Startup Mixology

by Frank Gruber

  Entrepreneur Gary Vaynerchuk—CEO of VaynerMedia and author of The Thank You Economy—knows that better than anyone. His life is infused with gratitude for his parents, who brought him from the former Soviet Union to the United States. And his attitude is an inspiration to any of us who forget to be grateful. “People have this entitlement thing—what are you going to do for me and then I'll give you something. I hate that!” he says. “Being an immigrant, you're not entitled. I didn't expect anything. We had to claw and scrap for everything, and that's how I roll now. And even as I've become a bigger presence in this space…I'm still so grateful.”

  The principles of gratitude can apply to your everyday life as well as your entrepreneurial life. One of the ways to enjoy the startup life—despite the roller coaster of challenges and stress—is to remain grateful for its enormous benefits. For example, you don't have to deal with a bad boss or worry about losing your vacation days. You are in charge of your destiny; you get to experience that feeling of ownership, pride, and potential for growth and huge success.

  Bo Fishback, the CEO of Zaarly, says, “I can't even imagine working in a big, slow company right now. Whenever I get too stressed out, I think, ‘What else on earth would I rather be doing?’”

  Final Thoughts

  Whether you're creating a teleportation device, building an app, or running a new media company—no matter how small or big your project—realize that you're changing the world.

  “You become a true architect of life. You get to create ideas, create jobs, find better ways of doing things, so it's really an enjoyable experience,” says Uassist.ME founder Alfredo Atanacio. And I couldn't agree with him more.

  Chapter 2

  Ideas

  Ideas are like rabbits. You get a couple and learn how to handle them, and pretty soon you have a dozen.

  —John Steinbeck

  We've all been there—something happens, we lose the keys, burn the eggs, or kill the car battery. If only there was a way we could prevent or quickly remedy the problem. Brainstorming begins—boom!—and an idea is born from necessity.

  Are you a person who's just flowing with ideas? Or do you have trouble coming up with them? The easiest way to find an idea may be to follow your obsessions—that's what MakerBot chief executive officer (CEO) Bre Pettis did.

  Pettis was a teacher and a maker. He grew up fixing things, then taught art in public schools. He eventually found himself working at Maker magazine, where he had to deliver a video every Friday showing how he made something, such as hovercrafts, lasers, and other cool gadgets. After some time at Etsy—a marketplace for makers—he started a side project, called MakerBot, that leveraged his knowledge for making things. MakerBot grew organically and eventually took over Pettis's life. It caught on with a group of makers just as obsessed as Pettis.

  But it wasn't easy. At one point, Pettis sold everything he owned to buy more robot parts to keep the company going. He remembers thinking, “I'm not letting this thing go until it eats me.” Thankfully, it did not eat him alive—but it did take him on a startup journey to the forefront of a budding industry, 3D printing. And MakerBot was positioned to enable consumers to use 3D printing to change the world and make it a better place. Its users did just that.

  In 2013, Richard Van As and Ivan Owen created a design for a Robohand, a set of 3D printed fingers that can open and close based on wrist motions. Printed on a MakerBot, Robohand can replace custom-made versions (which can cost $10,000 per finger) for around $150. Liam, a five-year-old in South Africa with a congenital disorder affecting his fingers, got one of the first Robohands. As he outgrows it, he'll be able to get another—as will others who couldn't afford a traditional prosthetic. This is just one example of why Pettis and MakerBot are obsessed with what they do.

  This chapter covers how to find the idea that's right for you and common questions you might have along the way.

  Scratch Your Own Itch

  Pettis's idea evolved from a passion, but sometimes the best ideas come from problems that you want to solve for yourself. Take 37signals, a Chicago-based design and development firm that needed a way to communicate with clients. The existing options were too clunky and bloated, so they decided to build their own and called it Basecamp. Now used by millions of people, Basecamp was born when 37signals (now called Basecamp) scratched their own itch: they found a problem they had and built a product that others could use as well.

  Banjo, a social discovery app, was born out of Damien Patton's missed connection. Fifteen years after serving in Desert Storm, he found himself in the same airport as one of his fellow servicemen, who lived across the country. He hadn't seen his friend for all those years, and they didn't see each other that day either—none of their social networks could alert them. So Patton set out to create an app that would feed you relevant information, such as friends nearby, without you having to ask.

  But how do you come up with an idea?

  Throughout your regular day, you may encounter a problem or something inefficient or irritating. Carry a notepad or use your mobile device, and write it down. No need to come up with a solution or product right now; just look at the world with a problem-oriented eye. Jay Alan Samit, president of ooVoo, tells his students to write down five things that bother them or could be improved each day, creating a list of dozens of ideas in a month. You'll have a lot to work with and should be able to find a problem you're obsessed with.

