Learn the steps involved in going from having a great idea, to building a successful startup around it, from an entrepreneur who has sold two internet companies in the last four years.

1. From Idea to Success A guide for first time entrepreneurs Gaurav Oberoi Twitter: @goberoi

2. What this talk is about Successful exit ? Have an Idea

3. What you’ll learn How to: Evaluate your idea Build a product that people pay you for Grow your business

4. But first, introductions

5. About Me Started and sold 2 companies BillMonk and PrecisionPolling Software background Amazon engineer, Computer Science from Rice U. Startup roles in Product and Eng Mgmt. SurveyMonkey (current), Xmarks (Mitch Kapor) Founded 2200+ entrepreneur group in Seattle SeattleTechStartups.com Advisor to several startups, angel investor

7. Self-funded, 2 founders

9. Self-funded, 2 founders

11. 15th largest market But

13. The Problem Successful exit ? Have an Idea

14. Woah, can we break that down? Decomposing into chunks = more manageable E.g. essay writing: thesis, outline, research, write it So my plan is: Break the process into stages Provide a guide on what to at each stage

15. A first stab at breaking it down Successful exit Product Market Fit Have an Idea

16. Product/market fit? Proof that people want your product Critical mass of users/usage Who are paying you Until you have a product people want, focus on growth is pointless

17. Product/market fit! Marc Andreessen: “I believe that the life of any startup can be divided into two parts: before and after product/market fit” Steve Blank: “set of customers and a market who react positively to the product: by relieving customers of their money” Sean Ellis: “40% of users disappointed without it”

18. Ok great: PMF as a milestone Focus: growth Successful exit Focus: product Product Market Fit Have an Idea But this is too broad

19. Break it down further Successful exit Repeatable Growth Product Market Fit Start Company Have an Idea

20. 3 Stages Successful exit Repeatable Growth Product Market Fit Start Company Have an Idea 1. Evaluate your idea 2. Build product people want 3. Figure out marketing

21. What do I do at each Stage? I’ll discuss: Your goals What to focus on Not to focus on Details by area: product, business, marketing

22. Great, we have a planLet’s dig into details

23. Progress so far Successful exit Repeatable Growth Product Market Fit Start Company Have an Idea Evaluate your idea Build product people want Figure out marketing

24. Stage 1 Evaluate your idea Start Company Have an Idea

25. Stage 1: Evaluate Idea Goal: reduce uncertainty and risk “Should I quit my day job for this?” Focus on: gathering lots of data Do not: write code

26. Stage 1: What to do (Product) Articulate the problem and solution List of assumptions to test Test assumptions by talking to customers 20+ potential customers Refine your assumptions Repeat!

27. Stage 1: What to do (Product) Define a super basic v1 1 page spec Estimate cost for building it

28. Stage 1: What to do (Research) Market size and segments Big market is key: you need room to pivot Competitors Features, pricing, positioning, value prop, marketing Biz model inputs: order size, rev per user

29. Stage 1: What to do (Business) Create a basic business model Calculate fixed costs: salaries, servers, admin Revenue target = costs IF break even this year Users needed = rev target / revenue per user Think about cost per acquisition ARPU > cost to serve + cost to acquire user Keep it simple Be honest! This is to convince YOU

30. Stage 1: What to do (Marketing) Test and refine your pitch continuously What do you do? Test value proposition Why should I care? Test company names and branding “Polling Power” was a fail

31. Stage 1: Summary Goal: reduce uncertainty Accomplished: validated assumptions About product About biz model And basic how to sell it (what and why) You have reduced uncertainty and risk. Now: quit job!

