Just having finished the first learning session of the YC’s Startup School (SUS) a few days ago, and we’re now literally onto the second one with a full speed ahead.

The more we dive into the Startup School, the more we advance in our product development and fundraising efforts. The feedback that we get regarding our product prototype is extremely positive and the advice we get from the entire community and our mentor is definitely helping us towards clearing out our concept, one-liner, and other materials such as the pitch deck and the video presentation of the product.

We’ll provide a more thorough explanation about our work during the SUS in a different post. But for now, we’ll set that aside and without further ado, let’s jump right into the second session blog post summarizing Week #3 and Week #4 of the YC’s SUS course.

Learning Session #2:

Week #3: How to Get Users and Grow + How to Measure Your Product + A Conversation with Andy Bromberg

Working in growth the wrong time in your company’s history can be really, really bad! Don’t have a growth team if you haven’t found a product-market fit.”

              

– Gustaf Alstromer, Partner @ Y Combinator

I. Lecturers: Gustaf Alstromer, Suhail DoshiAndy Bromberg.

II. What was discussed this week:

The week took off with Gustaf Alstromer’s lecture on “How to Get Users and Grow” by defining what growth truly means and explaining why startups’ existence is depending on growth efforts. If there is one thing to remember from Gusta’s lecture, it is that startups = growth (this statement is based on the Paul Graham’s famous essay on the topic, a link to which can be found below). This is because of that – contrary to the common belief most startup founders have that “when the product is put into the market, people will come” – additional activities related to growth are needed for a product to be delivered to more and more customers.

Facebook’s early growth story was also illustrated. We recommend you to check the video for yourself since Gustaf provides some really interesting insights and real case study from Facebook’s kitchen. Long story made short, the moral from the story is that if you’re intentional by growth and you’re really trying to break through the forecastings’ ceilings, you can grow really, really fast. And this is no secret as it applies to every company.

Gustaf then told a very simple but memorable way of measuring product-market fit. It consists of two steps:

– Identifying the metric(s) that represent the value the target users get from the product;

– Measuring the repeat usage of that metric(s).

This framework actually relates to measuring retention rate which is the foundational one for your company to track in order to build experiments and eventually scale.

Lastly, we believe that Gustaf’s “Three-ways-to-grow-at-scale” framework is definitely worth taking a glance of. Simply put, these are the three ways for your startup to grow:

– Product Growth / Growth Engineering;

– Performance Marketing;

– Brand Marketing.

We purposefully won’t tell what all those terms really mean and what tactics can be tested to run appropriate experiments. Instead, you can watch a very insightful lecture on the topic for free here.

The second lecture was about tactics on how to measure your product. The lecturer was Suhail Doshi, the founder of Mixpanel, a SaaS that “tracks actions instead of page views for mobile apps”. At the very beginning of his lecture, Suhail pointed out the three most important questions that a founder will most likely need to find an answer to during the first 24 months into his starting venture. Because we believe this is extremely practically-oriented knowledge, below we copied the questions directly from Suhail’s presentation:

– Question #1: Is my product easy to understand?

– Question #2: Is it easy to get started with my product?

– Question #3: Are people coming back to my product?

It turns out that these three questions lay out the foundation of the already-mentioned above retention rate metric. And measuring retention rate is fundamental to measuring growth!

What followed up next was a lot of suggestions on how to measure your product along with practical examples from real case studies from companies Suhail worked with in the past.

The third lecture was actually a short interview talk with Andy Bromberg, Co-founder and CEO of CoinList, led by Geoff Ralston. The topics being discussed mainly revolved around blockchain, cryptocurrency trends, and tokens. A few important term definitions were outlined that we believe are important to be known by every entrepreneur since they are fundamental in today’s economy, such as:

– Blockchain: an ultimately democratic version of networking that is decentralized (central authority such as a company or government institution is being removed as a “middleman”). Or simply put, blockchain is a democratic version of networking;

– Token / Token sales: if the internet is an infrastructure for exchanging and transacting information, then tokens or token networks are an infrastructure for transacting or exchanging value.

The following quote by Andy is very important and we decided to add it to this review since it’s quite knowledgeable: “Blockchains and tokes are about incentive alignment. It’s about this question of how can you build a trustless system, a system with no party has to trust any other party without anyone being involved in managing trust”.

One of the most interesting facts mentioned during the conversation was that more money has been raised in ICO than has been delivered in venture capital to companies in 2018 thus far. Now, didn’t that spark your curiosity and desire to check this video talk yourself?

