Author Archives: Elia Freedman

Paul Graham: Start Small To Grow Big

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One of the most influential thinkers in the world of startups has got to be Paul Graham. The founder of Y Combinator also writes some of the most influential essays, always excellent and thought-provoking. Recently Paul announced he was stepping down as the head of Y Combinator and then was interviewed at The Launch Festival about the things he has learned.

One of the most interesting and important comments, from this TechCrunch article, was the following:

In relating the ingredients or factors that are the secrets to — or most often point the way to — achieving that illusive hockey-stick-style growth curve, Graham said:

“Start with a small, intense fire.”

In other words, find a small number of people that want what you have or are making badly. In the beginning, Graham said, that number is going to be small, and that’s okay. Don’t be embarrassed. Graham related the example of Apple, which only produced a couple hundred units of Apple I, its first computer. However, Apple sold 175 of those 200 units within the first 10 months by finding and appealing to early computer hobbyists.

More so than identifying who you want your users to be, your ideal customer, you have to understand who your users actually are, and who is really clamoring for your product. “You’ve got to know who those first users are,” Graham explained, “and sit with them, spend time with them, focus on them — have a party with them.”

Your first goal is focusing on those first 50, 100, or 500 users, and make them really, really happy. If you can do that, you’re on your way, and you can go from there, he said.

I’ve been asked how we get started a lot lately as we applied to a startup incubator for Equals and did some practice pitches last year. What’s the marketing plan, they ask? I know what I’m doing in my head but I’m certain I’ve done a really lousy job of relating what I’m thinking to others.

Paul Graham put the right words in my mouth. Our goal is to get 50-100 extraordinarily committed customers using and excited about Equals. I want to understand these people as well as I can and then use that knowledge to tailor the product even further. I believe the marketing plan will flow out of this work.

The problem, though, is that getting “50, 100 or 500 users” is really hard and that’s one of the reasons we chose to work on Equals out of all the prototypes we wrote a couple of years ago. We have 1.5 million iOS and Android powerOne downloads, 230,000 of which use our software calculators — which solves a similar job to be done — on a monthly basis. Of those 230,000 active customers, 50,000 are using one of our paid products with the rest using our free ones. We have already queried a small subset about Equals (about 2,000 of the 230,000), showed them the site, a video and other materials and had some small conversations with a few. The email list stands at around 700 right now.

I’m betting that Paul Graham is right, that it takes less than a few hundred to start an inferno. I’m also betting that we will find those 50-500 amongst our existing powerOne customers. We will know more in the next few months.

If I Think I Get Hate Mail

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Man, if I get hate mail I can only imagine what Evernote receives. Phil Libin wrote an article on the topic for Inc Magazine over a year ago. In it he says how complaints are his favorite kind of comment:

On the night before we first released the Evernote service, in 2008, I made a quick screen capture movie pointing out the features. Apparently the audio of my voice was not satisfactory, because the first comment we received was, “Whoever did the voiceover in this video ought to be found and beaten to death.”

I respectfully disagree, but even in a comment like that, there was an element of truth. The audio was bad. My narration was sloppy. We fixed it.

Classic Libin humor, too.

He’s right, though. I receive tremendous value from negative feedback and we have made many improvements to our products based on it. But all the same, I’ve seen negativity done well and negativity done poorly. Frankly, Phil, that feedback is negative done poorly.

Apple Buys TestFlight

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TechCrunch reported rumors (re/code confirmed) that Apple bought Burstly, who among other things, runs TestFlight. TestFlight is one of the popular tools (Hockey is another) for developers to distribute beta versions to testers.

Oh, a developer can dream, can’t he?

A simple way to go from XCode to beta testers without all the insanity…
Knowing who will get the beta before you send it to them…
Raising the limit of 100 beta testers or eliminating it completely…
A/B testing…
Analytics that tell us how our apps were found and search terms used…

Oh, yes. I’m certain I’m reading waaayyyy too much into this acquisition.

Whatsapp And The Stories Behind The Story

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If you missed it, Whatsapp was purchased by Facebook yesterday for $19 billion ($16 billion now plus $3 billion in stock to keep the employees around). Whatsapp had 33 engineers serving 450 million active users. That’s amazing and shows what the Internet has done to the structure of businesses. If you aren’t familiar — and I’m amazed at how many industry people admitted as much yesterday — Whatsapp is a mobile messaging service. (I have not used it but am familiar with the company.)

There are some great articles on the acquisition. I’m not interested in recounting those so here they are:

  • Jim Goetz, Sequoia Capitol, recapping the investment by focusing on four numbers
  • Benedict Evans discussing that the winner-take-all mentality of social on the desktop does not appear to be the case in mobile
  • Michael Arrington on failure before success
  • Om Malik on rational decisions that appear irrational
  • bedhead, HackerNews, in his second paragraph discussing wealth inequality

What I am interested in is how the history of each of these two founders shaped the way they created and presented their service. Whatsapp does not store any data on their servers. Once the message is delivered to your phone, it is deleted from the server. Authentication is with a phone number, which means no login or password even. And the service is free the first year and a dollar per year after that. (Absolutely amazing if they figured out how to be profitable at that amount.)

Each of these are grounded in the founder’s personal stories. Jan Koum and Brian Acton both were laid off by Yahoo previously. Both hated ads and decided to go with a very inexpensive subscription, rejecting the standard way (ads) most of these messaging services made money. Jan was born and raised in a communist country. He is fearful of spying and oversight and thus made sure that they didn’t keep any information around. They rarely drew attention to themselves, apparently on purpose, letting their app speak for them instead.

These stories rarely ever get told — our personal narratives and how they are interwoven into the companies we found. It is amazing to see Jan’s and Brian’s stories so boldly displayed for the world with this acquisition. For whatever reason this acquisition feels less like the normal, faceless big dollar acquisitions we so often hear about.

Instead I felt like I got a sense for the people behind the company. I smiled at their success.

The “Blah Blah Blah on Steroids”

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Great post from investor Bijan Sabet. In short, less is more:

Over the years I’ve seen pitches for YouTube on steroids, Flickr on steroids, WordPress on steroids, yahoo shopping on steroids, google search on steroids and many many more.

But here’s the thing. Steroids aren’t good for you.

The best way to deal with YouTube is Vine and Snapchat.

Flickr on steroids is a mistake. Instagram was the answer.

…

Less is more is a powerful notion. But it’s deeper than that. Redefining an experience in a unique way is how you beat the market leader. 

And that’s when you put a dent in the universe.

I, too, like businesses that carve out a small piece of a larger one, redefining it in the process. I heard someone recently say that the only way to kill Excel is to build something bigger and better than Excel. I disagree. The only way to kill Excel is to peel off a small part of Excel and do that better than Excel can. In the process, hypothetically, we make customers who would never use Excel use the new service. Snapchat and Instagram, for instance, peeled off a small subset of Youtube and Flickr, made those pieces better, and in the process made creators out of non-creators.

Here’s another way to think about. Every political poll conducted always queries likely voters. And in every one of those polls, any independents are trounced. But here’s the thing: if an independent wins election it is because he or she appealed to unlikely voters.

I can’t win by attracting the power users of Excel, the equivalent of die-hard Republicans and Democrats. I win by making those without allegiance — the independents — vote with their dollars for my products and services.