32. Progress so far Successful exit Repeatable Growth Product Market Fit Start Company Have an Idea Evaluate your idea Build product people want Figure out marketing

33. Stage 2 Build product people want Product Market Fit Start Company

34. Stage 2: Build a Product People Want Goal: get proof that people will pay for product Focus: minimum viable product, first customers Do not: build stuff nobody asked for

35. Stage 2: What to do (Product) Create wireframes and show customers Chopped 40% of features before coding Then start building minimum viable product Iterate fast, embrace change Don’t focus on dev plumbing/geeking out please Yes: 1-click deployment, core unit tests No: scaling, using new tech, rolling custom libraries…

36. Stage 2: What to do (Business) Sell to first customers 1-1 demos, write emails, whatever works! Make them pay you Otherwise it’s not a fair test Keep low burn rate

37. Stage 2: What to do (Marketing) Create a one-pager You will email this a lot Create a 1-2 minute video Because people don’t read And some feature pages What, and why customers should care

38. Stage 2: Summary Goal: build something people will pay for Accomplished: built something people want Customers are using it And paying you OMG, you have discovered a goldmine. Now: grow it!

39. Stages Successful exit Repeatable Growth Product Market Fit Start Company Have an Idea Evaluate your idea Build product people want Figure out marketing

40. Stage 3 Figure out marketing Repeatable Growth Product Market Fit

41. Stage 3: Repeatable Growth Goal: scalable and profitable Cust. Acquisition ARPU > Cost to serve + cost to acquire Focus: marketing experimentation Do not: add features

42. Stage 3: What to do (Product) Install metrics that you understand Setup an A/B testing framework Maybe: build referral or affiliate programs Do not add features to attract customers

43. Stage 3: What to do (Marketing) Define your conversion funnel and optimize Leads  …  convert to paying! Dave McClure’s startup metrics for pirates is an excellent resource.

44. Dave McClure’s Startup Metrics for Pirates SEO Campaigns, Contests SEM PR Biz Dev Social Networks Affiliates Blogs 1. ACQUISITION Apps & Widgets Direct, Tel, TV 4. REFERRAL Email Campaigns, Contests Domains 2. Activation Homepage / Landing Page Emails & Alerts 3. RETENTION Emails & widgets Product Features System Events & Time-based Features Biz Dev 5. Revenue $$$ Blogs, Content Ads, Lead Gen, Subscriptions, etc Website.com

45. Stage 3: What to do (Marketing) Phone sales should be optimized too. Tip: Bessemer Ventures blog has great tips for SaaS companies.

46. Stage 3: What to do (Marketing) So where do I get customers? Ads on industry email lists (gold!) Ads on industry blogs (depends on industry) Referrals (can work great, e.g. DropBox) Affiliate programs (it’s like a “sales channel lite”) Partnerships (time consuming, hit or miss) Viral features (hard) Social media (risky) SEO and link bait (good but slow) Tradeshows (hit or miss, not scalable) Adwords (often a miss: high CPC, low conversions)

47. Stage 3: What to do (Marketing) It’s all about experimentation Budget (time + money) Metrics Run Calculate CPA (total cost / num converted)

48. Stage 3: What to do (Marketing) And some miscellaneous tips: Get 1-3 anchor customers ASAP Get industry awards (silly but valuable) PR is awesome, but NOT a repeatable and scalable growth strategy

49. Stage 3: Summary Goal: scalable and profitable Cust. Acquisition Accomplished: marketing that works Channels to acquire leads And a process to convert them Profitably: ARPU > Cost to serve + Cost to acquire Congratulations, you are a badass! Now: $$$?

50. Progress so far Successful exit Repeatable Growth Product Market Fit Start Company Have an Idea Evaluate your idea Build product people want Figure out marketing

51. Successful Exit? You are in a great position for the big kaching! But lots can still go wrong: Competition, operational failures, hitting market saturation, inability to hire fast enough… blah blah Btw, there other options too: “Lifestyle” biz: do what you love, decent money And successful exits without this too: Talent, IP, customer base, biz-deals

52. Conclusion It’s not magic, there is a process Evaluate, Build, Grow The process depends on data Validate assumptions, MVP, Run marketing experiments Be honest to yourself Get cracking! Validate your idea and quit your job Disclaimer: your mileage may vary

53. Resources Book: 4 Steps to the Epiphany (Steve Blank) Blog: http://startuplessonslearned.com (Eric Reis) Latest info: http://news.ycombinator.com A great pitch deck template:http://www.slideshare.net/BryanStarbuck/alliance-of-angels-pitch-deck-template Look up: minimum viable product

54. Q & A Follow me on Twitter: @goberoi