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When an engineer finishes something earlier than expected, I'm like
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Blake Masters: Peter Thiel’s CS183: Startup - Class 4 Notes Essay
Here are my class notes, typed in essay form, from Class 4 of CS183: Startup. Errors, omissions, and/or poor phrasing are my own. Credit for good substance and wording is Peter’s entirely.
CS183: Startup—Notes Essay—April 11—The Last Mover Advantage
I. Escaping Competition
The…
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The Third Option
Too many people look at life like a binary. Do this or do not. But there’s always a third option, a win-win that we’re too blind to see. It’s guaranteed to require discomfort, to require pushing people. But if you can handle it, systematically, the benefits are not trivial.
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I want to make sure that I distinguish between net-promoter score and the ‘very disappointed’ number. I do think that they’re actually different. I would say, for example, that Virgin America probably has a pretty high net-promoter score but if you look at it, it’s not that differentiated from different airlines, so, in a sense, net-promoter score becomes more important in a relatively undifferentiated category. The question that I’m talking about, if you’re a brand new company coming into a category that exists and you’re not very differentiated, you don’t have a chance. Therefore, you have to start by being able to create a must-have product. It’s not that you don’t have a chance, because clearly Virgin America would be an example of a relatively new company that has been successful. To me, I wouldn’t put my money on companies being able to come in with a nice-to-have product and a high referral rate, a high recommendation rate, but on a nice-to-have product. I would always put it on the must-have product because of the sticking. The one thing that a high net-promoter score is that you’re a lot more vulnerable if you suddenly burn your relationship with users, that net-promoter score could drop overnight. One bad Puerto Rico move. Where, if you’re a must-have product, you can screw up many things on the relationship with the users, but if they don’t’ have a good alternative they’re going to stick with you. They’re going to hope an alternative comes out, so you should definitely maintain a good relationship with users. I just wanted to separate, I think having a good number on that does generally correlate to a good recommendation rate, so there’s some correlation, but I think for a start-
Up that net-promoter score is not as important n the early days. Fortunately, in the case of Eventbrite, they were really strong on both numbers. The ‘very disappointed’ number to me is something that is essentially a milestone for the business to basically say, ‘We’ve created something that is now a must-have and we can go from that super low-burn, super patient, conservative mode of just gathering feedback, where it may take us years to get there.’ To ‘All right. This is an inflection point in the business where our priorities have changed. We want to start growing this business as quickly as possible. There’s a few things we need to do first so that we can efficiently grow the business.’ That’s the part where I come in to essentially help them get through those parts quicker because I’ve done it multiple times.Sean Ellis - http://mixergy.com/sean-ellis-interview/ -
yongfook: Accidental Entrepreneurs Don't Exist
In response to this post.
The fairytale of an entrepreneur having an “aha!” moment - which transforms their business into a billion dollar public company - glosses over the months or years of wading through shit it took to get to that “aha!” moment.
The general sentiment of the author’s post…
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We Need Someone to Bridge the Gap
It’s 48 hours before elections close for the NYTM Board. Last year I outlined my reasons for voting for Evan Korth of NYU/HackNY and here I’d like to explain the reasoning behind my vote for this year.
Let’s start by asking: What’s missing from the NYTM Board?
Take a look at the Board and you’ll see a cast of accomplished and inspiring people. Dawn Barber, Scott Heiferman, Esther Dyson, David Rose, etc.
It’s great to have them on the Board because they bring influence and credibility to the NYTM, which is now the largest meetup in the world and the center of gravity for the startup community in NYC.
The Board’s job is to steer the direction of the organization through empathy with its members’ needs, and also manage relationships with other important bodies (the city, stakeholders, etc).
Think about the former for a minute and you’ll realize the opportunity I’d like to get across. While the membership is composed of mostly first-time founders—the hackers & hustlers who are trying to figure everything out—the Board are far past that stage.
