I help startups around the world
I love helping young companies figure out their strategy and grow. Having started up many companies, I understand a lot of the issues and stress involved in the pre-seed stage. I was in Budapest recently helping out some entrepreneurs, and the #1 newspaper in Hungary interviewed me about my work there. I'm told it's quite flattering, although I don't read Hungarian which is a beautiful but complicated language!
Your website is unviral
Your website is probably unviral.
Everybody wants his or her website to go viral. As web designers and entrepreneurs it is our goal to create buzz; an unstoppable avalanche of traffic; a self-feeding hurricane.
For many entrepreneurs PayPal, YouTube and Facebook are the alpha and omega of marketing and strategic growth. The goal is to emulate the distinguishing characteristics of these products in an attempt to achieve similar heights.
Some websites succeed and grow on the same trajectory or faster. They usually exist in fundamentally social businesses like email, payment services or social networking in places without such networks.
However, there is also a special cadre of websites which lies in a no-man's land untouched by virality. Not only is it difficult for these sites to become viral, but the nature of the business actively fights its own online growth, behaving much like a tumor suppressor gene. These businesses never experience exponential growth and all of their growth paths, even if strong, are linear. Some examples quickly come to mind: male enhancement pills, adult diapers, schizophrenia medicine.
The online world is in the habit of thinking itself as viral by nature. Virality, some think, is built into the very fabric of the Internet. It is not. In fact, one of the most profitable online businesses is unviral: online dating.
Dating websites carry such a stigma that some couples successfully matched online invent a fictionalized romantic encounter to conceal the fact that they were mouse-selected by a filtering process and a geographic search. Although dating websites provide immense value, arguably more than almost any other online service, users will often strive to hide their enrollment from even their closest friends. Maybe especially their closest friends.
Dating websites are unviral. They do not spread by word of mouth. As a matter of fact, they actively suppress this form of growth due to the nature of their service. Many an experienced entrepreneur has made the mistake of underestimating the unvirality of online dating.
Your website may be unviral too, although it may be less than obvious. Perhaps it only demonstrates certain elements of unvirality; for instance, would your users tell all of their friends about your service, or only some? Would they actively deny using or even knowing about your website to certain friends, acquaintances, or co-workers if asked? Is it embarrassing? That would be pretty bad for your virality.
If this is the case you must face the facts: your website is unviral.
Look at examples of of purely viral websites: PayPal, the old Hotmail, YouTube and the current Facebook (not the old version that limited itself to college students) all display or once displayed growth without any symptoms of unvirality. I told everyone about Hotmail when it was launched: cousins, teachers, pen-pals. Users of contagious sites like this may not actively evangelize to literally everyone (as they do with, say, YouTube) but they certainly wouldn't avoid a discussion or hold back praise once the topic was broached. In contrast, there are many sites that quickly provoke responses of "yea that's weird," when mentioned. In these instances unvirality dominates and kills growth.
Though unvirality is not a death sentence, it does limit a potential for greater growth. In some instances, unvirality is inherent to the service or structure of the business. But if this is the case, why should an entrepreneur involve himself with it and how can he manage to save it from the depths of unvirality?
Two Answers: Anonymity and Covert Transformation
- The Internet supports anonymity which allows users to praise a product they love to others--thousands or even millions of other strangers--while avoiding the embarrassment and reluctance to share a product or website that often results in unvirality. Anonymous forums and reviews abound for even the most unviral of products.
- Secondly: The web entrepreneur can covertly transform an unviral business into a viral one by euphemizing or disguising its true purpose. For example: Create a website with dating tools but market it as a social network. Facebook at Harvard worked this way with its subtle but pivotal "relationship status." Give users a guise under which to refer their friends and thus avoid the focus on unviral traits, such as the embarrassment endorsing a dating site, that would otherwise prevent the expansion of your user base.
Utility vs. Virality
Many people confuse utility with virality, but these are actually very independent qualities. Entrepreneurs may believe that if they have developed a good product it will naturally become viral. This could not be further from the truth.
Often, people will want to tell their friends about a product they find useful but this is not a necessarily so. Some of the most useful online services actually discourage such talk. Something can be useful and viral (such as Facebook), useful and not viral (dating websites; most products ever created), not useful and viral (lolcatz; chia pets; almost all 4chan memes) and something can most definitely be neither useful nor viral (almost everything). Utility and virality are therefore orthogonal. They represent two different dimensions which can intersect but do not necessarily do so.
In fact, something extremely useful--something that you and many others may pay thousands of dollars for to bring yourselves joy for a lifetime--may be strictly unviral. As I mentioned earlier, people will actively go out of their way to not talk about some very useful products. Many medical products fall into this category. Utility is one dimension of a service and it is clearly distinct from virality, though by no means mutually exclusive. The realm of influence between utility and virality is vast and depends mostly on the nature of the business.
The lesson: just because your website is useful, does not mean it will be viral. Just because it is viral, it may not be useful and thus will die once the virus finishes spreading. First, solve the utility problem: build something useful. Then, you have to solve the distribution problem, and I gave 2 techniques for doing so: anonymity and covert transformations. Do you have other ideas?
How to hack Silicon Valley, meet CEO's, make your own adventure
It was my sophomore year. Everyone was making plans for fall break. What are you going to do? You don't know? There are only 4 days left before break.
Before this particular fall break, I was busy with classes and had thus neglected to make plans. Some students were going skiing, others on class trips, others to homes nearby. Where are you going? I had no idea.
