin Cola failed● Virgin Vision failed● Virgin Vodka failed● Virgin Wine failed● Virgin Jeans failed● Virgin Cars failed● ... and many others failed● ... but several hundred others succeeded

"I have not failed. I have just found 10,000 ways that won’t work."

Thomas Edison

"Screw it! Just do it!"

Richard Branson

Reid Hoffman

● His first startup was Socialnet.com: a social network for dating.

● Never heard of it? Exactly.

● Went on to become COO of Paypal, co-founder of LinkedIn, and one of the most successful angel investors of the last decade.

"If you're not failing every now and again, it's a sign you're not doing anything very innovative."

Woody Allen

Outline

1. Make excellent mistakes

2. Speed wins

3. Boyd's law

4. If you can't measure it, you can't fix it

5. Distribution

6. Sharing

"Speed wins"

Stephen Kaufer

You will not get it right the first time. Or the 10th.

Time

Maturity

Mature, stable

Proof of concept

Product development (assumption)

Idea

Time

Maturity

Mature, stable

Proof of concept

Product development (reality)

Idea

Time

Maturity

Mature, stable

Proof of concept

Product development (reality)

Idea

A very large portion of development time is trial and error

In a trial and error world, getting to errors faster is the key to success.

Time

Maturity

Mature, stable

Proof of concept

Product development (technology comparison)

Dynamic/interpreted languages Static languages

Idea

Time

Maturity

Mature, stable

Proof of concept

Dynamic/interpreted languages Static languages

Innovation Advantage

Product development (technology comparison)

Idea

Time

Maturity

Mature, stable

Proof of concept

RoR, PlayServlets, Spring

Innovation Advantage

Product development (framework comparison)

Idea

Time

Maturity

Mature, stable

Proof of concept

Agile, ScrumWaterfall

Innovation Advantage

Product development (development method comparison)

Idea

"If you're not embarrassed by your first release, you've launched too late."

Reid Hoffman

Outline

1. Make excellent mistakes

2. Speed wins

3. Boyd's law

4. If you can't measure it, you can't fix it

5. Distribution

6. Sharing

Boyd's Law of Iteration: "Speed of iteration beats quality of iteration."

Jeff Atwood [3]

Brikman corollary: "Speed of iteration improves quality of iteration."

Change the code See the result

Should be as close to 0 as possible

Rapid Prototyping

Demo

● jsfiddle● Firebug● Developer tools● apigee● JavaScript API Console● CodeKit

"A canvas or sketchbook serves as an external imagination."

Bret Victor [4]

"A programming language is for thinking of programs, not for expressing programs you've

already thought of."Paul Graham [5]

Leverage

● Always, always, always google first

● "There's an open source library for that"

● Many minds are better than one

● Bonus: learn from the code

Demo

● node.js modules● ruby toolbox● github● google fonts● lorem ipsum● placekitten

"You'll be lucky if you have a single original idea your entire life."

Mr. Patch [6]

Outline

1. Make excellent mistakes

2. Speed wins

3. Boyd's law

4. If you can't measure it, you can't fix it

5. Distribution

6. Sharing

"If you can't measure it, you can't fix it."

DJ Patil

You will not get it right the first time. Or the 10th.

Or ever, if you don't know what is right and what is wrong.

inGraphs

Server metrics

inGraphs

Database metrics

inGraphs

Client-side metrics

Profile metrics

Activity metrics

Bug metrics

Build metrics

Test metrics

Measure everything.

LiXLinkedIn Experimentation Platform

LiX

● Group members into buckets

● Control feature visibility by bucket

● A/B testing

● Feature ramps: dark launch, 1%, 10%, 100%

Subscriptions

Bucket A

Subscriptions

Bucket B

Subscriptions

Bucket C

Subscriptions

Bucket D

Picking the right image for a given user significantly increased CTR

"Web 3.0 will be about data."Reid Hoffman

Outline

1. Make excellent mistakes

2. Speed wins

3. Boyd's law

4. If you can't measure it, you can't fix it

5. Distribution

6. Sharing

Products do NOT sell themselves.

"Poor distribution - not product - is the number one cause of failure."

Peter Thiel [7]

All credit goes to Peter Thiel [7] and Adam Nash [8]

Common distribution channels

Sales

● Dedicated sales team: LinkedIn

● Employees as sales team: Square

● CEO as sales team: Palantir [7]

● Competitions, grants: SpaceX [7]

Email

● No one likes spam, but email can work: personalized, universal, measurable.

● Direct marketing emails: very low CTR

● Product emails: built into to product interactions. Far better CTRs.

