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What is Growth Hacking?

Key Takeaways

Growth hacking is marketing + coding. It includes things like: landing page optimization, SEO, public relations, advertising, and copywriting.

Three things that a Growth Hacker might do in a typical day:

  1. A/B testing landing pages
  2. Capturing emails before you launch your product
  3. Optimizing the virality of your product so that more people use your product.

How to Learn Growth Hacking Today

  1. Read “Growth Hacker is the new VP Marketing” by Andrew Chen (5 minutes)
  2. Read “Find a Growth Hacker for your Startup” by Sean Ellis (5 minutes)

Additional Resources

  • Growth Hacker TV — Over 100 episodes where the experts on startup growth reveal their secrets. Multiple new episodes released every week.
  • One Month Growth Hacking — learn growth hacking in 30 days or less with Mattan Griffel

LLC vs. Corporation: Which is Right for Startups?

If You’re Starting A Startup:

If you’re starting a startup, and you want to deal with equity, you’ll need to start something known as a C-Corp.*

The two major ways you can create a company are as a C-Corporation (C-Corp for short) or a Limited Liability Company (LLC). If you want to have equity in your company, then you shouldn’t start an LLC. An LLC is just for multiple partners owning a business. A C-Corp will let you take investment and have equity in your company.

Another important thing about a C-Corp is that you’ll have a Board of Directors. That might start out as just you and your Co-Founder, but as you grow and get more investors, they may join as board members as well.

For now, you probably don’t need to know about A-Corps or B-Corps (but if you want to geek out, we won’t stop you from Googling). Focus on LLC vs Corporation.

*Of course, for questions specific to your particular situation, it’s best to seek the advice of an attorney or accountant.

Key Takeaways:

  • If you want to take investment (and have equity in your company), you’ll need to start a C-Corp.
  • The two main forms of company structure are C-Corp and LLC.

Why Should You Incorporate Your Startup In Delaware?

Startup Series: Why Delaware?

Why should you incorporate your startup in Delaware, even if you’ve never been there?*

A whole lot of companies in the US are incorporated in Delaware, even if the company doesn’t actually exist there. One Month, for example, is incorporated in Delaware, even though we’re headquartered in New York (and we’ve never been to Delaware)!

The reason? There’s a body of law in Delaware where many court cases have already been tried, so companies and potential investors have more certainty about how different legal disputes will turn out. It’s riskier to incorporate your startup in a state where the outcomes for legal problems don’t have any legal precedent, and it’s unclear what would happen if a case were to go to court.

For investors, it’s also more attractive for them if they know you’re incorporated in Delaware, because this gives them more certainty. If your business has a legal question and it needs to be figured out in the court system, investors prefer the certainty of knowing that previous cases have established precedent (known as case law) in this state.

*Of course, for questions specific to your particular situation, it’s best to seek the advice of an attorney or accountant.

Key Takeaways:

  • Ideally, you’ll be incorporated in Delaware (you don’t have to live there to incorporate there) because many of the laws and cases have already been figured out
  • The steps to incorporating a business are fairly simple, and there are people who can do it for you.
  • If you try to do it the manual way, it can be more complicated, but still do-able.

More Links:

Startups + Fundraising Series:

If You’re Not Embarrassed By Your Startup, You Launched Too Late

“If you’re not embarrassed by the first version of your product, you’ve launched too late.” — Reid Hoffman

If your startup is successful, no one will remember how ugly your product looked the day you launched. (And if it’s not successful, no one will care.)

When we think about successful companies like Google, Facebook, and Twitter, we tend to forget the modest beginnings from which they came. As Paul Graham recently wrote, “Think of some successful startups. How many of their launches do you remember?”

In celebration of modest beginnings, here’s a dose of reality: I recently came across the landing pages of some of the most successful companies we know. This is something everyone should see.

The moral of the story: don’t name your company BackRub. Also, don’t worry about making something pretty, worry about making something people love. As Reid Hoffman (the founder of LinkedIn) once said, “If you are not embarrassed by the first version of your product, you’ve launched too late.”

It’s easy to say “have a growth mindset,” and “follow lean startup principles.” It’s a lot harder in reality, when you have to launch quickly, and put out versions of your product that feel unfinished, raw, or even ugly. Take a look at the startups below, and how they launched their first product — and maybe you can launch a little earlier. Or a lot earlier.

(Credit goes to Phil Pickering for finding these.)

Twitter’s first landing page:

Early Facebook screenshot:

Early Google homepage (from 1997):

The precursor to Google, BackRub:

An even earlier Google homepage:

Yahoo!’s homepage in 1994:

Early tumblr dashboard screenshot:

Early Amazon homepage screenshot:

Apple circa 1997:

AuctionWeb before it became eBay:

Burbn (a Foursquare clone) before it pivoted to… Instagram:

The first ever prototype of Foursquare (shown at SXSW in 2009):

Reid Hoffman’s original LinkedIn:

And finally… Reddit (some things never change):

What stands out to you? How would you have designed things differently?