However, around this time, I was reading a lot about California. I read work by entrepreneur and essayist, Paul Graham, in which he says that the San Francisco Bay Area is the best place to start a company. He described the energy, but I couldn't palpate it. If I were to take his word, it's an ethereal, magical place.
That day, James Currier, internet entrepreneur, stood before me and a packed class full of eager students. His eyes were shot open, a purple glaze lit them afire. His wavy hair burst out atop his skinny head. Gaunt and fearless, he embraced the air as he swung his arms widely to make his point.
“Silicon Valley is absolutely the place to be,” he said. “It’s where all technology happens. It’s where Google started, it’s where Apple, Yahoo, Intel, Oracle, and so many other technology companies started. Some of the smartest people in the world lived there at Stanford, Berkeley, and Xerox PARC. It is a magical forever-sunny wonderland where dreams come true and it rains investments and acquisitions.”
He went on to make even more grandiose claims. Startups? Risky? Not at all when you do things right. Moreover, they are nothing compared to the risks of a financial job.
Everyone laughed. This room in Princeton was filled with students who had already accepted offers at investment banks or who would be applying soon. In 2006, finance was booming with big bonuses and strong growth prospects. Derivatives opened up whole new worlds for trading and speculation. Operations research quants donned their glasses in pride. They were respected.
So everyone laughed. He said, "No, really. They can fire you any time. They don't care about you. The market can turn the other way in a heartbeat. You have no job security. Your firm can go bankrupt."
To the students at the time, this all seemed ludicrous. They all envied these corporate finance jobs, nevermind that many would lose their finance jobs less than 2 years later.
He inspired. He didn't have charm so much as hurricane-force energy. He was insightful and learned. He talked about his great times. He talked about his learning moments.
And so he inspired me to see it. I had to see it. What is so special about the Silicon Valley, the San Francisco Bay Area? How can it actually be that great? What exactly gives the air such power to breath life into world-changing tech empires?
I knew what I had to do, but Fall Break was just two days away. How would I fly there without paying outrageous fees? Where would I stay? What would I do there? How would I meet the minds behind these great startups? I was a sophomore from Florida. I had no network in California.
I searched online for cheap tickets, no luck--that is until I noticed an ad for Hotwire. If you have yet to try this site, Hotwire buys leftover seats in bulk, and then sells them to users blind such that they don't know exactly which flight on which airline at what time until they buy. I snagged a very cheap ticket for 3 days later.
Now, where would I stay? I knew exactly three people from my high school in the bay area, 2 at Berkeley, and 1 at Stanford. I sent them all an email and hoped they would get back to me in time. I could always get a hotel somewhere.
Finally, how could I reach the top startups in Silicon Valley and find entrepreneurs who could meet with me on such short notice? I didn’t know any CEO's. How do I hack Silicon Valley itself?
TechCrunch always covers the hottest new funded startups. Every day, they publish dozens of new articles on the latest technology. I should just pick a few of the best and email them. But how do I choose the best? What if they don't get back to me? Will I waste a trip?
I noticed half of all of the articles listed the location of each company. Some in California, some not. So I enumerated every neighborhood in the bay area: Redwood City, Palo Alto, Berkeley, San Francisco, Menlo Park, etc. I wrote a program to crawl all of the Techcrunch archives to find all of the articles about companies in one of these cities. I then parse out the name and URL automatically as well.
I looked through the list of companies and I picked the most interesting. Some invented a new technology, and others just came out of a new incubator called YCombinator.
These days, you can do this easily yourself with Crunchbase, a useful database of every startup in existence.
I wrote another script to send an email to every single one: firstname.lastname@example.org, email@example.com, and so on. In each email, I wrote: I am a student who will be graduating soon, and I would be very interested in learning more about your startup since I saw it in Techcrunch and I think your Company is very innovative. I'm from Princeton and I'd be interested in potentially working for your company. I am visiting California next week, can we please meet?
I sent out dozens of emails, and then I waited. Not everyone replied, but many did. I flew in, finished my homework on the plane, and crashed with my friends (all three through through the week).
I met with many CEOs. In startup land the companies are all very small. Everyone in the company has to wear many different hats. Therefore, when you send an email to firstname.lastname@example.org, the CEO reads it. Few people realize that you can easily get direct access to startup CEOs.
One company I reached out to was YouOS. YouOS was in the first class of YCombinator. They are incredibly good hackers. We just talked over pizza and they joked about how they've written and rewritten servers from scratch so many times that they can do it in 5 minutes while sleeping. YouOS did not work out, but the founders continued innovating. A couple of them made and then sold Project Wedding. Another went on to create thesixtyone.com and Aweditorium, two of the most innovative music apps in the world.
Walking around Palo Alto, I saw several startups on each block. If you can imagine another planet where the Internet is turned into physical locations with storefronts, with Facebook next to Dropbox next to Shopkick, then you have a pretty good idea of what Silicon Valley looks like.
You see zetok, jlingo, and any conceivable combination of letters plastered everywhere. I noticed a small blue frog in one corner, it looked familiar. I tried the door and walked upstairs. The offices were in fact the offices of Azureus, the Bittorrent app that made torrents popular. I went up to the exhausted man walking hurriedly by the front desk, and I began with: hi. I'm Joseph Perla. I am a student looking for a job. I am visiting just for a week, can I talk to you for just a few minutes?
He was taken aback at first, a little flustered. He said, yes, sure, but not today, I'm a little stressed because I'm signing papers. We’re raising 4 million dollars right now. Can you come tomorrow?
The next day, I spent 3 hours talking to the CEO one-on-one about Azureus, raising money, silicon valley, bittorrent, technology, France (he's French), and the french technology industry.
