introduction to software products and startups
TRANSCRIPT
1 — Products
Software Development From Code to Product
Is this a restaurant?
From Code to Product Lecture 1 — Products — Slide 2 gidgreen.com/course
Tasty, nutritious food
Is this a product?
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Some leading products
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Lecture 1
• About this course
• Products and people
• Layers of a product
• Software platforms
• What does a startup do?
• Founders and goals
• External resources
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Course objective
“Learn how to turn a core
technology or idea into a software
product which delights users,
succeeds in the marketplace and
becomes a profitable business.”
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Our assumptions
• You can program
• You are web savvy
• You know English, ish
• No other experience
• Technical founder(s)
• No investors (yet)
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Syllabus
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1 2
3 4 5
6 7 8
9 10
11 12 13
Products + Process
User Interface + Localization
Business models + Analytics
Marketing + SEO
Desktop, web, mobile
We won’t cover…
• Raising money • Forming a company • Recruiting • Legal issues • Enterprise sales • Management • Exit strategy
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Lecture 1
• About this course
• Products and people
• Layers of a product
• Software platforms
• What does a startup do?
• Founders and goals
• External resources
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Products are for people
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People are physical
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Eyes
Hands
Brain
People are emotional
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People are impatient
“The vast majority of people who visit your site… will arrive with their finger poised on the Back button… So your site has to say: Wait! Don't click on Back. This site isn't lame. Look at this, for example.”
— Paul Graham, Y Combinator
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People are irrational
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People are self-interested
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People are skeptical
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“The average American is exposed to several hundred ad messages a day and is trying to tune out.”
— Prof. Philip Kotler, 2005 “On average, Americans are subject to some 3,000 essentially random pitches per day.”
— Inc.com, 2005 “Not too long ago, the average American was exposed to over three thousand advertising messages in the average day. Today, you get that many before breakfast!”
— Newspaper Association of America, 2002
People are followers
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People are short on cash
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$20,000
$25,000
$30,000
2010 2008 2006 2004 2002 2000 1998 1996 1994 1992
US Inflation-Adjusted Median Income
Lecture 1
• About this course
• Products and people
• Layers of a product
• Software platforms
• What does a startup do?
• Founders and goals
• External resources
From Code to Product Lecture 1 — Products — Slide 20 gidgreen.com/course
What is a software product?
Code that solves problem
+
Inputs and outputs
+
User packaging
+
Can generate cash
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Mar
keti
ng
Layers of a product
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Core
Less unique
Less technology
But more visible to end users
(in general…)
Mic
roso
ft O
ffic
e
Layers of Microsoft Excel
From Code to Product Lecture 1 — Products — Slide 23 gidgreen.com/course
Calculation engine
PR,
Gm
ail,
Map
s, …
Layers of Google
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PageRank
Code Breakdown Example
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Algorithm Core
48% 13% 14% 5% 9% 11%
What’s the core of PayPal?
• High volume transaction processing?
• Integration with external systems?
• “…PayPal is: a security company
pretending to be a financial services
company” — Max Levchin, Founder
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An ideal core
• New • Clever • Invisible • Hard to reproduce • Research-based • Optimized for speed • Improve with usage
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Objective: Barrier to
entry
An ideal core interface
• New Familiar • Clever Simple • Invisible Obvious • Hard to reproduce • Research-based • Optimized for speed • Improve with usage
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Objective: No barriers
to usage
Product Technology Interface
Desktop P2P + VoIP Config-free
Web Messaging 140 characters
Mobile Super effects Instant posting
Combining the ideals
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Lecture 1
• About this course
• Products and people
• Layers of a product
• Software platforms
• What does a startup do?
• Founders and goals
• External resources
From Code to Product Lecture 1 — Products — Slide 30 gidgreen.com/course
Major platforms
PCs Web Touchphone Tablet
Initial adoption 1977 1993 2007 2010
2011 shipments 350 million — 250 million 50 million
Jan 2012 users 1.4 billion 2.3 billion 350 million 60 million
Annual growth 10% 12% 100% 150%
Core platforms
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Historical user growth
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0
1 billion
2 billion
1980 1985 1990 1995 2000 2005 2010
PCs Web
Touchphone Tablet
Other platforms
• Mainframes • Supercomputers • PC servers – Linux, FreeBSD, Windows Server
• Game consoles – Wii, Xbox, PlayStation, handhelds
• Other mobiles – Blackberry, Symbian, Windows Mobile
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Lecture 1
• About this course
• Products and people
• Layers of a product
• Software platforms
• What does a startup do?
