We’ve demonstrated that there is significant demand for this type of service, we have 46% product / market fit based on Sean Ellis’ suggested measurement method, and we have users so enthusiastic about the idea that they just send us money. Still we’re shutting it down.

There’s a lot that’s gone into that decision, more than would fit into one blog post. So this won’t be comprehensive, but I’d like to explain a little bit to our users why we’re taking this course.

Time for a Pivot

It’s been very clear over the past few months that we’re overdue for a big zoom in pivot. We spent much of Oct looking at our metrics and trying to figure out what to focus on and how to get to revenue or a funding opportunity. One thing that came up again and again in our discussions is that we were trying to do too much at once given our resources. startupSQUARE is trying to be:

• A place to find co-founders and advisors for startups (a discovery engine)
• A place to brainstorm ideas (ideation)
• A place to find the best resources for your startup

Any one of these topics is enough for several websites. By trying to tackle them all at once, we bypassed our Minimum Viable Product by several orders of magnitude and in doing so, we didn’t focus on enough basic value to keep our users coming back.

In addition to that product pivot, there was a strong possibility we’d need a market pivot. We’d been engaged with tech entrepreneurs as an early adopter crowd, but the needs of the tech crowd are more focused to finding co-founders, which is not a large demand for brick and mortar SMB entrepreneurs. SMBs however represent a much larger market and a much better opportunity for monetization.

The tech entrepreneur market may be more inclined to try out a new service like this, but also represent significantly different needs than the larger market. So they aren’t early adopters so much as a niche market segment.

Fork in the Road

We therefore decided we needed to focus and look at some strategic alternatives which included:

• A simple mailing list for people looking for co-founders or advisors
• Reviews of startup resources (Yelp for startups)
• A social network for SMBs to get business advice (an on-line environment similar to SCORE)
• Continuing on with startupSQUARE as an amorphous entity
• …and many more

All of these ideas had one of two difficulties. They either represented a small market opportunity that was unlikely in the short to medium term to generate revenue sufficient to sustain a team of three people working full time, or they were highly risky opportunities which would require substantial additional development.

Regardless, we’ve come to the conclusion that taking startupSQUARE to any of these alternative ideas does not make sense for us. Despite the current mini-angel bubble for funding, we are not comfortable raising funding without significantly more concrete metrics which show our business model to be solid. As such, we will be disbanding to focus on our own projects.

The End?

We have been approached by two parties and counting who are interested in taking startupSQUARE to the next level and we’re more than happy to discuss this if we think another team can succeed. After all, it stands to benefit us as entrepreneurs as well!

At this point, we the discussions have not proceeded very far. If we’re able to hand it to another team, then it is certainly possible that startupSQUARE may continue. But for now, we’re going to assume that that’s not feasible and start work on our next projects.

My Personal Goal

After learning a tremendous amount since moving to San Francisco a year ago, I’m excited. I’ve made some big mistakes in my management of startupSQUARE and I’d like to turn those mistakes into expertise with practice practice practice.

I’ll be taking that learning and implementing four startups in four weeks in Dec (and perhaps January) to improve my ability to focus on Minimum Viable Products. One of those projects will be a simple co-founder mailing list as a public service with no pretense of trying for revenue. This is one aspect of startupSQUARE that is very successful, seems to provide real value to users, and will not take much development to implement.

I’ll also continue blogging at Grasshopperherder.com so that I can pass the know-how we’ve acquired to the next team working in this market.

Thank you!

So, on behalf of Manuel, Marcel and myself, I’d like to thank everyone for trying out startupSQUARE, giving feedback, donating to support our costs, and pushing us harder. We really appreciate all the kind thoughts and honest criticism we received.

Sincerely,
Tristan

No.

I hadn’t bothered to use startupSQUARE the platform to ask for advice on where startupSQUARE the business should go from here. That’ll change now.

Practice What You Preach (Dogfooding)

Eating your own dog food is when a company uses it’s own product.