I ended up meeting with half a dozen other startup founders. I toured the golden gate bridge and many parts of the bay area, Berkeley, and Stanford.
The Valley is very friendly, and everyone does everything they can to help you because, at some point, someone definitely went out of their way to help them succeed. I started building a network from nothing. I directly used the connections I made on my spontaneous trip to start my next company, Labmeeting.
David Tisch, of Techstars NYC, made a great point recently. Startups are very difficult. The odds are against you. Your competitors are twofold. On the one hand you compete with the biggest companies in the world. Even more difficult, you compete with inertia and ignorance and apathy. Everyone in the startup industry knows how hard it is, so we all do what we can to help each other to beat the odds. That's the only way it works at all. That's how we succeed against all odds. Silicon Valley is one big mega-commune of startup capitalists.
Make the most of what you have (friends in new places), trust in people, and find out what the ethos of Silicon Valley is really like. I know scores of startups who would love to have smart students, especially students looking for jobs, visit their offices and see what they have built. I can point you in the right direction. CEO's love to tell their stories more than you like to listen to them! Let me know if you plan to make your own adventure, and please tell me about your trip when you get back.
Peter Thiel: Lessons on Innovation and Entrepreneurship
Peter Thiel gave a talk at Princeton where he touched on technology, the future, and education. Here are some notes paraphrasing his comments at the talk today.
Startups need to have a big vision. You have to have a big vision to hire the 20th person for your startup. Hiring the first few people is easy because they are basically founders, and hiring the 1000th engineer is easy with a salary. You can't motivate the 20th employee with money.
Was it fun to work at PayPal? The mood went from scary to fun several times a day at PayPal.
Peter took out a hundred dollar bill. He took one out at PayPal presentations all the time. He held it up. Money is worthless but powerful, clearly. It shuts people up in the room, gets attention. But it is poorly understood: network effects? Influence?
There has been significant deceleration in rate of innovation outside of IT/Telecom in last 4 decades. Food/transportation/energy have clearly not improved since 1980.
Biomedicine has modest progress: pharmaceuticals has not had a breakthrough in the last 20 years. Pharma is firing scientists.
Big companies stay innovative as long as founder is CEO, many examples. Google will be more innovative now that Larry Page is back.
Peter is concerned about having the most talented people push harder. They can coast on the many-year game that is school. Go to the next level of school. The best and smartest coast by unchallenged.
Big companies are either a commodity or a monopoly. You're not supposed to say "monopoly", you're supposed to say "positive network effects" or something else. Buffet says "moat". But they're really more similar than different: look at Google.
We need to make it so that entrepreneurs are not glorified episodically and generally derided. It should be a valid path to take at any time and respected.
How to launch in a month, scale to a million users
These are case studies.
I will talk about my last two startups where I used a lot of techniques to build them quickly and scale them up. Here I explore different techniques I used to architect them to scale which are quite simple, but someone who is not familiar with building systems may be interested in learning how to build his or her own scalable site.
This is based on the outline of a paper by Lampson with more modern web-based examples:
Labmeeting was a search engine for biomedical literature and a social network for scientists. http://www.crunchbase.com/company/labmeeting.
The same principles in Lampson can be applied to any large system such as Google or http://www.turntable.fm.
Keep it simple.
We built API's before making the website at Labmeeting. That means that the design of data access, security, and data flow happens long before the first interfaces are created. Simplicity in a small interface is key, with well-defined and single-purpose functions coming from each module and submodule of the API. The whole front-end interface uses exclusively less than 30 methods in 5 modules available in the API.
Get it right.
From day one, we built automated tests into Labmeeting to catch any conceivable and subtle bugs that we may introduce during development. In advance, we knew that it would be a complex, dynamic site with hard to reproduce state. This made it all the more important that each simple method in the API performed exactly as it needed to both in the edge cases and in the normal case. We had individual function tests, module level tests, and full integration tests that automatically started a full chatserver and tested real requests. The tests were run on every commit and no bugs were allowed to persist before writing new code.
Don't hide power
You can see the docs and use this library yourself at the Pebbles introduction.
Use procedure arguments to provide flexibility in an interface
We created a system for filtering through news articles. The system has many basic parameters that can be passed that are very simple, but the parameters are simply procedures. Therefore, if someone had a special complicated need, they could write their own function that returned a boolean value of whether to filter the news and pass that through the interface.
Leave it to the client
The interface at Labmeeting was very simple, and we expect the client to perform complicated manipulations of the many elements of the interface and keep track of all those states. This allowed the backend to be developed very quickly, although it meant that frontends, like an iPad or Android app, take a little longer to develop.
Keep basic interfaces stable. Keep a place to stand if you do have to change interfaces.
The API of Labmeeting and Stickybits is versioned. They can thus offer full compatibility with previous functionality, but enhancements and changes can be made in newer versions.
Making implementations work
Plan to throw one away.
Many of the routines in the initial prototypes were written very quickly and with an eye to throwing them out once in full production mode. For example, the first version of the PDF search feature pulled in the whole user's collection and did a search in memory. A fully optimized version would be a little more complicated, but many routines were designed that way with an eye to throwing the inner part of the function out and rewriting once the bottlenecks are identified.
Keep secrets of the implementation
We built Labmeeting up from separate silo'd modules that, while decreasing performance a bit, allowed them to operate independently and with maximum flexibility to respond to changes in requirements in the interface. For example, the PDF manager knew nothing about how users were stored or queried. The User api could store users in memory, on disk, in Postgres, or halfway across the world. Lab groups only knew that it could call the same API external methods used to look up a user or set of users.