III. What were the key takeaways:

1. You should go out and talk with users asking them “How would you feel if you no longer can use my product?”

2. Measure the retention rate! This will let you know if and how repeatedly are people using your product.

3. Don’t do paid growth if you don’t have revenue!

4. If you keep making decisions without using data or experimentation, you’ll be lucky or wrong.

5. You should build a culture of experimentation in order to accelerate growth in your organization.

6. Measuring is the other side [of the coin] of growing and it’s everything that helps you build something that people truly want and will use.

7. If you don’t have specific problems, don’t optimize for them until you do.

8. Poor retention is often the most ignored metric by early founders. It’s often the reason even products with millions of users die.

9. The benefits of talking to customers: you’re going to get way more information and depth from talking to them than you ever will looking at a data point on a graph!

10. The biggest mistake people do with analytics is being really overcomplicated! Less is more! Pick one north star (a number that you bet your company on) and monitor 3-5 metrics instead of tracking 25 metrics, let’s just say, that overcomplicate the entire company.

11. Usually, the first metric you will choose to track will be the wrong one. So, be ready to change it and commit to it for a short period of time (6 months, i.e.).

12. What matters is that you run an experiment to develop a hypothesis and then measure it to find out whether the thing that you thought of was in fact right.

13. How to measure product-market fit? Measure your retention rate. This is the repetitive/frequent use by a user for a specific period of time.

14. For your company, you should figure out what is the one metric that you can measure easily every day and what is the ideal frequency through which that should happen. If you answer those questions, you can make a cohort analysis of your company right now and start figuring out if you’re product-market fit.

15. Bothering to sign up doesn’t mean that people are going to use your product!

IV. What we liked and what we think could be improved:

What we forgot to mention last week was that each week, the YC stuff shares additional relevant resources, such as suggested videos and reading material to help us – the students – to prepare for the upcoming lecture session. The pre-start initiative is something that we at Berger Neurorobotics absolutely love. By the way, all of this content is available on the respective lecture pages in the Startup Library.

We already mentioned that we’re a critical team of professionals. Although our very positive vibes toward the YC initiative are in place, we have to provide our first critical claim. We’re fascinated by the consistency and relevance of the study content being provided. However, on the topic of product-market fit, although every lecturer talked about growth, scalability, and the like, there was not a clear definition of and a distinction between sales, marketing, business development (BizDev), growth, growth hacking, etc. Or simply put, there is a lack of one unifying common framework to be presented and proposed to be put in use by the YC stuff. This may lead to a great level of confusion among first-time entrepreneurs and thus, instead of learning what’s important and which should be a priority, exactly the opposite happens.

We suggest that a visualization kit or a “map” of all these to be put in one place that explains which activity means what, what can be used for, and when it’s most appropriate to be used by the founder considering the stage of development in which his startup is currently at.

V. Additional resources to this topic:

1. Y Combinator additional resources:

How to Get Ideas and How to Measure by Steward Butterfield & Adam D’Angelo;

How to Get Users and Grow by Alex Schultz;

Growth Guide: How to Set up, Staff, and Scale a Growth Program by Anu Hariharan;

Startup = Growth by Paul Graham.

2. What we believe could be of help:

A Recipe for Growth: Adding Layers to the Cake by Jeff Jordan;

a16z Podcast: The Basics of Growth – User Acquisition by Andrew Chen, Jeff Jordan, and Sonal Chokshi;

a16z Podcast: The Basics of Growth – Engagement & Retention by Andrew Chen, Jeff Jordan, and Sonal Chokshi;

Andrew Chen on Startup Growth: Zeto-to-One vs. One-to-N by the Atrium team;

Does Slow Growth Equal Slow Death? by Joel Spolsky;

The Secret Behind Pinterest’s Growth Was Marketing, Not Engineering by Liz Gannes;

The Right Way to Set Goals for Growth by Casey Winters;

Diligence at Social Capital Part 1: Accounting for User Growth by Jonathan Hsu;

Scaling up Excellence by Bob Sutton;

“Give Away Your Legos” and Other Commandments for Scaling Startups by the First Round Capital team;

Hyper-Growth Done Right – Lessons From the Man Who Scaled Engineering at Dropbox and Facebook by the First Round Capital team;

How Squarespace’ s CEO Pivoted to Scale for Millions by the First Round Capital team;

The Do’s and Don’ts of Rapid Scaling for Startup by the First Round Capital team;

Pinterest and Grubhub’s Former Growth Lead on Building Content Loops by the First Round Capital team;