The NYTM has been built up to an incredible scale and influence, and now it’s time for it to execute on fulfilling the needs, hopes and dreams of its members.
Because of this I believe that we need someone to bridge the gap between the membership and the Board. And I think the best person to do that is Brandon Diamond.
If you’ve been to the NYTM, you know Brandon.
He’s the young nerdy-looking co-organizer of NYTM that also runs the Hacker Union, a close-knit meetup for NYC’s developer community. Brandon’s incredibly active in the tech community, and he’s a first-time founder himself.
As co-organizer, Brandon does the heavy lifting of throwing the monthly event (which he’s done for the past two years) without much say into the vision/direction of NYTM. Electing him to the Board will give him that say.
Since Brandon knows the Board members and NYTM intimately, not only can he empathize, but he can also translate.
One of my favorite quotes goes, “In the beginner’s mind there are many possibilities, in the expert’s there are few.” There’s so many directions the membership want to go with the NYTM that have not been addressed or given attention by the Board. Brandon makes a specific mention to address this in his campaign page because he knows better than anyone what’s going on.
As an example, consider the Student NYTM, a subset of the NYTM that connects like-minded students in the community and gives them free tickets to the monthly meetup. Brandon spent significant time brainstorming and helping the group launch because he recognized the importance of the student pipeline. What did the Board do? Well, they’re not involved.
Another example is Hack of the Month, which Brandon created to get more hackers involved in the meetup. This adds a ton of value to the NYTM and is something that only Brandon could pull-off.
Not only does Brandon have empathy for the community, but also he has vision and the dedication to execute it. He won’t just be an important member of the Board, he’ll become one of the most important leaders in our community.
For these reasons, I hope you will consider the importance of casting your vote for Brandon.
Go here to vote: http://vote.nytm.org/polls/3
The opportunity to submit or modify your vote ends Tuesday, December 20th at 11:59pm.
- Politicians and businessmen have re-discovered the power of Lenin’s old idea that a lie repeated often enough, becomes the truth. This dark assumption throws a pall over America as well as the entire world and endangers democracy itself. When people believe that their government systemically lies to them they become cynical. Cynicism breeds apathy and a sense of powerlessness that causes people to withdraw from public life. It is not coincidental that less than half our population votes. If only 44% of our country vote and we are equally divided ideologically, it means that 20% of the electorate control the fate of our nation—this has become a profound threat to the future of our republic and democracy itself. We can only call this a systemic scandal and observe that those in power have done very little to change the condition. Which raises one last question. From our government’s point of view, have we become the “other”?
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nayiaisms: Never stop chasing your windmills
And turning to Sancho, Don Quixote said: “Forgive me, my friend, for the opportunity I gave you to seem as mad as I, making you fall into the error into which I fell, thinking that there were and are knights errant in the world.”
“Oh!” responded Sancho, weeping. “Don’t die, Señor; your grace…
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Stay Humble
Quote From Seth Godin: “No one cares about you, not even your mother-in-law. No ones eagerly waiting your press release.”
Read more: http://www.flowtown.com/blog/17-lessons-seth-godin-can-teach-you-about-the-new-marketing#ixzz1efIwBx00What You Can Learn From It: There is no deadlier mistake in marketing than narcissism. Truly effective marketing is not even about how great you think your product is – it is about what it can do to change or enhance your customer’s lives. Do not waste time focusing on yourself, the heritage of your business, the triumphs of your team, etc. These things are not directly relevant to your customer’s lives, and frankly, no one really cares to hear them. The sooner this unflattering truth is solemnly accepted, the sooner you can focus on your customers and what you can do for them.
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1. Trust in yourself
2. Break some rules
3. Don’t be afraid to fail
4. Ignore the naysayers
5. Work like hell
6. Give something back
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Steve Jobs Quote Poster / Luke Beard
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Asshole Survivorship Bias
Turn your back on others and succeed, everything’s ok. Turn your back on others and fail, it’s a long way down.
