StartMIT, impressions from a course on entrepreneurship
How fun these two weeks have been! StartMIT is a short introductive course to entrepreneurship. Students come in with ideas they want turned into reality, while an amazing panel of speakers tells them how to do it.
If you don’t have time to read this whole post, here are the most important lessons I learned: (1) if you’re going to start a business, it’s best if you’re passionate about what that business is bringing into the world, the rest will come by itself or you’ll learn it along the way, and (2) you need to build a network of people who can help you, who you can hire, who can mentor you, who can fund you, etc.
Before I start this post, I want to share my favorite moment in the course; these 40 seconds in a video shown by Bob Maresca, the CEO and President of Bose Corporation.
Here are some of the ideas I encountered, sitting in this class, every day, from 9:00am to 4:00pm:
- It’s doable if you are passionate about your idea. Many speakers told us about their journey building their companies. Many mentioned how much harder it would have been to bear through it without caring deeply about what they were doing. They had a vision about a product or a service and the impact it could have on people (consumers, businesses, government, etc.).
- Alice Brooks wanted more STEM-focused toys in the world, so she and her co-founder created Roominate
- Kris Bronner was tired of unhealthy-but-delicious junk food, he wanted a healthy-and-delicious alternative, so he co-founded UNREAL Brands.
- Jeremy Conrad wanted hardware-oriented startups to have a place where they can actually start up, so he co-founded Lemnos Labs, a venture capital firm and incubator for hardware startups.
- Some might disagree, but “if you’re doing it for money, don’t.”
- “It’s not about the money. It’s about doing things that you love, that you have passion for, that you can make a difference in.”
- Many businesses are started from personal frustrations.
- Drew Houston was frustrated with forgetting his USB stick and not being able to do his work, so he coded up a client-server solution that allowed him to sync his files from home to his laptop and vice-versa. Then he co-founded Dropbox.
- Andrew Sutherland wanted to study using his home computer, so he founded Quizlet.
- An entrepreneur has imagination and courage. This leads to action and, naturally, some mistakes, which leads to growth and ultimately to success.
- “Just do it,” many speakers argued. “You will learn along the way!”
- “Go for it! What’s the worst that can happen?”
- “You can get into procrastination when you keep learning about how companies work.”
- The importance of vision
- “We had a time machine. We were at XEROX Parc and had seen what a bunch of network computers could do, what they would need, etc. Our competitors were confused.”
- “Bill Gates designed all his software for 16-bit computers, even though most computers were 8-bit. But when 16-bit computers started appearing, Bill Gates had already taken over them.”
- The importance of having a good team. Hiring is difficult.
- The CEO, the VP of Marketing, the VP of Sales are very important people. You need strong hires for these positions.
- They need to be 100% effective at their job, since they are models in the company.
- “At what point is X% better than 0%? And at what point does ‘performing at X%’ become acceptable behavior in the company because a high-level manager is doing it?”
- Check references yourself. Don’t rely on a firm. Always ask references if they know someone else who can recommend the candidate and talk to them as well if you can.
- Some of your hires will be bad. Firing people is necessary if they make your organization slower or less productive.
- Find people who believe in what you are doing; people who are not just motivated in general, but specifically motivated to work on you idea, your vision.
- Team and co-founder issues is the number one reason startups fail.
- Allegedly, 65% of early stage startups fail due to people problems.
- The CEO, the VP of Marketing, the VP of Sales are very important people. You need strong hires for these positions.
- The importance of being a good leader and building team culture.
- Culture is important: you can create good values that help keep your organization afloat.
- “You will be creating a culture anyway, whether you like it or not, so you might as well think about it and be deliberate about the culture you create.”
- “One of the things I find interesting, is folks who come out in meetings and disagree with you. You have to foster that culture.”
- “Sometimes it’s the things that are the simplest to say, that are the hardest to do. Obvious, but not so obvious. Not that common either.”