Use a good idea again instead of generalizing it
At Labmeeting, we had to extract author names from PDFs. We realized that we could do decently well at extracting the names using machine learning techniques, but never perfectly. However, by indexing a gazette, a complete database of every possible PDF, then we could simply make some guesses (possibly using machine learning) and then just look up those guesses in the gazette to see if there is a match. It becomes a problem of efficient enumeration. We didn't generalize it, and used the idea again in a slightly different context. Each PDF has a scientific abstract with various complicated terms from biology and physics. We wanted to identify those important terms to allow further exploration. Again, some indicators could point us in the right direction, but we did not get everything. So, we crawled Wikipedia to compile a gazette of biological terms, then merely used those terms in the abstracts that appear in the gazette modulo very frequent words like DNA. This was highly accurate again. We linked these extracted entities to Wikipedia to provide further information for the curious.
Handle all the cases
Handle normal and worst cases separately as a rule
At Labmeeting, we analyzed PDFs to extract the title, publication date, and other information. The special case of a PDF which is encrypted and unparseable and no text can be extracted went straight to a separate method. The special case could possibly be handled by a more general-purpose algorithm for text extraction that happens to special case to a right answer, but it is more straightforwardly handled separately. Anyone reading the code could see it plainly, rather than having to think through the special case in more complicated parsing code.
Split resources in a fixed way if in doubt
At Labmeeting, we put the database index on a separate machine from the Solr search index. We had millions of search queries coming into the search system, and we didn't want those queries to slow down the db, and thus normal operation of the site. Writes take much longer than reads, and are more important for logged in users. External users of the site using the search engine just hit the index, performing exclusively reads on the index. This allowed us to scale up the search index independently from the database.
Use static analysis if you can
At Labmeeting, before every commit, I had a version of PyFlakes run on all of my new code. PyFlakes is a static analysis tool for Python that finds common errors that can be detected before run-time. For example, PyFlakes can find improper number of arguments to a function call and references to variable names that are not in scope (like typos). Static analysis finds a lot of bugs that might appear in production only rarely in edge cases. It is most useful in a language like Python that is dynamic and thus doesn't have a lot of the normal safety features available to a statically typed language.
Cache answers to expensive computations
Obvious we did this all of the time at Labmeeting. For example, we performed a document similarity search to find "Related Papers" when we showed one individual paper to recommend other papers a scientist may want to read. The vector computation and search for this is quite expensive so we cache the results for a month. Another example: we had to open up a PDF file which has a research publication, perform text extraction, and then do an information extraction step from the text to analyze the title, authors, publication date and other information. This is a difficult problem to do and involves searching a gazette of 30 million documents and querying the PubMed database at least once. Once this process was completed for one step we saved it to the paper metadata so that we would not have to calculate it again for that PDF each time. The flip-side of caching is that for quickly changing data then one needs to be careful about cache invalidation.
When in doubt, use brute force
We wanted to get the first version of Labmeeting finished very quickly. There are many ways to optimize a system to improve performance, but they come at the cost of decreasing modularity, making more assumptions, and, most directly costly, developer time. The first implementations of the pdf search algorithm used brute force linear search by pulling the name of every scientific paper and then searching each one for the substring. This takes a few minutes to write and does not require a complicated separate hosted index. Moreover, for the small number of papers used during testing, it ends up being much faster than doing a network query to a search index!
Compute in background when possible
After a user uploads a PDF to Labmeeting, a process must go through the PDF, analyze it and normalize it, perhaps convert it to a standard format, extract the metadata, and deduplicate it. This process can take a while, so we avoid this process from blocking the web server by pushing it to a queue. When the queue completes, it sends a message back to the user, which adds the PDF to the person's collection.
How to drop out of college and start a funded Social Network
I will tell you how drop out and start a social network that grows into, ironically, the leader in the college admissions space. I will tell you how to start a social network for scientists whose lead investor is Peter Thiel (who also funded Facebook and started PayPal). Finally, I will tell you about how to help launch the hottest new rival to Facebook, also funded by Peter Thiel and SoftBank, the Google of Japan, and move on to work on Stickybits, to revolutionize how people interact with everyday consumer products.
Step 1: Read Paul Graham's essays.
The story starts my freshman year at Princeton. I had read all of Paul Graham's essays, which are not only thoughtful and information-rich, but also inspiring. Paul's essays described his own experience starting ViaWeb, which he eventually sold to Yahoo! for tens of millions. It is now called Yahoo! Store, one of the few examples of successful '90's bubble companies. He talks about every step of the process, a process which seems very unique and peculiar, and yet surprisingly all startups experience basically the same sets of problems, setbacks, successes, disagreements, and emotions.
In fact, in general, read good books. Blog posts are useful and timely, but books have much denser concentrations of information and they are more insightful. The best blog posts on the web are often just slivers of individual chapters of an existing good book. Blogs give you tiny tidbits of information, one interesting aspect of a complicated story, but a good book gives you that plus the other side and the whole picture, the future and the past, all at a deeper level. A well-written book will not waste words. Those hundreds of pages are worthwhile. Read Founders at Work, by Jessica Livingston, also at YCombinator and also a brilliant entrepreneur and interviewer. The book's stories are inspiring: James Hong's amazing viral growth of HotOrNot will make you want to do the same and become an overnight millionaire.
These writings are inspiring. They inspired me. I started to itch to start something, anything. I started to build things and talk to more people about these interests.
Step 2: Be friendly.