  While writing for my personal blog and guest blogging for TechCrunch, I took several trips to Silicon Valley, where I met numerous startup founders, entrepreneurs, investors, and pundits. I noticed that many of these folks saw each other regularly at San Francisco events, like every week, where they met, chatted, and shared information. I took note and brought nuggets back to the Windy City to see if there were similar opportunities.

  When I did not see any events that had the same San Fran upstart vibe, I began to toy with the idea of starting something to help facilitate these interactions. I had seen what new media such as blogging could do and understood the importance of real-life events to bring together a community, so I began to noodle on an idea. After asking a few entrepreneurs what they thought, I started to reserve domain names for what this new venture might be called. I secured names like Techstir.com, TechBlendr.com, TechKoolaid.com, TechMixr.com, and TechCocktail.com. I had found an idea; now I wanted to find a cofounder.

  Go After an Industry

  If you haven't found a problem out in the wild, look closer to home. If you're familiar with an industry, you already have contacts and personal connections who could give you an advantage. You speak the language, and you know how it works. You're also familiar with major players and competition, big obstacles such as regulations, and more. This industry expertise will help you see things that others cannot.

  Here's an example: Dan Stratman was a pilot and worked in the airline industry for 23 years before starting Airport Life, an airport application that includes flight statuses, airport restaurants, and baggage policies. It would be hard for an outsider to figure out how to pull in all that real-time information, but he knew where to look for it, which gave him an advantage.

  As for me, I worked for the Tribune and AOL, both giant media companies, for years. I was one of the early contributors to TechCrunch, along with my personal blog Somewhat Frank. I had industry experience in new media platforms and connections with startups to get me started.

  You have industry knowledge as well; you just need to determine what it is. To research, go out for coffee or breakfast with people in your chosen industry. Ask them about problems they have or areas that need fixing. The idea is to always be looking for ways these people or organizations might become customers.

  Debate: Should You Build Painkillers or Vitamins?

  No, you're not jumping into the pharmaceutical industry, but the common advice for entrepreneurs is to build painkillers rather than vitamins. Don Dodge, an investor, startup veteran, and developer advocate at Google,
calls painkillers a must-have. They could be something that increases return on investment (ROI), improves sales, or helps companies satisfy a regulatory requirement—it's really needed. On the other hand, a vitamin is something that's nice to have. Productivity tools, collaboration platforms, analytical tools—any kind of tools—tend to be vitamins.

  Don Dodge

  Don Dodge is a developer advocate at Google, where he helps independent developers work with Google platforms. He came to Google from Microsoft, where he was a startup evangelist. Before that, Dodge worked at pioneering startups such as Forte Software, AltaVista, Napster, Bowstreet, and Groove Networks. He is also an angel investor.

  With a painkiller idea, people are more likely to pay for it and remain loyal customers. They're also more likely to find you even if you don't have a huge marketing budget. You're solving a real problem, and these people are probably already out there searching for a solution.

  These painkillers are known to soar higher, but some vitamins do very well. Products such as Facebook, Instagram, and Pinterest were not created to solve an obvious user problem, but they have had staying power and generated huge demand. Sarah Tavel, a senior associate at Bessemer Venture Partners, calls this category a drug; it's something that's nice to have that becomes addictive and hard to give up. Evernote, for example, uses a freemium pricing model to give people a taste (for free) and get them hooked so they'll upgrade to a premium plan. A number of other companies use the same model.

  Remember, different products appeal to different people—something that's a vitamin to one group may be a drug or a painkiller to another. For example, a meditation app might be a painkiller for someone who gets panic attacks but a vitamin for a mildly stressed parent. Keep the painkiller/vitamin/drug distinction in mind when coming up with and sorting through your ideas and target market.

  But don't give up if you don't get the support you expected. Matt Mullenweg, creator of WordPress, didn't, even when the world told him they didn't need another blogging platform. “Some of the most interesting things come from doing what everyone says is a bad idea or where no one else is interested—those ideas that you almost have to ram down the world's throat. Even if you fail, at least you weren't failing at the same thing everyone else was doing,” he says. The founders of GrubHub followed this advice, persisting in their dream of online food ordering even when everyone in 2004 thought that the idea of ordering food from your computer was crazy. Little did we know everyone would be carrying a computer in their pocket as a mobile and app revolution kicked into gear. And GrubHub certainly didn't fail: merged with its largest competitor Seamless, the company now has more than 600 employees, processes about 150,000 orders a day, and helps people in more than 600 cities order food from more than 26,000 restaurants.

  For a list of tools for coming up with ideas, check out http://tech.co/book.

  The Harsh Reality

  Coming up with ideas takes time. It's difficult to come up with ideas when you sit down and try to think of them. The best ideas come to you naturally or organically. Keep notes in your everyday flow, and you should be able to capture some good ones.

