Startups – Page 12

May 16, 2018May 17, 2018

Discussions with Regina on Go To Market expansion

Amazon continues it’s pursuit along the bleeding edge of the artificial intelligence frontier. As new frontier recedes and more capability becomes available, it continuously identify relevant use cases it could apply these new capabilities with

Its important to constantly deepen your understanding of your user personas, it will help in the identification of new use cases with these new capabilities that would not have priorly been possible.

In the case of GetData, generate user personas in the different segments based on psychometric profiling.

Multiple companies can occupy positions in the same market. Its important to know which position in the market you intend to occupy and be very strategic about your company’s investments in terms of people, resource and process. Its an ever shifting landscape so long as the players continue to operate in it.

July 9, 2017July 9, 2017

Book Summary: Hooked

Key Points

Habits are one way the brain learns complex behavior
habit forming products increase Customer Life Time Value (CLTV)
Customers of habit forming products are relatively price insensitive
Viral cycle time –
- time it takes for user to invite another user
- higher user engagement levels – more visits per day > grow faster than competitors
Older Habits are more resilient than New Habits – LIFO
Habit potential
- Frequency
- Perceived utility
Vitamins versus Painkiller
- Habit formed over time could transform a vitamin into a pain killer
- Habit forming technologies are both vitamins and painkillers
Types of Product Creators
- Peddler
- Facilitator
- Dealer
- Entertainer

The model

Trigger

habits are built upon
External triggers
- put yourself in their shoes to understand the task they want accomplished
Internal Triggers
- 5 whys – till arriving finally at a basic emotion

Action

increasing motivation is expensive
reducing effort is easier
must be easier than thinking
identify desire and use technology to take out steps

Motivations

Seeking pleasure and avoiding pain
Seeking hope and avoiding fear
Seeking social acceptance and avoiding social rejection

Effort

Subjected to users current situational context

Money
Physical effort
Brain cycles
Social deviance
Non-routiness

Autonomy

implicit choice of doing things the old way
a new more convenient way to do things

Variable Reward

Tribe – who it comes from
Hunt – material outcome of action
Self – perception of self mastery

Investment

Reciprocation – humans treat machines like humans too
Escalation of commitment
Cognitive dissonance
leads to improvement of service for the specific user which increases the likelihood of users returning
- content
- data
- followers
- reputation
- skill

Habit Testing

Identify
- who are the product’s habitual users?
- Based on frequency of use
Codify
- make sure at least 5 percent of users will find your product valuable enough to use as much as you predict they would
- Habit Path: a series of similar actions shared by your most loyal users
  - codify they steps they go through
    - where they come from
    - decisions they make when registering
    - sift through data for similarities
Modify
- identify ways to nudge new users down the same Habit Path taken by devotees
- Cohort tracking

Enabling Technologies

Technology wave
- Infrastructure – when technology makes an existing behavior easier
- applications built on top of infrastructure – causes more people to exhibit behavior
- subsides – the next technology wave starts forming
Look for Nascent Behavior
- discover apps occupying the first screens on mobile devices

Blitzscaling Lesson 19 – Jeff Weiner ,

Mission versus Vision

Mission – an ultimate goal that is measurable and can be executed upon
Vision – the dream / an aspiration
Strategy – what we need to do
Priorities – in what order do we need to do

Empathy versus Compassion

Empathy: being able to feel the suffering of the person in front of you
Compassion: A more objective form of empathy. Feeling the suffering of the person in front of you and executing upon a plan to alleviate the person’s suffering

Culture

becomes exceedingly important when building a large scale organization as it helps aligns the actions and decision making process of individuals functioning within the organization
A commonly accepted way of doing things
important to find the people that live and breathe the culture when hiring
Increases the speed of making high quality decision

Optimization concerns

Local proximity versus global proximity optimization
- an unsolvable problem
- clairty of mission and vision is important in managing this problem

At different scales

Preserving optionality – needed to be a good investor
Scaling up – need to define what the core of the company is
As the company goes through the scaling process and becomes a big behemoth a lot of the entrepreneurial DNA will become diluted as roles becomes more specialized. It becomes important to figure out how to continue cultivating this DNA so that the company still has the muscle to catch the next wave of innovation

Brian Rothenberg – Building market places from zero to billions

Key points for building market places

The only thing that matters: Build liquidity – the first one there wins
- sellers can expect their items will sell
- buyers can expect to buy items at price they can accept
- cross side network effects – one side drives the other side