Through a friend and my work, I met Mick Hagen and Jeremy Johnson in the spring semester. If you are lucky enough to meet them, Jeremy and Mick are two of the nicest, most thoughtful, and most ambitious people you will be lucky to meet. We shared a common interest in technology startups. We started talking about what we could do together, drawing on all of our skills.
Some of the best friends you make will be in college: life-long friends. These tight bonds are forged from living very close to each other, possibly in the same room, every day for years. In the real world of apartments and houses, a friendly visit can easily take a half hour commute each way and is centered around a big event. In college, you walk down the hall and just hang out. Moreover, in your classes, you learn both the quality of your friend's effort and how well you work together. A mutual trust is formed over these months and years that are hard to form in the real world. In college, you will find your cofounder, whether they be friends or friends of friends.
Jeremy was interested, as he still is, in the college markets. What can we do to help improve college admissions, the student bodies at the colleges, and the college experience? His plan was more ambitious, but I proposed a simpler one: let students form a social network with ties to college admissions officers. Let students display their scores, interests, and activities online, and let admissions officers at Princeton and Harvard search for them. Charge per student found. Would this work? I reasoned that the College Board already does the same thing with PSAT scores, so I called them (abbreviated transcript):
Step 3: Test your assumptions.
Me: Hello, is this the PSAT office? My name is... um... Mark Westerner at the Marbur College.
CB: Which college?
Me: Um... (*will they look it up?*) Marbur College, a small liberal arts college in New Jersey.
CB: Marbur, can I help you Mr. Westerner?
Me: We are interested in purchasing some student PSAT scores and mailing address information.
CB: Yes, we do that here.
Me: How much would that cost?
CB: Let me see, you can buy 1000 names and addresses for $280.
Me: Thank you. Goodb—<I quickly hang up>
Gold mine. We would sell student information to colleges, completely willingly and enthusiastically on the student's part. Colleges already pay lots of money for very similar but incomplete, noisy data. We could sell the same information over and over again. Colleges get to target and recruit in a way that they have never been able to before. Everyone wins. This would be our primary business model, and in fact still is used today at Zinch.
Step 4: Use university resources to get feedback and advice.
With a business model in place, we went to all of the professors we knew who might be able to help. We talked to Ed Zschau who helped us write a business plan. We talked to the dean of admissions. She said she would love something like this. She told us a story where the school musical director told her that we needed an oboe player, since all of the oboe players were graduating seniors. This endangered the diversity of the school, and the annual Mozart concert. She looked and recruited and found nobody. On the last day, Princeton happened to receive 3 applications from oboe players with excellent academic records, and they all got in. She got lucky, but she would have much preferred an electronic way to target individual students to recruit and encourage to apply.
Armed with a business model, a plan, and this story, we entered an undergraduate business plan competition. We won 2nd place, and, more importantly, we received valuable feedback from the experienced venture capitalist judges. We tweaked the presentation, and then entered the Princeton alumni business plan competition. You have to understand that the alumni business plan competition is open to all Princeton alumni. This includes seasoned financial professionals and Harvard MBAs. We won first place to a raucous applause.
Step 5: Ask for forgiveness, not permission.
Now, we needed to reach out to more admissions officers to learn more about what, exactly, they wanted, and how to sell it to them. How could we do this? There just happened to be a conference on college admissions in June at Harvard with all of the top admissions officers at Harvard, Yale, Stanford, Duke, and others attending. This would be a perfect place to make connections.
Jeremy: Hello, we are students interested in learning more about college admissions.
Jeremy: Is it possible for us to attend this conference with a free or reduced price?
Jeremy: We want to make a product to make admissions better. We won't take up anybody's time.
Jeremy: But, really, please we have no intention of...
Jeremy: (to us) Let's go anyway and crash it.
So we drove up together to the conference. We figured that we would probably not be allowed in, but we might get a little information and trade business cards. When we got there, we saw that the conference was just in a hotel lobby. We walked up, put on name tags, and started mingling. Note that most of us were freshmen, so we barely looked post-pubescent much less like admissions officers.
Step 6: Do your research.
We sat at the back of a panel discussion with the admissions officers at Harvard and UPenn. They would literally say to everyone, to us, "It is just really hard to find good students which are the right fit for our colleges. We would love to able to find a student with these exact interests and academic record, pick them out of this area of the country, and just recruit her." Everyone we talked to loved us. Mind you, if asked, we would always tell them the truth that we are Princeton students passionate about and interested in learning more about college admissions. We never ate any of their food or interrupted any classes. We merely observed and met our exact target clients who basically begged us to make Zinch for them.
One piece of research we did not do was where to stay that night. We figured we would be kicked out, so we hadn't planned on anything. We tried calling people who we knew in the area, but nobody answered their phones. We asked friends, friends of friends, people our friends met on the Subway. We were a poor startup with barely the money for the gas. We sat in Qdoba waiting for a call. Looking out the window, we saw a Sports Authority. "That's it! We'll buy a tent, set up camp at some park somewhere overnight, and then return it tomorrow." We were desperate. So we went in, started figuring out the measurements. We went over to the register, credit card in hand. Then, an aunt's friend called us back: we could stay at her house. Too bad, would have made for a good story.
The next day at the conference, we met even more people, and they loved us. Suddenly, this woman walked up to me with a very stern face. She organized the conference, and had told us not to come in the first place. She kicked us out, but not before we already had the contacts and market research we needed. We drove home happy. There are a lot more unbelievable stories from the formation of this company, but they will have to wait for the memoirs.
Step 6: Don't drop out of school.
