Saturday, August 4, 2012

Star-tup: Think it, build your ship, beam up your first customer onboard, test drive, then get millions and go for the universe

If you are just starting or planning to start your first startup you may be wondering what a startup founder should do to build a great pruduct, get the first customer onboard and then how to scale the business. I have been reading great posts by great people and a few books on startups and take some notes in my notebook.
This post is a reflection of things I have learnt (and I have just started to learn). I have tried to cover a few topics in a single post. So its a little longer than a typical blog post.
I'll continue improving the post as I continue to learn things and create an ebook. If you are interested to have the ebook please subscribe to this blog (Follow By Email).

You may disagree with some of these and agree with some. Please let me know about your thoughts. If you are knowledgeable in this field please leave feedback so I can make this note better over time.

Your startup idea

You do not need to spend a lot of time to get a world changing idea. Just pick a problem you believe worth solving and then you get a great idea to start with. You will be adjusting your idea while executing it. Just consider a few points to make sure you are doing right thing:

Do you believe in your idea

No one will be more passionate about your product than you are. If you are not greatly passionate about what you are doing you should consider doing something else. Everyone will almost instantly know about your lack of passion. You should believe in your heart that this problem you are trying to solve is actually worth solving.

Talk about your startup ideas

You should talk about your startup idea with people you meet as long as they want to hear. Do not be afraid that your idea will be stolen. If someone is not already working on same idea possibility is very slim. If you have a few competitors your idea is already not unique. And if your idea is unique it will sound like a toy project to most people. So do not worry and talk about it. This will help to make the idea clear to you.

Ignore naysayers

When you talk to people about your idea most people will not like your idea without solid fact and logic. Even though they remind you Einsteins theories about absolute maximum speed. Thank them for their feedback but do not stop. If you truly believe in your heart that this problem worth solving and it can be solved it does not matter what others think. In fact if enough people likes your idea, it could be a very bad idea after all.

Name your product and buy the domain mane

You should give your idea a good, short relevant name (how the name auth2 feels for a 2 factor authentication startup name?). Think of a name and see if the domain name is available. If it is available buy it immediately.

Release early for validation

Your idea could be bad after all or you may be trying to solve a problem at the wrong time. Technology may not be available to build a warp drive yet. You should create a small prototype (minimum viable product) and get some feedback from your target customer segment. If it seems promising iterate like hell.

Try until you find your niche

If it is not clear if you are doing the right thing try to adjust a little and probe again. Do it a few times untill you find a niche.

Make a plan

You shoudl have a plan to operate your business. It does not need to be 137 pages long unless you plan for VC funding. Create a simple business model - should not be longer than 2/3 pages. Your plan does not need to be perfect. You should be flexible to change your plan as necessary. It is OK to change your plan as long as you get closer to your final goal. If you find customers are not taking the product as you expected make adjustment based on that feedback. Do not stress on the format much. Plain text, powerpoint slides, word table anything you like will be fine. Just keep it shortest possible. Here are some items to include in your business plan:


Describe the problem

You must fully understand the problem you are trying to solve. If your understanding about the problem is not crystal clear you will end up solving wrong problem and no one will care. [ask why/ so what until you get to final point of the problem]. If you solve a right problem everything will be easy. And easiness will be proportional to the usefulness or intensity of desire to have of your product. How much marketing effort AIDS vaccine will require? Desire may come from other emotions than need. Like a diamond necklace is a product most people buy not because they need that, but because they want to be a proud owner of the necklace. Are you solving something that will satisfy a need or people will want to be a proud owner of the product?

Define the solution

After you understand the problem clearly describe how you are going to solve that problem. It should be a high level description not a functional specification. It should be clear and short.

Describe unique value proposition

You need a clear unique value proposition. It needs to be more beneficial in some way than existing alternates. What are the alternatives customers already have and why will they choose yours. Here are a few you shoudl include in your plan sheet:

Be usefully different

Ask yourself what it you are building, who will use it and how are you making their lives better, easier or more fun that can not be achieved using current alternatives.

Finished story benefit

First describe what your product offers then continuously ask "so what?" until you get the core value. Like you can say we are building warp drive - so what? - it will help moving the star ship faster than light- so what? you can travel faster than before- so what? you can travel places where it was impossible before.
Here is another example: We are building a simple but strong two factor authentication system Auth2 that is more secured than simple password authentication system. It will be used by website owners and corporate network managers. It will make it extremely hard to break into the system and minimize risk of valuable data to be lost or stolen.
Without the final benefit of stopping data being lost or stolen it is not clear yet why should someone use two factor authentication.
Study other companies unique value proposition to get better idea. Until you are solid about your value proposition, chances are you do not understand your products value yourself (at least not clear about it) and spending time/ resources on building or worse marketing will be a waste. You may be building a wrong product targeting totally wrong audience.


