Startups

How to Ask for an Introduction

Mar 09

I don’t know a ton of important people. But as a founder of a venture-backed startup with some amazing investors and advisors, I do know a few.

With Nivi and Naval preaching the gospel of social proof (can I get an “amen”?!) and with fundraising posts and articles espousing the importance of introductions, it’s no surprise that about once a week someone asks me to introduce them to someone else. It’s especially common around Y Combinator Demo Day, where YC groups shift from pure product mania to fundraising mode. I’m pretty sure that YC tells new crops of startups to ask for introductions from the funded companies from previous sessions.

What does surprise me is how people ask for these introductions. Here’s pretty much how they usually read:

“Hey Tony. I’m [insert name] from [company name]. We’re starting our fundraising effort and I was wondering if you’d introduce me to [insert RescueTime investor/advisor].”

I usually will make the introduction, but the person asking for it is certainly not making the most of the opportunity (and asking me to spend my social capital by doing so). So after making a mess of these introductions in varied ways, here is my suggested checklist for making an introduction (it’s pretty much my reply when I get a request like the one above):

Write the introduction for me. Seriously. You know more about your story than I do. You know the things to say that will make someone light up. I don’t. I might flub it. I can personalize it (“Hey [insert investor name]- hope your trip to [offensively exotic location] was fun. Welcome back! Listen, I wanted to introduce you to…”), but you should make the pitch. Bonus: this saves me a few minutes of writing, which is kind and thoughtful of you!
Don’t bury the lede. What’s the thing that will get an investor excited? Be concise, but talk about social proof, traction, growth, size of the market, how badass your team is, mainstream press coverage, other investors who are on board, and user passion/joy. Choose whatever distinguishes your startup from the sea of startups that investors read about every single day. Unless your product is revolutionary, spend more time talking about your market (“we’re helping companies in the billion dollar widget maker market sell doodads”) and your team than your product (“we’ve got an ajaxy shopping cart!”). If they investor blogs or has EVER talked about their investment strategy, hopefully you’ve read how they think and tune your pitch to match that.
Heap on the social proof, man! Getting an email intro from a near-stranger (me) is about the weakest social proof you can get (but it’s better than nothing). Tell us how many other investors you have soft-circled. Give us a link to a list of all of the blog posts praising you. Or all of the users tweeting about you. We’re herd animals. If the investor feels like the herd is leaving him behind, that’s a good thing.
Think about why it’s an opportunity for investors. If I’m writing to an investor about a company that looks like a credible opportunity, that’s me doing them a favor. If you don’t have any bullet points that many you look like a great opportunity, that’s me doing you a favor and adding noise to their already overflowing inbox.
Keep it short. All of the above stuff could mean a lot of content. You’ve got to pick and choose what to send and hope it’s enough bait for the investor to dig in and learn more.
Bonus points: track it. When we were talking to investors, we created custom (private) pages for each investor we were courting giving them a ton more to dig through and get excited about if they wanted. The emails were short and sweet with a “want to learn more” link at the end. We used Google analytics to track which people clicked through and which individual pages they clicked on so we could know what to focus our discussions on when we met them.

All that said, if you’ve got a great investment opportunity (with a launched product and some happy users), don’t be shy about dropping me a line if I can help (with introductions or advice).

(post scriptum: If you are in the market for introductions, you should check out VentureHacks’ StartupList!)

(post post scriptum: If you’d like to learn more about making good introductions, Chris Fralic just wrote an outstanding post for the “connector” – The Art of the Introduction)

PR for Startups

Mar 02

My startup (RescueTime) has enjoyed some pretty ridiculously good PR (online, print, and video). It’s not a surprise that the most common questions that we get from other founders are about PR. How do you get press and the blogosphere talking about your product?

When you research this topic, you’ll see lots of technical and how-to articles that talk about how to build relationships with writers, how to use services like PRweb, how to format a press release, and more. In a lot of ways, this reminds me of SEO (search engine optimization). Research SEO and you’ll find a bunch of articles about page markup, link sculpting, meta descriptions, and all sorts of other mechanical processes. But what you won’t find much of is information that teaches you how to write great content and how to build your startup and features (from the ground up) with “linkworthiness” in mind.

Just like fabulous content solves 75% of your SEO problems, fabulous storytelling solves 75% of your PR problems.

