I just did the following experiment:
The intent of this post is to save you time. Pitching to VCs takes a lot of energy, and it’s easier if you prepare correctly. More importantly, you must know whether it makes sense to do it given what you have to offer.
Over the years I’ve heard people repeat the idea that Google is an “objective search engine” because they allow their algorithms to reflect “the voice of the web.” This sounds great in theory, but in practice it implies two things:
- There is such a thing as “the voice of the web.”
- Google can be a perfect mirror of such voice.
Here’s a video in which a few Google insiders talk about how Google Search works. At one point the moderator (Danny Sullivan) asks if Google ever manually tweaks results. He brings up one time when the top result for the query “Jew” was an antisemitic site. Amit Singhal (head of Google’s ranking algorithm) responds: (jump to minute 41)
Many people ask me what I think about running a startup in which the founder(s) are in Silicon Valley and the development team works from another city / country. This is what IndexTank did, and we were successful. The answer is easy: this setup helped us as much as doing hard drugs helps a rockstar. It’s a handicap, you can succeed in spite of it but I recommend avoiding it if you can. I defer to the words of Steve Jobs, when he was explaining the design of the Pixar building to encourage random meetings:
Despite being a denizen of the digital world, or maybe because he knew all too well its isolating potential, Jobs was a strong believer in face-to-face meetings. “There’s a temptation in our networked age to think that ideas can be developed by email and iChat,” he said. “That’s crazy. Creativity comes from spontaneous meetings, from random discussions. You run into someone, you ask what they’re doing, you say ‘Wow,’ and soon you’re cooking up all sorts of ideas.”
Youtube is one of those websites I can’t live without. A few years ago it used to be hip to declare that you didn’t own a TV. I do own one but I rarely use it; I watch most of my movies / TV shows / music videos on my computer. Not owning a TV today simply means “I couldn’t care less for cable content or a big screen.” I would guess that at least two thirds of the video content I consume on a daily basis comes from Youtube.
Twitter is great if you are a celebrity. Jerry Seinfeld joined a few days ago and already has 180k followers. But what if you are a random person who joins Twitter today? What’s in it for you?
Remember a few weeks ago when the Great EBS Outage took place? Everyone became a software scalability architect overnight. Lots of posts were written about how most startups didn't know what they were doing by using ebs. Netflix in particular was the talk of the town. Their service wasn't affected at all because they didn't rely on EBS. While sites like Foursquare, Reddit and Quora were down, Netflix boasted that:
For Netflix, the short answer is that our systems are designed explicitly for these sorts of failures. When we re-designed for the cloud this Amazon failure was exactly the sort of issue that we wanted to be resilient to. Our architecture avoids using EBS as our main data storage service, and the SimpleDB, S3 and Cassandra services that we do depend upon were not affected by the outage.
1) Marketing is not necessarily evil.
If you come from the hard and logical side of coding, the word marketing has an aura of evil. It conjures images of blabbering corporate droids that make you want to play buzzword-bingo during all-hand meetings. On Hacker News I see comments such as:
Barf. Sad, to see Hacker News being used as a marketing channel.
One of our investors told me that one of the reasons he invested in IndexTank was because he’d seen me “go full stack.” I like that phrase, and I take it as a compliment. He was referring to the time back in 1998 when I built an mp3 search engine in C, hosted it on my desktop computer, promoted it until it reached 200k daily queries, and made six figures out of it (all in a matter of months).Being able to “go full stack” is a very good ability to have for an entrepreneur. It’s not necessarily good for other life endeavors (e.g. being an academic researcher, or the CEO of a large corporation). I’m sure it can be very counterproductive in some cases, because it means that you won’t be able to have a multi-year focus on improving one single ability. Even for an entrepreneur, it’s neither necessary not sufficient. My case is that it’s very helpful, and I’ll elaborate a little bit on what “going full stack” means from beginning to end. 1) You have an itch to scratch. It’s possible to start a company building stuff you wouldn’t use but other people want. I prefer to build things I want because it’s easier. If I’m building something I wanted and I’m not using it myself, that’s a red flag. It makes me happy to find myself hacking quick apps with IndexTank once in a while. 2) You can code. This doesn’t mean you are a guru who would make it to the finals of Google Code Jam, or even that you could impress a technical interviewer with your deep knowledge of encryption protocols or graph traversal algorithms. However, you can read a “Learning X Language” book and manage to write a program from scratch. It runs and it does something. It may be ugly and inefficient. You may shudder at the thought that a seasoned programmer might see your code and post a snippet to TheDailyWTF. It doesn’t matter, it works and you are ready to try to build a business. 3) You understand people. It’s not enough to create something you want, other people have to want it too if it has a chance to become a business. You can sense frustration from people who are trying to do something and get on with their lives, even though they don’t care about technology. You can empathize with them. I don’t care if a bottle opener is well crafted or pretty, I just want to open the damn beer! Do you have one? I’ll pay a couple bucks or whatever. 4) You can make things “not too ugly.” A designer may cringe when seeing Craiglist, but it has been successful for many years despite not being beautiful. There is a threshold of ugliness that makes people ignore a product because they can’t stand to look at it, Craiglist is clearly on the right side of it (perhaps barely). Our brains evolved that way. Do you use any sites made in Comic Sans? 5) You can put the pieces together. Coding is not enough, you need to be able to set up your product or service somewhere and make it available for people to use. Today that’s easy, in the case of web apps all you need to do is know how to deploy to the cloud and make sure your stuff doesn’t crash too much. 6) You can promote your stuff. Some young hacker guns believe that creating something awesome is good enough. Sometimes that’s the case, but more often it is the squeaky wheel that gets the grease. There are plenty of stories of Silicon Valley startups that had great technology but could not figure out how to get it in front of the right people at the right time. For example… um, well, you get my point. Because you don’t have deep pockets you’ll have to resort to guerrilla marketing tactics. This is a lot of fun (who doesn’t like the thrill of seeing a blog post get lots of retweets or upvotes on social news sites), but you can’t do it willy-nilly. This leads to the next point. 7) You can communicate. You don’t need to be a motivational speaker, but you have to be able to present your ideas to an audience. You must be able to tell a story both orally and in writing. You have to put yourself in the place of the listener. Are you still reading this? Are you bored? If so, I’m failing. OMG ZOMBIES! MICHAEL BAY!!! Ok, moving on. 8) You can sell. Obviously this depends on being able to communicate, but it’s more. You must not be shy about asking for money. You must think of your product not in terms of what it cost you to produce but in terms of the value it gives to your customers. What alternatives do they have? Will they do it themselves? Why did they come to you? Why did they listen to you? This seems daunting to a young hacker but it isn’t. If you are building something good, selling it is just a matter of spending time paying attention and listening. Read “How to Win Friends & Influence People.” 9) AND MOST IMPORTANTLY: You enjoy the whole process. None of the above feels like a horrible burden. Some things may not be as interesting as others (OH NOES ANOTHER SALES CALL!!), but the prospect of doing *whatever it takes* to be successful is exciting to you.
In case you haven’t heard of BitCoin, it’s one of those concepts straight out of science fiction books from late last century. Untraceable digital cash that’s not controlled by a central agency such as a government. Jason Calacanis thinks it’s the most dangerous project he’s ever seen.
Bitcoin is a P2P currency that could topple governments, destabilize economies and create uncontrollable global bazaars for contraband.