Describe any unfair advantage you may have

You may have something that other people can not easily copy or you may have invented the technology to build the warp drive and the technology to create essential element dilithium crystals is proprietary technology invented by you and you have the patent for some key technology (patent may not be very useful btw) or you are so much ahead of others that they will never be able to catch you.

What is your customer segments and who are early adopters

Start with a small focused segment. You can always expand later. But you can not start to build for large segment without lot of resources. As a startup you may not have that.
Identify your early adopters so you can validate your idea early by reaching them.

What are your marketing channels

There are a lot of them- blog, email, search engines (SEO), external sites/ blogs, social media, youtube, phone, print, TV/radio, bill boards etc. Research your customer segment and choose the best fit and cheapest one or more of those. With careful planning marketing does not necessarily should take lot of your time or resources.

What are your costs

You need money to build your product. You may need to buy things like servers or ion exchange plant to produce dilithium crystals. There possibly will be maintenance and continuous development cost. You should consider those and include in your plan.

Have a pricing/ revenue strategy

You should have a price plan early. If you can not decide on price plans look you competitors for guidance. It can be free as well but you need to plan that from the beginning. Charging early will validate your products viability early and will help define your customer segment. While pricing against existing alternate product do not undercut those prices. People value products by price. So if you charge less customers may think your product to be inferior quality. More price may be interpreted as better product.
You should have more than one plan with increasing value and price accordingly. You should test a few times for right price.

Describe key metrics

Describe what factors are key to your success. A simple bullet list to refer to when required will do it. You later need these to measure your progress.


What is your expected revenue

Do not create a long projection plan with charts. A few sentences will do it .

Plan your feedback loop

You should plan a feedback loop that will give you idea if you are on track. You create this so that you can adjust your plan and be able to reach your final goal.

Plan for actionable metrics

Plan to collect actionable metrics (do not collect any data that you do not have plan to use).

How many visitors came ? from what channel? How many subscribed? How many bought? Add any other key metrics you are interested in here.

Validate business model

After you create the one or two pages business plan you should probe it for its validity. Here are a few things you may consider:
  • Customer pain level: this should tell you if it worth solving
  • Ease of reaching customer (channel)
  • Price and gross margin
  • Market size (is it big enough to have a viable business?)
  • Technical feasibility (can you create the vaccine with the resources you have?)
  • Legal isssues

Identify the risks in your plan

You should identify the risks for your startup and be prepared for those risks. Every venture has some risks associated with it. You should be aware of those and have a mitigation plan.

Keep your runway long

If you get more time you may be able to fix some mistakes you made early in the process and reduce the risk of getting out of business. If you spend a lot of money and can not continue you are out of luck.


Build a great product

Product building is easy part of the equation. If you have time and resource you can make a product. Saying that you should be obsessed about the quality of your product. You need an compelling product first. Don't just make a good enough product. make it as good as you can dream and possibly can afford. You do not want to hear "maybe" from your customer. You want "hell yeah". No compromise is allowed here. This is your warp drive propulsion system. This does not contradict with the early release for feedback loop. Just do not stop until you find dilithium crystals and achieve FTL (faster than light) speed.

Plan for "less but useful" features and make them rock solid

Number of features are rarely a factor for a product to be useful. Always remember the 20/80 rule- 20% feature is useful to 80% people. You have limited resources. Use them to make useful features flawless instead of making a mediocore product with a lot of features. Will your customers be delighted to recommend your products to their friends?

Key departments

Development, design and marketing are your key three departments. You do not afford to neglect any of these key departments. Do not plan to outsource. You may not initially afford to get great people for all three, that is fine. But these gets higher priority than any other activities.

Startup timeline

There are three phasses of a startup. You should know where you are standing at any moment.

Market research: Is the problem worth solving

Will the customers want the solution?
Will they pay for it?
Will enough people pay enough money for the business to be a viable one?

Build the product and test if the right product was built

Do people want the product that is built? You get your first few customers. Initially you need them to support learning.

Scale to millions

Accelerate your growth get first million customers or whatever your industries enough number is- If you build space shuttles you can have a few customers and still become profitable.

Software project management

Here is a few things you should do to efficiently manage your time. It is focused for software projects.

You should use the language that helps build your product faster and easily. People don't care about underlying technology. It is just a tool. Use something you know well and fit for your project.
Have a source repository. I use It is free for private repository up to five users.
Have test cases to cover your product and run the test cases before every checkin. Do not break any test case. It may seem waste of time but it will be a valuable resource when your project gets little bigger than one person can handle.
Use skydrive/ google docs for your documents. You can use your source repository also to track versioning.


Before you start make sure your product is ready. Untill your product is ready spending on marketing could be a waste or it may even do harm to your brand. You can start blogging any time and it is better to start as soon as you decide your field.