- Example of a culture:
- Tell the truth – provide honest assessment and advice. Put engineers in customer meetings including sales meetings. Including advice like “we can’t do that in a year.”
- Keep your promises – other companies will love you for it.
- Treat everyone fairly – example, salaries should be fair, i.e. it shouldn’t matter whether someone is a good negotiator when we hire them, or if the market is up or down. If we look at a roster, the salaries should seem fair. Employees will feel good about this.
- Take care of people – tell them if they’re burning themselves out, best medical insurance, best dental insurance. As a result, people would be loyal.
- Be bold – try to do the hard thing, instead of the easy thing.
- The importance of mentors.
- “If you have first developed yourself, mentors will find you. It will occur.”
- Start by understanding what problem(s) your customer has, not by building a solution to a problem you might think the customer has.
- This is really key. One of the first exercises was to define our assumptions about our customers and their needs. The next exercise was to try and define who the customer is (e.g. single dads in their 60s). Finally, we had to find such customers and talk to them to see if they had the same problem we wanted to solve. This is where you typically learn that the customer tends to want something slightly different than what you think he wants.
- Come up with a user “persona”. Sell to that person. Study and refine with demographic studies. Then identify 10 additional customers.
- Building an MVP (minimum viable product) early is not a good idea. Moves you out of inquiry mode into advocacy mode. Disincentivizes listening to the customer.
- Understanding your customer allows you to come up with a value proposition: “For
- Your real goal is not to see if your solution is right, but to understand the underlying problem and the people’s needs. You might be solving a problem that the customer doesn’t consider it to be a problem yet.
- Example: For higher-ed students in the US, Inkling provides an interactive social textbook to solve students’ lack of engagement with their education content by expressing content in reflowable HTML5.
- Do your primary market research. VCs will not take you seriously if you don’t.
- “Lots of them think marketing is necessary evil. Others think it’s an unnecessary evil: because my product, people will absolutely love it!”
- Marketing actually helps you find people to love it. You might not think it, but that doesn’t happen automatically. No matter how good your product is.
- Definition: Marketing is figuring out what the product should be.
- Example: “Value of a network is in the # of connections. So if you buy N cards you’ll get N^2 value. Therefore, you should buy more cards.”
- Classical marketing: I have this budget and I have this thing I want to promote and I’m gonna spread my budget it to promote it all over the place.
- Inbound marketing is the opposite: I have some budget and I need to share useful things in the hopes that people who are already looking for me will be able to find me. It’s about finding out who out there is looking for the things you are selling and seeing if you can attract them.
- Idea: Don’t make ads. Write content on your website that people will find via searches, etc.
- Write different types of content: blogs, photos, infographics, videos, podcasts, presentations, books, software tools.
- More on inbound.org
- “At the end of your day, talk about your ideas. Even if you have a drawing, you’d be surprised how much you can learn from people.”
- The hardest thing for technical people and business people is to speak the same language.
- Networking, networking, networking. All of your problems are solved with the help of people. How can you find people to help you, to ask for advice, to hire? You need to be constantly on the lookout. You need to build a network. You need to be deliberate about your time.
- Simple advice: Don’t be an asshole. This simple rule will take you a long way.
- “Face-to-face relationships are really valuable.”
- Go to public events: meetups, open happy hours, free and paid
- Go to alumni events: Wear your class ring, if you have one. You will be stopped on the street for it.
- Go to public conferences AllThingsD, TED, Davos
- Go to private events: The Lobby, dinners
- Go to VC’s networking events every week.
- How to work the room
- Survey the attendees before hand if possible
- If you wanna talk to a speaker, stand at the door before they speak and chat with them.
- 5 minute interaction, max. 1 minute for ones that aren’t value add.
- 3 questions: What’s your name? Where do you work? What do you do?
- Never say, “Nice to meet you,” you might’ve met them before. Instead, say “How do you do?”
- Don’t show up at people’s office uninvited, ever.
- Outbound networking:
- Public speaking. Keep the deck simple. Publish blog posts for longer items.
