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Startup DNA: the formula behind successful startups in Silicon Valley (updated May 5, 2017)
The document outlines key traits and strategies that contribute to the success of startups in Silicon Valley, emphasizing the importance of learning from failures, rapid iteration, and effective use of data. It highlights the necessity for startups to adapt quickly through experimentation and to incorporate distribution strategies to reach customers effectively. Successful companies are characterized by their willingness to share information and insights, fostering a culture of collaboration and learning.
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Startup DNA: the formula behind successful startups in Silicon Valley (updated May 5, 2017)
- 1. STARTUP DNA The formulabehind successful startups in Silicon Valley
- 2. STARTUP DNA The formulabehind successful startups in Silicon Valley
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- 6. “Successful startups areall alike; every unsuccessful startup is unsuccessful in its own way.” Leo Tolstoy, probably
- 7. This talk isabout a few traits that make startups successful
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- 12. 1. Make excellentmistakes 2. Speed wins 3. Data 4. Distribution 5. Sharing Outline
- 13. 1. Make excellentmistakes 2. Speed wins 3. Data 4. Distribution 5. Sharing Outline
- 14. The road tostartup success is paved with failure
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- 20. Initial idea: Game Neverending(MMO). Pivoted to focus on photo sharing. Acquired by Yahoo for $35M in 2005.
- 21. Initial idea: burbn (socialnetwork). Pivoted to focus on photo sharing. Acquired by Facebook for $1B in 2012.
- 22. Initial idea: Odeo (podcasting). Pivotedto focus on microblogging. IPO in 2013.
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- 24. Reid Hoffman’s first startupwas socialnet.com, a social network for dating. Never heard of it? Exactly.
- 25. Went on tobecome COO of PayPal and co-founder of LinkedIn.
- 26. “Startups are like jumpingoff a cliff and building a plane on the way down.” Reid Hoffman LinkedIn co-founder
- 27. Virgin Clothes Virgin Cola VirginVision Virgin Vodka Virgin Wine Virgin Jeans Virgin Cars … all failed
- 28. But several hundredof Richard Branson’s other companies succeeded!
- 29. “I have notfailed. I've just found 10,000 ways that won't work.” Thomas Edison
- 30. These were notfailures. These were experiments.
- 31. The goal ofan experiment is learning.
- 32. “I've come tobelieve that learning is the essential unit of progress for startups.” Eric Ries
- 34. #1 cause ofstartup failure: “No Market Need.”
- 35. The biggest riskis building the wrong thing.
- 36. The only wayto find the right thing is through experiments.
- 37. The experiments can’ttake too long, or you run out of money.
- 38. That’s why youneed to fail fast.
- 39. That’s why youneed to fail fast.
- 40. That’s why speedwins.
- 41. 1. Make excellentmistakes 2. Speed wins 3. Data 4. Distribution 5. Sharing Outline
- 42. “Speed Wins.” Steve Kaufer TripAdvisorco-founder
- 43. Boyd’s law: speedof iteration beats quality of iteration.
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- 47. In a trialand error world, the one who finds errors faster, wins.
- 51. Key idea behindAgile, Lean:
- 52. Some of yourassumptions are wrong.
- 53. The problem is,you don’t know which ones.
- 54. “Winners recognize their startup‘vision’ as a series of untested hypotheses in need of ‘customer proof’.” Steve Blank Bob Dorf
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- 57. 1. Identify yourriskiest, most central assumption. 2. Perform the smallest possible experiment to test the assumption. 3. Repeat.
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- 61. 1. Make excellentmistakes 2. Speed wins 3. Data 4. Distribution 5. Sharing Outline
- 62. Some of yourassumptions are wrong.
- 63. Data can bea good way to find out which ones.
- 64. “Anything you needto quantify can be measured in some way that is superior to not measuring it at all.” Douglas W. Hubbard
- 65. Server and clientmetrics
- 66. User and sitemetrics
- 67. Code and bugmetrics
- 68. Use feature togglesand A/B testing
- 69. Wrap new featuresin if- statements. Default is “off”. Group users into buckets. Toggle features for some buckets: A/B testing, ramping (1%, 10%, 100%).
- 70. Measure the impactof new features!
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- 73. Example: same page,different stock photo.
- 75. Which one shouldwe use?
- 76. Using A/B testingto pick the right image significantly increased clickthroughs
- 77. Note: use datato inform your decision-making process, not replace it.
- 78. “If we can’tidentify a decision that could be affected by a proposed measurement and how it could change those decisions, then the measurement simply has no value.” Douglas W. Hubbard
- 79. 1. Make excellentmistakes 2. Speed wins 3. Data 4. Distribution 5. Sharing Outline
- 80. If you buildit, they will come.
