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Startups - David Sacks - TWiST#354

Video via Youtube, related tweetstorm.

General Startup Advice

Lean Startups - not a fan once traction is established. Scale fast once you have customers, 'get fat fast'.

Raise money when you can. During poor funding environments startups have to go through hell to raise money. When it rains, put a pail out.

4 Things To Look For In Startups.

3 out of 4 usually good enough. A startup should have...

A 'Product Hook'

A simple way to engage with the product, that is realistic and repeatable. This is a starting point, the bootstrap/wedge that get the whole product moving. 'A simple product hook that a typical user can engage in'.

Some simple user interaction or behaviour that is easy, quick, valuable, repeatable. For example, Paypal: email + credit card, Yammer: answer the question, 'what are you doing right now' for enterprise.

Traction is a good substitute for clear product hook. Users already there a good sign a hook exists.

Solving real problem with addressable market

Market broken or need a solution? Does the solution have a problem to solve? Product-market-fit, etc.

Distribution Model

Probably the single hardest of the 4. Big Internet out there, how do people find your product? How does the product spread? Virality is KEY. Important because sales and marketing is EXPENSIVE.

Solving the distribution problem is essential to success.

'NON-Copyability'

Does the product have a moat, can it be a monopoly? Can someone just copy your idea and eat your lunch? What makes your product fundamentally non-copyable?

A network effect is the best defense. First-mover advantage, could help. How much confidence do you have the market won't erode into a bunch of copycat?