Understand your market

You should research market as your fast task (after starting your blog) of marketing. Look for possible customer, research your competators and do whatever you can to gather as much data you can. later you can use the data and take decision about other things.

Find your competitors

You should actually find them all and start monitoring their activity. Watch for who buy from them. What are they offering.

Make a list of increasing goals

Like get your first paid customer, then first 100 and so on. Make a timeline and track your progress regularly. If you are on track it will boost your morale, otherwise you need to adjust your plan.

Treat your customers well

They are the vital force of your business. If you treat them bad your business die. Customers pay for your service. They deserve this. You should always try to exceed their expectations. Delight them. It can seem costly sometimes but it pays ultimately. Build a great relationship with your customers.

Get endorsement

Get endorsement from great people. People have very limited time to research and depends on opinions of people they respect. It reduces risk and help take decision quickly. Again, to get endorsement your product must stand out. If you have skipped the sections about product quality please read those. You must do your best to make a great product.

Recursive Marketing aka SEO

I do not think I need to remind you that organic traffic is most important for your startup. You can spend small and get great benefit. Have a SEO strategy in your core marketing plan. Learn about it as much possible and implement those you learn. Here are a few things to consider:

Its all about content

If you have great content it becomes very easy to other things. If you do not have great content its almost hopeless. It can be heard to get more content on a website. Blog can help a lot for this.

Create a good landing page

Do it as soon as you can after registering the domain name. The landing page should give clear idea what problem your product solve. It should be focused. Make sure your customers can tell what you are offering by spending 30 seconds or so on your landing page. The benefit of your service to the customer should be clearly identifiable.
I see a lot of landing page posted on Hacker News to review. After visiting those I can not tell what the website is all about. Please make it easier to understand for stupid and lazy soul like me. See "Create an elevator pitch" to get started.
You want to have a nice logo and a favicon for your site. Easy things to do but makes difference.

Create a robots.txt file

Otherwise googlebot shows error like this and do not crawl your site:
"Over the last 24 hours, Googlebot encountered 1 errors while attempting to access your robots.txt. To ensure that we didn't crawl any pages listed in that file, we postponed our crawl. Your site's overall robots.txt error rate is 100.0%."
I do not like this message.

Create great page titles and description

And you should have one or more core keyword in your site title. The first word in your title carries most weight for search engines. Look at your pages and see how you are doing. Your page description is waht people see on search result pages. If it is not great and unique people will pass by your site on the search result.

Create an elevator pitch

Can you describe your idea in 140 letters and clearly communicate in 30 seconds? This is not only required for getting funded or something like that but also to be crystal clear of what you are doing and focus on that. You can create your pitch by first writing about your product and what problem it solves. Do not worry about the length. Then start removing auxiliary parts until you get to the core and it is of right length. Finally you should have 4 parts in your pitch-
  • Name of your product
  • Problem you are solving
  • Your solution
  • Key benefit of your solution - how are you usefully different than others

    You get eight seconds to grab your customers attention. Can it be read and understood in eight seconds?

    Create a high level concept pitch

    Here are a few example of high level concept pitch
    • Youtube: "flickr for video"
    • Dogster: "Friendster for dogs"
    • Auth2: "Makes your web site safer than your bankers web site"
    It'll be easy to message people what you do.

    Other things you should do for your web site

    • Have an email subscribtion form
    • Have your site link in all your online profile and as your email signature
    • Tell people to have link on their sites
    • Subscribe to web search engines and use web admin tools

    Get social

    Have a twitter account, facebook and google+ business page and start following important people. have conversation with people.

    Select relevant keywords and build your site around them

    If you are writing a service about security and there is no mention about security in your site it is hard for people to find you through Internet search. Craete a lit of 3-5 keywords that are related to your service and mention them in your site. You shoudl include most important keywords in you page's title.

    Invest in design

    Pople value how things looks. You get one chance to get the first impression right. It should not look crappy. More importantly it should be intutive enough for anyone. You wont be there to describe how to useyour site. While right design may not be enough for your product to be successful, it can break it if the design is not right.

    Brand your product

    Make sure all your web pages and social profile have same theme and color scheme. Your customer should instantly recognize any of your page and profile.

    Be mobile friendly

    Mobile traffic is increasing. Browse your site to see how it works on popular mobile platforms. Add Apple icons, have meta viewport tags on your pages (search for them if you do not know what they are).

    Setup search alerts

    You should add a few search alerts for you domain name, your competitors domain names and keywords you are interested in. I use google alert for my project. You can set instant, daily or weekly alerts. You can engage yourself whenever you see beneficial.

    Get business cards

    People asks for business card and you should have then just to avoid the conversation about why you don't have those. Do not spent lot of money on it though. Simple card is fine.