Year in Review Email

CTRs so high, it was "clicks-per-email"! [8]

Facebook photo tagging email

My personal CTR on these is 100%.

SEO

● Free, measurable, effective

● LinkedIn: public profiles, public groups, LinkedIn Today, LinkedIn influencers

● TripAdvisor: the vast majority of TripAdvisor traffic comes from Google

TripAdvisor SEO

One of the top search results for almost any hotel

LinkedIn SEO

"Professional profile of record"

Social

● Put it in the stream

● Social gestures: comments, likes, votes

● Just like email spam, the feed is becoming flooded

Media

● Blogs, news sites: techcrunch, mashable, huffpost, wired, and many others

● Newspapers, magazines, TV

● Huge reach and a great way to bring in many users in a short time

Build relationships with the media

Marketing

● Traditional ads: TV, print ads, billboards. Expensive, hard to measure, and rarely used by startups.

● Online ads: CTR, CPM, SEM. Measure everything!

Viral Marketing

● Your users attract more users

● Game theory, psychology, sociology

● Free, often measurable (tracking codes)

Viral loops must be built into the product.

Key Viral Marketing Concepts

● Viral loops: in my product, where do users interact with non-users?

● Viral factor: how many non-users do they reach per viral interaction?

● Cycle time: how often do these viral interactions occur?

People You May Know (PYMK)

Invite notification shows up via email, web UI, and mobile. When the other member accepts the invite, we show them PYMK too!

Twitter @mentions

Notification shows up via email, web UI, and mobile

Google Analytics & Webmaster Tools

Essential tools for measuring the performance of your distribution channels (measure everything!)

The best product doesn't always win.

The best distribution wins

● Betamax vs. VHS [11]

● Apple vs. Microsoft (early 90's) [12]

● TiVo vs. DVR [13]

● Netscape vs. IE [22]

Outline

1. Make excellent mistakes

2. Speed wins

3. Boyd's law

4. If you can't measure it, you can't fix it

5. Distribution

6. Sharing

Silicon Valley companies share (almost) everything.

Share Everything

● Papers: MapReduce [15], Dynamo [16]

● Open Source: Hadoop [17], Voldemort [18]

● Hardware: OpenCompute [19]

● Companies: Red Hat [20], Mozilla [21]

Open Source

SpeakingWriting

Why?

Mastery: the best way to learn, is to teach.

Better code & products: the house is cleanest just before guests arrive

Free labor: free QA, free documentation, free bug fixes, ...

Publicity: recognition for the company and its employees

Happier employees: something they keep forever

"If I have seen further it is by standing on the shoulders of giants."

Isaac Newton

This is why I'm here today.

Please share your feedback and experiences with me!

Recap

1. Make excellent mistakes

2. Speed wins

3. Boyd's law

4. If you can't measure it, you can't fix it

5. Distribution

6. Sharing

Questions?

References1. http://www.amazon.com/Adventures-Johnny-Bunko-Career-Guide/dp/1594482918?ie=UTF8&s=books&qid=1206925356&sr=8-1

2. http://www.bizstone.com/2010/09/timing-lessons.html

3. http://www.codinghorror.com/blog/2007/02/boyds-law-of-iteration.html

4. http://worrydream.com/LearnableProgramming/

5. http://www.paulgraham.com/hp.html

6. Mr. Patch was my 11th grade physics teacher

7. http://blakemasters.com/post/22405055017/peter-thiels-cs183-startup-class-9-notes-essay

8. http://blog.adamnash.com/2012/03/28/user-acquisition-five-sources-of-traffic/

9. http://blog.adamnash.com/2012/04/04/user-acquisition-viral-factor-basics/

10. http://www.linkedin.com/today/post/article/20121002124206-18876785-how-to-model-viral-growth-the-hybrid-model

11. http://en.wikipedia.org/wiki/Videotape_format_war

12. http://www.roughlydrafted.com/RD/Q4.06/9FD12E37-8DC7-4AD1-872F-2021BEDE6D96.html

13. http://www.quora.com/TiVo/Why-did-TiVo-fail

14. http://www.paulgraham.com/growth.html

15. http://research.google.com/archive/mapreduce.html

16. http://www.read.seas.harvard.edu/~kohler/class/cs239-w08/decandia07dynamo.pdf

17. http://hadoop.apache.org/

18. http://www.project-voldemort.com/voldemort/

19. http://www.opencompute.org/

20. http://www.redhat.com/

21. http://www.mozilla.org/en-US/

22. http://en.wikipedia.org/wiki/Browser_wars