One of the key functions of startupSQUARE is to help entrepreneurs find co-founders. Another is to get business advice. We don’t need another co-founder at the moment, so today I posted a question about how startupSQUARE should vet new members to the community to see if they had some ideas. Turns out they do.

I’m spending more and more time trying to vet new users as they apply. Some people enter very little information and I don’t activate their accounts while we’re in alpha. Some are simply in industries or locations where we probably can’t help. But a lot I just don’t get to or I do a quick read, which isn’t good enough.

So I’ve asked our own users how they’d like to see people added to the site. Should we continue to vet each application? Should we let everyone in? Should we let the users vet the applications themselves? Should it be invite only?

All Cards on the Table

I’ve liked some of the responses I’ve received already and I’m excited to see what improvements we can make when the community is directly engaged in the debates we’re having internally among the team.

So thanks in advance to the feedback from our users!

Cheers,
Tristan

StartupLinkup.com is winding down. It was a nice experiment, but I realize it’s not the best model for connecting startup founders.
I strongly recommend that you use StartupSQUARE. Tristan, Manuel, and Marcel are the great guys there, and will make sure you get the right connections. All the best, Adrian.

Opportunities Everywhere

Adrian is a great developer. I saw when the first seeds were planted in his head months ago based on the Google Doc spreadsheet for co-founders and I predicted that some speedy coder would have something up in a couple weeks. Yep…that was Adrian. So why would he abandon his idea?

Partly because he’s a great developer. He can build a website in a week or two. He doesn’t lack for new ideas or the skills to implement them and that’s a distinct advantage in this ecosystem. With opportunities everywhere, there’s no need to doggedly chase down one path if it’s not the right one for you. In this case, Adrian recognized the same customer problem we did and also recognized that his solution wasn’t quite working. Why keep pursuing it?

Instead of fighting it out for each customer, he turned to his competitors (startupSQUARE, techcofounder.com, kofounder.com, fairsoftware.net, etc.) and announced that he would redirect traffic to whichever one of us had a good solution that would actually solve the problem. (Fortunately, that turned out to be us thanks to some really great endorsements from our users!)

His rationale was pretty straightforward. A successful solution that helps entrepreneurs find co-founders helps Silicon Valley, it helps the economy, and ultimately Adrian benefits as a member of that ecosystem.

Adrian thought in terms of long term benefits for the group instead of the short term benefits for himself.

(note: Adrian’s next project sounds pretty cool. I’m interested to see how it develops.)

That brings me to my next point: we all know each other. There are quite a few companies looking to provide opportunities for co-founders, advisers, and investors to find one another. We talk on the phone, we share information. Why? Wouldn’t it make more sense to horde data? Isn’t business like a poker game? The guy with the most information wins, right?

The pervading philosophy here is that cooperation builds businesses and competition chokes markets. Instead of having ten companies compete for the same slice of the pie, they’re more inclined to sit down together and figure out how to bake a bigger pie.

Chess vs. Poker

If you want to win in Silicon Valley, you have to play chess more than poker. For those that don’t play chess or poker, here’s the difference: Poker is a game of incomplete information. You don’t know what cards the other person has.

The only way to give yourself an advantage at poker (beyond being able to calculate simple probabilities) is to read the other person’s mind. Of course there’s a science to that and some people are great at picking up subtle micro-expressions and body language. However, that skill doesn’t help you in chess.

Chess is a game of complete information. Of course, you still don’t know what the other person is thinking, but all the pieces are out in the open and obvious. If you lose, it’s not because the other person pulled a fast one and somehow hid a piece, it’s because they had a better strategy and tactics. In Silicon Valley, information is a commodity.

Information is a commodity?

Yes. Well…no…information still valuable and in some cases rare, but data is a certainly a commodity and information is on it’s way.

You can have all the facts and figures in the world and without the ability to parse that data into useful information, it’s useless and worthless. Minor case in point, if need you need to know how to create an arrow using CSS instead of a graphic, just search the web. (I liked this post when I needed to know.) There are ten thousand blogs giving away more than just data. They are giving away information under the rightful assumption that their ability to generate that information (a “how to” guide) is more valuable than the raw data (meaningless lists of css syntax).