Future Founders, Here’s How to Spot and Build in Nonobvious Markets by the First Round Capital team;

16 Startup Metrics by Jeff Jordan, Anu Hariharan, Frank Chen, and Preethi Kasireddy;

SaaS Marketing 101: Marketing for Growth and Survival by Brian Kotlyar;

What Is Support-Driven Growth? by Mo McKibbin;

The visionary’s dilemma: knowing when to expand beyond your first product and market by Daniel Slate;

Growth Hacking Guides by Austen Allred;

DHH on “The Basecamp Way”: Competition, Growth, Targets and How to Incentivize Employees by the Atrium team;

5 Principles for Goaling Your Growth Team by John Egan;

Hey Reid Hoffman, What is Blitzscaling? by Polina Marinova;

7 Counterintuitive Rules for Growing Your Business Super-fast by Reid Hoffman;

Introducing the Amplitude Growth Engine by Spenser Skates;

Lessons from Coinbase’s Wild Ascent: Four Rules for Scaling by the First Round Capital team;

The Next Feature Fallacy by Andrew Chen.

VI. Evaluation of the week:

We had a great GOH (Group Office Hours) session with the rest of the group. It definitely felt pretty encouraging as knowledge and suggestions on every problem that founders faced were discussed. Definitely, by far, the experience and the expertise of the network that we manage to create among ourselves remains the most competitive advantage of this MOOC.

Week #4: Product Design / Prototyping / Design Thinking + PR for Growth + A Conversation with Aileen Lee:

Your startup success truly lies at the intersection of design (the art of the possible), business (the politics of viable), and technology (the science of the feasible)!”

 

– Garry Tan, Former Partner @ Y Combinator and Founder @ Initialized Capital

I. Lecturers: Garry Tan, Kat Manalac, Craig Cannon, Aileen Lee.

II. What was discussed this week:

How to effectively integrate design into a product development process. That was the theme of the longest lecture that we at SUS had until now. Garry Tan, a designer by training, founder by predisposition, and venture capitalist by accident blew us away with his thorough and insightful perspectives on design as it turned out that it’s a discipline that plays a crucial role in the entire product development cycle.

The lecture started with a short definition of design. We decided to not go in more depth in that topic since we strongly recommend you to hear how passionately Garry spoke about design in his lecture. What stood out for us was the four elements required for building a great product:

– Great product management;

– Great design;

– Great engineering;

– Great customer support.

The overall product development process according to Garry includes three main stages. The following framework is extremely important for every starting entrepreneur so we decided to include it and provide it to you first-hand:

1. Product Design /what’s the problem and who’s the solution for/:

What questions do we ask:

>> What’s the problem?

>> Who has the problem?

>> What are the possible ways to solve the problem?

>> What’s the priority for each part of our solution?

What is created:

>> Product specifications.

2. Interaction Design /how does it work/:

– What questions do we ask:

>> How will people actually do things?

>> What are their goals?

>> What are their preconceptions?

>> Can they achieve their goals?

– What is created:

>> Prototypes (for testing);

>> Wireframes (for visual designers to build).

3. Visual Design /how does it look/:

– What questions do we ask:

>> What should users pay attention to?

>> What is important?

>> What emotions do we want to evoke?

>> How do we want users to feel?

– What is created:

>> Comps, HTML/CSS.

This was the framework upon which Garry’s entire presentation was based on. Although summarized, we assure you that the entire hour-and-a-half lecture is worth it the time to be watched.

The second lecture, co-led by the Y Combinator’s Kat and Craig, described the most effective ways to use PR and content to help you communicate your startup’s brand and find more users. Their presentation was really fun and definitely was informative as we thought it would be.

The following working framework provided by both speakers illustrates the basics of what needs to be covered by your startup in order to take off and be spotted by the almighty media representatives, journalists, and PRs out there:

– Define your goals/audience:

>> Who is your audience?

>> What does your reader read?

– One-sentence Pitch:

>> What are you building?

>> Who are you building for?

– 3-5-sentence pitch:

>> What does your company do?

>> Who is the customer?

>> Why is it better than what’s currently in the market?

>> Anything particularly notable?

– Know how to answer reporter FAQs:

>> What do you make and sell?

>> Who are your customers now? Who will they be in three years?

>> Define your competitive set – how do you distinguish yourself from the competition?

>> Why do customers keep coming back?

>> What keeps you up at night (about your business)?

>> Nuts and bolts — How many employees do you have now, full-time? URL?