  You may come up with a genius idea only to discover that it's been done before—no worries; a little competition never hurt anybody. Google launched when there were plenty of other search engines out there; Gmail came after Hotmail, AOL Mail, and Yahoo! Mail. The iPhone was not the first smartphone to launch, but it innovated on a trend. Some entrepreneurs see competition as validation for their idea. As much as you like the idea of being a visionary, you may consider working on someone else's idea and become their cofounder. It's even possible to buy ideas on various websites.

  It's easy to fall in love with your idea, but be wary of getting too attached. You'll probably have to change it or pivot to survive and keep up with the environment around you—like these companies did:

  Twitter grew out of Odeo, a personal podcasting service.

  Instagram (bought by Facebook for $1 billion) was originally a location-based service called Burbn.

  Pinterest came from Tote, a shopping app that sent updates when items you liked went on sale.

  Flickr grew out of a game called Game Neverending.

  Groupon was originally The Point, a site for organizing around causes.

  LivingSocial started out as Hungry Machine, a small team making Facebook applications.

  Fab.com was originally a social network for gay men.

  Groupon

  Groupon grew out of The Point, a site for organizing around causes. The Point was struggling to get traction, but the team noticed an interesting campaign: people organizing around the “cause” of saving money, hoping to negotiate a discount if they all bought the same product. Groupon the daily deals website launched in Chicago in 2008, starting with restaurants and then expanding into products, getaways, live events, and luxury experiences. Groupon's initial public offering (IPO) took place in November 2011, and the company now has hundreds of millions of subscribers. It was cofounded by Andrew Mason, who was CEO until he was fired in February 2013.

  Finally, your ideas aren't considered valuable—they are a commodity. Coming up with ideas is hard, but it's not the hardest part by any means. It's just the beginning of what will be a long, up-and-down startup journey.

  Should you tell other people about your ideas? This is a huge debate that entrepreneurs have all the time. But someone has probably had the idea before, and execution is arguably more important than the idea. Not to mention that you may end up pivoting or changing your idea at some point. For these reasons, it's common practice for entrepreneurs to talk to venture capitalists or apply to accelerators without having them sign a nondisclosure agreement (NDA). Investors are not going to go out and copy your idea. What I'd be more worried about is an investor sharing your idea with a competitive startup in their portfolio, which has been known to happen. But the odds are pretty slim. As for sharing your idea with other entrepreneurs, most people won't have time to drop everything and work on your idea—they have their own to worry about.

  Celebrate: Enjoy the Journey

  Coming up with ideas is fun. I love it. Who doesn't love thinking big and trying to change the world? So enjoy the process and the eureka moment when you come up with a good one. Try to relish the idea generation stage, because you get to be so creative and think about problems worth solving. Entrepreneurs love this part of the process.

  Chuck DeMonte of GrooveFox says it's “one of the best parts of being an entrepreneur, creating!”

  “Coming up with new ideas is the best part of entrepreneurism!” echoes Jamie Walker, founder and CEO of SweatGuru. And idea generation doesn't stop once you have an idea to work on; you'll constantly be coming up with new ways to change it and tweak it to delight customers even more, evolve with a changing landscape, or expand your business.

  One way to make sure you enjoy your startup journey is to ask yourself a few questions right from the beginning:

  Who do you want your customers to be?

  Do you want to sell directly to consumers or to businesses?

  Which type of consumers do you want to sell to—moms, male twentysomethings, rich people, poor people, fashionistas?

  Which type of businesses do you want to sell to—small businesses or big corporations?

  Your customers are the people you'll be interacting with day in and day out, and you want to be sure you enjoy being around them. I love the passion and drive of entrepreneurs, and with Tech Cocktail I get to hang around, write about, and interact with them every day while also working with amazing brands that are interested in connecting with our audience online and off. So make sure you are comfortable with your chosen clients or customers.

  Another question you should think about is this: How big of a problem do you want to solve? Do you have a passion to change the world? Or change your community? Or an industry?

  If you're more interested in money, this aspect is less important. But if passion is something
you're looking for, you'll have more fun along the startup journey if you pick a project that's meaningful to you. You'll also have a greater chance of making it through the tough times.

  Final Thoughts

  Ask yourself if your idea is something you're willing to be obsessed about for the next 5 or 10 years. If not, there may be another idea that you would love to do for the long haul. Be patient; it will come to you.

  Bre Pettis is a shining example of following your passion. When MakerBot released its first 20 prototypes, thinking they'd take two months to sell, they sold out instantly.

  “I didn't realize how important [being obsessive] was,” says Pettis. “We were just obsessed with getting it the best it could possibly be with the resources we had at hand. That meant that I answered all the support e-mails and support calls for the first two and a half years—and then it turns out that's not normal, other people just hire people at that point,” he laughs. “If you're not obsessed with your product, f*** it, screw it, or don't do it! . . . Kill it right now and get on to the next thing.”

  Today, there are more than 35,000 MakerBot machines in the wild. The company raised $10 million in funding and was then acquired by Stratasys for $403 million in June 2013. And it all started with a maker, a teacher, and his obsession.