In this case, Jon Rohan is trying to increase his reputation as someone who can turn data into information by making it freely available to everyone. The only thing that now differentiates a front end developer on this particular task is their ability to successfully execute a Google search. However, Jon’s skill and willingness to share it set him apart.

Companies behave in this fashion as well, not only open sourcing their prized code, but they generate open APIs by the thousands which allow hundreds of thousands of developers to use their abilities to turn data into information and generate value. Companies like Facebook of course keep some data to themselves, but their APIs essentially commoditize vast swathes of data and enable any company out there to become a partner of Facebook simply by writing a couple lines of code.

In this system of complete information, developers in Silicon Valley wind up cooperating more than competing in order to differentiate themselves on the basis of abilities rather than information or data.

Chess rather than poker.

Thank you!

So I’d like to take this opportunity to say thank you to Adrian Fritsch again for his kind words and his contribution to our site. He realized what we should all realize, that contributing to the eco-system in the spirit of cooperation leads to greater long term benefits for everyone.

I hope that startupSQUARE can play it’s part in this, by taking those values to the broader entrepreneur community via our site and help every system build as vibrant a co-founder eco-system as Silicon Valley.

These are notes from the participants themselves of advice given by a variety of different clinicians (see here for the list). So the bullets may at times contradict one another or other advice you may have read or received. I’ve edited some for legibility.

Special thanks to John Maloney from NetworkGrader.com who took some very good notes and sent them in.

• You need to hook an investor in 30 second on a human level by finding a shared experience/pain point.
• Start your pitch with stories and craft a compelling narrative.
• Describe the offering first and why it is important and an opportunity.

note: Feedback on what to start a pitch with often varies tremendously. Often people advise starting with the problem statement.

• Avoid ‘TMI’ – Too Much Information.

note: This was mentioned more than once. It is the “Lean Deck” Clinic.

• Add screen shots, mock-ups and demonstrations when available.
• Be carefully using industry investment quotes because companies often invest for reason other than they say.
• Some VCs want to see domain expertise in the team.
• The team is important, but startups are a lonely business since Individual founder(s) do virtually all the work.
• If you can present without a powerpoint, it’s fantastic, but it’s very very hard.
• A good presentation with a small audience (a table of 5) is very different than a good presentation in front of a large audience (a room of >50).

note: Knowing your audience is always key and you should ideally change your presentation to fit your audience. So a larger audience will clearly change your pitch. You may also be targeting a small portion of the audience (investors) at a conference rather than the general audience. So things can get very complicated.

• Avoid launching if you’re fundraising.

note: In followup discussions this was very contentious advice since it potentially reduces the amount of learning you can do. However, there is a big difference between a public launch and ongoing customer development.

• Clearly elaborate how you will get traction.

note: a.k.a Customer Acquisition. This is the most often overlooked slide or part of a business plan.

Cheers,
Tristan

The bloated thing is my foot.

After my anti-ninja rant last week, it was perhaps inevitable that the universe would see fit to prove that I am not a ninja by any stretch of the imagination. Behold my foot. (see pic) It’s not supposed to look like that.

Let the laughter and taunting begin!

The End of My Parkour Lesson

As I vaulted gracefully over the first 4′ block and approached the more imposing 6′ padded barrier at a full run, I had nothing to fear. I had cleared it a half dozen times already and as I’m 6’4″ myself, I reckoned that if I collided with it my 190 lbs would more than likely flatten it and the diminutive gym teacher holding it in place.

One foot goes halfway up the wall while your hands slap the top of the barrier, providing a pivot point to convert your forward momentum into upwards velocity as you vault over and land gracefully on the comfortable looking floor pad on the other side. At least so goes the theory.

Reality looked reasonably similar except for the graceful landing part, which was replaced by a pop, a surprised expression, and the subsequent agony of my right ankle twisted at an implausible angle to the left of where it should be. Fortunately, I retained enough of my wits to cry feebly for help.

