Startups Share your startup - February 2019 |
- Share your startup - February 2019
- A humble glossary of mistreated terminologies
- Leaving my current startup after a month but I like the people there
- How do y'all stick with an idea?
- If I hire a salesperson on pure commission, how do we negotiate an appropriate commission?
- I need cash for a medical marijuana startup
- Market Research Trapped behind Paywalls
| Share your startup - February 2019 Posted: 01 Feb 2019 03:07 AM PST Tell us about your startup! /r/startups wants to hear what you're working on! Contest mode is on, so remember to select 'Show All' to see all the replies. If you don't see your post, you probably need to load more comments at the bottom. Also, all posts are sorted randomly, so the sort function doesn't seem to work.
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| A humble glossary of mistreated terminologies Posted: 01 Feb 2019 08:41 AM PST Lately, I've been involved with more early-stage startups and first-time founders. I find that the industry has been plagued with many concepts without most people taking the time to fully understand the underlying philosophy behind each of these concepts. I thought that maybe it would be nice to share a few definitions, and what they really mean. Feel free to add yours. Startup: A corporation created for the purpose of finding a scalable business model. You are not a startup if you are growing fast through a proven value proposition (you are a scale-up, and soon to be a regular business). You are not a startup if you are a design consultancy unless you can scale without adding human resources at a proportional rate. A startup is not a culture, nor is it an "early-stage company". The word finds his true meaning within the scope of a business created for the sole purpose of finding a scalable business model (and thus, validate a market hypothesis). That's why many startup pivots. MVP (Minimum Viable Product): A data-driven approach to testing a market hypothesis as fast as possible. You are building an MVP for the sole purpose of proving to yourself, and potential investors, that there is indeed a market for your product. If your code is good enough to allow you to scale with it, it's most probably not an MVP. If your code is good enough to handle all kinds of usage or behaviors (edge-cases) it's probably not an MVP. An MVP is a radical approach that trades long-term efficiency (scalability) for short-term results (data). It's focused around a very specific use-case/need and tries to prove that people need this enough that they will either pay for it or forgive many missing parts of a more complete / fully-featured solution. Needless to say, an MVP should be released with sufficient tracking technologies in order to in/validate things with accuracy and do the necessary changes. Agile: An iterative methodology favoring single-feature implementation over feature set deliveries Being an Agile team is not about being reactive and adaptable. Any good team is. It's about having a strict working process which favors short iterations and fast code-to-market development cycles. It's a real engineering process and one cannot just decide that his team is agile because he deems so nor because they share the values of the Agile Manifesto nor so they can avoid documenting their code in favor of speed. As a methodology, any business going the Agile way should be properly working on the underlying methodology before granting itself this definition. In the eye of many people, there is nothing more turnoff than a business saying that they are Agile while being incapable of describing the core processes at work in a consistent manner in their team. From personal experience, more often than not, what they really mean as a startup, is: we're not stubborn and as an agency: we'll bend over the way you want. It's especially bullshit in a digital agency setting as you can't have an agile-minded team without an equally minded product owner (the client). Growth marketer: The illegitimate offspring of a marketer and a product owner. A growth marketer is not the person who will grow your business from zero to a gazillion users using a bag of tricks he found listening to Vin Clancy. It's a stand-in for a seasoned marketer with good product skills and a great data-driven mindset. Since your business model is the keystone to any growth, a growth marketer will help fulfill your business' market potential. A growth marketer will enable your growth by suggesting you data or experience-backed product enhancement and enabling a growth model allowing you to know, with minimal data, how much you need to spend and how much it will take to meet your goals. Just like for your core product, he understands that he will first have to do things manually (and things that don't scale), and eventually move to a more scalable approach to its marketing operation as different tactics prove to be valuable. In my opinion, you can't be a growth marketer if you are not already somewhat advanced in marketing and have a basic ability to code your way to automated successful recipes. No junior marketer can fill that position. In the end, it's still a marketing position, where you extend a startup / MVP mindset in your operations. Strategy and tactics: A strategy says what should be done. A tactic says how. It's not about the magnitude of the scope (macro vs micro). It's about prioritization and execution. Too many times, founders will focus on the tactics because you can find a formula for these. Say you don't know shit about Marketing, it's easy to find a throve of "growth hacks" or "SEO tricks" or "Facebook secrets" as they don't ask you much in-depth knowledge to implement. What's harder is to take the time to breathe and understand that if your business model is unique, so are the strategies that will enable it to work. You better have the right strategies and not the right tactics than the right tactics and not the right strategies. While the former will only need more work to eventually work, the latter will kill you faster than anything else. Faster than having the wrong strategy and the wrong tactics because you can tell it's not working fast enough to adapt while using the right tactics at the wrong moment will keep alive the satisfactory illusion that it's working, even if it really isn't. A perfect illustration of this is a startup landing a major client and starting to put a lot of work into developing specific features for that client instead of grinding further to truly validate their market potential. In the end, they become a VC-subsidized client-specific product. It's the worst situation to be in if you are an ambitious startup. (and most of the time, VCs won't invest). TAM (total addressable market): Your cold, hard, true