Monday, April 21, 2008

Startup School: Surfing the Wave

The most interesting pair of talks at Startup School were Greg McAdoo from Sequoia, followed by David Heinemeier Hansson from 37 Signals. McAdoo talked about how to build a billion dollar company, and Hansson spoke about how to create a small profitable one.

The contrast couldn’t have been bigger: The Sequoia talk was about big words and surfing metaphors. The ridicule in the video's comments shows that the audience was displeased. Hansson, on the other hand, wanted small web companies that charge users. A simple model. People loved it.

In reality, the two talks were about different things. Hansson talked about how to create a profitable business with a web site. This is a well-known if underused model. McAdoo, on the other hand, was talking about building the next Cisco, PayPal, Yahoo, or Google. Billion dollar businesses, not million dollar ones.

In order to make a really successful billion-dollar startup, you do have to have find a large, growing technology market. Marc Andreessen agrees. Xobni, for example, found great market when we changed our focus from an analytics package to today’s sidebar, a product people use for hours a day. We’re now in a much better, billion-dollar market, have a wider audience, and greater odds of success.

So why the disconnect? Two reasons.

First, I think that smart technical people – the kind that inhabit the computer science halls of Stanford, Berkeley, MIT, CMU, ETH and Oxford – have a strong appreciation for beautiful technology: The beautiful technology that, for example, made Google what it is today. But it’s not the technology that created that success, but the fact that people wanted fast full-text web search, which was just happened to be very hard to build. The market did it, not technology.

Second, when business guys mention "identifying customer needs", "designing a platform", and "assembling great team DNA", hackers shrug. Why use these big terms for talking to customers, drawing up architecture diagrams, and recruiting that great hacker? Because these are abstractions. Just like you wouldn't discuss each for-loop when describing what that method does, VCs use these abstractions to communicate effectively. It often takes experience to really understand the meaning behind them. Once entrepreneur, you’ll understand what it means to identify markets and customer needs, and you won’t need the baby steps spelled out for you. You’ll be using those big words yourself.

Saturday, April 19, 2008

The Startup School Career

I’m at YCombinator’s Startup School at Stanford. There’s a great audience here with lots of hackers. Still, I think a lot of the guys here came with the belief that their first startup is going to be Facebook. That’s not going to be the case.

There’s a disconnect between the public image of doing startups and the realities of the game. The press wants you to believe that startup founders, through a fantastic idea, become billionaires, complete with Boeing jets and petting zoos.

Reality is different: Entrepreneurship is a career. You start your first startup, maybe with backing for YCombinator, and it will probably go well: Paul Graham said that 57 of the 80 startups they funded are still alive, for some value of alive. You’ll learn all these things that today’s speakers are talking about - angel and VC funding, building a product, finding a market, and making money. You might get sold, might go bankrupt, and maybe you’ll make some money. But with a large probability, you won’t own a Boeing jet when you’re done.

The great thing is that you can put another dime in the slot. The second time around, you’ll have more experience, more firepower, and a track record. This was best illustrated by today’s first speaker, who by the time he got around to doing Xfire, instantly got a term sheet, and 100 days later had a built product. Jeff is another great example of this model.

Startups: It’s not a shot for the moon, it’s most likely going to be your career.

PS: I remember the first time I went to Startup School back in 2005. Seems like a decade ago!

Monday, April 07, 2008

Xobni Turns 2

Almost exactly two years ago, Xobni was born. It spent its first months of life at YCombinator, saw the development of Xobni Analytics, and the raising of venture capital. One year ago, I joined Adam and Matt in their quest for global domination. Greg arrived 6 weeks later, then La Donna, then Bryan, Skyler, Aamir, Tyler, Ryan, and suddenly we were one big family, celebrating Xobni’s second anniversary. Here’s the team holding the cake at our BBQ.

And here's the cake itself:

Happily, Skyler created a little "Xobni Turns 2" collage with our pretty faces to remind us of these days of innocence.

I recently found my photo blog entry about the days before the Xobni launch, and tears were rolling down my face. Yes, we look very tired in those pictures, but those were the days! I decided to post some more pictures so I can relive the feelings of nostalgia a few months from now.

Greg T, for example, caused quite a stir when he joined, since there was already a Greg on the team. We decided to name them “Greg 0” and “Greg 1”, somewhat inspired by the scheme that Jobs and Wozniak gave themselves employee numbers at Apple.

This is Bryan, our web engineer extraordinaire. Note that he got the corner office.

Here’s Jeff, our new CEO, looking very serious at work.

Ryan, less serious at work. No, his behavior is not encouraged by our employee handbook.

Tyler is our QA rockstar and has by far the biggest collection of monitors of anyone at Xobni.

Here’s Rob, who recently joined us from Google (read about it at Wired). Rob and I share not only the same previous employer, but also a wardrobe composed of Google T-Shirts.

If you’ve ever sent us your resume or a support request, you probably had a chance to talk to Skyler. Here’s Skyler looking at that email you sent.

We’re not the only ones who hit an anniversary this month. Our friends from Scribd below had their 1-year anniversary, but their party was a bit more opulent than ours. To seal our friendship, we had a little Xobni-Scribd ping pong tournament. Here’s Greg 0 trying to nab the title.

We lost the tournament, but have high hopes for 2009.