For most students, this advice is correct: you should not drop out. It only makes sense to give you this advice, all responsible adults will. There are a special few students, though, who, at exactly the right point in their lives, will understand that this advice does not apply to them. There will be no shadow of a doubt that school would just be too boring and unmotivating. When the time comes, those students know who they are.
I had shadows of doubts. Jeremy, Mick, and I disagreed a bit about direction. I decided to stay in school and stop working on the company, which was the right decision for me at the time. Mick and Jeremy continued on a different path from me. As an epilogue, Mick is now in California with a terrifically growing company, Zinch, which is so big that it is now expanding to students in China. Jeremy co-founded and now runs 2tor, which is leading the online college education space. Many people come to me with ideas for allowing students to take classes online. They ignore what has come before, and they do not aim high enough. Jeremy and John Katzman (founder of Princeton Review) put real, leading universities online, like USC, so that top students around the world can take classes entirely online and receive a full diploma equivalent to someone who spent time on campus. You will be lucky to get to know these guys.
Step 7: Integrate into your local community of entrepreneurs, or, lacking that, build it.
Back from my startup adventure, I wanted to evangelize the gospel of Paul Graham. Unfortunately, the Entrepreneurship Club was defunct. Instead, financial firms were hiring in full force, and almost no students knew anything about starting a business. I decided to resurrect it, and start it anew. I grew it from 0 members to hundreds, and made sure that the new leaders in every year learned how to run the club and teach the following year's posterity. It continues itself now in a virtuous cycle. It has grown every year, and in fact, now, the Entrepreneurship Club transfers more tens of thousands of dollars through its account than any other organization on campus. The first year that we bought back the TigerLaunch business plan competition, we ignited the career of another successful drop-out Princeton entrepreneur: Seth Priebatsch of SCVNGR. The network of people at Princeton now involved in startups is growing, and we have helped each other succeed in innumerable ways.
Step 8: Talk to other students from your school who have taken time off.
The club, one day, invited someone to give a talk, James Currier, who started Tickle.com which sold to Monster.com for an incredible amount of money. James stood before me. His eyes were shot open. They had a purple glaze that lit them afire, still bleeding from the red-eye flight he took from California. James had taken time off of Princeton to start his first company, which failed, but he doesn't regret it at all and learned so much. His hair burst out atop his skinny head. Gaunt and fearless, he embraced the air as he swung his arms widely to make his point: "Silicon Valley is absolutely the place to start a company", he said. "That is where all technology happens. That's where Google started, that's where Yahoo, Intel, Oracle, and so many other technology companies started. Some of the smartest people in the world lived there at Stanford, Berkeley, and PARC. It is a magical forever-sunny wonderland where dreams come true and it rains investments and acquisitions." (not exactly what he said...)
He was inspiring. He didn't have a smarmy kind of charm so much as sheer hurricane-force energy. He was insightful and learned. He talked about his great times. He talked about his toughest times. And so he inspired me to do it. I had to see it. What is so special about the Bay Area? How can it actually be that great? What exactly gives the air such power to breath life into world-changing tech empires?
Step 9: Pick a startup hub like Silicon Valley.
It was a school break the following week, so I bought a ticket for that weekend. I bought an incredibly cheap ticket on Hotwire and asked my high school friends in California schools if I could crash on their couches. I also emailed every single company on TechCrunch which stated that its company is in any city in Silicon Valley, San Francisco, or Berkeley to ask for an interview. It was tight scheduling.
If you haven't been to the Bay Area, then you don't understand how it is possible that literally almost everyone is involved in startups. I go to the basketball courts to play some pickup. After a sweaty game, each one in turn introduces their crazy new web2, hardware, or biotech startup to you, each one the founder or CEO. Multiple lunches and talks happen every day, with free food and drinks, you cannot possibly go to all of them or even meet everyone. And everyone wants to help you. I walked down University Ave and saw Facebook, I talked with the CEO of Azureus for 2 hours one-on-one, to the CEO of StyleHive and so many others.
The fact is, these hubs do not crowd you out. They have an overwhelming amount of resources to help you both in early stages and in later stages. Be friendly, learn what you need to know, and everyone there will do everything they can to help you be successful. If you stay in your hometown, as Jeremy, Mick and I almost did in New Jersey, we would have certainly failed. Now, Mick is in San Fransicso, and Jeremy is in New York, enmeshing themselves in the startup scenes and reaping the benefits. If you stay in your home town, understand that you do so not to maximize the success of your startup, but for some other reason, like comfort. Startups are risky, not comfortable. Get a job at Microsoft for comfort. I was done with comfort, I wanted to start a startup.
Step 10: Ask a dean about how to take a leave of absence, and how long you can take one.
Just grab or email your nearest dean, who will point you in the right direction. Princeton has a very lenient leave policy. You can take 3 years off without a problem. You do so by filling out a 1-page form, and you can do this all in a day. You can leave as late as the day before classes, or even after classes start (although you have to pay some tuition). To get back in a year or 3 later, you send an email. Financial aid is unaffected. Every dean you talk to will be very supportive of your decision; they will not question you. This is an excellent policy that encourages students to figure out what they want to do without pressure. Certainly, they would prefer a student to learn in a different way for a year rather than drown in school or do something worse.
Other schools have less lenient policies. Yale only allows a 1-semester leave, which limits the potential for student startups at that school. Their entrepreneurship club would do well to lobby the administration to relax the policy.
Step 11: Reach out to your friends and brainstorm.
