a seattle startup

Earlier this week, Michael Arrington posted an article on TechCrunch complaining about the frustration of dealing with an overflow of emails (2,433 unread in his inbox to be exact). Though I don’t have that problem and am fairly diligent when it comes to responding to emails, I think it would be great to have Outlook auto-prioritize emails by keywords, contact, frequency of email exchanges with contacts, subject line, topics, etc.

Jealous Thankful that I don’t have 2,433 emails in my inbox, I ran into a similar problem in my Google Reader. After falling behind on one day or reading, I ended up with 1,000+ unread feeds the next morning.

Typically when this happens, I just scan through to my favorite feeds, scroll through a few unread articles, then click “Mark all as read” to start with a clean slate. Here’s a few problems with this method:

• I miss out on great articles in feeds outside of my 3-4 favorites
• Even in my favorite feeds, I end up wasting time glancing through entries I don’t particularly care for. I don’t have much interest in a random article on a stranger’s favorite music and I’m sure many people don’t really care about me bowling a 300 on Wii. Some blog entries are meant for close friends and a small niche of the readers.
• High volume feeds (e.g. Engadget, Gizmodo, KillerStartups) with 20-50 daily posts quickly become overwhelming and I quickly retreat to the “Mark all as read” button

So here’s another opportunity for an entrepreneur – make a feed reader that filters & prioritizes feeds based on user defined settings. I would like to see the following features:

• Feed ranking (allow users to rank their feeds)
• Keyword filters (e.g. Engadget.com – show me posts on PS3, Wii, Macs, Phones; I really don’t care about the Pleo, OLPCs or Chinese knock-offs)
• Tag filters (many bloggers have their own set of categories/tags for each post, I care about ‘startup advice’, don’t care about ‘tvshows’)
• Filter articles under a certain length (80% of the article under 200 words are crap, might as well use Twitter for those)
• After applying these user defined ranks & filters, group all these feeds into a single tab

If Google Reader has these functions, I’d almost pay to use it. If you know of a feed reader out there that already have these functions, please tell me (but don’t tell them I’d pay to use it). If you have any other ideas for features, I’d love to hear them in the comments.

Quick 2-step solution on something that’s bothered me for a while…  

Most tech geeks love MacBooks but I can’t let go of my ThinkPad. I love the clean, utilitarian and minimalist look which many hate but that’s not why I’m so attached to my ThinkPad. It’s the “nipple” mouse cursor on the keyboard that’s got me hooked. I’m so much more efficient with the “nipple” than using a touchpad because I don’t have to take my hand off the keyboard to perform simple, low accuracy, clicks & drag.

Anyways, one problem that’s bothered me for the longest time since I got my T61 is the lag when IE7 boots up. Every time I open a new window or a new tab, there’s usually a 2-5 second lag before anything loads. Initially I thought anti-virus software was the culprit so I disabled all the background processes that weren’t mission critical but the problem persisted. After a quick search online, I found the solution. The lag is due to the ThinkVantage Client Security directories and here’s how you disable them:

1. Go to Tools > Manage Add-ons > Enable or Disable Add-ons…

2. Find the CPwmIEBrowserHelper Object and disable it… that’s it, simple as that.

Last month I attended a MIT Venture Forum here in Seattle and the topic was “Ten Steps to Launching an Early Stage Company”. The speakers were Jonathan Roberts of Ignition Partners and Stan Shull of Intelligent Results which was recently acquired by First Data. I’ve been meaning to write about my thoughts & what I learned and finally sat down to do it. Instead of laying out all 10 steps, I will layout the main bullets and integrate my thoughts to make it relevant for consumer applications. Jonathan & Stan both work mostly with enterprise software so the presentation was more enterprise focused but I think the same advice is equally valuable & applicable to consumer internet startups.

Key Takeaways:

• Determine who your customer is and what they want to buy
  • Don’t be disruptive
• Secure first customers – deep is better than broad
  • Focus on engaging first customers rather than aggressive customer acquisition

I strongly believe that understanding who your customers are is the most critical step to building a profitable business. And by customers, I don’t mean the end users that get your product for free – focus on the paying customers too. Whether it be advertisers, subscribers or whoever, it’s important to understand the following at a granular level:

1.      What’s your vision for monetizing your product? (don’t just say “targeted advertising” and be done with it)

2.      What’s the addressable market and how quickly is it growing?

a.      How much of that market is actually your addressable market? (if you’re selling targeted advertising online, don’t include TV & print ad spend in your addressable    market)

b.      What’s the penetration and how quickly is that changing?

c.       Realistically, how much share can you gain and how quickly? (if you tell me you can take 20-30% market share in 1-2 year, I’d have a hard time believing)

3.      Why are you better than your competitors? (in consumer apps, you have to be better at appealing to users & paying customers if they’re not the same people)

a.      Who are your competitors?

b.      How much incremental value are you adding to existing solutions?