market size Once you have calculated your TAM, you get a number. While you want that number to sound sexy in the eye of VCs, the real goal of a TAM is to provide them with your methodology behind your market potential. Most seasoned VCs don't care so much about the final number as they care about your TAM and its methodology. If they agree with the methodology, they agree with the number. Using a solid methodology signals a solid founding team. You have more chances of raising money on a conservative TAM your VCs will agree on then an ambitious TAM they can't wrap their mind around. Moreover, the TAM is an interesting exercise. When done right, it should provide the founders with a better sense of their market potential. If you find the methodology to be right, but the number it yields too low, it's the perfect occasion to go back to the drawing board and see how you can best address your business model to capture a larger market. TAM is a tool, not a stand-in for the broader "Market size" terminology. [link] [comments]  |
| Leaving my current startup after a month but I like the people there Posted: 01 Feb 2019 11:50 AM PST This has been a very very difficult decision for me, I've been at a startup for about a month, and while I absolutely love the people Im with I simply dont believe in the startup, its founders, or its vision. I've been here for about a month, and since I've been working at startups for the past 4 years, every signal Im getting tells me its time to leave this place, so lets dive into why Im worried about the startup. 1. Too many juniors A lot of the most recent hires at this company have been very junior, they don't have all that much experience, they've all graduated about 4-5 years ago and for some they've had very little to no managerial experience yet they're being promoted to the highest positions in the company. Whilst they've certainly worked at FANG companies, they havent managed a project at a FANG company and my immediate manager is all too eager to say yes to any project which has resulted them in having to put their foot in their mouths a bit too many times already by saying yes to some very bad projects that have had no chance of success. 2. Technology instability and no concrete plan to fix it 3. Wrong people in the wrong place 4. An Absent CEO The CEO of this company isn't present in the office very much, and they sent out a letter the other day stating that due to several family emergencies they'll have to spend even less time with the company. Ontop of this, they're constantly sending emails nearly daily about working at a startup and sending the message that everyone can do more and to not treat this like any job, you've got to have all this passion and what not. I dont think this is a good mentality to have, while its a startup and theres work to be done, this is sending the message that everyone isn't contributing which is toxic especially since they aren't exactly the hardest working person. 5. Hiring way too fast for positions no one believes need to be filled Theres a hiring spree, yet everyone says we are hiring person X because executive Y wants to have this position at the company. The company has had 0 new business to justify such hires. Theres also too much focus on process and getting that right rather than building things and getting things up and running. I've gone ahead and made my peace here, not sure what IM looking to get out of this post. Im certainly feeling very down because IM going to let down a lot of people that I really like, but from a mental health standpoint and a career perspective I dont see this being good for either of those and I can accept an offer from a very large company today and get a bump in salary, better benefits, and a lot more stability that will really help my career out. [link] [comments]  |
| How do y'all stick with an idea? Posted: 01 Feb 2019 01:53 PM PST Looking for motivation here. Cofounder (roommate...lol) and I have been through dozens of ideas and just can't seem to stick on one. We keep thinking of things that sound great at first, but once we start actually analyzing the idea, we realize it has no legs. What's happened historically is 1) Think of an idea, 2) Spend about a week doing mockups, design, ideating, looking at competitors, etc. 3) Make a financial analysis spreadsheet and make sure it's financially viable, then 4) Look into marketing this product and then...realize maybe it's not so great. A couple examples where this happened: 1) Software Engineering Interview Reports - An automated technical interview platform (think CoderPad, Hackerrank CodePair, Codility, etc.) that provided detailed reports of your candidates performance (runtime and spacetime complexity over time, comparison to other candidates, "efficiency" scores, etc.) when we realized....no company worth their salt is going to make this report the deciding factor on whether or not they want to hire a candidate. Hiring is much more emotional ("Would you /want/ to work with this person?"), and technical interviews are more of a formality to make sure the candidate can code. So we scrapped it and moved on. 2) Unlimited Workouts/Unlimited movies/etc for Restaurants - We ideated pretty quickly through this one, because it sounds like something /everyone/ would want, but there's some key issues that we felt were big enough barriers to entry that we should just scrap it. Namely the effort required to integrate with major PoS systems, the amount of time and effort that would be required to negotiate deals with local restaurants, and the low profit margins due to having to pay out restaurants. These issues could be circumvented by offering a "RestaurantPass Credit Card", but then there's approximately zero way to make profit...we all saw how the unlimited movie company turned out. So how do you do it? How do you find an idea and not get hung up on the pitfalls? [link] [comments]  |