- “I cant meet a hundred people at a time, but I can talk to them.”
- Practice public speaking. Video tape yourself. Super important. Painful. You’ll notice a lot of things.
- PowerPoint Roulette: 10 random slides and talk about them.
- “If you can’t communicate, your startup doesn’t exist. Customers won’t know. No technology is so good that it will work without communication.”
- Read Dale Carnegie’s How to win friends and influence people.
- “Whenever you go into a PR: Why am I doing this? What do I wanna get out of it? Otherwise you are wasting your time.”
- “Reporters are terrifying. They are super-friendly and then they’ll ask you things you shouldn’t answer. Have a script. Know what you wanna say. Pre-write everything you want them to write.”
- Never eat alone: 2 breakfasts, 1 lunch, 2 happy hours with people.
- Throw good parties.
- Venture Capital firms (VCs)
- Fantasy: VCs are hungry sharks.
- Reality: VC is a stressed out dude or dudette. He has large funds but it’s other people’s money. 5% is their money. Full-time career. Big funds mean we need to shoot before big exits. Making 6M is not a lot for us. We optimize for big exits.
- Before you get in business with VCs, you better be realistic about what you got, what do you think that you’ll have and what do you want. Better have something big.
- Don’t be dogmatic. Bootstrapping with customer money might be the best or raising big money might be the best. You need to be thoughtful about what you need. Get in business with people that you like and you trust and you think are good.
- Always think about the asymmetry of the commitment. If a VC asks you to hold off on other VCs for a month until they can prepare an offer for you, but you could lose your company in the meanwhile due to lack of funding, then you might want to say ‘no’ and knock on some other doors.
- Many times VCs really invest in the founder(s), because they trust their commitment. Even if the idea and the market research are impeccable, if the founding team does not seam like the right team, then that could be a big no-no.
- “We’re betting on you. Authenticity is one thing we’re trying to connect to. Your passion and your connection to the problem. ‘Do the work for me: Come in the room and give me all the info I need to make my decision to invest in you.’“
- “I want to understand your (as the founder) authentic connection to what you’re doing. Your ability to stick with it is critical.”
- “Investors at the seed stage are not investing in anything else than the entrepreneur themselves. You need to do the customer research, you need to have a product idea in mind. And at the end of the day, they’ll see the kind of person you are (who does his homework, motivated, knowledgeable, passionate). When you’re at the 10M round they’ll want to see what you got, and more.”
- “Raising money is the most intimidating thing in the world. You can’t read these people cause it’s their job for you not to read them. They might pretend to perfectly like you.”
- “With early-stage startups, it’s more about that interaction, not about your slide decks. If you can make a great connection in those first 10-15 minutes, because the VCs love baseballs or they secretly wanted to be engineers…“
- “When I meet with entrepreneurs, I’m testing your ability to follow through. If you can’t follow through with me, how can you follow through with customers?”
Some quotes I liked:
“If you don’t know where you’re going every road will get you there.”
“Great entrepreneurs are seldom wrong about what’s next, but often wrong about when.”
“I stupidly left MIT and went over to Harvard to get my PhD. A big mistake. Don’t do that.”
“I may have strong opinions that are weakly defended. Some of them may be controversial. Many of them will be presented as fact.”
“Stealth mode is for fighter jets, not startups.”
“If anyone doesn’t think equity is important please contact me. Give me your equity and you can go and change the world.”
Here are some of the recommended books that came up throughout the course:
- Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers
- Inbound Marketing: Get Found Using Google, Social Media, and Blogs
- The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses
- How to Win Friends and Influence People
- Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant
- Inside the Tornado: Strategies for Developing, Leveraging, and Surviving Hypergrowth Markets
- Toxic Sludge is Good For You: Lies, Damn Lies and the Public Relations Industry
- The Accidental Billionaires: The Founding of Facebook: A Tale of Sex, Money, Genius and Betrayal