I think there’s a lot of built-in contempt for PR and marketing among entrepreneurs (especially hacker-flavored entrepreneurs). We’ve all been in companies with fat communications budgets wasted by blow-hard marketeers, so many of us have dismissed the profession altogether. We’re so entranced by the concept that just building something people want will win the day. I remember cheering the first time I read the quote, “marketing is a tax you pay for being unremarkable“. I remember reading a statement on Hacker News that said, “my code speaks for itself“. Two years ago, I would’ve said, “Right on, brother! Preach it!”

But my mindset has shifted about 180 degrees over the past few years. I now believe that how you say something is at least as important as what you’ve built. The A/B testing and design/copywriting iteration that we’ve done over the past year (which has, over time, resulted in a 400% increase in conversion rate on our site) really has driven home this belief. What’s A/B testing if not a bunch of microscopic marketing/PR tests?

What you need to send to reporters and bloggers

If you’re reaching out to reporters and bloggers, you put yourself in the shoes of that person. They are looking to write a headline that causes readers to buy a magazine/paper or click on a link. They are looking to write a story to support that headline that causes readers to consume that content and (ideally) find the content so provocative (note that “provocative” can be VERY different from “valuable”) that they send the link to their friends and relatives, post it to Twitter, and write a supportive (or critical) write-up on their blog.

If you can truly empathize with a writer, you fairly quickly realize why your new social bookmarking app, web annotation service, or small business accounting app isn’t particularly newsworthy. You aren’t click-bait. You aren’t link bait. You aren’t going to sell a paper.

Which is why your most important problem from a PR point of view is this: How can you make your uninteresting (to a broad audience) company interesting?

The good news is that it’s quite do-able. If at all possible, read Made to Stick by the Brothers’ Heath. If you can’t read it, read this summary. If you can’t do that, just try to craft a story that succeeds in as many of these areas as possible:

Surprising
Funny
Personal
Has a story arc
Useful

(notice how low “useful” is on the list? That’s not an accident. You have to be REALLY useful to be worth talking about.)

A boring company with good storytelling skills can do some amazing things on this front. Off hand, I can name a company that sells shoes online that did pretty well on the PR front, a personal finance app that a lot of people talked about, and a creator of small-business project management software that people can’t stop linking to. If you want to see smaller/earlier successes, check out Balsamiq or UntitledStartup (both are doing some clever things out of the gates).

So if you tell your product’s story at a party (which you should, over and over!), watch the listeners eyes. Do they glaze over? Or do they light up? Do they laugh? Do they argue with you? Do they ask questions? If a you’ve never had a listener at a party say, “wait a minute– John over there would LOVE to hear about this… Let me grab him!”, then you probably aren’t ready to work on the mechanics of outbound PR. If at the end of your story, the listener doesn’t often say, “Can you tell me that URL one more time?” as they reach for their smartphone, then you need to keep working on your story. Because charging forward on outbound PR with a shitty story is pretty much the equivelant of working on your SEO mechanics when you know you have crappy content. Your’e ignoring the most important part in favor of the least.

Post Scriptum – On the Value of PR

Having enjoyed pretty great PR success, I wanted to throw out a final thought. Like a lot of accelerants (marketing and funding being two other examples), PR can be like throwing gasoline onto a fire. Or it can be like throwing gasoline on a pile of wet wood. It can be especially exciting if your business is enjoying growth already. But PR (and, more broadly, your startup) is a marathon, not a sprint. The first couple times you get a PR hit, you’ll quite likely be flummoxed by the fact that your traffic and usage doesn’t really change that much as a result. TechCrunch might get you 5-10k uniques. Being in the print version of the New York Times might get you a few thousand uniques. PR is not going to result in a viral/word-of-mouth explosion, but it’ll speed things up nicely if you’ve already got one happening.

As Andrew Chen says in one of his many fabulous posts (why bloggers and press don’t matter for user acquisition), if you’re going to spent time on marketing and PR, spend it on things that will pay ongoing dividends rather than 1-time dividends. Andrew was talking about stuff like viral loops and SEO, but in my opinion he missed the most important marketing “gift that keeps on giving” – crafting and tweaking a story that makes you worth talking about.

Considering Y Combinator (or any seed funding)?