    Find and make relationship with bloggers

    Subscribe to bloggers who write about your industry. Follow them and engage in conversation on their blog. Then you can ask them to write about you. You should give them all the required information. Think about their interest and their readers interest on they blog post you are requesting.
    You may avoid big names initially. They get so many pitches regularly it is hard to get their attention if you are not considerably big.

    Have some video

    Video engages people a lot. You should use as many channel you can and video is a great one. You can start by creating the video by talking in front of your camera. People will see your enthusiasm. Upload them to youtube/ vimeo and display in your site.

    Gather useful statistics

    Use analytics service to get different statistics about your site visitor. There are a lot of good analytics service. I personally use Google Analytics for my pages.


    Blogging is one of the most important cahannel to engage people. You should have one. If you don't have a blog start today. The more blog post you create the better. It will be easier for people to find you through search engines.
    You may have more than one blog. One personal blog and one product related blog.

    Make your blog easy to find and SEO friendly

    Have your blog link on the home page. It is good to have your blog url looks like It is hard if not impossible with some blogging service. But, if you can, I suggest you have a simple folder on your webserver and drop wordpress in that. Make sure your blog theme is consistent with your product web page theme.

    Make it useful for readers

    Very few people reads company or product blog unless there is something useful for them. You can talk about related field. Like for Auth2, since it is about 2 factor authentication, security or multi factor authentication, how they work, what a website owner should know to keep his sites secure, what are the risks of ignoring security these days and how costly it can be in terms of reputation etc. are related topics. I recommend not to directly write about your product. Others should write about them if it is a fantastic product.

    Write regularly

    When you post useful content regularly you build a reader base who will check your blog periodically or subscribe to your blog. If your post frequency is uncertain with a long delay readers will stop following your blog.
    It requires discipline to blog regularly. Schedule a time to write your blog. Put blogging activity on your calendar.

    Create a list of blogging ideas

    When you get an idea about blogging you should write it down. You can write a detailed post later. It will be easier for you to pick one from a list and start writing.

    Create your content yourself

    People will know if you use ghostwriter and will not trust. Blog needs to be personal and authentic. You can have people research for you and then give you all the resources you want. But then you should do a little more research and write your own content.

    Create a great title and engaging first paragraph

    If your title is not good most people will skip it. With a good title you draw their attention. Then your first paragraph should give an idea what to expect. Write this very carefully so that the reader is interested and continue reading. Optimize your blog title for search engines. It is equally important since blog is an essential part of your website. (But don't be careless after that. You do not want to scare off your reader :) ).

    Short post with simple language

    Your post should not be too long. If it is not very interesting most people will skip a lot of content or entirely skip your blog post. Write simple words and short sentences. You do not need those words found in GRE textbooks. (Yes I am violating the rule- but I have spent more time researching that we do usually fr a single post).

    Have a good "about" page

    If you write useful posts for readers they will want to know about you. Write a through about page. Add a good photograph. Make it personal. You should add your product and company details and links to those.

    Engage people through comments

    Have conversation with the readers. You should not just throw the party and leave the house. Its rude and unsocial. Be there and talk to your guests. I think its obvious anyway.

    Have RSS feed

    Use feedburner or similar service if you don't have it in your blogging software. It is important because lot of people depend on rss reader to get latest content. Most blogging software includes this anyway. But check for it.

    Make it very easy to share

    If a reader finds your blog interesting s/he want to share it with friends using facebook, twitter , google+ or watever platfor he likes. Make it easier by placing share icons on your blog. If there is no support for social sharing get one. And of course share yourself on all the social platform you have and in your friendly forums (do not spam) and ask your friends to do so.

    Paid Advertising

    If you have not raised a lot of money I would suggest not to spend on paid advertising to start with. It is very easy to spend money on advertising initially without getting value for the money you spend. Even if you do always track what value you are getting.



    Getting funded is an optional part for most startups. If you can get some traction and can become ramen profitable [link] you may want to skip to take funding. But if you want that is fine too. Sometimes it may be hard to grow without funding. But spend most of your time and resources building a great product for customers. If you have a good product that customers want you'll have better chance getting funded and everybody wins. With a crappy product that solves no customer problem, it is very hard to get funding no matter how much you try. Even you get it will be a lose for all party and you do not want yourself in that situation. One last thing about funding- if you get it do not waste it. Spend the money as if it is yours. When you take other peoples money take the responsibility as well.

    Final thoughts

    Building a startup is not about a great idea or creating a great useful or desired product or great management or great sales and marketing. It is a combination of all those and much more things. As a startup founder you need to learn a lot, negotiate with a lot of people especially customers whether you personally meet them or not. In the journey you find a lot of manageable but great obstacles and challenges and if you can overcome those the payoff is equally great. The journey is very tough and risky but at the end it is worth taking the risk and pursue your dream. I wish you good luck.


    1. Nice post -- worth-reading ! Definitely will be helpful for the people who are dreaming for start-ups. And all the best with Auth2 !!!


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