104. How To Start A Startup: Doing Things That Don’t Scale & Public Relations Tips

13 important takeaways from this lecture:

Stanley Tang of Doordash

00:03:16 After talking with hundreds of small business owners who all agreed that delivery limitations was a major problem in fulfilling their orders, we tested the need for DoorDash, a quick and easy restaurant delivery service, with a simple experiment: a very simple landing page with a couple of local online pdf menus along with my cell phone number at the of the page:

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Our only question was “Would we get phone calls from this?” No drivers, no algorithms, no back-office, in less than an hour we launched our test website, and within the afternoon we had our first real order. My first marketing campaign was an email to the inhabitants of my college dorm.

The next day we received two orders. The third day we received 5 orders, then 7, then 10… Once word spread around university campus, business exploded.

The fact that the web page was very basic and even time-consuming to navigate, yet still received orders, told us that we had a good business model.

00:06:35 At the beginning it’s all about testing your idea, trying to get your idea off the ground and create something people want. At the beginning doing things that don’t scale isn’t a problem:

  • We delivered all the food ourselves
  • We used Google docs to track orders
  • We passed out flyers on the street
  • We used Square to collect payments – we were growing so quickly that at one point Square actually shut our account down for fear of money laundering
  • We used Apple’s Find My Friend app to keep track of our drivers’ location

00:08:22 Another benefit of doing things that don’t scale is that it allows you to become an expert in your business.

00:09:00 At the end of every business day we painstakingly emailed each of our first-delivery clients and asked them how their first delivery went, how they heard about us, and if they had any suggestions to improve the service.

It was our dilemma between going and getting ice cream, or delivering a sudden spike of customer requests that finally made us decide to start automating our business as much as possible.

Walker Williams of Teespring

00:16:47 As a startup, you have the competitive advantage of being able to do things that don’t scale.  

00:18:45 She simple fact that you’re launching a new product means that you will probably be bad at selling it: no success stories to point to, no idea the customer’s pricing point expectations, no testimonials, etc. It will be difficult, but you must do whatever it takes to bring in your first users. 

At the early stages, focus on growth rather than ROI.

At the early stages, avoid giving your product away for free because people treat products differently than they do paid products. Also, this is an unsustainable strategy, and you can’t just assume you can convert all your freemium users over to paying customers. Focus instead on making sure that users value your product and at the price you are charging for it.

[EDITOR’S NOTE: In her Lecture How To Start A Startup: Growing From Zero To Many Users, Adora Cheung of HomeJoy explains that for FREE products, the closer that person is to you, the less honest they will be and the more ‘white lies’ they will tell, or the more they will avoid critiquing your product or service.The farther away from you they are, such as strangers you cross on the street, won’t really care about you and are likely to answer your questions half-heartedly.

For PAID products, however, the closer consumers are to you, the more likely your close friends and connects are to lie about their satisfaction with your product, however the farther away  that person is to you, the more honest you can expect their feedback to because they have put money into your product, and so expect improvement.

Meaning, you get more reliable feedback from paying customers than from free users, so if you’re offering a product that you eventually plan on selling, you want to get to that point as quickly as possible.]

00:21:12 Champions are users who talk about and advocate for your product. The easiest way to turn users into champions is to delight them with experiences they will remember.

[EDITOR’S NOTE: In his lecture How To Start A Startup: Building Products That Your Users Will Love, Kevin Hale of Wufoo notes that  first impressions are most important because when you ask a person about their relationship with their significant other, and usually they’ll tell you the story about their first kiss or where they first met. First impressions therefore are important in the starting of a relationship because it is the story we tell over and over again.

Therefore you must consider the emotion on your new user’s face as they interact with your product.]

00:26:05 The product you originally launch with will probably not be the product that takes you to scale. As you find your product-market fit, you’ll have to alter your product accordingly. Your goal is to get your current non-scalable product to that scalable product as quickly as possible.

00:26:50 Optimize your business model for speed over scalability. Throw in patches and hacked up code to temporarily and cheaply fill the gaps necessary to get the job done and  the sale made, and then overhaul everything once you can.

00:27:55 Only worry about your next order of magnitude. Once you’ve gotten ten users, don’t begin worrying about how you’re going to meet the needs of a million users, worry about how you’re going to get to a hundred users. At a hundred users, think about a thousand users.

Justin Kan of TwitchTV

00:33:34 Getting press coverage isn’t something that happens magically. Before you think about press, you want to think about the target audience of readers you want to reach such as investors, customers, and the industry.

If all of your customers live locally, then there is no reason to set your sights on national press.

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00:38:15 You don’t have to be original, just original enough. The second Kickstarter campaign to raise 1M€ won’t be newsworthy. But the first Kickstarter campaign to raise 1M€ in the ‘gaming’ category is news.

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00:42:30 Do your best to procure a face-to-face meeting with the blogger or journalist because this plays on the

Sunk costs fallacy: that time and money already spent which cannot recovered, and the more time and money invested into something, the most value it is perceived to have. The worse thing you can do is to only have an email exchange because that makes it easy for the person to forget about you or brush you off.

[EDITOR’S NOTE: For more relevant logical fallacies, watch the lecture Psychology & Marketing: How Cognitive Biases Influence Consumers by Sacha Greif of Folyo and Sidebar.io.]

[EDITOR’S NOTE: For more tips on getting press coverage, read my interviews with:

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