Feb 22

[Timely note! We're hosting a Y Combinator Meetup in Seattle on Thursday Feb 25... details here!]

March 3 is the deadline for YC’s Summer 2010 session. I figured that I ought to throw my thoughts out there on the decisions that lead up to the application, the app itself, and the interview process that follows (if your app makes the cut!).

Making the Decision to Apply

First off, I think the most important thing to emphasize as an entrepreneur is that you should optimize for your chance of ~~success~~ a meaningful exit, NOT the magnitude of it, should it happen. It may seem like selling for millions to Google is a foregone conclusion given how brilliant you are, but it’s not. Startup success is a tough slog with lots of randomness outside of your control. If you can trade a little bit of equity to nudge up your shot at success by a few percentage points, you should do so. Thankfully, YC from this perspective is a no-brainer. No one can argue that it doesn’t improve your shot (with the amazing mentoring they provide, the investor introductions/credibility, and PR bump), and if you calculate YC’s take is if you sell for $100m (divided by the number of founders), it isn’t too painful.
Think about what you’re building, what market you’re playing in, and whether it’s appropriate for venture financing. I think I recall reading about someone applying who was proposing to build an app to manage Dungeons and Dragons campaigns. While there’s probably a business there, it’s pretty unlikely that the pen-and-paper RPG market is going to be the next big thing to change the world. Pick a big market– or better yet, pick a small market that can eventually morph into a huge market (like classifieds for San Francisco, selling books online, or an online garage sale).
Read everything here and make sure you agree with some of it, but don’t be afraid to disagree with some of it either!
Do something bold. You aren’t going to be thinking to yourself on your deathbed that you really should’ve taken less risks. YC is a blast. You get to meet amazing mentors, other great startup founders, and a few fairly impressive robots.
Consider how committed you are to your idea/market, your company, and your co-founders. YC has plenty of flips, but the majority of ‘em seem to be going concerns for years. Can you get excited about what you’re doing (and who you’re doing it with) for 7 years?
Do a gut-check on your team. Do they have the rough ingredients necessary to kick ass? If the better mousetrap you propose to build is going to be better because of an amazing UI, make sure you have a great UI guy. If you’re doing a vertical search/UGC play, make sure someone is at least a little interested in SEO. If you’re going to sell software to businesses, make sure someone is willing to sell stuff. And, of course, if you’re tackling something with big technical challenges (like most of us are) make sure you have some great hackers.

The Application Process

Read Paul’s essays. It provides good insight into what’s important to him (and YC). Reading Founders at Work is a good idea, too. It’s a great book and shows you some patterns for startup success.
Remember that the app is a sales pitch and focus your answers on the things that are important to YC. The biggest risks to YC are:
- That you don’t have the chops to build something good. The best way to deal with this concern is to show them something good that you’ve built. Preferably several things, and preferably things that you’ve built with your co-founders.
- That you’ll get bored/discouraged and quit. So try to work in examples of times when you’ve persevered despite significant obstacles.
- That you’ll fail to make something that people want. So do what you can to show that you’re in tune with the market you’re proposing to serve. You can be a badass hacker with unflagging dedication, but if you don’t/can’t understand your users, you’re probably not going to be a big win for YC.
Don’t be too shy or too arrogant to sell. I remember reading a comment on Hacker News that said, “My code speaks for itself.” No, it doesn’t. At least, not to investors, customers, employees, reporters, and the zillions of other people out there you’re going to have to sell to.
Get working on your software ASAP. If you apply with a functional product (or even a launched product that people love), you remove a lot of the risks listed above.
Get working on the YC app ASAP. If you’re unsure, apply! The app takes a few hours and it’ll help focus your thinking if nothing else.
If possible, make sure that your whole team is ready to dive in whole hog. Starting something up is a commitment to your founders and to your new investors. Having a team member who has other commitments can be a source of contention.
Hack the system! Every session I get emails from people asking me to review their apps. I usually do. I can’t imagine why you wouldn’t do this… YC founders are people who wrote successful applications and spent at least 3 months getting repeatedly kicked in the junk by Paul Graham and friends. I’m sure we must know something about how YC thinks that might not be obvious. If you can’t bring yourself to ask a stranger for some time, how are you going to raise money after YC? How are you going to hire your first employee?