>> What are you hoping to do over the next year that you have not done before? Why?

>> What was your “eureka moment” that led you to start this organization or company?

>> Are you solving problems for your industry, for society, the world? Which problems? How come nobody solved those problems before? Or if they did, why didn’t it work out?

The provided framework is incredibly detailed and it gets you ready to get introduced to your first media editor in no time. Surely enough, plenty of information can be found on the internet. However, the real examples illustrated by the YC companies is what made this lecture so thorough.

The last interview-based lecture was starred by Aileen Lee, a founding and managing partner of Cowboy Ventures, who coined the famous and often used term “Unicorn” (a startup evaluated at $1b+). The talk, led by Geoff Ralston was mainly about the topic of fundraising and venture capital. In short, we considered the following 5 key takeaways to be extremely valuable and important for startups that are actively raising their seed round of investment at the moment. Because they’re focused only on the topic of venture capital, we decided to separate them from the below ones. Here are Aileen’s five-diamond statements based on her talk:

1. It’s really hard to give advice to a startup CEO [unless] if you haven’t done it yourself. (On how VCs should think about assisting and advising their portfolio companies’ CEOs.)

2. Thoughtfulness and empathy are the key characteristics of investors. (A very debatable question being slightly touched during the conversation).

3. It’s vital that you [as a startup founder] understand the venture capitalists’ math so you understand what the motivation of the person sitting across the table from you are and why they’re asking how big your business is going to be in the future.

4. A lot of VCs are afraid of telling you why they’re really passing [on investing in you] because if you do well, they want to be able to call you later and pretend they were just really busy when they passed. The point is that if you’re successful, they would want to invest in you later on in the future.

5. What components of a pitch should be:

Team: who they are and why they started the company; why you have a certain background or certain things you’ve done that make you the right founders/people to be solving this problem;

– Problem: why is it a problem and how bit it is;

– Product/solution: how it works; what is special about it (unique insight);

– Competitive landscape: your honesty and transparency regarding the competitors;

A 3-year financial plan: what you’re going to get done by month in the next 12 months and what the P&L will look like (especially metrics like revenue, revenue growth, margins, costs).

III. What were the key takeaways:

1. Design is not a singular thing on its own. It truly is deeply integrated into this broader picture of how do you create great products.

2. Design is all about making and building things that other people can use. Design is creating things for users that work well (FUNCTION) and delight them (FORM).

3. As designers, you probably shouldn’t be spending too much time trying to be extremely novel because novelty is the opposite of functionality.

4. Design for its own sake it’s not design, it’s art.

5. Probably the most common misconception about design is that design is how something looks. It is actually also about how it works (what the product should do).

6. Product design = what’s the problem and who is the solution for. Interaction design = how does it work. Visual design = how does it look.

7. The overall product development process includes the following phases: user research, product design, interaction design, visual design, engineering/QA, customer support.

8. User research = this is just a basic piece of the customer development process. It means understanding your users, spending time with them, being able to write down specific personas.

9. Personas are just one tool for designers and product people to think through who are the very specific people going to use your product. Personas are a specific type of users that the founder wants to use his product.

10. One of the most dangerous things in product development is that if you don’t have priorities, you don’t know what to cut. This is why prioritization (of features to be developed) matters!

11. Interaction = a conversation that happens over and over with users. Interaction design is about telling people what to do with your product! [Remember: people are incredibly suggestable!]

12. Don’t reinvent the wheel by trying to be extremely novel. Great artists steal what works!

13. One of the issues of badly designed user experience is that we don’t know where to go, we don’t know where we are, and the signs (that are supposed to lead us) are placed on the wrong place.

14. Content = anything that you create and distribute yourself. PR/press = a startup pitching to independent third party media organizations (anything that is external to your communication channels).

15. As a founder, it’s one of your primary jobs to tell the story of your startup to investors, users, employees, etc. The goal is to tell it in a way that it makes it easy for other people to repeat it and help you spread the world about it (make it viral).

16. No amount of press or content marketing is going to help you if you don’t have something people want.

17. Although press can help get you some early inbound and early adopters, it’s not something that you can rely on long-term for growth.

18. There are basically two things that early-stage companies want: engagement (if you’re a social company) and conversions (for anybody else). You don’t need to worry about branding (how people perceive you) early on.

19. Set-up analytics: Mixpanel + Facebook Pixel (track who’s hitting your site logged into Facebook so you can remarket at them) are good tools as a start.

