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Don't be afraid to charge more:

- Most founders severely underprice their products/services. If your product is valuable - people will be willing to pay for it.

- Higher margins will allow you to invest into improving your product. It's better to compete on quality than on price.

- It's easier to sell 10 $100 products than 100 $10 products.

- Higher prices filter for better customers.

- If doubling your price won't lose you more than half of your customers - that's free money.

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Ability think independently is is one of the best predictors of founder (or investor) success, and it is a skill you can practice.

The key is to think "from first principles" instead of "by analogy". Boil things down to fundamental truths, and reason up from there. Understand core principles and put them together like lego blocks in a way that optimally achieves your purpose, instead of following recipes, copying "best practices" or conventional wisdom.

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4 types of innovation:

1. Basic research - making fundamental scientific discoveries.
(Deep Learning, Blockchain)

2. Breakthrough innovation - applying fundamental discoveries and thinking from first principles to engineer new products. (Tesla, SpaceX)

3. Disruptive innovation - finding new applications and business models.
(Uber, YCombinator)

4. Sustaining innovation - gradually improving what already exists, making it better/cheaper. Solving clear problems using preexisting skillsets.

You improve your models of how things work and come up with epiphanies/ideas by taking action and practicing.

Don't wait until you have the perfect startup idea, or have figured out all the answers on how to write well, or have learned all the theory.

Taking action and making things without perfectly seeing the whole picture is uncomfortable, but this is the best way to tweak and improve your model.

Draw your map as your journey towards your goal, not before you get out of the house.

Boredom is valuable, it is a state that drives creativity. When your brain feels bored, but doesn't have the outlet of games, TV, or social media, it will seek other ways to relieve it, which often results in making cool things or thinking up some ideas.

The craving to refresh reddit or RSS has value, it is the same sensation that drives you to do cool stuff. By not refreshing the page, you can "save up" the boredom/dopamine, fuel it into the motivation to do useful things.

Notes on Startup Growth
(Most insightful things I have learned from the recent Startup School lectures)

medium.com/@startuplab/notes-o

Why retention is important:

If you have 7% revenue churn in a month (you lose 7% of paying users), it doesn't seem like a lot (you still keep 93% of your revenue), but that adds up to 58% in a year. So if you're a $1m/year startup, each year you have to figure out how to make up for $580k in lost revenue, and grow on top of that.

The more you grow, the harder and more expensive it will be for marketing to gain the amount of users you have lost.

Don't keep pouring water into a leaky bucket.

Startup growth formula:

Visits * Sign ups * People who found value * Retention * People who shared product = Growth.

Use these metrics to diagnose why startup is not growing and fix it.

To prioritize - forecast outcomes. How much effort will it take, how much value it will produce? Work on one thing that has the best ratio.

An example of Airbnb optimizing an invite email:

- Use inviter's name in the subject for social proof.

- Use big headline conveying clear value (get $40 on your first trip).

- Create urgency by setting a deadline, the date by which you can accept the invite.

- CTA button says "Accept invitation" instead of just "Sign up" creating more "sense of exclusivity".

- Inviter's name, social image, information on how long he's been a user - creates even more social proof.

Growth channels to explore:

- Do people use Google to find the kind of product you're offering?
Try Content Marketing + SEO.

- Do existing users already share your product via word of mouth?
Optimize Virality and Referrals (for example offer rewards for inviting new users).

- Can you make a list of all your potential customers?
Do sales (like calling the companies in your niche).

- Do users have high LTV?
Use paid acquisition (like Facebook ads).

Conversion rate optimization.

Your product is a funnel. There are multiple steps between the first time user sees your product and the moment he hands you money. Each step causes some drop off in number of people who follow to the next step.

Optimizing each of these steps increases the number of sales.

3 key types of conversions:

- Authentication (new user signups).
- Onboarding (new user experience taking them to receiving value).
- Purchase conversion (user buying your product).

Measuring Product Market Fit

Figure out what metric represents delivering the value to your customer, and what would be the ideal frequency for that to happen.

Facebook users should visit Facebook daily, Uber users should order rides weekly/monthly, Airbnb users should book apartments annually.

Then use that metric to measure your retention(how many users hit that target metric). If retention gradually drops to zero, your product is bad, if it flattens out at 10% it's good, 50% is great.

List of the most valuable majors:
scribd.com/document/388081338/

To sum it up:
- Computer Science/Engineering and related fields.
- Engineering of every kind - electrical, industrial, chemical, aerospace, etc.
- Math and Statistics.
- Physics, Chemistry, general science.
- General business, economics, marketing.
- Insurance, accounting, finance.
- Medicine and related stuff - biology, biochemistry, genetics.
- Neuroscience, cognitive science.
- Transportation, Construction, Agriculture.
- Politics

When they've been making Halo games, they spent a lot of effort designing the perfect, most engaging 10-second experience. They figured that if they can make a game that's really fun to play for 10 seconds, they can repeat this 10 seconds fragment indefinitely, making the whole game very fun. It worked.

I keep that in mind when I design a UX for my app, or think about tweaking my work/hobbies to be more fun and optimized for flow.

Nail the 10 seconds that hook your brain, then just repeat.

Business challenges based on Stripe's report:

- Access to talent constraints growth

- Security/data breaches can threaten the business

- Bringing products to market faster and increasing sales are the areas where developers make the most impact

- ‘Bad code’ costs companies $85 billion in opportunity cost annually. Developers spend about half of their time dealing with bad code, errors, debugging, refactoring, addressing “technical debt”.

stripe.com/reports/developer-c

"Build a visual library" is one of the most valuable design tips I've ever head. Great designers don't try to think up cool ideas out of nowhere, they spend a lot of time browsing works of others, and creating a library of patterns in their head. By using and recombining those patterns/tropes they create new ideas.

I should do the same thing with startups and SaaS tools. Put more effort into browsing and analyzing successful projects to build a library of ideas I can make my own stuff out of.

Taking over a toy market:

- Doesn't take a huge amount of money relative to progress (no need to compete with large incumbents).

- Lower expectations and easier targets to hit.

- Less dilution and more ownership for the founders.

Noone has a formula for reliably identifying promising toy markets, they never look the same twice, and are never obvious from the start. So you need vision, independent thinking, and your own framework for success.

Toy markets become huge in two ways:

- Adjacencies - take over a small but valuable set of customers, use this niche as a base to capture a larger but similar (adjacent) audience. Like Uber expanded from "order a black car" to "order any mode of transportation".

- Behavior Change - start with no market at all, create a company that changes the way humans live their lives. Create demand and own the market you've created. Like Apple did with smartphone and Google did with search.

Bet on "toy markets" - niches that look tiny now, but will be big in the future.

Because of hindsight bias, it's hard to look back at Amazon's decision to sell books online, and understand how small and uncertain the opportunity may have seemed back then. And it's difficult to look at markets that seem tiny now, and realize how fast they will grow.

It's tempting to do what everyone else does, but really huge opportunities look like risky bets on toy markets.

blog.ycombinator.com/toy-marke

You can expect society to perform suboptimally and find low-hanging unsolved problems in areas where:

- Decision-makes have little to lose or gain personally from making improvements.

- Decision-makers can’t reliably learn the information they need to make decisions, even though someone else has that information.

- Systems that are broken in multiple places so that no one actor can make them better, even though some magically coordinated action could move to a new stable state.

Furthermore, the relationship between a founder’s age and the probability of a successful exit increases monotonically until about age 60. Founders in their early 20s have the lowest likelihood of achieve a successful exit, and a founder at age 50 is almost twice as likely to achieve a successful exit than one at age 30.

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