Metrics
- Zuckerberg wanted 80% useage at Harvard with 50% daily activity retention
- Do you get more value for more people using?
- How much of the medium.com views came internally versus facebook and google?
Growth Hacks: In a two-sided network, who shows up first?
- Mark Zuckerberg “hacked” the Harvard directory to pre-populate facebook with data.
- Uber subsidized traffic around a city
- Instacart subsidized until it built up a lever of orders with grocery stores.
- when you subsidize, what is your ROI and lifetime value?
- Open Table could take advantage of high fragmentation, where the suppliers didn’t have market paper
It is virtually impossible to displace OpenTable because you have to go market to local market
How America Lost Its Mojo
U.S. dynamism is in the dumps: Americans are less likely to switch jobs, move to another state, or create new companies than they were 30 years ago (or 100 years ago). What’s going on?
Between the 1970s and 2010, the rate of Americans moving between states fell by more than half—from 3.5 percent per year to 1.4 percent. “It’s a puzzle and it’s the one I wish politicians and policy makers were more concerned about,” Betsey Stevenson, a former member of Obama’s Council of Economic Advisers, told TheNew York Times this week. Fewer Americans moving toward the best jobs and starting fewer companies could lead a less productive economy. On Thursday, the Financial Times reported that productivity “is set to fall in the U.S. for the first time in more than three decades.”
.. Whereas the middle class used to move toward productivity and jobs, like the River Rouge complex, they’re now barricaded from the most productive places by housing costs. So they’re moving toward cheap housing, instead.
.. Like smoking habits and fitness, entrepreneurship is a contagious behavior. “Exposing individuals to entrepreneurs may encourage them to start their own ventures,”
Projects and Companies
In the early days of my startup, I used to get slightly offended when people would refer to it as a “project”. “How’s your project going?” seemed like the asker didn’t take us seriously, even though everything felt serious to us. I remember assuming this would stop after we announced a $5 million Series A; it didn’t. I kept feeling like we’d know we made it when people started referring to us a company.
I now have the opposite belief. It’s far better to be thought of—and to think of yourself—as a project than a company for as long as possible.
YCombinator: Startup Playbook
We have noticed the most successful founders are the sort of people who are low-stress to work with because you feel “he or she will get it done, no matter what it is.” Sometimes you can succeed through sheer force of will.
.. Founders that are hard to talk to are almost always bad. Communication is a very important skill for founders—in fact, I think this is the most important rarely-discussed founder skill.
.. Tech startups need at least one founder who can build the company’s product or service, and at least one founder who is (or can become) good at sales and talking to users. This can be the same person.
.. A quick note on equity: the conversation about the equity split does not get easier with time—it’s better to set it early on. Nearly equal is best, though perhaps in the case of two founders it’s best to have one person with one extra share to prevent deadlocks when the cofounders have a fallout.
.. To do this cycle right, you have to get very close to your users. Literally watch them use your product. Sit in their office if you can. Value both what they tell you and what they actually do. You should not put anyone between the founders and the users for as long as possible—that means the founders need to do sales, customer support, etc.
.. Recruit users manually, and make the product so good the users you recruit tell their friends.
.. In fact, more generally, when there’s a disagreement about anything in the company, talk to your users.
.. You can do this as the founder even if you have a lot of flaws that would normally disqualify you as a CEO as long as you hire people that complement your own skills and let them do their jobs. That experienced CEO with a fancy MBA may not have the skill gaps you have, but he or she won’t understand the users as well, won’t have the same product instincts, and won’t care as much.
.. It’s valuable to have a single metric that the company optimizes, and it’s worth time to figure out the right growth metric.
.. Speaking of metrics, don’t fool yourself with vanity metrics. The common mistake here is to focus on signups and ignore retention. But retention is as important to growth as new user acquisition.
.. Counterintuitively, it turns out that it’s good if you’re growing fast but nothing is optimized—all you need to do is fix it to get more growth! My favorite investments are in companies that are growing really fast but incredibly un-optimized—they are deeply undervalued.
.. Most early-stage startups should put “Do things that don’t scale” up on their wall and live by it. As an example, great startups always have great customer service in the early days, and bad startups worry about the impact on the unit economics and that it won’t scale.
.. Some of the biggest traps are the things that founders believe will deliver growth but in practice almost never work and suck up a huge amount of time. Common examples are deals with other companies and the “big press launch”. Beware of these and understand that they effectively never work.
.. It’s very hard to be both obsessed with product quality and move very quickly. But it’s one of the most obvious tells of a great founder.
I have never, not once, seen a slow-moving founder be really successful.
.. It’s important that you distort reality for others but not yourself. You have to convince other people that your company is primed to be the most important startup of the decade, but you yourself should be paranoid about everything that could go wrong.
.. One mistake that CEOs often make is to innovate in well-trodden areas of business instead of innovating in new products and solutions. For example, many founders think that they should spend their time discovering new ways to do HR, marketing, sales, financing, PR, etc. This is nearly always bad. Do what works in the well-established areas, and focus your creative energies on the product or service you’re building.
.. Invest in becoming a good manager. This is hard for most founders, and it’s definitely counterintuitive. But it’s important to get good at this. Find mentors that can help you here. If you do not get good at this, you will lose employees quickly, and if you don’t retain employees, you can be the best recruiter in the world and it still won’t matter. Most of the principles on being a good manager are well-covered, but the one that I never see discussed is “don’t go into hero mode”. Most first-time managers fall victim to this at some point and try to do everything themselves, and become unavailable to their staff. It usually ends in a meltdown.
.. Speaking of managing, try hard to have everyone in the same office. For some reason, startups always compromise on this. But nearly all of the most successful startups started off all together. I think remote work can work well for larger companies but it has not been a recipe for massive success for startups.
.. Do not worry about a competitor until they are beating you with a real, shipped product. Press releases are easier to write than code, which is easier still than making a great product. In the words of Henry Ford: “The competitor to be feared is one who never bothers about you at all, but goes on making his own business better all the time.”
.. If you have a paid product with less than a $1,000 customer lifetime value (LTV), you generally cannot afford sales.
.. In any case, try to get to “ramen profitability”—i.e., make enough money so that the founders can live on ramen—as quickly as you can. When you get here, you control your own destiny and are no longer at the whims of investors and financial markets.
.. Not having enough money can be bad, but having too much money is almost always bad.
.. When investors tell you no, believe the no but not the reason.
.. Great board members are one of the best outside forcing functions for a company other than users, and outside forcing functions are worth more than most founders think. Be willing to accept a lower valuation to get a great board member who is willing to be very involved.