Category Archives: Tips

What all does a non-technical co founder do in a SaaS / Mobile application startup?

If you are non-technical co founder at a startup that’s primarily a consumer web / SaaS or Mobile application company, there’s only ONE thing you should be focused on:

A plan to acquire, nurture and grow users (customers) with as little money as possible.

With a caveat – you should not use any of your technical cofounder’s time (once a week update / meeting to discuss progress is okay) to achieve your goal. If you do that, it takes away from building the product.

Dont waste your time on “legal paperwork”, “office space hunting”, “attending networking events” or “talking to lots of people to get advice”.

User acquisition involves multiple steps that you need to do in a disciplined fashion:

1. Understand, document and verify your user segments / audience / customers (demographics, usage patterns, usage behavior, etc.)

2. Put a plan to create awareness with as little budget as possible. Make the assumption that as a startup you will have some time but no money.

3. Document who are the key influencers (bloggers, reporters, analysts, etc.) you need to get in front of and when / where you plan to meet them to talk about your product.

4. Plan a content marketing strategy (blog posts, infographics, surveys, slide share presentations, videos, etc.) that will consistently help you build lots of content to help grow your organic traffic from search results.

5. Learn how to build, manage and grow a community of users to help build a great fan following for your company.

You can call this anything you please – Marketing, Hustling, Selling, Community building, User acquisition, etc.

Each of these are very measurable.

1. How many visitors came to your site?
2. What were the sources of your visitor traffic – blogs, organic search etc.
3. How many are repeat visitors, versus first time?

Nothing else matters. In fact if you do a great job at this, you will be as valuable as your technical co founder.

How to choose the right incubator to fuel your entrepreneurship goals?

A big trend I have noticed in the last few months is that almost every Venture Capital (VC) company in India is looking to either invest in or build an “incubator”, which can help early stage entrepreneurs. There are already several of them in India, including Morpheus, The Startup Center, CIIE at Ahmedabad and others. I would imagine that by December of 2012, we will have at least 10 very well funded incubators all looking to guide, mentor and help young entrepreneurs through their initial stages.  This will go a long way to help the startup ecosystem in India.

The flip side to this is the amount of choice that startup entrepreneurs will now have. I can easily see many entrepreneurs spending days and months trying to figure out which incubator is the best for them. The answer to the “right one” depends on multiple criteria including your background, what space you wish to build a company in, how big do you wish to build your company into and other related factors. Outside of these criteria, there are others that are dependent on the incubator itself.

Most Indian incubators offer a combination of some cash and mentorship in exchange for 8%- 12% of your company. Some incubators require you go to their office location and spend 3-6 months with them, yet others will prefer you stay at your own office / location. Some do offer design talent, technical resources, and others offer a bevy of informal advisors.

So how does an entrepreneur evaluate incubators? I decided to put together a simple (not comprehensive, initial cut) spreadsheet of the list of things to consider before you decide on your incubator. I would imagine an entrepreneur would use this sheet to write down things that are important to them in an incubator by and then rank their choices by their evaluation of each incubator.

While I personally believe the top 3 criteria are (a) ability for the incubator to help your company gain momentum (customers, hiring, resources, etc), (b) ability for the incubator to help you raise money and (c) quality of the network the incubator possesses which provides you access to other entrepreneurs, venture capitalists and resources that you might need to scale.

Here is a simple spreadsheet I put together and if you believe you need to add more criteria, feel free to drop me a comment on my blog.

 

# Criteria Notes Importance Incubator 1

1

Background of the incubator founders This is the most critical factor. If you have incubator founders, who have not successfully built and sold companies before, then it’s a warning signal.
Do they have an entrepreneurial background that’s proven?

2

Amount of capital the incubator has raised Not very relevant, but it gives you a sense of how many companies they might fund

3

Number of companies in each batch Fewer companies in each batch is usually better because each company gets more mentorship and time with the incubator executives

4

How many companies have they funded so far? This gives you a sense of their track record as an incubator.

5

How many of their companies got follow on investment? This is another critical metric for most founders. You are going to an incubator for experience and help with funding. If most of their companies do not get follow on funding, that’s not a good sign

6

How deep is their network of venture and angel investors? You want to understand the relationships the incubator has with follow-on investors so it makes it easy for you to raise the next round

7

How good is their existing portfolio of companies and their founders? The existing cofounders of their portfolio company will be great resources to network and advice

8

How much time do they provide to each company per batch At the early stage you need a lot of time with the mentors on all aspects of the business. If their time is unavailable then the value of the incubation is limited

9

Have they successfully helped a company grow in your space? Its important to see if they have a portfolio company in the same broad space as yours. For e.g if you are an eCommerce company, look for others they have funded so they know the issues and can help you early to avoid obvious mistakes

10

What is the deal offered? How much money will they give you, what % of your company will they take from you are important parts of the structure

11

How long is the program? Most incubators have 3-6 month programs, which should give you enough time to get your company to a seed / series A stage of investment

12

Can you work out of your office or do you have to relocate to the incubator’s city / office? Some of the incubators require that you move to the city where they HQ are located so you have access to their resources, others will let you work from your own office

 

How can a hacker ask for startup advice so they get the most value?