I contacted some friends I had met on my trip to California, asking them if they knew of any other people interested in a new startup. I talked to Mark Kaganovich and Jeremy England, and we talked about making a social network and practical tools for managing research for scientists. Mark and Jeremy went to Harvard and are hard-core scientists. Mark is friends with Mark Zuckerberg, and was the 6th person on Facebook. If you get a chance to meet them, you will be blown away by their brilliance. They think analytically and carefully. I only met them from a friend of a friend, but we quickly got along well and we are very good friends and trust each other about everything.
So we started Labmeeting, led by an investment from Peter Thiel, who met the Labmeeting team randomly at one of the many events at Stanford. He saw the quality and depth of thinking of the team, and made his trademark quick decision. These kinds of lucky coincidences happen all of the time in the Bay Area. Now, thousands of scientists love and use Labmeeting to manage their labs and do research. We were the first, and we have the largest number of users from Stanford and Harvard than any other imitation network.
Step 12: Help other entrepreneurs.
In the mean time with Labmeeting, I was helping another young entrepreneur start up his own company, Josh Weinstein. He refused to drop out, but I did help him get GoodCrush off the ground and launched. Since that launch, GoodCrush has renamed and has now been funded by several notable people and venture firms (including Thiel of Facebook). It will rival Facebook at its own game: the college market with CollegeOnly.
One key to Josh's success is public relations. When launching GoodCrush, we were given the contact information of someone at the Huffington Post who could write about GoodCrush. We called them the day before Valentine's day, the big launch, but we mis-dialed:
Josh : Hello, is this the Huffington Post?
Chris: No, you must have the wrong number.
Josh : Oh, I apologize... <almost hangs up>
By the way, who is this?
Chris: Chris, I write at MediaBistro.
Josh : <excited> I'm Josh, we are launching GoodCrush.
It's a new dating wesite for college students
Chris: Is this a new startup? Tell me more...
An hour later, Chris Ariens posted a story on MediaBistro, all from mis-dialing and taking advantage of opportunity. Serendipity is the essence of startup success.
Through the Entrepreneurship Club, I've advised and helped set up half a dozen different companies. They may or may not do well, but the students will certainly learn a huge amount of work. In just a few years, we have seen a tremendous amount of new interesting startups coming out of Princeton, far more than I thought could happen in such a short time. For example, art.sy will transform the way that high-end art is sold. I encourage you to research more and help them out if you can.
Step 13: Let others help you.
Josh introduced me to Billy Chasen at Stickybits. Stickybits is an iPhone app that lets you scan barcodes, and then attach images, video, or text to the barcodes. It's like a virtual bulletin board, so that people can have conversations around products. We have exciting new ideas for how to transform the way you interact with consumer brands, but I can't talk about those yet. We are funded by none other than Mitch Kapor, Chris Sacca, First Round, and Polaris Ventures. My limited experience and skills and the people along the way have helped me do well here. The amount I'm learning from other team members is tremendous. We are the leaders in the social barcode scanning space.
Peter Thiel just launched a new program that will give you money to drop out and start a startup. Startup business is on the rise, the economy is improving. Facebook and other companies are enabling newer business models. More people are on the Internet than ever. This is really the perfect time to start a company, consider doing it now, but don't drop out of school. Meet people, make friends, brainstorm, build a community, help others. You will know when to leave and do startups.
The Face that Launched a Thousand Startups
The Facebook Movie will launch a thousand new websites. The Facebook Movie will be beyond epic. It is written by Aaron Sorkin, an incredible screenwriter who also wrote the West Wing, Zuckerberg's favorite TV show. It is directed by David Fincher who directed Se7en, Zodiac, and Fight Club. Trent Reznor of Nine Inch Nails writes the music. Early reviews love the acting brilliance. It is a story that everyone knows, down to the ending. Yet, early critics praise it for its brilliant cuts and editing. The dialogue is fantastic, as can be expected from someone who wrote the careful prose that defined the West Wing.
This movie will blow out the box office. It will blow out the box office not because Facebook has 500 million users, but because it is actually good. Only 1/3 of US adult population uses Facebook, so a big proportion of people who could watch it will not be Facebook users. It has to be good, and given the people involved, it clearly is. The trailers are dark and moody. If the website and trailers are any indication, the movie will bleed drama while simultaneously aspire to the grandest visions. The movie trailer inspires a dream of creating an empire from a dorm room. Ironically, the movie will be the Wall Street of our times, but for startups instead of finance.
And therein lies its power. Millions of young people will be inspired: college age, out of college, and kids. They will see what is possible from a kid in a small room. They will want to learn how to do the same thing, to learn to hack, to build a website. Thy will create companies emboldened by inspiration and luck. The movie presents a gleaming vision of success and power. The movie, in a brilliantly dramatic way, will inspire thousands to follow the same path to achieve just a fraction of the wealth. Being a computer genius will be cool again.
Measure the numbers of applications to incubator like YCombinator and TechStars. Measure over time the hits to startup-related forums like Hacker News. I guarantee a large influx over the coming months.
How to drop out of college and start a venture-backed Social Network
A quick google search reveals that there are no good guides online that tell you how to drop out of college. So, this will be a first. There are many opinions about whether you should or should not, but none which really tell you how.
For example, Jason Baptiste just wrote an excellent blog post about why you should stay in college. He is right in many ways, but you should also look at the other side in detail and how well that can turn out.
I will tell you how drop out and start a social network that grows into, ironically, the leader in the college admissions space. I will tell you how to start a social network for scientists whose lead investor is Peter Thiel (who also funded Facebook and started PayPal). Finally, I will tell you about how to help launch the hottest new rival to Facebook, also funded by Peter Thiel and SoftBank, the Google of Japan, and move on to work on Stickybits, to revolutionize how people interact with everyday consumer products.