20. When should I start thinking about the press? Ideally, it’s worth waiting to pitch until there is a call-to-action for your intended audience; is there a product they can try or buy or something they can sign up for. Biotechnology and hard tech companies are an exception, though.

21. Don’t bother to hire a PR firm until you either have more funding or so much inbound that you can’t deal with by yourself.

IV. What we liked and what we think could be improved:

Unfortunately, we see that the level of the engagement among our group’s founders is low. While we can’t identify the exact reasons why this is, we believe a proper solution for this is if we engage with group members in forum discussions and ask them specific questions and share relevant resources. We hope this will work. We’ll report back how our efforts went on this one later on during the course.

We spotted an inconsistency in terms of receiving information via e-mail about the relevant material (video uploads, lectures, etc.) that we are supposed to browse through prior to every week’s beginning. That’s another con of the course and we believe this practice shall be re-started since it let us know what other resources are uploaded and worth checking on the topic that is to be discussed during the incoming week.

Specifically, about this week, we believe that a more thorough explanation about project and product management practices and frameworks that are mostly used in nowadays’ companies should have been provided. When we talk about product design, methodologies overview are, nevertheless, always helpful because they provide a basic explanation of how products/services are being developed and delivered to the market.

Finally, we must admit that in our point of view, the content began to overlap, which although sad, it’s ok since they are only key areas in which a startup must be specialized in, such as finding product-market fit, growth, and fundraising.

V. Additional resources to this topic:

1. Y Combinator additional resources:

How to Build Products Users Love by Kevin Hale;

How to Think About PR by Sharon Pope;

Taste for Makers by Paul Graham.

2. What we believe could be of help:

Creating Passionate Users by Kathy Sierra;

Your App Makes Me Fat by Kathy Sierra;

Epic Products by Shasta Ventures;

The Press Release is Dead by Mike Butcher;

PR Hacks for Startups by Benjamin Joffe;

How to Write for WSJ, Forbes, HuffPo, VentureBeat, etc. by Michael Park;

in Blog: a Design Blog by the InVision team;

Your Marketing Doesn’t Need to Reinvent the Wheel by Geoffrey Keating;

Content Marketing Certification by HubSpot Academy.

VI. Evaluation of the week:

We are delighted by the progress that we manage to make in terms of numbers of investors that we’re being introduced to on a per weekly basis. Definitely, quite a lot of futuristic-mind VCs are interested in helping us succeed in our efforts to develop a device that connects computers to your brain. Another great experience that we encountered during the past week was that finally we accidentally got into a fully dedicated private session with our group moderator. Martin Diz is a knowledgeable professional who helped us to clear out our one-liner and improve on our pitch so that we can send additional materials to the investors we were connected with. We’re motivated and ready to go onto the next learning session of this course for sure.

Learning Session #2 Conclusion + What we learned in the previous session + What Follows Next:

Because a strong emphasis on how important it is to find a product-market fit was made again during the past two weeks, we begin to understand that this is probably the biggest challenge that lies ahead of us. It’s very valuable for us to learn from experts first-hand and in that case, we had started to work on setting metrics to follow before, during, and after we launch our product officially. This was inspired by all the lectures and study materials that we studied from by now on the topic of finding product-market fit.

In addition, we now feel more confident to talk with potential investors since our believes and knowledge at this point is being validated by YC stuff and their feedback.

Previously, we learned about how to start a startup and how to introduce our product/service to the market so that we can find a product-market fit as soon as possible. Check our first blog post from the “Startup School” series if you still haven’t got a chance to do so in order to learn more about this topic.

What comes up next is getting our feet wet with how to best prepare ourselves in order to successfully apply and get accepted to the YC’s original program. In addition, next week – according to the course original syllabus – we’ll learn more about building sales and engineering teams. So, if organizational development and culture building activities are among your favorite professional area of interest, we strongly encourage you to read our next blog post in order to learn more about our experience.

NOTE: Privacy is the most critical part of the Startup School. All content discussed or shared during the course, office hours, weekly progress, chat, forums, etc. is considered confidential unless otherwise stated. That’s why we’d like to inform that the entire “Startup School Diary” series is based on our experience and point of view that purposefully excludes data and information regarding other participants’ thoughts, views, and opinions.

2nd NOTE: We have no authorship nor we claim any copyrights and/or ownership on any of the additional resources that we recommend to be checked along with the Y Combinator ones. Our goal is to support the reader by providing her with reliable sources of knowledge we believe could be of help for her fast advancement on a particular topic.

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