My ankle was dislocated and (as I’d later learn) fractured.

Laugh It Off

Failing sucks. But it happens. A lot.

It’s been a long time since I injured myself badly, but I was fortunate in that I could see the humor of the situation almost instantaneously. As I lay on the ground hoping that my ankle would suddenly pop back into place, I had to start laughing. It was presumptuous of me to start vaulting 6′ barriers after my second class and it was perhaps inevitable that I’d hurt something. So I laughed long and hard.

(Important note: If this happens to you, call for help first, then laugh. If you laugh first, people tend to ignore your “no really, I broke my ankle” claims.)

In the same way, coming back to the US to start a company after five years abroad with little sense of the local market is potentially stupid and some flailing about was overwhelmingly possible. However, the possibility for injuring either my body or my ego is not an acceptable excuse. The real failure would be not to try at all. Stumbling on the way, that’s just part of the fun.

So it’s healthy to laugh about it. Laughing does great things to you when you’re injured. It jacks up all your endorphins (mmm…sweet sweet endorphins) and it also gives you a sense of perspective. Even in pain, I just learned something and will know better next time.

(In this case, avoid hitting the top of the mat straight because by the time it compresses you’ll be at an angle.)

If All Else Fails…

However, sometimes you can’t get up.

Certainly in this case, I couldn’t even considering getting to my feet until my ankle was back in place. That’s when other people come in handy. Other people can do all sorts of useful stuff like help you up, get a pack of ice, and drive you to the hospital. They can also take blurry pictures of you to commemorate the occasions. (Thanks Tota!)

Hurt but happy.

Teammates, co-founders, and advisors play the same role in your startup. I can’t imagine what I’d do without co-founders to talk me down when I’m wrong, back me up when I’m right, and flat out get things done. The fellow entrepreneurs I’ve come to rely on for advice serve the same functions. And in addition to giving great business advice, they’ll also swing by the drug store and pick up ice packs for my ankle.

Other people are great. If you don’t think so, consider a career where you don’t have to talk to anyone. Perhaps a monk.

Lessons Learned

• The universe has a wicked sense of humor.
• You’re going to fall down at some point.
• Pick yourself back up.
• If you can’t pick yourself back up, make sure you’ve got a good team to help you.

Cheers,
Tristan

[UPDATE: Thanks to everyone for pointing out that WoW has no ninja class. Sorry...I'm a Starcraft guy.   ]

Rockstars suck!

A rockstar is an heroin addicted egotistical maniac who rakes up enormous hotel bills by throwing TVs out the window and has clauses in their employment contract like “my poodle requires a foot massage by a 6’2″ Russian model.” You want to know why your favorite band broke up? ’cause one of the band members suddenly noticed “I’m a rockstar” and they didn’t need anyone else. Why would you want to hire one in your company let alone choose one as a co-founder?

Know who I want in my company? Tony Levin. That guy doesn’t play one more note than necessary and he ROCKS. He’s what I’d call a lean bass player of the highest caliber. Check out his discography if you don’t believe me or just take Peter Gabriel’s word for it. Listen to the bass line on Sledgehammer. Is he a rockstar? You probably wouldn’t recognise him walking down the street. Do you want him in your garage band? You can’t afford him.

Shinobi

Let’s see, why wouldn’t I want to hire a ninja?

The functions of the ninja included espionage, sabotage, infiltration, and assassination.

Wow…that sounds awesome! Let’s hire a backstabbing assassin for our company! Wait…is he assassinating us or infiltrating us?

The ninja, using covert methods of waging war, were contrasted with the samurai, who had strict rules about honor and combat

Even better! I can start a company with someone who has no sense of honor! That should be great when it comes to protecting our intellectual property!

[UPDATE: John Metta has the best picture showing how overused the word ninja is here. Also embedded on the right.]

Seriously guys…I’m sure we can think of some ego flattering terms for a good programmer that don’t immediately imply that hiring them would be an act of blatant stupidity. I’m open to suggestions.