The last few weeks I had the opportunity to talk and chat with several (engineer) entrepreneurs who were in various stages of their company. While most entrepreneurs are fairly clear and specific on the problems they are facing, a few are unable to clearly articulate where they could use help or advice. There are several “categories” of  questions and issues that an entrepreneur has. Some questions are procedural – “how do I do this”, others are “introduction”, still others are “transaction-al”.

The most difficult ones for both parties are the “What should I do?”.

Any mentor / advisor will not have enough context (regardless of how much time they spend with your company) to help you by giving the “right answer”.

For these class of questions there is really no right answer.

The right answer does not exist because it comes down to what the entrepreneur wants to do. What she is comfortable with, what her biases are and what her motivation is.

The only thing a good advisor can do is to provide a “framework” for your question.

The only other thing an advisor can do is to give the entrepreneur confidence in herself so she can best utilize the framework to her benefit.

A simple way to think about the “framework” is a set /series of “if-then-else” statements, with <then> and <else> colored with the advisor’s experiences.

E.g. When faced with this issue like <a>, I responded with <b>, but the alternative is <c>.

So, if <you believe “a” is true> and <you also think “b” will happen> then <you should do “c”> else <the other thing you can do is “d”>

The framework is not just one if-then-else. Its a series of them.

Can it be that simplistic you ask?

Yes. That’s it.

The best advisors / mentors listen and ask a lot of questions, with each answer leading to more questions. The questions are to help the entrepreneur think, not for the advisor to assess.

So the next time, as a hacker you are looking for some advice on a question “What do I do?”, then remember to keep a note of the conditional construct.

P.S. For those that know me as a hard-core sales guy and nothing else, I did study DES based cryptography algorithms under Dr. Sherman, who I am sure is absolutely disappointed that I ended up a sales guy in a tech company.

Are you celebrating your milestones enough at your startup?

Celebrate
Celebrate all the little things

I had a friend who invited me to his new “office warming” party the other day. Unusual, but fun. It reminded me of our own office “warming” party at Jivity several months ago.

Side note first: If you are like most Indian entrepreneurs, you mom has a big say in the matter (so do most relatives, uncles, aunts and others). First was the date I should sign the agreement (has to add up to 9 was my mom’s advice), then the date I should move in, where I should sit (face East, the sun’s rays should first hit the CEO’s desk! yes, you laugh, but that’s what I was told). Did I really care about all these astrology / numerology and feng shui (Vaastu for us Indians)? Mostly no, but my mom did and mom’s always get their way. Anyway, I digress.

Back to my friend, though, who asked me “How often should we celebrate and what should be celebrate”?

There’s a really simple answer to that – “Very often and anything you believe is something to be proud of”.

That does not mean you break open the champagne every day or take the team out for a 7 course meal each week, but most startups dont celebrate achievements enough.

There are 3 important things celebrations do:

1. They cherish those moments of fun and accomplishment – these are then passed along to all new employees as “folklore”.

2. They help put together shared experiences which helps you tied over the Sine-curve of emotions at your startup.

3. Most importantly though, they reinforce achievement. However small.

Most startups celebrate only the “major” accomplishments – funding, customer wins, new office space,  end of the quarter. Or if you are in India, Diwali, Holi, etc.

The amazing part is there are small milestones you can celebrate daily. I am going to make a short list and please add your own in the comments below.

I put these celebrations into categories: Product, Hiring, Finance, Sales, Customers, Admin (or Operations), Marketing, etc.

Within each of these categories you can have multiple celebrations. For e.g:

1. Product – mockup ready, alpha/beta/version 1 ready, demo ready, etc.

2. Hiring – first employee offer letter, first (or 10th, 20th any number really) employee hired, etc.

3. Finance – funding from angel investor, adding members to the advisory board, etc.

You get the picture.

Here are some more examples!

1. Name resolution from ROC – Yay! The name you wanted for your company is actually available! I suggest going to your local print shop and getting the name typed in gold print & a certificate embossed.

2. Signed up your first advisor – Bring the advisor to meet your team and get everyone lunch. The person who asks the most questions, gets to drink beer. Rest have to drink water.

3. Got your company incorporated. Make 15 copies of you MOA and AOA. You’ll need it! Even the person that serves you tea and coffee in India wants a copy of these in paper!

4. Got your domain registered and website launch page is up! I am told the launch page being up is the most legit you can get early on!

5. Your first mockup created on the back of a napkin. Take multiple photos, get them printed so you can then hopefully sell them on eBay when you get big.

Celebrate more! Have tons of fun and please invite me to the party.