It’s easy to think that you need to have a great design and get everything polished before you release it to the world. In reality, you should launch things as soon as you can, as quickly as you can, to get validated learning. The Lean Startup talks about this as validated learning — getting immediate feedback from users as to what they actually want, not assuming you know all the answers.

How can you launch a beta version earlier? Why is getting feedback on a somewhat-shitty design more valuable than perfecting a design that no one wants? Post your thoughts in the comments below.

What Are Convertible Notes and Why Use Them?

Throughout our previous entries on raising funds as a startup, we’ve been talking about raising money for your company by sharing equity with venture funds.

When you’re a company in its early days, sharing equity is difficult. Moving equity from your company to another requires a lot of time to hash out an agreement everyone can live with and it requires lawyers to work out the actual contracts. The whole process can cost upwards of $50-$100K, which is a lot of money for a company still looking for its first round of seed money.

Rather than dealing with the hassle of transferring equity, a lot of venture funds find it better to offer funding to startups using convertible notes.

Convertible notes are debts that convert into equity when a startup raises an actual equity round of funding. In essence, the venture fund offers to give you a loan of whatever amount, but instead of paying them back in actual money, the startup agrees to pay them in preferred equity. The venture fund gets the same agreement as whoever has invested in the series A round, with a bit of a discount as a good faith offer for investing earlier.

Early investing venture funds often find working with convertible notes preferrable to working with equity transfer for a few reasons:

For one, issuing a convertible note is easier. It can take weeks of discussion to transfer equity, but you can really issue a convertible note in only a couple of days. They also make it easier for the venture fund to work out the valuation of the startup by putting the discussion off until the series A round, when there is actual data to base their valuation on (rather than just a hunch). That considerably lowers the risk of their investment.

For startups, the convertible note also simplifies things. Convertible note agreements are short, maybe ten pages at most, and they can often be found online and modified according to the template.

Instead of the high cost of hiring a lawyer to transfer equity, the documents for a convertible note can often be found online. As a result, they can help generate quick funding in exchange for onle a few hundred to a thousand dollars. For a company that has limited time and financial resources, that is a tremendous advantage over complicated agreements.

Key Takeaways:

  • Convertible note are a form of debt taken on during seed funding that converts into equity when a startup begins an actual equity round of funding (usually in series A).
  • Convertible notes are preferrable to startups because they are quicker, easier, and cheaper to issue than equity. They are better for venture funds because they make valuation more flexible.
  • You can find a lot of online templates for convertible notes that you can use. Usually a lawyer is only needed in a limited capacity when working out a convertible note agreement.

Links

Storytelling For Startups

In light of our recent Storytelling for Business course announcement, this Founder Friday, I wanted to talk about storytelling for startups and how you can improve your ability to pitch your startup.

I have four basic pieces of advice:

  1. Set up a problem. Do this before you talk about your startup or what you do. Convince the listener that the problem your product is trying to solve is real and significant.
  2. Stop with the Jargon. Don’t talk about about “leveraging big data analytics and optimizing the social graph” because no one knows what that means. Really dumb down what you’re talking about to the level that a five year old could understand.
  3. Make it personal. Tap into people’s emotions by using language that relates to the five senses — show rather than tell. You ideally want to make it concrete and somehow relate to your listener. At the very least, you should be engaging your listener in a dialogue instead of just talking at them.
  4. Use common storytelling beats. Such as the 3 act structure (Exposition, Rising Action, Climax), the 5 story beats (Introduction, Incident, Stakes, Event, Resolution), or Dan Harmon’s Story Circle

No One Cares (About Your MVP)

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In this Founder Friday, I answer your questions about MVPs. Questions like:

“How early should I release my MVP?”

(It was basically just iterations of the same question haha)

Look, there are three parts to an MVP.

Product, that’s the obvious part.

Minimum, it should only have the features that it needs. Here you should tend towards less rather than more. It’s your baby and you’re afraid people are going to make fun of it, so you want to give it as much of a chance of success when you release it as possible so you keep adding all these features and polishing it up so it looks good.

But what you don’t realize is that by doing all that adding of features, you’re likely killing its chance of success in the real world — first, because you risk someone else coming in and building it before you, and second, because more features and more polish doesn’t necessarily mean better.

Many products that are successful are actually simplified products of things that already exist. Twitter is just Facebook without all of the other features, and a 140 character limit.

But what counts as minimum? Well that depends on the second word, Viable.

You will only have a GUESS as to what minimum features constitutes a viable product, and you have to actually release it to see if your guess is right. If your product is too minimal to be viable when you release it, then it won’t get usage. So what? No big deal. At least you didn’t waste any time building additional stuff that no one needed.

Then you can go back to the drawing board and think about how your product needs to change in order to be viable. But at least you got really useful information.

That’s one thing that a lot of people don’t realize. If you release your product and it’s not viable — aka no one uses it — then no one will care. It’s not like everyone will know your product is lame and will boycott it and never use it again. No — repeat after me: NO ONE CARES (about your MVP). And that’s a good thing. Now go learn something.

