(De) bunking some myths about those $1b startups

I want to direct your attention ton interesting article about $1 Billion Startups – “Unicorns” – on TechCrunch today. Some myths debunked and others confirmed:

So, we wondered, as we’re a year into our new fund (which doesn’t need to back billion-dollar companies to succeed, but hey, we like to learn): how likely is it for a startup to achieve a billion-dollar valuation? Is there anything we can learn from the mega hits of the past decade, like Facebook, LinkedIn and Workday? (from: Welcome To The Unicorn Club: Learning From Billion-Dollar Startups | TechCrunch🙂

 

More about GreenGoose and the Brush Monkey

Amazing story of a great looking product, and awesome demo, on the spot investment of $100,000 and still… It didn’t work. The story was told by Scott Kirsner in the Boston Globe:

“Today, GreenGoose is out of business, and Krejcarek is grappling with $80,000 in credit card debt — his approach to funding the company after investors’ money ran out earlier this year. When he says, “I’m trying to scrape together spare change to buy gasoline,” it’s hard to tell if he’s kidding.” (from The Boston Globe)

You have to admire that the founder of Green Goose (Brian Krejcarek) was willing to share his experience with Scott and the rest of us. There are many lessons there. To really appreciate the story you need to see how it started, with the demo at the Launch Conference. It was an unbelievable and triumphant presentation:

And yet. Here’s a page of Bonus material where you can read more of how it ended:

“Krejcarek says that the company spent much of the money it raised exploring different product concepts. By the time he launched Brush Monkey, there was about $200,000 left in the bank. The product wasn’t simple enough for people to set up. And there was no big distribution partner putting it on store shelves and helping to promote it. “Distribution is probably one of the hardest problems for a startup to solve,” he says.” (from Innovation Economy, Scott’s Blog)

A fascinating story of Curt Shilling’s game company’s demise

This is from the New York Time’s article about Curt Shilling’s ill fated game company “38 Studios”:

“It just felt really good, when this all started, to have the sexy sports celebrity from Boston who seemed to like Rhode Island and showed up in Rhode Island, and who built this exotic new business, even though no one knew what it was,” says the historian Ted Widmer, who grew up in Providence and works at Brown. “It seemed like the digital economy, or biotech, or whatever. But then it turned out that it wasn’t the new digital economy. It was some 13-year-old’s medieval fantasy.” (fromThe New York Times)

Read it, it’s a fascinating story.

Oh and I had some comments about the story way back when: “Can Shilling focus on 38 studios and still be great for the Red Sox?”

Good tips for building products that people want

Here is a good cheat sheet on how to build products that people really want. It is cribbed from this article on TechCrunch.

  • Draw On Previous Experience and Understanding – The biggest problem is startups in search of a problem. Chase what you’re passionate about; you’ll probably already have knowledge in the space.
  • Have A Hypothesis About How You’re Different – Have a point of view about your startup. Why is there a special opportunity for this now?
  • Never Build Without Sketching – Mike says he and Instagram co-founder Kevin Systrom would go to a cafe with little iPhone design pads where “we’d build and throw away entire features. You’d waste three or four pieces of paper, not three weeks of coding.”
  • Learn In Weeklong Increments – Start with a question: “Will folks want to share photos on the go? Can we build filters that look good?” Spend the week investigating, and by Friday have a conclusion and move on.
  • Validate In Social Situations – “We called this the Bar Exam. If you can’t explain it to the guy or girl at the bar, you need to simplify.” Don’t just test with your techy friends.
  • Know When It’s Time To Move On – “I know ‘pivot’ has become a dirty word, but if there’s no unanswered questions left, then it’s time to move on.”
  • The Wizard Of Oz Techniques For Social Prototyping – You don’t need to build everything at first. You can be the man behind the curtain. Krieger says him and Systrom tested an early version of a feature which would notify you when friends joined the service. Instead of building it out, they manually sent people notifications “like a human bot” saying ‘your friend has joined.’ It turned out not to be useful. “We wrote zero lines of Python, so we had zero lines to throw away.”
  • Build And Maintain A Constant Stream Of Communication With Your Audience – Don’t spend months building something without any idea if someone actually wants it.

Teaching at Olin College next year

College photo 10842 130x0I’m excited to tell you that I just accepted a position as Visiting Lecturer at Olin College for Spring 2013! Actually the full name is Olin College of Engineering.

Olin is a small engineering college, actually in the top ten of engineering colleges according to US News’ Rankings. Olin is a very young college: it just celebrated its 10th year! 

I’ll be teaching Entrepreneurship in a course called “The Tech Startup” (at least I think that will be the name of the course.) 

As you might know, I was teaching at Brandeis University over the last three years. The course I taught at Brandeis  was more computer science oriented, aimed at getting the students the experience and helping them gain the skills to build software products in a way that looks like the real world.

At Olin the focus will be on the broader topic of how engineers should think about startups, how to come up with products that have a chance at selling, making sure they match what customers want and are willing to pay for. I

am still nailing down the details of the curriculum but it’s very exciting to have this opportunity and I am totally psyched about it!

Hey, you’re an entrepreneur!

I like this quote:

“Everyone here introduces themselves as an “entrepreneur.” It’s as if they hand out the title at the airport when you arrive. “Welcome to San Francisco, you are now an entrepreneur! Which start-up T-shirt would you like?”

This belief that everyone is an entrepreneur has a stultifying effect. It can drive founders to seek an easy acquisition instead of a quest for true innovation and a sustainable, profitable business — a truly entrepreneurial challenge.” (from Bits Blog, NYT)

 

[EDUCATION] Sign of change in the universe

I would love to see this trend accelerate:

“The five-year-old [Innovation, Creativity and Entrepreneurship] program, [Wake Forest University’s]  most popular minor, requires students to learn the practical aspects of starting a business. It is a sign of change in liberal-arts colleges, which are grappling with the responsibility of preparing students for a tight and rapidly shifting job market while still providing the staples of academic inquiry.” (from Wall Street Journal)

This is really important in my opinion, and it’s a big part of what we cover in the course I am co-teaching at Brandeis this year, “Web and Social Apps”. The course starts next week and runs for 10 weeks, practically full time. During that course students go through the whole cycle of conceiving a product, designing, implementing and deploying it to the world. It’s an exciting experience. Fairly exhausting for everyone involved, but worth it.

I wish all college students, especially in my field, Computer Science, were thought learn theory and critical thinking, but also got exposed (and were even required) to learn what I like to call “critical doing”. Working in teams, inventing and creating things that others could benefit of, could touch and feel, and could have an impact in the real world. 

The truth is that in many Universities, this is not a priority today, but there is signs that the students and parents (the customers after all) are demanding this. Change is slow, but it is coming.