The Interview

I don’t recall the stats on how many applications make the cut, but if you get asked in for an interview, congratulations! Now get to work building something (hopefully you already have).

Get started on a demo. If you walk in and start monologuing, you’ll fairly quickly get interrupted and asked to start showing stuff.
The “demo” will be less like Steve Jobs and more like Guantanamo Bay. You’ll be derailed almost instantly and peppered with questions and objections.
Have a backup idea that you’re comfortable talking about. I know several founders who were essentially told, “we don’t like that idea. Do you have any others?” This may be a test of how much you love your idea as much as anything else. Founders who refuse to pivot often die from it. It also might be a test of your ability to have good ideas. If they don’t like your idea OR your backup, they might los faith in your ability to grok what people want.
Practice. Ask 10 smart people to name 10 things that will make your idea fail. Have good responses for those objections. Don’t practice a speech. Don’t practice a 10 minute demo, practice little 1-2 minute chunks of a demo that you can string together if they leave you alone. Practice individual talking points and responses.
Be willing to be wrong but also be willing to disagree. YC doesn’t want lapdog PG fanboys(and girls!), but they also want people who are coachable and willing to learn. Don’t be afraid to say, “That’s one of the things we’re going to have to figure out, but we have a few ideas.”
Be dynamic and energetic. You’re a storyteller here. Your job is to get YC excited about your business. Make them believe that it (and YOU) are an investment opportunity. Work on eye contact, not talking to too fast, and thinking on your feet. Have someone role-play an aggressive interviewer.

That’s about all the advice I have. I’d close with this point– very very very few YC founders wouldn’t do it again in a heartbeat. It’s a killer experience and it’s certainly a needle-mover during the most fragile part of your new company’s life. Applying is cheap in terms of time and rewarding even if you don’t get asked in for an interview. Do it!

Startups with Something to Believe In

Jan 07

I went to an informal Seattle startup CEO dinner a while back and it was an awesome opportunity to talk candidly about the problems that early stage products face. Someone remarked to me afterwards that a lot of people in that room had already “made it” (financially speaking). That’s one of the cool things about being a startup founder. There were plenty of folks in the room who put on their pants one leg at a time. There were some other folks who sip Pinot Noir while they have two pant-assistants dress them. But (with a few runaway exceptions) many of them were facing the same challenges.

I had a lot of takeaways from the dinner, but the biggest came from two comments by CEOs in two unrelated conversations (these are paraphrased with a bit of hyperbole tossed in).

Comment #1: “My biggest concern is that we’re on a long road. And it’s going to be a tough slog. We’re going to be dragging our asses uphill for years with a still uncertain future. With that to look forward to, how can I hold on to my best-and-brightest stars when they could take an offer from [insert megacorp] and double their salary overnight? Or they could hop onto another startup that isn’t at the ‘slog’ stage yet?”

Comment #2: “Sure, the downturn has effected our startup. But we’re all working together on stuff that we want to work on and we’re working with people that we really want to work with. If we end up making less money, it really doesn’t matter much.”

The huge challenge is that we are constantly telling ourselves, our teams, and our customers that great stuff is in on the horizon. But the reality is, bad shit is coming. There are going to be huge and gutwrenching bumps in the road and times where the company feels like it’s going to auger in. The thing that can pull a team through these rough spots is belief in SOMETHING.

Something amazing happens, I think, if you can cross the chasm from people getting paid to work for you company and people getting paid SO THEY CAN work at your company (I think that concept came from Tandy way back when– can anyone confirm?). As founders, I think it’s easy to dismiss this possibility. “That might work for people who ooze charisma,” we say, “but it won’t work for me.” Or: “You can only pull off that kind of passion if you have a world-changing product with a runaway growth rate– not for something so mundane as what we’re working on.” Bullshit. Look at companies that actually inspire the founders, employees, and customers– there’s WAY more variety than you might suspect.

