This past weekend was the kickoff event for DreamIt Ventures’ 2010 program. The program, considered as one of the top three accelerators in the country, received over 350 applications for its third class, per opening remarks from co-founder Mike Levinson.
On Monday, I wrote about some of the lessons that the 2009 DreamIt Ventures alumni panel spoke about at the kickoff event for the 2010 cohort. Following this panel session was a presentation by Steve Barsh. Steve was the DreamIt partner who ran the day-to-day operations last year, but he’ll be taking a somewhat reduced role this year, as his main focus now is his newly launched startup that’s a marketplace for great last minute deals on vacation rentals, PackLate.com.
As always, Steve had a ton of great thoughts for the companies. His presentation was a collection of startup tips and tricks, to get the companies in the right mindset for the first day of the program (which was Monday). Here were some of the highlights of his talk:
- Steve talked about some of the common problems startups face. One of the key issues he mentioned was early-stage startups commonly looking for validation from investors, and thus attempting to raise money from investors too early (More on Steve’s blog). Steve told the DreamIt companies that you don’t need any funding to go out and ask your customers if they would buy your product if you built it. And if they say no, you can ask why not and dig into what their concerns are. For more, see Steve’s blog post on the topic.
- He covered the concept that every startup has a number of key assumptions and that the companies want to be looking for ways to kill these off as early as possible during the summer. Remove these assumptions to increase the probability that your business will succeed, but also if you are going to look for funding at some point down the road, this is one of the best ways to improve your valuation. (Post on Steve’s blog)
This concept of de-risking your business plan was an extremely transformative way of looking at building startups for me last summer and I hope that this important concept was driven home for the new founders in a similar way.
- Steve spoke about how a startup’s job is to learn as quickly as possible – to run through a maze filled with a ton of dead ends, realizing that you’re heading towards one of these dead-ends as quickly as possible, and pivoting to start off on a new route.
To this end, each week, you should be figuring out what you can learn, what experiments you’re going to be running. What marketing experiments? What product experiments? Pitch experiments? Set a hypothesis and then go off and prove or disprove it. Build a minimum viable product, release it, learn, improve, and release again. Along those lines: If in retrospect, you look back at your first product and you’re not embarrassed by it, then you waited too long to release it.
- Steve also talked about the importance of not sitting there and debating these learnings amongst your team. A/B test everything. Think people want a new feature? Put a button on a page and see if people click on it. Put Google Adwords up and see what people click on – refine your pricing and positioning via this methodology. Steve has some good tips on these techniques here and here on his blog.
- He shared an interesting way of looking at startup strategy: every single day, what can you do to gain an unfair advantage? What can your mentors, advisors, board, university connections, LinkedIn, etc. do to give you an unfair advantage? Can you call in favors from friends? Can you get in touch with a key contact through a fellow alum? Figure out what you can do to give you an edge over your competitors – you are in this to win. In that vein, start building your networks on LinkedIn – those shared connections will be the basis of your personal competitive advantage.
- Steve shared one of his classic tips that I’ve always thought was one of his best: he suggested that the companies, as they’re meeting with investors this summer (for advice – most are too early stage to be pitching for real), end their conversation with this question: “If you would ever consider making an investment in a company like ours, what would it take for you to make that investment?” I love this question, because it’s a great way for the entrepreneurs to get inside the investor’s thought process, and get some insight into the kinds of issues that they’re going to need to address before they can have the follow-on investment conversation for real.
- Steve closed with this bit of advice: You are getting on a roller coaster. You are going to have great days. You are going to have days where you’re ready to pack up shop. Stay stubborn and focused, but keep looking for pivot opportunities.
And so many more great thoughts and ideas. The summary recap hardly does the presentation justice. So, the presentation is embedded below – check it out.
In many ways, Steve offered similar thoughts and techniques to what he presented last year at the DreamIt kickoff event for the 2009 companies, however, I think the presentation was much richer this year. For the better part of the past year, Steve has been living the early stage startup life again and putting all of these techniques into practice with PackLate.com. All of the lessons learned really came through in this talk. Tons of great advice for the DreamIt companies – hopefully, they’ll take a handful of these and put them into practice. And just like that classic novel that every time you read, you get something new out of it, there were even things for the DreamIt alumni in the audience to take away and put into practice. Certainly, if you ever get the chance to hear Steve speak about his tips for startups, take him up on it – there will certainly be something worthwhile for you and your business.
Check out the presentation for yourself, from SlideShare:
EDIT: The presentation has been embedded.