[UPDATE: As many have correctly pointed out, I had to hurriedly strip out these terms from our own site! Yes, this was a tongue in cheek late night post, but that is how ubiquitous these terms are. I actually annoyed myself while trying to write a web site copy without using them. It will take dedication to kill off these evil evil memes.]

Summary of Lessons Learned

• A company is a team.
• Teams are built from strong individuals
• “Strong individual” is not a synonym for “raging egomaniac”
• When looking for a co-founder look for a partner, not a rockstar

Cheers,
Tristan

At the last Startup Weekend (#swmobile) the team I joined was called KissMobs. As far as I’m aware, we are the only Startup Weekend team ever to finish the weekend cash flow positive. It could be there are others, I don’t have the stats and I’ll let Franck correct me on this one. We also didn’t pay ourselves any salaries and my dividend totaled enough for a cup of coffee. A bad cup of coffee.

Still, I think every team coming out of Startup Weekend should have this as a goal: A SALE

No Whining Allowed

My challenge relates to some of the snide anonymous comments I saw going across Floughter (I’ll explain later). There were a couple of people griping that the technical demos weren’t cool enough and it ‘looked more like a business plan presentation than a Startup Weekend.’

I half-heartedly agree and you can read some of the ways I flailed on the technical side at our own presentation in my last post. However, I’m am just as unimpressed by a great demo without customer development as I am at a business presentation with no demo. A product with no customers is not a product and it’s not a Minimum Viable Product either (sorry Eric). Regardless of how impressive your 54 hours of hacking were, you have failed.

Get Out of the Building

Steve Blank‘s commandment of “Get Out of Building” is exactly what Katherine Webster from our team did. We had an application designed to promote bars by creating a spontaneous flash mob singles scene. We didn’t have a working product, barely had a landing page with a survey, and no marketing effort. So how could we get a customer? She went over to a local bar and talked them into giving us $50 bucks to promote a Startup Weekend after party on Sunday.

She gave them enough of a pitch that they paid us $20 upfront. After we bought a domain name to put up our basic landing page, we were still up ~$10.

Floughter Wins by a Landslide

I am not saying we should have won the event. We shouldn’t have, we weren’t the best company by far. The company that won the weekend was clearly Floughter. Floughter is basically  Twitter but completely anonymous, 70 characters, and local to within 70 meters. (Actually the geo-location didn’t work, but nice fake for the demo anyway.)

While they didn’t get an advertiser to pay for some tweets in their stream, they did rake up about 1500 tweets in the 45 minutes after their presentation. I would argue that those users paid for Floughter with their time, even if they didn’t pay cash. I think 100 of those tweets were Tony, Nick, and myself, but regardless it was very impressive user adoption for 45 minutes of uptime. They weren’t cash flow positive, but they won by demonstrating traction.

It was all the more impressive since the team didn’t have a single engineer among them. They outsourced the entire development to oDesk.

Summary of Lessons Learned

• Revenue is Good
• Whining is lame
• Get out and sell something

Cheers,
Tristan

This last week was crazy, mostly because I spent all last weekend coding, marketing, pitching, and navigating the intense and creative atmosphere of Startup Weekend SF (#swmobile). If you haven’t been to Startup Weekend, you should because it’s the best place to get a quick feel of what it takes to run a startup and one of the best places to find a co-founder for your next business.(aside from startupSQUARE of course!)

One of the great things about Startup Weekend is the amount you can learn in a short time. It’s really a lean startup practicum. So I’ll write a few quick notes about what I’ve gotten out of it, starting with the big pitch at the end of the event. My team was called KissMobs and we made a mobile dating app to create a flash mob singles scene.

Pacing

Some people get nervous and talk fast because they’re trying to pack a lot into a five minute presentation. This can be mitigated by a lot of practice and we did so while timing the presentation. It clocked in at 4 minutes, which should have been plenty of time. But there are always kinks.