So here’s a stab at how startup founders can get creative and (hopefully) inspire.

a dragonslaying startup (killing inefficient incumbants, like Redfin is trying to do)
“business religion” startup (like Zappos, FogCreek software or 37signals– where the products isn’t something the team gets THAT excited about building, but the “business religion” and/or lifestyle of working there is magical)
The “we’re going to change the world” startup. Steve Jobs once said to John Scully (then CEO of PepsiCo), “Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?”
“we’re going to get filthy rich” startup (this feels scary to me– seems like people will jump once there’s a bump in the road… and there is almost always a bump in the road).
A “family” startup. My first company had this– just about everyone in the company was really close to everyone else. We had regular gaming night, fun social events (that everyone WANTED to come to), etc. Loyalty can definitely help folks through the aforementioned “bad shit”. This is the biggest reason why solo founders quit more often. It’s always easier to quit when the only person you’re letting down is yourself.
Succeed, loudly and publicly. Nothing inspires more than setting tangible business goals (that everyone buys into) and actually knocking them out of the park. Want to see a role model here? Check out Balsamiq’s Blog.

The math of working at a startup rarely works out– people get paid less to do more. You have merely adequate benefits and lousy job security. With VERY few exceptions, the journey to liquidity is long and is by no means a sure thing. So you have to offer piles of intangibles that make your best people say, “Yeah, I could get paid another $50k across the street– but it wouldn’t be worth it.”

Did I miss any motivations? Why do you work at a startup when you could be making way more money elsewhere? Or, if you work at BigCo, what would it take for you to take a 30% pay cut?

Twitter isn’t a Social Network

Dec 29

One of my biggest frustrations with Twitter is that it’s a pretty clumsy mechanism for 2-way conversation (IM style) as well as “one and a half way” conversation (commenting on a tweet that may or may not elicit discussion). I posted a tweet the other day to see what other people think:

I quickly got two responses from two people whose opinion I really respect (@sacca and @andrewchen).

@Sacca’s Response: “@webwright Speaking for myself, it seems like that could induce some lame behavior in asymmetric networks.”

@andrewchen’s response “@webwright inline replies work best in 2-way friending environments. Otherwise ppl you don’t follow show up in your main feed”

I found myself vehemently disagreeing with them, so I figured I’d blog through it as an product design exercise. Disclaimer note: armchair quarterbacking is easy. The Twitter team (note: @sacca is an investor/advisor) has more brain cells and a helluva lot more time invested in designing Twitter than I do– I have no illusions that a little rumination over Christmas makes me smarter than they are. I also know that there are (were?) some technical hurdles. For a while, Twitter wasn’t TOO good at understanding when an @ tweet was actually a reply, and which tweet it was replying to. Still the case, or no?

So here are some ideas for your consideration. I’d love to hear what folks think in the (delightfully threaded) comments.

1. Twitter would do better to think about their site as a content/microblog network than as a social network.

This is my fundamental disagreement with Andrew and Chris’s response. They’re thinking of Twitter like a social network with asynchronous/2-way friending (maybe it’s because the media is constantly comparing them to Facebook?). It isn’t, IMO. In fact, I think Twitter would have more success if they acted more like WordPress.com (or LiveJournal?) than like Facebook. Twitter followers aren’t friends. They are subscribers. The people you follow aren’t people you know– they are microblogs that you find interesting. Twitter is a fabulous distillation of blogs and an RSS reader all rolled into one. It’s 10x easier than blogging. Following is 10x easier than subscribing via RSS (and following is a lot more grok-able than RSS to begin with). But they’ve crippled/marginalized one of the key features that make blogging so damn sticky (for bloggers and readers)– comments and discussion.

2. The problems of Chris, Andrew and (to a hugely lesser degree!) me are not the problems that most Twitter users (or bloggers) have.

To many/most Twits/bloggers, they are doing it because they want to be heard. I remember when I first started blogging what an absolute rush it was to get a comment on my blog. Heck, it still is. Similarly, I confess to checking my @replies fairly often. Is anyone listening? Did my breathtakingly insightful/amusing tweets result in anyone replying or retweeting? I think this changes when you get to the follower count that some celebrities enjoy (Chris, who mentioned above that inline comments might result in too much noise, has ~1.3 million followers). Similarly, there are some pretty famous examples of prominent bloggers shutting OFF comments… They’ve transcended the “I just want to be heard” problem of most twits/bloggers and have graduated to the “holy crap, discussion is a nightmare to manage/moderate” problem. My guess is that the higher up you get at Twitter, the less the product managers empathize with people who have less than 100 followers, who often feel like they are talking to an empty room.

3. Regardless of whether you want Twitter to be a social network instead of a content/broadcast network, it’s more VALUABLE as a content network.

