Do More Faster

by Brad Feld

  I learned from my iContact experience to not repeat the same mistake with Techstars, and we didn’t grow the company before our business model had been validated. We started with one accelerator in Boulder in year 1 and 2, expanded to Boston in year 3, then to Seattle and New York in year 4 and eventually internationally, in London. We now have over 45 accelerators in 13 countries and we work with Fortune 500 companies, communities, and business schools. We had the vision to expand internationally and develop partnerships, but if we had tried to carry that out in our founding years we probably would have lost the whole company.

  If you’re early in the life of your startup, do yourself a favor and figure out what one thing you’re going to be the best in the world at doing. By all means, don’t stop there, just as we didn’t with Techstars. But spend some time to think about how you can cross the finish line and avoid throwing in the kitchen sink. The market will love you for it.

  Note

  1You might have heard of iContact, but it’s not the one that I worked on. The domain name was recycled, and today iContact is a very successful email marketing company. My friend Ryan Allis ran it until 2012, when it was acquired by Vocus for $169 million. Yes, I sold him the domain name after my iContact failed. It was the most revenue my failed company ever had!

  Chapter 9

  Find That One Thing They Love

  Darren Crystal

  Darren was the cofounder and CTO of Photobucket, a photo-sharing company that was acquired by News Corporation in 2007 for about $250 million. He’s been a Techstars mentor since 2007.

  Shortly before Alex Welch and I cofounded Photobucket in 2003, Alex had launched a photo-sharing site in which we noticed that people were doing something that we didn’t want them to do. We had intended them to share photos with one another, but they were embedding their photos on other sites on the Web.

  At first, our natural instinct was to shut this behavior down because it’s not what we wanted our users to do. Luckily, we didn’t act on that instinct. Instead, we started watching what our users were doing, and we discovered that most of them didn’t even care about the photo-sharing site. Instead, our service turned out to be a way for our users to show their photos on sites like eBay, LiveJournal, Craigslist, and social networking sites like MySpace.

  Instead of assuming that we knew what our users were doing, we figured it out by carefully monitoring our logs and studying our analytics. Rather than tell our users they couldn’t do certain things, we stepped back and decided that if this is what they love to do with our service, we should make it even easier for them to do it. That’s when we started Photobucket.

  Users were jumping through all kinds of technical hoops to find free sites in which they could host their photos and link to them from other sites. Most of those sites were eventually shutting down that sort of behavior, breaking images on other sites. What a pain. We created Photobucket to make this behavior that we were observing to be dead simple to do and designed the site for this one specific use case.

  Users loved it! We put up a way that users could donate five dollars through Paypal, and these donations started flowing in to cover our costs of maintaining the site. You know you’re on to something when the community starts donating money to make sure it stays alive.

  From there, the growth of Photobucket was staggering. At one point, we were one of the top 25 sites on the Internet in terms of traffic, with over 24 million visitors monthly. We eventually sold the company to Fox Interactive Media, a division of Rupert Murdoch’s News Corporation. All of this happened because we found something users loved and wanted, and then obsessively made it easier for them to do it. If you really pay attention to what your customers love, your path becomes obvious—even when they’re doing something you don’t think you want them to be doing.

  At Techstars, we’re fond of telling each company to look for the one thing that you couldn’t take away from your customers without them screaming at you. Once they find it, we encourage them to make that one thing even better. Photobucket is a great example of a company that did one thing really well, even though it’s not what the founders initially set out to do.

  Techstars 2007 company Intense Debate stumbled across their one thing, too—making blog comments great. Intense Debate originally started as a live, online, real-time debating system. It quickly morphed into the best blog-commenting system on the Web and was adopted by tens of thousands of sites. The company was acquired in 2008 by Automattic. The founders of Intense Debate deserve tremendous credit for focusing on what their users told them to—threading blog comments and enabling bloggers to easily reply to commenters through email. In this case, they found the two things their users love.

  Chapter 10

  Don’t Plan. Prototype!

  Greg Reinacker

  Greg was the founder and CTO of NewsGator Technologies, a provider of enterprise social computing software. He is currently the founder and CEO of Tradervue, an application for journaling, analyzing, and sharing stock and futures trades. He has been a Techstars mentor since 2007.

  Over Christmas vacation in 2002, I did what every good programmer does—I threw away my blog software (Radio Userland), which worked perfectly well, and wrote my own new version.

  Within a week I realized I had also thrown out a key function that I used daily, my RSS aggregator. So, credit card in hand, I set out to find a new one, buy it, and get it working quickly, so that I could get back to my real job, which was doing .NET consulting work.

  There weren’t many RSS aggregators around at the time. In fact, I think there were about four of them. None of them worked the way I thought they should. During this exploration process a light bulb went on and I wondered, why couldn’t I simply read my RSS feeds inside of Microsoft Outlook, where I read everything else?

