Another post that should have been several months ago…
In April of this year, I headed down to Stanford for something called Startup School. I didn’t really know what to expect but it’s hosted by Y-combinator so I knew it would be pretty cool. It turned out to be a bunch of talks by successful entrepreneurs, lawyers, and venture capitalists and all in all I learned a lot over there. Also it was way for entrepreneurs from all over the place to gather and meet each other, look for teammates, competition and all that stuff.
Since I wasn’t currently working on anything, and since I was one of the younger people there (most of the attendees were out of college) I wasn’t that interested in meeting a lot of other people, except to find out what they were working on, which I always think is very interesting. I was there pretty much to hear the talks, and hopefully take something from them that I could use maybe later on when I do try my hand at a startup.
Of all the talks (I believe all of them are on justin.tv), the most interesting, and most entertaining on was by David Heinemeier Hansson. DHH is I think the head developer of ruby on rails (or something like that) and now he’s working for 37 signals, which is doing exactly what he recommends (which you’ll know about if you either watch his talk or read the rest of my post). Here is his talk. I definitely recommend that you watch it if only for entertainment purposes (he’s really funny). But of all the talks, I think I learned the most from his as well.
His main point was that rather than trying to provide your product for free, charge a little bit. Then you don’t have to struggle to make ends meet, you don’t have to work so hard to monetize (by ads or whatever) and you get to make money. And granted most ordinary people are no longer willing to pay for your service, but almost all companies are willing to pay you if you are providing them a valuable service and doing it really well. So the real trick is to find something that companies need, make it, and then charge them for it and you’ve got yourself a pretty good startup.
So that’s the underlying idea, but there are a couple of problems with that. When you’re charging for your product, you’re held to a much higher standard, so you’d arguably have to work harder. This is even more the case when you’re making something for companies. But arguably this may actually be a good thing. When you’re trying to get something out to users (even if it’s free), the only way you’re going to be successful is if you hold yourself to a high standard, but it’s a lot easier to let things slide when there is no external force here. For example, If your free website is of the highest quality, you’re not going to get any traffic, and you’re not going to get any revenue from ads or whatever monetizing scheme you’ve thought of, so you have to do this anyway. The fact that you’re selling your product means that there’s an external force (namely your customers) holding you to that high standard and they definitely won’t let you slip up. Charging your customers is just force that keeps you working well.
The other problem and solution is talked about here. I won’t go into much detail there, just read that.
So I’ve become a convert to this thinking, I’m now looking for things that I could sell to companies and hoping to form my startup around one of these ideas. But it’s definitely much harder to find pain points of companies than it is to find pain points of ordinary people, so I’ve been looking for awhile without much success. I’ll still look for more consumer facing ideas, but I find that they are much easier to shoot down quickly and so I’m not sure if I’ll be working on something like that in the near future.
And that was pretty much startup school. If you’re interested, watch the talks; most of them are pretty interesting and they offer a lot of different perspectives from pretty big shots (Jeff Bezos, Marc Andreesen, and others). Definitely will be going again next year.