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Why Founders Should Emulate Wozniak, Not Jobs
Having just read Isaacson’s biography of Jobs, I’ve come to realize just how many misconceptions there are about his life and who he was. In an era of Steve Jobs fan boys, I think it’s important founders understand the truth and not misguidedly emulate him.
More specifically, founders should think about something: Jobs was not a great founder. The early success of Apple was more dependent on the brilliant engineering of Steve Wozniak and the industry insight of Mike Markkula. What Jobs is known for today: product vision, design aesthetic, and Reality Distortion Field, were more harmful than helpful. Jobs’s most important contribution was just general hustling. Based on this, I challenge founders to consider what skills are truly important for them to develop.
Steve Jobs played a minor role in Apple’s early success with the Apple II
The Apple I & II were built by Steve Wozniak. Wozniak was definitively one of the best computer engineers of his time. At the first personal computer trade show in Atlantic City, Jobs walked around taking a close look at all the competitors. Afterwards he concluded, Wozniak really was the best engineer in the room.
The Apple II was marketed and pushed beyond the hobbyist users by Mike Markkula, Apple’s chairman and first investor. Mike was previously a senior marketing executive at Intel where he learned the industry and met everyone in it.
Mike Scott was the CEO of Apple from 1977, when the Apple II launched, to 1981 when Apple went IPO. This is the most difficult stage of running any company, and Scott built the team and navigated the market like a seasoned pro. But who hired Scott? Markkula did.
When Steve Jobs created the breakthrough Macintosh he had immense resources & clout
Many brilliant engineers wanted to work at Apple because they idolized Wozniak, not Jobs because he wasn’t an engineer. But Wozniak had no desire to run any part of the company, he just wanted to be a mid-level engineer (he initially wanted to give plans for the Apple I away for free). Markkula also had no desire to run the company either, he was content with all the money he had made after the IPO.
Steve who was mainly given no authority up until this point, was obsessed with (proving) himself and was able to get an opportunity to lead the Macintosh team. At this time Apple had already gone IPO and Jobs was a multi-millionaire with net worth > $200M in 1981. He was famous, successful, young, & rich. He grabbed the best engineers from around the company and put them on the Macintosh team.
The Macintosh underperformed against the Apple II, essentially was a flop
Despite its breakthrough technology, the Macintosh was too slow and overpriced. It sold like crazy the first year, mainly due to the runaway success of the “1984” Super Bowl ad. But sales dropped dramatically in the second year after people actually tried the product. The Macintosh only accounted for 10% of Apple Computer’s revenue, whereas the Apple II at this time accounted for 70%.
NeXT Computers released a series of product flops
After Jobs was kicked out of Apple Computer by the board, he founded NeXT Computers. With financing from billionaire Ross Perot, Jobs poached some of Apple’s employees and released the NeXT Computer and the NeXTstation. Both products had limited adoption and Jobs spent excessively on a $100,000 logo, $650,000 computer case molds (because Jobs wanted the case to be a perfect cube), and $10,000 leather chairs for his factory that was set to produce 10,000 units a month (they ended up only selling 400 / month). In 1993 NeXT laid off 300 out of 540 employees and left the hardware business altogether to focus on software.
Jobs’s later success (as a CEO) is due to his failures
Jobs should be remembered as one of the best CEOs ever to live, but not as a great founder. He went through many failures and his vision was wrong over and over again before he started producing successful products. Founders today will not have the opportunity to learn the lessons Jobs did because they don’t have the resources and clout that Jobs had. Founders will have to do a lot with almost no resources, not spend millions of dollars trying different things before something works.
So then look at the skills that were most valuable in Apple’s early success: Wozniak’s engineering ability and Markkula’s industry knowledge. These are the true ingredients to success for today’s founders.