First of all, look at Twitter’s big pile of 4th quarter revenue (high five, Twitter!). That’s for content. That content would be more valuable if it was richer. Let’s take Paul Kredosky’s “Dishwasher” scenerio, discussed on Fred Wilson’s blog. He’s looking for a dishwasher and finds that Google’s organic search results are lousy. I empathize– after a 6 month home remodeling effort, I am aghast at how bad Google is once you move outside the realm of the “linkerati“). Paul searches for a dishwasher, and now that Twitter content is featured in Google results, he sees a tweet that says, “Just got a new Bosch ScrubGunner Dishwasher installed today. Amazing!” That tweet would be way more useful if it also had associated with it the three @replies that said stuff like “The ScrubGunner starts off strong, but has a record of exploding about 3 months after you buy it”. Added bonus– this would make Twitter’s permalink pages quite a bit richer in terms of indexable content, which would increase traffic dramatically. Permalink pages with lots of comments could actually be VALUABLE pages.

Even taking the search deals out of the equation, Twitter is a consumer web service and its stock and trade are things like pageviews, # of tweets, retention cohorts, return visits per day, etc. In short, it wants lots of addicted users using it a LOT. Nothing does this better than conversation and Twitter is lousy at conversation. There are very few emails I open more reliably than the Disqus comment notifications for my blog, the WordPress.com notifications for the RescueTime Blog, or Facebook telling me that someone has responded to one of my status updates. Further, nothing brings me BACK to a blog like a reply to my reply. Take a look at Fred Wilson and Neil Patel– they pretty religiously reply to every commenter on their site and it generates return visits, more (valuable) content, and happier “customers”.

In short, if Twitter made conversation easier and noisier, it’d help engagement, retention, and growth (or that’s my guess anyways). New users would graduate from the “empty room” feeling quicker.

4. To keep things simpler, they should consider punting retweets for replies/comments.

Retweets are interesting and certainly help Twitter and API-wranglers understand the value/popularity of a tweet. But they don’t feed the core need that Twitter is filling for most twits… To feel HEARD. Further, the retweet feature is simply too smart and assumes too much understanding of how Twitter works. I’d wager that if you took 10 “newborn” Twitter users and asked them to explain retweets, you’d get a fair bit of confusion (humble hat tip to Twitter though– I can’t imagine retweeting being implemented clearer than it is). Comments/conversations, on the other hand, are as old as the Internet. People grok that right out of the gates.

Beyond just “grokability”, retweets just aren’t as approachable as replies. While Facebook’s “like” feature is the lightest way to endorse a status update, the retweet FEELS heavier. It’s saying, “I like this– and I like it enough to broadcast it to others”. I personally @reply folks about 10x more than I retweet them (and I imagine I’m not alone). If this is true for most people, who not focus on enabling what most of your users are doing more often?

Discussion would also help with user discoverability. @replies are often a source of followers for me (replies to me as well as others when I bother to dive into the clickfest necessary to track a full conversation on Twitter).

5. How I’d implement inline discussion on Twitter.

Obviously, comments/discussion would accelerate the number of tweets dramatically, so I think slamming them all into the main feed might be bad. I’d:

- Add the text “11 replies to this Tweet” as a gray link at the bottom of any applicable Tweet (when shown in a stream) to i
- Add threaded replies on the tweet’s permalink page. So Tweets like THIS ONE would actually be rich/interesting/engaging conversation and clickthrus to tweets from search engines would actually have more meaningful content.
- present @replies that are actually replies to other tweets as part of a conversion. So the “in reply to…” text below reply tweets could be a bit richer/more enticing, like “reply to @username (13 other replies)”.
- Maybe present a “thumbs up” or “like” button (a la facebook) for light endorsements of a tweet (easier and less noisy than “I agree” or “this is awesome” comments). Would this be better than a retweet option?
- Allow people to turn off the above display of @replies if they want.

Twitter is obviously a public IM client/chatroom for some. For others, it’s a microblog broadcast platform. For still others, it may actually be a social network. But I’d contend that serving those first two audiences FIRST (by making conversation easier) would create happier users, gut-punch their early attrition problems, and create a more valuable business. What do you think?

(You should follow @sacca and @andrew_chen and maybe even me on Twitter!)