4.      What’s most important to your customers? (this better align with your answer to 3)

5.      What’s the sales process / sales cycle? (who’s actually making the final decision)

a.      What’re the barriers to sales? (existing contracts with current vendors, typical replacement/upgrade cycles, etc.)

b.      Jonathan believes you need six customers before you can replicate the cycle

If your only exit strategy is to get acquired and not actually generate any revenue, then figure out who you’d ideally want to be acquired by and treat them as your customer. Understand:

1.      What kind of acquisitions have they been making?

2.      How do you fit into their acquisition strategy?

3.      How much value do you add to the acquirer’s strategic vision?

4.      What are their competitors doing that they haven’t noticed yet?

5.      How do you shape your product so they can leverage it compete?

One of my favorite points is when Jonathan said “don’t be disruptive – don’t try to create something revolutionary”. It’s a bit counter-intuitive at first but quickly made sense. He explains that if you make something revolutionary, then don’t expect customers to buy it like hot cakes because it’s a much tougher sell – most successful companies makes products that are improvements of predecessors. (e.g. Microsoft improved on Lotus products, Facebook on Friendster, Google on search, etc.) Why is it a tougher sell? Because people like products they’re familiar with, products they’re already spending money on. If your product requires your customer to allocate new budget for, you must convince them to slash budget elsewhere. If your product is revolutionary, most customers will view it as a “nice to have”, not a “need to have” – “need to haves” are much easier to sell.

A lot more was talked about which I will follow up in later posts. Let me know if you agree or disagree with these thought or if I’m missing anything…

Hedley, our awesome developer, sent me this and it’s among one of the funniests videos i’ve seen in recent memory. Enjoy! 

[youtube=http://www.youtube.com/watch?v=E3IwiynxE3A]

Original Article

Just walked out of an intro meeting with the producers of the show Startup Junkies which airs on MOJO TV – we’re exploring the possibility of starring in the show next season. How exciting! Initially, we contacted them after reading a post on John Cook’s blog about Screaming Flea Productions recruiting startups for their new season and thought we’d be a good fit.

I first came across the show while channel surfing one night (Comcast channel 664 for those of you in the Seattle area). It’s a good show to see the ups & downs a startup goes through and the atmosphere they work in, especially if you’re new to the industry. The current season features another Seattle based startup, Earth Class Mail, and documents the company’s struggles with product development, deployment & fundraising. Earth Class Mail is a well funded startup with a seasoned management team but the show is looking for some variety next season with a younger & less experienced crew (sounds like us). They have all their episodes on their website so feel free to tune in. We actually saw Ron Wiener (CEO of Earth Class Mail) at a MIT Venture Labs seminar last month but didn’t get a chance to talk to him.

Overall, the meeting went well and I think it’d be cool to get a chance to be on reality TV. As expected, we were asked about our marketing & fundraising plans as well as other potential checkpoints in the business where we can expect to see some drama. After all, this is reality TV and it’s no fun for the producers or the audience to see everyone holding hands and skipping along in a sunny garden with jolly smiles (then we’d be Teletubbies). It’s still early in the selection process so I’m not getting my hopes up too high and not quite sure what to expect out of the experience. On the plus side, we’ll get some great PR from the show and be able to leverage MOJO’s marketing engine – on the flipside, we’ve never had cameras in our lives so it would be “interesting” (for lack of a better word). Either way, I think it would be a fun experience if we end up doing it…

Instead of going out on a Friday night, I ended up staying in to get some work done. Taking a break from work, I played a few games of Wii Bowling and got a record high score - so close to a perfect game… sigh~

Tell me you’re impressed! =D

Update: 3/23/2008 - Mission accomplished “300″ - 1 week later, I accomplished my goal! =D

I’ve asked a number of people this question and done a fair amount of reading online and haven’t come across a compelling reason why we shouldn’t be in stealth mode during development. Being stealth protects our idea. It guards against the possibility of having the idea stolen (though extremely rare), but more importantly, it prevents competitors from capitalizing on our innovations. The anti-stealth arguments generally go like this:

• the idea doesn’t matter, it’s all about the execution
• it’s very very unlikely for someone to steal your idea
• you can generate buzz pre-launch and have potential users lined up
• if you tell people about your idea, you can get feedback, make improvements, and launch a better product

These arguments just didn’t cut it for us – the risk reward isn’t very compelling. Yes execution is more important than the idea but just because the probability of having our idea stolen is low doesn’t mean it’s zero – the lottery still pays winners on Wednesdays & Saturdays. Unless the idea is truly revolutionary and barriers to entry are high, you probably have competitors and you likely have strong differentiation or at least believe you have it. The risk of competitors implementing the features that makes you different is much more material than having your idea stolen. The more you publicize your idea, the higher the odds your competitors will hear about you. If you don’t aggressively publicize your idea, then you’re safer with competitors but you won’t get the buzz.For us, we’re working on a consumer web application so we don’t think the prelaunch buzz is that critical. There’re so many powerful vehicles online that can be leveraged to quickly generate buzz & drive traffic, we don’t think the benefit of prelaunch buzz justifies the risk. We’re diligently doing our homework and creating a solid marketing strategy ready to execute on day 1 or launch. With consumer websites, it’s always hard to tell what will happen until after launch – the feedback we would get from publicizing our idea is unlikely to add that much value. We used our personal networks for feedback and it’s been extremely helpful. Here’s another article I recently came across on this topic by Seth Levine and found it helpful.