| If I hire a salesperson on pure commission, how do we negotiate an appropriate commission? Posted: 01 Feb 2019 07:27 AM PST My startup is a social networking app whose primary revenue stream will come from advertisers. Within that framework there are still a lot of unsorted variables in terms of quantifying that revenue. Our attractiveness to advertisers will depend on how many users we get so the first six months of the marketing plan calls for focusing on user growth, without real consideration to revenue (we'll be launching a premium subscription option but don't expect a huge buy-in rate) until advertisers are on board and paying. I've been leaning toward offering early advertisers a free trial, particularly as it's still a little experimental and I'm trying to get advertisers to try a more involved approach (it's a chat platform, I want at least some of my advertisers to actually chat with the users). I'm also still trying to figure out the best billing model for the advertisers- per ad displayed, per interaction, or flat monthly fee? We're focusing on the outdoor subculture for our initial phase until a planned pivot at least a year out to bring in some more general interests. I've got a guy I know who's run a few small businesses of his own and has found his primary niche in sales to consumers and has been looking for a gig that would let him travel more and connect more with industry players instead of just consumers. This job is a perfect fit for him, except that we are bootstrapping and won't be able to afford to pay him until we start getting some revenue (or investors but I'm trying to avoid that route as long as possible). I told him this when I first floated the idea of bringing him in a couple weeks ago, and yesterday he called me back with a proposal that I had to reject: he wants his commission to be the entire first year of revenue from each deal he brings in. I explained to him that this wouldn't be feasible because the rest of the company needs to eat too. With so many variables, he would be taking on a huge risk no matter what scheme we put him on unless I find a way to offer him a salary and travel expenses. I am so far the sole investor and pulling this thing together with whatever discounts I can find with other small businesses and offering my main worker, the programmer, generous equity in lieu of salary to work part time alongside other paying gigs. The programmer definitely wouldn't like it if he found out I deferred his cash compensation a whole year to pay the sales guy. So I need to negotiate something more affordable. My first thought was to keep it generous without giving away the entire store - like 50% of the first year for each client he signs, or maybe even 50% of the first six months and 10% of subsequent months ongoing so he has incentive to touch base and do some customer service as well. Once we get to a certain point of revenue we might be able to transition him to salary plus expenses, maybe even get him a company van like mine (my personal RV will become a "company van" when I coat it with company graphics and start driving it to events). He can be a tough negotiator from my past experiences, but I've also known him to be a fair dealer in the end. We've done a few deals in the other direction in the past - I used to buy most of my kayaking gear at his store when he was running his own shop and he was a great negotiator and closer back then. I really believe he's the best salesman I could get for this particular company that would be willing to work on deferred payment. I just can't have too much of my revenue go to his commissions. Where should I look (book or website to read?) for tips on negotiating in this situation? What have you seen as "industry standards" for commissioned ad sales? [link] [comments]  |
| I need cash for a medical marijuana startup Posted: 01 Feb 2019 05:01 AM PST Long story short, I am looking to start a Medical Marijuana growing/processing business. About 18 months ago my architecture and engineering firm was approached to provide design and construction management for a medical marijuana growing and processing facility. We took the job and this project quickly absorbed most of my time. Throughout the process, I learned a great deal about all aspects of the business and upon completion of the first phase of the facility I was asked to join the company. I ended up working out a deal to provide consulting services and have been working with them for about the past four months. I should note at this point that the facility that I am referring to is in my neighboring state (I live just over the border). However, I believe that my state is on the verge of releasing the application to approve growing/processing, and I am seriously considering trying to assemble a group to apply for a license. I have access to a large network of people who I think would be interested in investing, but I just have no idea of how I can structure the deal so that I have enough skin in the game to make it worth my while when I don't have a ton of money to invest. In order to prepare a successful application, I believe that it will require about $300k in investment, which will be lost if the application is unsuccesssful. Additionally, this will require the full-time attention of someone for at least 6 months to fully prepare. Ideally, that person would be me. My quick back of the napkin math says that the facility will require approximately $20M in capital for build out and to cover operating expenses until the facility can become profitable. This is a very conservative estimate. My investment in this would be approximately $200k. Ideally, I'd like to offer this investment to cover the cost of the permit once awarded (I would initially post the 50k application fee - 45k of which is refundable if the application is rejected). So my question to you all is this: if you were a prospective investor, what level of compensation would be palatable for me? I believe that I bring a lot to the table having been through this process once already, and I know that My knowledge will save the company millions from application through operations. My investment would be 1% of the total, but I'd like to have a bigger chunk than that. I'd also like to focus on this full-time during the application process, taking a salary. Is this appropriate? If so, to what extent? And lastly, I wouldn't mind having some control of the company being that I have some experience and have lived though the mistakes that were made by a board of investors with limited MMJ knowledge. I know that I'm leaving out nearly all of the information that you might need to weigh in, but I'm on mobile and I'm just trying to see if this is even feasible at this point. Let me know what you think. Thanks for you input! [link] [comments]  |
| Market Research Trapped behind Paywalls Posted: 01 Feb 2019 03:35 AM PST Hi everyone, I'm having a strange problem, in that I can't find any market data for free online, it's all behind research paywalls for $3000+ I'm working on a startup focused on reducing travel costs for historical researchers, which is still a very manual process that requires physical travel (specifically to museums and archives). Our solution falls under Document Imaging ($20B industry, who knew...) as a new methodology for digital scanning that's about 50% cheaper. The problem is, we can't find any public breakdowns of the $20B, or demographics information. Has anyone ever had this type of problem? How do you beat the paywalls? Edit - I doubt I can get a University to aquire the data for me [link] [comments]  |
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