• Founders and goals
• External resources
From Code to Product Lecture 1 — Products — Slide 34 gidgreen.com/course
What does a startup do?
• (Raise money) • Development • Monetization • Marketing • Publicity • Biz dev • (Exit)
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Baseline scenario
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Revenue
Time
Steady growth by word of mouth 5% per month = ~80% per year
Monetization
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Revenue
Time
More revenue per user
Business development
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Revenue
Time
Gain partner
Lose partner
Marketing
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Revenue
Time
Constant flow of extra users
Publicity
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Revenue
Time
Euph
oria
Depression
Diminishing returns
Example: Not so Cuil
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Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10
Raised $8m
Raised $25m
Launched as Google Killer
Didn’t Kill G
oogle
Relaunched as Cpedia Dead
Everything but the Product
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Revenue
Time
Revenue
Time
Revenue
Time
Revenue
Time
Product development
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Revenue
Time
Incr
easi
ng
grow
th r
ate
Word of mouth
• Sharer: – Helping their friend – Building social capital – Thanking you
• Recipient: – Saving time – Is “in the know” – Becoming a sharer
• Also: word of web
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Growth by word of mouth
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Monthly 1 year 2 years 5 years 10 years
3% 1.4x 2.0x 5.9x 35x
5% 1.8x 3.2x 19x 349x
7% 2.3x 5.1x 58x 3358x
On marketing schemes…
“The one thing we learned over 5 years is that nothing works better than just improving your product. Every minute, every developer hour we spent on any one of these crazy things… was nothing compared to just making a better version of the product and releasing it.”
— Joel Spolsky, Fog Creek Software
From Code to Product Lecture 1 — Products — Slide 46 gidgreen.com/course
Lecture 1
• About this course
• Products and people
• Layers of a product
• Software platforms
• What does a startup do?
• Founders and goals
• External resources
From Code to Product Lecture 1 — Products — Slide 47 gidgreen.com/course
Startup founders
• 2 or 3 people – If just one, get lots of advice
• Complementary skills – Vision + Product – Technology
• Friendship + trust • Shared goals • Everyone vests
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Founder goals
• Make money
• Have fun
• Be free
• Create something
• Do good
• Get famous
• Make money
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How much annual income?
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$1,000
$10,000
$100,000
$1,000,000
Feel good
Extra money
Lifestyle
Working rich
How big an exit?
From Code to Product Lecture 1 — Products — Slide 51 gidgreen.com/course
$2 million
$20 million
$200 million
$2 billion
Something neat
Team + technology
Scaled business
Scare someone big
Lecture 1
• About this course
• Products and people
• Layers of a product
• Software platforms
• What does a startup do?
• Founders and goals
• External resources
From Code to Product Lecture 1 — Products — Slide 52 gidgreen.com/course
Books
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Some websites
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Hacker News Links to news news.ycombinator.com
Mashable Social media news mashable.com
Mixergy Interviews Interviews with founders mixergy.com/interviews
OnStartups Answers Q&A for startups answers.onstartups.com
Quora Q&A popular with startups quora.com
ReadWriteWeb In-depth startup blog readwriteweb.com
TechCrunch Leading startup blog techcrunch.com
Thought leaders — Entrepreneurs
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37 Signals Ruby on Rails 37signals.com/svn
Steve Blank “Customer Development” steveblank.com
Jason Cohen SmartBear Software blog.asmartbear.com
Seth Godin “Permission Marketing” sethgodin.typepad.com
Dharmesh Shah HubSpot onstartups.com
Joel Spolsky Stack Overflow joelonsoftware.com
Eric Ries “Lean Startup” startuplessonslearned.com
Thought leaders — Investors
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Chris Dixon Founder Collective cdixon.org
Brad Feld TechStars feld.com
Paul Graham Y Combinator paulgraham.com
Guy Kawasaki Garage Technology Ventures blog.guykawasaki.com
Dave McClure 500 Startups 500hats.typepad.com
Mark Suster GRP Partners bothsidesofthetable.com
Fred Wilson Union Square Ventures avc.com
And check these out
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