I started out too fast, then noticed it by my second sentence and regained the pacing I’d rehearsed. Then I went one step further and slowed down another notch to “compensate” for my nervousness. The result? “ONE MINUTE LEFT!” and I wound up rushing the last part of the presentation.

Another tactic is to have convenient hyperlinks interspaced in the presentation so you can skip sections easily if you’re running behind. I used to do this all the time and completely forgot about it for this one.

Button Pushing

This one is simple, we had six people in our group but I wound up advancing the slides myself. This locked me to the podium and more importantly, distracted me instead of allowing me to focus on the audience. If you don’t have a clicker, it’s great to have someone else in your team advance the slides for you. It does take a bit of rehearsal because the timing of slides is a lot like the punchline of a joke. Bad timing can ruin it.

Best is to lead into a slide so that the slide augments what you’re saying. If you advance to the “Problem” slide before the speaker has introduced it, the audience isn’t listening to the speaker, they’re reading the slide. That’s not good.

Have a Plan ‘B’

Everything at Startup Weekend is rushed, so it shouldn’t have been a big surprise that our demo went from “almost done” to “totally screwed” to “it actually works!” within the last two hours. But of course, the presentation had to be modified to account for this and I wasn’t prepared. So I spent the last hour or so creating slides to fill in the blanks for part of the demo and then deleting some.

Better would have been to assume that we’d have no demo at all, then just cut out slides depending on what we actually finished. As is, I could have cut a lot more out but got frazzled at the last minute and didn’t adjust properly.

Get a Second Projector

If you’re doing a demo, odds are that you’ve got admin screens, a mobile client, and a ppt. You can’t fit all that on one screen let along one projector. Flicking back and forth between screens is time consuming and distracting. Have a second projector to show the demo while you reserve one screen for your presentation.

Rehearse the Demo

We did rehearse the presentation, but not the demo. Granted, the demo only got finished a couple of minutes before hand but still…big mistake. The demo is the key part of a Startup Weekend presentation and I definitely wasn’t polished enough. We could have shown a lot more cool stuff and as is, I don’t think we conveyed the awesomeness of what the KissMobs development team was able to accomplish in 54 hours.

Leave Room for Questions

Our presentation was funny (or so we thought) and the laughs in the audience seemed to agree. I was flying high by the end of the presentation. Sure, things could have been better, but I was excited for the Q&A since I could elaborate on some of the points I had to rush through. “Questions from the judges?”

DEAD SILENCE.

Silence is the death knell. It says your presentation wasn’t interesting enough to ask more about. We only got one question which was pretty straightforward and had three minutes left which we had to abandon. In our case I think we failed on two points here.

First, our presentation was perhaps too funny. It had stick figures in inappropriate poses and honestly, our business concept was not exactly trying to solve global warming. It was a mobile dating app. So one thing that could have gone wrong is that people thought we weren’t being serious enough.

Second, we didn’t leave any room for questions. We had a solid business model proven many times over (basically we created a flash mob ladies night with a mobile app). We had a very basic customer problem (people are lonely and looking for a date). There was nothing mysterious about it.

A good tactic to avoid this crushing silence is to leave some details out, or better yet, insert a controversial statement into the presentation. You can have a prepared answer to the presentation and if you’re lucky it’ll distract people from a controversial aspect of your business plan that you haven’t quite worked out yet.

Summary of Lessons Learned

• Practice, practice, practice… including the demo
• Watch your pacing
• Get another projector
• Be prepared to skip sections
• Plant a slide to provoke questions

Cheers,
Tristan

Special last minute addition is the big grandaddy prize of a whopping 15 hours (~$5,000) of in legal work courtesy of Antone Johnson at Bottom Line Law Group who is himself a lean startup and focuses on providing “lean startup lawyers for emerging growth companies”. That’s enough legal work to get incorporated, deal with patents, trademarks, privacy policies and more. There may even be some more special treats coming for the other participants.

And don’t forget to check out the NYC Lean Coffee if you’re in New York!

Good luck to all participants!
Tristan