Always start with building building Supply first
- seek out inefficient, fragmented markets that you can roll up
- look for fragmented + high friction for supply sign up
- pick method that works for your target market
- Methods
  - trojan horse strategy – provide immediate value through the offer of the use of a tool – SAAS model
    - can help bootstrap the project
    - Eventbrite was a event management SAAS model before it became a market place for events
  - Manual hack #1 – Yelp
    - Web crawling
    - Clean data and categorize
    - pull out key insights and distribute
    - upload data into directory and invite service providers to claim their profiles
  - Brute force
    - hire 300+ remote team
  - Plug into existing liquid network
  - PR + timing
  - get customers to promote your brand
    - TripAdviser

Challenges
- In the short run supply is always the challenge
- In the long run demand is the bottleneck

Network effects create virtually impenetrable barriers to entry
- retention grows
- increasingly attractive economics
- reaching scale as fast as possible matters

Competition
- horizontals are going vertical
- horizontals that fail to go vertical lose market shares – craiglists
- moving forward focus on building niche networks
- technology shifts sometimes open new windows to attach horizontal market positions
- Winner either take most or takes all

Operations
- track satisfaction / separate NPS for both supply and demand side
- more satisfied demand side drives growth
- very powerful dynamic:
  - look for overlap between buyers and sellers
    - Uber / Lyft
    - Meetup.com

May 11, 2017May 11, 2017

Blitzscaling lesson 5 – Mozilla

Hiring
- define the north star really well
  - not about getting market share
  - its about how to make the web a better place
- hire people that want to be there because of the mission
- set salary at below the top of the market as an acid test
- don’t compete based on compensation
- hire people where you can find them. Hire them and hire their friends. Setup the office where they are in the world and how they want to live their lives
  - Berlin
  - Tokyo
  - New Zealand
Competition
- focus on being asymmetrical to competitors
- Microsoft IE did not know how to respond to Mozilla which looked like swamp of political activists
- A community needs to look strong enough that it matters and weak enough that people think if they need to contribute
- how to give assets away that competitors can’t do
- Get community to own more and more stuff
- After product market fit relationships change
  - Google was originally supportive
  - Started seeing threats
Operations
- LinkedIn – drive growth through promise of value when we achieve the vision
- Start showing up and focus on working on things that matter
- Setting goals
  - set it
  - monitor whether we hit it or not
  - figure out how to get better at setting goals
  - Hitting 71% of goals – seems about right
  - Hitting 100% of goals – not stretching enough
  - Market share
    - a lagging indicator
    - can keep going up even when fundamentals sucks
    - drive growth through value – LinkedIn
- Team A and Team B
  - Team A is focused on building and delivering the product –
    - Engineers
    - Product managers
  - Team B is focused on protecting the people in Team A from distractions
    - Office managers
    - Finance people
    - HR

May 9, 2017May 9, 2017

Blitzscale lesson 2: Sam Altman

Founding teams

Fatal conflicts
- looking at having different vision
- looking at having the same role
complementary pairs
- technical owner
- business / product owner

Best startups

hired the least
more people less effective
70 productive hours –
- focus those hours on users
- focus on getting a really small number of users that really love the product

Best founders

The ability to clearly articulate the vision of what they are trying to do
- easier to recruit
- easier to promote
- easier to raise fund
determined
passionate
intelligence
Effective in execution

Early stage investing

network effects at play

Reason to launch quickly

gain conviction
Recognize a shift in the world
see that people are constantly using the app over and over again even when being ridiculed by the masses
figure our core metric that gets better 10% each week

Pivots

Found an opportunity that worked
Built the stuff that you originally wanted to work
Found an opportunity that could be monetized
A rush to get an idea is very bad! If original idea is bad. Shut down the company, return the money and go travel the world for an organic idea

Learnings

The only most valuable pre-start experience is to join a really successful rapidly growing company so that you get put into different roles that you don’t have much experience yet for

Most critical mistake

Not firing bad people fast enough
- it hurts both the company and the employee by keeping them around longer
- the employee will stagnate during the time he is with the company
- explain clearly and be firm in the decision that the employee needs to go
- allow the employee to communicate his needs prior to departure
  - he could work from home while looking for a new position
  - he could state that he is still working for the company while looking for a new position
  - preparing the termination letter prior to communication only creates a highly adversarial environment

Time window

You only have a relatively short window of 20 years to be great.
- between 25 – 45 years old
- focus on the one single problem that you really find important and want to solve
- learn how to become a great CEO then or
- join a company whose mission you really care about

Valuation

An employee should consider the valuation of the company 5 years down the road and how many percent of the valuation he owns.
current valuation for a position that is illiquid is only a distraction
valuation only means something when someone else is willing to pay for the shares at that valuation