  I built a super-quick prototype to display some of my feeds in Outlook, took a screenshot, and posted that on my blog on January 4, 2003. Overnight there was a flurry of comments, all of them positive about the idea. Fewer than 10 days had elapsed at this point.

  Encouraged by this feedback, I stayed up late one night working on my prototype and posted a 0.1 version of the “Outlook News Aggregator” on my blog on January 5. Version 0.2 came out on the 6th, the ninth public release, 0.9, was out on February 10, and the release of NewsGator 1.0 came on February 23, 2003. Somewhere in between those releases I also built an e-commerce site to sell NewsGator with direct credit card processing built in. This all happened within 60 days of having the idea.

  During the early development process, I was very public about discussing potential new features and how things should work. I wrote openly and asked questions on my blog about technical issues and some of the early adopter folks in my audience helped out. Most of what I was trying to do was new at the time but together, with a few other people, I was laying the groundwork for future applications that would use RSS.

  I remember that on the first day of NewsGator’s release, it sold 25 copies. I sat back and did the math: 25 copies times $29 each times 365 days in the year—that was my initial business plan! One nice thing about having developed the product out in the open was that on the first day there were many blog posts and articles about it, including some from influential folks who had been using the product for a while. Most of them praised the product and talked about how it had already changed their lives, made them more attractive, and doubled their salaries. Well, at least the first part.

  The next few months were spent iterating the product, mostly working on some of the difficult features that I never figured out how to do for version 1.0. I also started to notice companies ordering the product for internal business use. There were a few orders for 50 units at a time that, needless to say, were encouraging. Two months after the 1.0 release, I stopped my consulting work so I could focus full-time on NewsGator.

  I decided that if I was going to strike it rich and retire on a Caribbean island, I was going to have to get the mainstream tech press to take
notice of NewsGator. Having no idea how to make that happen, I decided I needed a PR representative and found someone who specialized in PR for small technology companies. By this point, the company was making enough money to pay her and most of the expenses, although not enough to pay me, too. Ah, the life of a startup—I took one for the team and paid her instead of me. We spent a lot of time on the road, talking to press and analysts, and doing events, all of which paid off in actual coverage of the product and awareness of the company.

  In January 2004 I took the wraps off the previous few months’ work, which was NewsGator 2.0 and the NewsGator Online platform, allowing synchronization between multiple computers and the online aggregator application. It was an ambitious release for me: lots of products at the same time (mobile, other email clients, and a web service), and a separate premium content services. NewsGator Online was a subscription service, starting at five dollars a month, and I had a hundred or so beta folks using the platform before its release.

  By this point, the company was earning about $20,000 per month and was growing, albeit not as quickly as I would have liked. I figured I could continue to grow the company organically, and probably make some decent money over the next year, but would likely end up getting stomped on by someone larger and better funded. An alternative was to find someone to invest some money in the company, get to work on building out the vision I had in my head, and swing for the fences.

  Along with Brad Feld, who somehow deciphered what was going on from the mysterious charts and graphs I showed him, I decided to go for it. If I hadn’t been prototyping and iterating aggressively, I would never have gotten to a point where I had a chance.

  The mysterious charts and graphs that Greg refers to are (a) the Growth slide and (b) the Product slide. The Growth slide was missing something important—the y axis!

  Source: Courtesy of NewsGator.

  When Brad saw this slide, his first question was, “What’s the y axis?” Greg hemmed and hawed. Brad said, “Greg—I promise I won’t tell anyone—but this graph is worthless if the y axis is $0 to $1.” Greg confessed that his March revenue was “about $20K.”

  Source: Courtesy of NewsGator.

  On the other hand, the Product slide was dynamite. This is the one that really hooked Brad. Greg knew how to share his vision, but more importantly, he started prototyping immediately. Nothing helps to convey ideas as well as a functioning early product.

  Chapter 11

  You Never Need Another Original Idea

  Niel Robertson

  Niel started his career as a software developer at NetGenesis, and from there has gone on to found numerous companies. He founded Service Metrics (sold to Exodus), Trada, Crowdsortium, TenXer (sold to Twitter), Ramen, and Influencer.co. He has been a Techstars mentor since 2007.

  I first gave a talk about product management at Techstars during the summer of 2008. One of the things I said that night caught the attention of all the founders, and we ended up talking about it for hours: “As long as I listen to my customers, I never need to have another original idea.”

  It’s a simple concept. Go get customers, then listen. It really can be that simple.

  The ability to listen is an important skill for any startup founder. We’re all accustomed to trying to persuade people to try our products, to invest in our companies, or to listen to what we have to say. If you’re doing that with customers, you’re doing it backward.

  Too many startups build things that they think their customers will want. If you’re looking for creative ideas that can make your company better, simply spend time with your customers. It’s not rocket science, but I’m always surprised by how few companies are really good at doing this.