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The Problems with Accelerators
- group think
- companies all look the same
- not doing anything crazy
- regress to the mean
via @LawrenceLenihan
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How to Overcome Your Fatal Flaw
One thing I’ve been thinking about recently is fatal flaws. Basically, what’s that one thing that is going to hold you back (perhaps systematically) from achieving your goals. For most people (and for me), this is a deep seated & recurring problem they’ve dealt with for a while. It could be caused by the way they were brought up, your personality, your physiology, or a combination of the three.
The first step: how can I turn this flaw into an advantage and how can I overcome or minimize the disadvantages?
For me, my whole life I’ve struggled waking up early and in general, having a consistent sleep schedule. It’s partly psychological. Growing up I used to loathe the weekends when my dad would wake me up at 7am to do house work and help with the family business. I remember lying in bed and covering my head with a pillow, groaning, “can I just sleep for 5 more minutes?” When my dad would travel for business nothing would make me happier than sleeping in on weekends.
And it’s part physiological. Five years ago through a sleep study I found out that I have severe sleep apnea, waking up every 3 minutes and falling back asleep without remembering. That’s a total of 180 times during an 8 hour sleep session. I get only 1 minute of Stage 4 deep sleep a night when 30 minutes is the norm (FYI - Stage 4 is when your body repairs deep body tissue & organs). Now I sleep with a CPAP, and while it’s completely changed my life, it’s not a total fix. I still need about 1-2 more hours of sleep than most people I know and it’s easy for me to fall asleep without remembering, even with multiple alarms.
As an advantage this has helped me in two ways. 1) It’s given me an affinity for the working late and hanging out at night. The “night crew” always knows each other. I’ve made some of my best relationships through partying out until dawn. 2) It’s made it difficult to have internships and jobs. For this reason I’ve always spent my summer reading, building websites, and I’ve opted to start my own companies instead of working for someone else.
So why bother to change? In all honesty, I could go on without changing this and be pretty happy and effective at what I do. But there’s a couple specific reasons why it’s an advantage for me to change.
One thing I’ve learned from my dad is the importance of being the first person to show up. As a startup founder & CEO, motivating your team and delegating responsibility is your job. 80% of leadership is leading by example, which is just another way of saying being first.
Next, I’ve noticed that that mentality of waking up early is a powerful one. It sets the tone for my day; I’m early for meetings and I’m more relaxed. When I start my day behind schedule by simply hitting the snooze button, the rest of my day seems to run behind schedule.
Lastly, many successful people are available first thing in the morning but not during the day. My friend Peter Boyce started a group called Early Founders where he gets together a bunch aspiring entrepreneurs to have breakfast with one successful entrepreneur. He learned that he could get the most interesting guests for his event to commit to doing something in the morning.
How I’ve corrected this problem before
Almost anything can be achieved with enough discipline and routination. When I was studying in Beijing, I used the time zone change to wake up every morning at 7am, run/workout, and be in class by 8am. It worked great for the first 10 days, but one night out with my classmates sent me back to my old schedule. I’ve later read that doing something consistently for two weeks will make it a habit. In my experience I’ve found this to be fairly true.
How I’m going to correct it now
I’ve always remembered the saying, “if you want to clean your apartment, invite your friends over.” It’s more motivating when you have a social oriented deadline/accountability. Surely, setting up an early meeting with someone you respect is a means to waking up early. So my goal is to do this starting off once per week, then slowly increase to twice per week, three times, etc. As long as I can make steady progress and keep my goals clear, I expect to be ok.
I’m also going to consciously keep my stress level lower, consume less caffeine, etc. But the focus here is starting off gradual yet being consistent.
Want to help me accomplish my goal? Let’s get together for breakfast, you know where to find me.
About
Hi, I'm Trevor. Here I write about startups, leadership, and personal development.
I'm the founder of Lean Startup Machine, an intensive workshop that teaches founders how to build products people want. This year we'll host over 50 workshops around the world.