Why You Shouldn’t Care About Competitors

One of the more overwhelming entrepreneurial challenges is seeing someone else, someone better funded, better equipped, or with better name recognition than you, tackling the same idea you have. But imposing competition should never immediately discourage you from pursuing your startup. You need to be realistic about the challenges you face in relation to your competition, but bear a few things in mind to make sure you never psych yourself out.

No One Succeeds By Default

Just because a competitor has a lot of funding or name recognition does not mean that they automatically beat you. From the Wright Brothers to Amazon Local, funding and support is never the deciding factor. They certainly help, and it’s scary to think you might be going up against Amazon — but it’s not enough of a reason to simply give up before you get started. There are countless examples of underdogs absolutely crushing their competition, based on the amount of superior effort, belief, and more thoughtful approaches they put in. You can look at Simon Sinek’s Ted Talk on the Wright Brothers, or Malcolm Gladwell’s book on the subject for a series of case studies.

Fight On The Beaches

Where startups succeed or fail is, ultimately, in the execution. Whether it’s approaching the problem in the wrong way, going after the wrong segment of the market, wasteful spending, or simply lack of forethought, there are any number of ways a large, well-funded, secure-seeming team can fail. In any one of these ways, you can improve and innovate on what other people are doing, and that will give you an edge. So, if you take away nothing else from today, remember this: don’t give up before you put in the hard work.

Dr. Do-Your-Due-Diligence

But that hard work takes several forms. There’s actually running your startup, producing a product, or developing an app. Before even that stage, you need to do some research. The one hurdle that’s very difficult to overcome is when a well established company already has a very strong presence in the space you want to inhabit. If you have an idea for something, for goodness sake investigate what might directly or indirectly be addressing it. It’s highly likely someone else has or is already trying your idea. The fact that you haven’t heard of them is probably a good thing — it means they have broken through to get your attention.

Everything Is Not What It Seems

Remember, too, when you’re assessing competition. that you’re on the outside looking in. The way that a company appears to you is never the full story of how they’re doing. Companies can look incredibly successful one day and be gone the next. A big name shouldn’t necessarily scare you. What should, is if someone has figured out a viable business model and has a lot of traction. This, again, is where research comes into play. Take the time of doing a full critique of a company that failed to attack your idea, or has stayed pretty small-time. There might be a reason for it that has nothing to do with you or any other company. It might be the health of that particular market, or the viability of that particular idea. You need to figure out who’s already competing and what challenges, if any, are holding them back. Because those are going to be the challenges you need to overcome.

The Only Thing To Fear Is… Well, You Know

The point of all of this is that never let yourself become intimidated without hard facts and a firm understanding of your competition and their market conditions. Don’t let your fear of getting beaten prevent you from doing something that you believe is a good idea. That conviction — that your startup idea is worth doing — can carry you through the challenges which may cow bigger name or better funded players, not to mention all the incredibly hard work of getting a company off the ground. The game’s not over until it’s over. Just make sure you have a good idea of what you’re getting into, and what strategies you can develop or refine to help you succeed where others have failed.

Maintaining Healthy Relationships While Working at a Startup

The thing about putting your all into your startup is that, technically, then you don’t have anything left for the other important facets of your life. This week, Mattan tackles why maintaining healthy relationships are important, and how you can (re)structure your time to push your business forward without leaving your friends behind.

The universally acknowledged and unpleasant truth is that when you’re running a startup, you’re going to be working unbelievably hard. Harder than you ever thought possible. It’s tempting to see the huge time commitment you’re making as a binary choice between relationships and work. But that doesn’t have to be true. Maintaining a good work/life balance is just that: balance. Here are three tips to help you keep all your plates spinning:

1. Relationships Are An Important Investment

Don’t simply write off your relationships in favor of taking care of, er, business. While relationships require energy and attention, you’ll eventually get that commitment back in the form of support, help, introductions, and resources. Those outcomes shouldn’t be why you’re investing time and effort into family, friends, and significant others — but they are an inevitable benefit.

2. A Change Is Gonna Come

That said, with so much of your time taken up by a startup, something has to give or change in how you invest time and energy into relationships. Think of new channels and mechanisms you can use to keep in touch with people. Perhaps consider putting together a friend update newsletter. Even the gesture of shooting a quick email to people you care about will be appreciated.

3. Constant Vigilance!

A key ability in managing your startup commitments, personal wellbeing, and other relationships is knowing when and how to say no. You can’t take every meeting, and you can’t see every movie, and you can’t always go out for drinks. Set aside one day, or a specific amount of time per week, for meetings/coffees/socializing, and then ruthlessly prioritize how you spend it. You have to be honest about your time commitments, both with yourself and with everyone else.

Still, remember that first point about relationships being worth the effort. Even if you don’t have the time to meet with someone, do still reach out out to them. People will appreciate that you’re thinking about them. All relationships are, are communication over time. So keep the lines of communication open and keep track of your time. The rest will, so to speak, balance out.