  Niel is a serial entrepreneur. His first company, Service Metrics, was a huge success and was acquired by Exodus for $280 million in 1999. He second, Newmerix, ultimately failed after shipping a series of products and building a modest, but not compelling, customer base.

  When we wrote the first edition, Neil’s third company, Trada, had recently raised another financing led by Google Ventures and was one of the fastest-growing startups in Boulder. But, like many startups, Trada hit some major bumps in the road, stalled out, and ultimately failed. But that didn’t deter Niel, as he has continued to build new startups.

  At the first ever Techstars demo day, in 2007, one of the companies (Search to Phone) hired an Elvis impersonator to make their point.

  Chapter 12

  Get It Out There

  Sean Corbett

  Sean is one of the founders of HaveMyShift, an online service that allows shift workers to have more flexibility and freedom, and a graduate of the Techstars 2009 Boston class. He is currently the CTO at Hire Abby, an AI recruitment app.

  HaveMyShift was an online marketplace for the 74 million hourly workers in the United States. We allowed people to trade shifts with one another, giving them options to choose a better work schedule for themselves. At our peak we helped over 5,600 employees in companies like Starbucks, Jamba Juice, Wegmans, Walmart, Ikea, Target, and Whole Foods trade over 44,000 hours of shifts.

  When we started working on HaveMyShift, we consciously made an effort not to build more features than people wanted or needed. In fact, we launched the site within two weeks of writing the first lines of code. People have asked me how we’ve been able to go from idea to launch in two weeks. Well, it’s because of my bicycle.

  I didn’t have a car, so I just got on my bike and rode around to several Chicago-area Starbucks stores and started asking employees and store managers what they wanted. What features would you need to start using our software? Not only were they excited about it, they helped me understand that if we could do one or two things well, then our software would be immediately valuable to them.

  At first, we struggled with our decision to get our half-baked product into the hands of our users early in the development process. The biggest reason to delay releasing code has always been “What if the users don’t like it and never come back?” The thought of real people having a bad experience is daunting. How would we ever get explosive growth if the product turned people off?

  In companies that rely on having a large user base as ours does, it is very unlikely that you will offend enough people quickly enough to dampen your future growth. Bad news and bad experiences don’t travel quickly; people just don’t tell each other about services they don’t get value out of. If they do, it’s easy to jump in and fix their problems, which can make you a hero. Build the smallest possible product that allows you to test assumptions and answer questions about your business, and then get it out there.

  Listening to your users early in the life of a product is a great way to build something that more and more people use and pay for. We quickly found out that it was not a good idea to send every interested user an email every time a shift in their area posted—this resulted in our being on spam blacklists within weeks of launching. We had to change our messaging model to email digests only. This led us to a great way to define the free and paid features of the site. We offer an emergency shift, which sends more email to more people, for a fee. We did not have experience managing retail stores, but we quickly got the message from our users that managers wanted to see some form of reputation system on the site. By getting our product out there early, we found out which features were important to our users.

  Having people use HaveMyShift gave credibility to the business. Each time we added a zero to the size of our user base, we gained credibility. Having a clear story to tell helped us get in to Techstars and resulted in face time with increasingly useful people in the retail industry. Persuading people to try HaveMyShift was instrumental in getting meetings in which we landed subsequent bigger customers. Repeating this process over and over again has served us well.

  One of the classic mistakes that startups make is developing a product in the absence of customers. It’s simply impossible to learn unless people are using your product. Sean’s story is typical
of startups that work. Instead of building what he imagined to be the perfect product, he jumped on his bicycle and visited Chicago-area Starbucks stores and asked those employees and managers what would help them most. Within weeks, those same users were using a live product and giving him feedback.

  HaveMyShift’s early users were so passionate about the product that they were willing to look past early flaws. Those same users helped Sean build credibility and had a massive impact on the product and business model.

  Chapter 13

  Avoid Tunnel Vision

  Bijan Sabet

  Bijan is a general partner at Spark Capital in Boston. He is one of the founding investors in Techstars Boston and has been a Techstars mentor since 2009.

  In the world of startups, big ideas are one thing, but execution is everything. The best entrepreneurs I know execute well by doing several things. They show up with an idea that they’re passionate about and a vision for the problem they’re trying to solve. They understand what they need to do to make that vision become a reality. And they make things happen, either through sheer will, determination, or focus. Successful entrepreneurs have a great sense of urgency and they’ll move mountains to get things done.

  There is another quality that the successful entrepreneur has, but it is one that took me a while to understand: They have the perspective that things rarely go as planned, and they are comfortable with that uncertainty. I think passion, understanding of what needs to get done, and determination are straightforward, but the last one, the idea that things rarely go as planned, can be incredibly challenging.