- 81. If you buildit, they will come.
- 82. If you builddistribution into the product, they will come.
- 83. The best productdoesn’t always win
- 84. How many customersdo you need to be successful?
- 85. (From the StanfordStartup Engineering Course) Company Product Price Customers Coca-Cola Soda $1 1,000,000,000 Unilever Household goods $10 100,000,000 Blizzard Games $100 10,000,000 Leonovo Laptops $1,000 1,000,000 Toyota Cars $10,000 100,000 Oracle Enterprise software $100,000 10,000 Countrywide High-end mortgages $1,000,000 1,000 To make $1 billion in revenue:
- 86. Company Product PriceCustomers Coca-Cola Soda $1 1,000,000,000 Unilever Household goods $10 100,000,000 Blizzard Games $100 10,000,000 Leonovo Laptops $1,000 1,000,000 Toyota Cars $10,000 100,000 Oracle Enterprise software $100,000 10,000 Countrywide High-end mortgages $1,000,000 1,000 Note the “customers” column:
- 87. The number ofcustomers you need to reach determines your distribution strategy
- 88. Common distribution strategies: 1.Advertising 2. Traditional media 3. Social media 4. Inbound marketing 5. SEO 6. Sales
- 89. Common distribution strategies: 1.Advertising 2. Traditional media 3. Social media 4. Inbound marketing 5. SEO 6. Sales
- 90. Print ads, onlineads, newspaper ads, billboards, etc.
- 91. Potential to reachmillions, but you’re battling for attention.
- 92. “Half the moneyI spend on advertising is wasted; the trouble is I don't know which half.” John Wanamaker
- 93. Common distribution strategies: 1.Advertising 2. Traditional media 3. Social media 4. Inbound marketing 5. SEO 6. Sales
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- 95. Massive reach. Canbe positive or negative.
- 96. Common distribution strategies: 1.Advertising 2. Traditional media 3. Social media 4. Inbound marketing 5. SEO 6. Sales
- 97. Email, Twitter, Facebook,LinkedIn, Pinterest, etc.
- 98. Reach depends onthe size of your audience.
- 99. Personalized content can bevery powerful
- 100. (My CTR on“you’ve been tagged” emails is 100%.)
- 101. LinkedIn’s “Year inReview” email also had a CTR of > 100%.
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- 103. Note: viral loopsmust be built into the product
- 104. Common distribution strategies: 1.Advertising 2. Traditional media 3. Social media 4. Inbound marketing 5. SEO 6. Sales
- 105. Attract users withcontent: blog posts, open source, videos.
- 106. The goal isto teach and to build a following
- 107. Medium reach, buthigh conversion rate and low cost
- 108. Common distribution strategies: 1.Advertising 2. Traditional media 3. Social media 4. Inbound marketing 5. SEO 6. Sales
- 109. SEO = SearchEngine Optimization
- 110. Google handles 2trillion searches per year
- 111. You can builda massive business on just a tiny slice of that
- 112. TripAdvisor is builtaround being the top result for most hotels
- 113. Need lots of(user generated) content to be successful
- 114. Common distribution strategies: 1.Advertising 2. Traditional media 3. Social media 4. Inbound marketing 5. SEO 6. Sales
- 115. Hire a salesteam to sell the product
- 116. Inside sales: sellin a store or over the phone.
- 117. Outside sales: travelto customer site to do a deal.
- 118. Small reach, butessential for expensive products.
- 119. 1. Make excellentmistakes 2. Speed wins 3. Data 4. Distribution 5. Sharing Outline
- 120. Silicon Valley companiesshare (almost) everything
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- 122. Open source: Kafka(LinkedIn)
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- 126. Quality: you dobetter work when others are looking.
- 127. Free labor: freeQA, free docs, free bug fixes...
- 128. Happiness: something youkeep with you your entire career.
- 129. Branding: you becomean expert by sharing your expertise.
- 130. Mastery: the bestway to learn is to teach.
- 131. That’s why I’mhere today:
- 132. To share whatI’ve learned with all of you.
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- 135. Rocket: manhhai Leo Tolstoy:Wikimedia Biz Stone: Joi Ito Richard Branson: Chatham House Thomas Edison: Louis Bachrach Reid Hoffman: startupofyou Dogfight: Alan Wilson MVP car: Henrik Kinberg Crowd of people: Scott Cresswell Picadilly Circus Ads: Sebastian Bertalan John Wanamaker: Bain News Service Social media: Ibrahim.ID Man using laptop: Negative Space Laptop with Google: Pixabay Handshake: Flazingo Photos Woman coding: Hamza Butt Resume: Flazingo Photos References & image credits