You can read about these stories on the new article page.
Many people do not understand the difference between a Pyramid Scheme and a Ponzi Scheme. They are very different. I believe the confusion lies mainly in that they are both Schemes and they both begin with P.
A pyramid scheme depends on the idea that you buy into something, but only get paid out when you convince other people to buy in under you or from you. Thus, you have a pyramidal structure. You sell to 10 people, they each sell to 10 people (100 total), and they each sell to 10 people (1000 total), and so on. Usually, the item sold is nothing substantial. This quickly becomes unsustainable, so the last suckers to join cannot sell to anyone else, so their money loses out and trickles up the pyramid.
A ponzi scheme is an investment vehicle that promises large returns. For example, I could tell you that I have a brilliant currency arbitrage. Instead of actually earning real returns, though, I convince new investors to invest new money. I use that money to pretend I have returns to the older investors. But now, I have to start earning returns for the new investors. However, that's easy to do because I can advertise huge returns and the old investors can vouch for me that I'm legitimate. Therefore, it's easy to convince new investors to come in with more money so I can keep pretending to have high returns. Usually, ponzi schemes are broken up by the government when they get too big, according to wikipedia.
I guess they are also similar in that they involve money and are not infinitely sustainable in that eventually you run out of suckers. But that's the definition of a scheme. Otherwise, it would be a legitimate investment since it would provide returns forever.
I want to tell you a little about Labmeeting. I work at Labmeeting. Actually, thinking about it, I have too much to say about Labmeeting. I cannot tell you everything in one post. I will tell you a little bit at a time as I think of cool things to talk about. Let me tell you about our goals.
First, understand that science is broken. Not in the traditional sense. Science has not been speeding along the freeway and then suddenly tore a gasket and broke down. No. Science is puttering along reliably as it has for decades, centuries. Exactly as it has been. No faster.
Yes, scientists do an incredible job of being on the cutting edge of technology while simultaneously pushing that edge further and further. Nevertheless, it takes between months and years to publish interesting results. Labmates email cumbersome PDF’s back and forth. Literature search tools frustrate even the most patient of users. Conferences help disseminate knowledge quickly, but not when abstracts lose themselves amidst a shuffle of papers and when fellow scientists’ contact information evaporates. Publishers almost seem to try to restrict access to fulltext research articles, so much so that the government must force them to share knowledge. Graduate students find professors and professors find grad students by pure luck, not by targeted searches. Professors spend little time at the lab bench due to the skyscraper of paperwork required for modern research grants.
At Labmeeting, we are well on our way to solving all of these problems and many more. Science operates best when people can develop good ideas securely and communicate good ideas rapidly. We created a platform to do both like nobody has ever seen before.
Thousands of biomedical scientists, both at top US Universities and smaller ones around the world, already use and love Labmeeting. We want to help all researchers communicate and work more efficiently so that they can focus on what they do best: science.
Y Combinator Application Guide
Y Combinator, a kind of mini-venture capital firm, invests tens of thousands of dollars ($$$) into very early seed stage start-up companies run by smart technology hackers. They wanted to fund me in Summer 2008.
I applied to Y Combinator two times. The first time, when I applied with my friend Mason for the Summer 2007 round, I arrogantly presumed that Paul would lavish on us praise and beg us to fly to California to work with him. I spent no more than an hour on the application. We had no passion in the idea we presented. Our projects list hinted at nothing particularly remarkable or unique. Our analysis of the idea and our competitors delved only into the shallowest parts of a deep lagoon.
The second time, when I applied alone in Summer 2008, in an inspired moment I sat down in Starbucks for a solid few hours to work on the application. I strived for excellence, not perfection. A few months prior, I had briefly glimpsed the semi-successful application of Liz Jobson and Danielle Fong. I recalled their deep detail and thoughtful writing, so I imitated that kind of deep analysis which shows off one’s mastery of logic and breadth of experience.
I wish I had known how to write a good application the first time. So, taking my cue from Brian Lash’s recent question on Hacker News, I helped him out. I write here a slightly expanded version to help out anybody else who wants Paul Graham & co. to fund his or her startup.
If I were to advise myself in 2007, I would recommend that I write briefly but write a lot. This advice seems contradictory, but I mean it in a very specific way. My first application, I kept brief. I did not want to swamp YC with a tome of text. I saved many of my accomplishments for the interview. Do not do this. Write, write, and write some more. Write everything interesting and unique about yourself. If you have doubts about a statement you made about a competitor, qualify it. Don’t vacillate, but at the same time don’t seem shallow, ignorant, and inexperienced.
Of course, once you’ve written all that, you have a very long application. Now, take out filler words. Compress ideas that take up two sentences when you can use just one. If you waste two words in a sentence, delete the whole sentence and write it again from scratch. If you see a phrase that you think an investment banker might use on his resume, nuke it. Achieve a high density. In my experience, the YC crew truly pores over these applications to understand all of the meat of it. They do not skim your application when it has rich content. Cut, cut, and cut some more.
Now, step back and look at your application. If you have very little writing left, real content, then you may not be the best fit for Y Combinator this year. That’s okay. It’s good you know now. Take this year off and work on some interesting, hard projects that nobody has done before. Bounce your idea off of the smartest person you know. Hell, micro-test the idea. Then, repeat this process.
Step back, look at your tight list of accomplishments. If it’s long, that’s great, since reading something long but rich in content everyone loves to do. The length indicates strength. In my limited experience, I think this is how I made my application successful.