Our office in my basement w. PS3 & Wii for post lunch entertainment… 

 Mini Bar with Nespresso machine (thanks to Lake buddies)

 My workstation… as Jason Calacanis said, larger monitors increase productivity. I’m waiting to get a couple of 24″ wingmen to go with my Dell 30″.

Adam hard at work… notice he hasn’t shaved for a few days… 

Our engineering department. Hopefully with 4 screens, he can work 4x as fast.

My name is Leo and this is my blog. Through this blog, I intend to document my life as a startup founder and share my mistakes and lessons learned. I hope to inspire other would be entrepreneurs as well as exchange ideas & advice with those close to the startup community. Our startup is still in stealth mode (entry on “Why Stealth” to come) so I will not directly discuss the idea until our launch this summer.

On January 31, I quit a management/strategic consulting job that I loved to pursue a startup. It was a tough decision because I enjoyed the work, enjoyed working with some of the most talented people I’ve ever met and had many opportunities had I decided to stay. I will outline how I arrived at my decision in this post. Every time I make major career changing decision, I always think of the worst case scenarios and worse possible outcomes – I believe if you’re prepared for the worst outcomes and can accept the consequences, then you will unlikely regret taking that step.

Three primary reasons why I quit a 6-figure job to do a startup:

1.       Timing/Risk Tolerance

There’s no better time to do a startup than when you’re in your 20s and it’s the only time in life when you have the freedom to be independent and do whatever you please. When you’re in school, most of us are financially dependent on our families. When you get married and have kids, you have responsibilities and lower risk tolerance. The few years between graduation and marriage, you’re financially independent and no one to really take care of but yourself.

When evaluating whether I should quit my job to do a startup, I noticed a sharp contrast in advice from those with entrepreneurial experiences and those who didn’t. Those who hadn’t started a company advised me to work a few more year, develop more experience – those who were young entrepreneurs themselves encouraged and supported my decision. After doing some research on my own, it became clear that I this is what I wanted to do. I was prepared for the emotional ups & downs, prepared to work hard and most importantly, I wasn’t afraid to fail and start from scratch doing something I love.

Paul Graham has a couple of great essays that inspired my decision: How to Start a Startup & Why to Not Not Start a Startup. My favorite quotes are:

        “If you try something that blows up and leaves you broke at 26, big deal; a lot of 26 year olds are broke.”

        “But the best way to get experience [doing a startup] if you’re 21 is to start a startup” (I’m already 25 so a bit late on the train)

My high school buddy Justin also inspired me. Justin had started a company (Kiko) right out of college to make an Ajax calendar, they worked for a year and things were looking up until Google came out with their own Ajax calendar. Kiko wasn’t wildly successful but they sold on ebay for $250k and the founders got a decent 1 year salary. Most importantly, they did something they loved and developed the contacts and skills to move right onto their next startup, Justin.tv.

2.       The Idea & the Plan

I always hear from people that ideas are a dime a dozen; it’s more about the people and the execution. Though I wholeheartedly agree with this, I believe it’s more true from an investor’s point-of-view as they’re constantly being bombarded with ideas. As a founder, the idea is crucial. Without a solid & well researched idea and a solid plan, I wouldn’t’ve quit my job to do this. I’ve batted around hundred of ideas with friends over the years only to arrive at 3 common conclusions: too many competitors doing the exact same thing, there’s no market for our product – alternatives are working well, and there’s no way to effectively monetize.

When my partner Adam & I came up with our idea back in Sept/October, we spent nights & weekends researching the idea and tried to poke holes in it until we were certain that it’s able to hold water. Maybe it’s due to our business backgrounds but we didn’t want to be another “me too” web startup with a cool application but no clear vision and strategy for monetization – the web is already too crowded for that.

3.       The Team

An equally important part of my decision to pursue a startup is because we had a great team. Although it was just me and Adam with no developer, I knew we could make this happen. We both had an obsession with internet startups & web applications and complimented each other’s strengths & weaknesses very well. When we discussed our roles in the company, we naturally gravitated to our interests & strengths and clearly defined our positions. Adam is the savvy CEO with solid analytical skills, passion for online marketing, and great people skills for interacting with investors, customers and the media. I’m the COO, I like to crunch numbers, guide product development, manage internal operations and come up with wild ideas. (Few days ago I was surprised to find that Brad Feld doesn’t believe in COOs, but after reading his thoughts, we seem to fit well in his 2% exception.)

In an early stage startup, there shouldn’t be too much redundancy in skills - when you’re strapped for cash and low on resources, redundancy just makes it more expensive to get the same work done.