An Introduction to Startup Methodologies

There are a handful of startup methodologies that every entrepreneur should familiarize themselved with. These concepts, widely accepted amongst tech startups, were developed by seasoned entrepreneurs to help fellow entrepreneurs avoid common mistakes.

The Business Model Canvas, developed by Alexander Osterwalder, is a framework for analyzing the different components of a business – it’s essentially a substitute for the traditional business plan, a long document that nobody will ever actually read.

The Customer Development methodology, developed by Steve Blank, is a scientific approach that can be applied to startups to improve the likelihood of their product success by developing a better understanding of the customer.

The Lean Startup method, developed by Eric Ries, was built on top of the Customer Development methodology, specificically with tech startups in mind. It focuses on testing hypothesis and quick iterations of product.

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If you’re unfamiliar with the above concepts, the best place to start is Steve Blank’s Udacity course, How to Build a Startup. This course covers both the business model canvas and the customer development methodology.

Another great free course can be found on Udemy called Build. Measure. Learn. Lean Startup SXSW 2012. These are recordings from the Lean Startup Track at SXSW Interactive 2012 with Eric Ries, Dave McClure, and other great startup founders.

Check Out These Books

You can learn more about the Business Model Canvas by visiting the website, where you can purchase the book and download the Canvas for free. Every entrepreneur should go through the process of filling out a the Business Model Canvas at least once!

If you’re going to read one book on Customer Development, it should be Steve Blank’s book, The Startup Owner’s Manual: The Step-by-Step Guide for Building a Great Company. It’s a more detailed and readable version of his first book, The Four Steps to Epiphany.

Check out the Lean Startup website, where you can learn about basic principles and check out some great case studies listed. You should also purchase the book, which many would tell you is a must read for any technology entrepreneur.

In-Person Learning

There are a few in-person courses designed to help you apply these principles to your business. The Lean Startup Machine is a three-day workshop that’s been going on for a while. SW NEXT is a similar course that meets once a week for 5 weeks, developed in conjunction by Startup Weekend, Steve Blank, and Udemy. Both courses force you to “get out of the building” and talk to customers, which can be difficult without a little push.

For a more casual opportunity to connect with people, check out the Los Angeles Lean Startup Circle Meetup. You might as well know name Patrick Vlaskovits, our local “Lean Expert”, co-organizer of the LA Lean Startup Circle, and co-author of the books The Entrepreneur’s Guide to Customer Development and The Lean Entrepreneur.

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Best Resources for Learning Startup Marketing

Here’s a list of the best guides I’ve found to teach yourself startup marketing, digital marketing, growth hacking, or whatever else you want to call it:

GROWTH HACKING/STARTUP MARKETING

Growth Hacking is becoming an increasingly popular term for metric-based marketing for early stage startups. The term itself can be controversial, but don’t focus on that too much. It’s a mentality that’s very helpful to understand.

The Definitive Guide to Growth Hacking – A great place to start and get in the mindset of what you need to focus on when growing an early-stage startup. This resource was put together by Neil Patel and Bronson Taylor. Neil Patel is the co-founder of Crazy Egg and KISSmetrics, and is one of the most prominent growth hackers out there.

The Ultimate Guide to Startup Marketing – This one is less of a general overview of what it takes, but has simple actionable starting points for you. This one is put together by KISSmetrics, which as I mentioned above, was started by Neil Patel.

Want some cool case studies? Check out this slide deck (Dropbox, Living Social, AirBnB, etc.).

CONVERSION RATE OPTIMIZATION (CRO)

No matter how much traffic you drive to your site, if those visitors don’t do anything, it does you no good. Conversion rate optimization is all about increasing the conversion rate of your passive visitors to active visitors.

The Beginner’s Guide to CRO – Everything you need to know about optimizing your site is right here. It’s hosted on the Qualaroo site, a company started by Sean Ellis, who is credited for coining the term Growth Hacker. He’s helped many companies grow, but most notably he was the first marketer for Dropbox.

Chapters: What is Conversion Rate Optimization?, Why Conversion Rate Optimization is Important, The Basics of Conversion Rate Optimization, Building and Testing an Optimization Plan, User Experience and Funnel Optimization, Landing Page Optimization, Reducing Bounce and Exit Rates, Myths About Conversion Rate Optimization, Tools to Test and Optimize Conversion, Measuring Conversion Rate Efforts and Calling Winners, Bonus Advanced Tips and Hacks for CRO, Conclusion

SEO

SEO is all about how to rank high on search engines when potential visitors/users/customers search for something relevant to your service. While it’s not the ideal marketing focus for everyone, for most, it’s very crucial.

The Beginner’s Guide to SEO – Moz’s guide to SEO is IMPO the best out there. It’s a little long, but read the whole thing and you’ll know SEO better than some of the cheaper SEO consultants out there.

The Advanced Guide to SEO – Another great guide to SEO put together by Neil Patel (same guy who did the growth hacking guide at the top).

The Advanced Guide to Link Building – Again, by Neil Patel. I put this under SEO instead of it’s own section because link building is core to SEO.

CONTENT MARKETING

Content Marketing is about publishing content online that’s so helpful to people that they share it with others, and they all become your customer. Not quite, but something along those lines. You could say this blog post, and most of the guides on here are content created as part of a content marketing strategy.

The Advanced Guide to Content Marketing – Again, by Neil Patel on Quicksprouts. He’s really killing it with these guides.

SOCIAL MEDIA

I hope I don’t have to explain to you what social media is. All the guides below are from Mashable, the king of social media news online.

Twitter Guide Book

Facebook Guide Book

The Beginner’s Guide to Tumblr

The Beginner’s Guide to LinkedIn

Reddit: A Beginner’s Guide

Beginner’s Guide to Facebook

Beginner’s Guide to Twitter

 

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How to Get Into YCombinator

I started reading HackerNews recently, and I love it. Today, 3 of the top 100 posts happened to be advice for getting into YCombinator, so I though I’d post them here for people who might have missed it. While these are tips for YC, the same advice goes for applying to startup accelerators in general.

And because it’s not all about getting in (also a top 100 from Hacker News today):

And because it’s not all about getting into an accelerator

 

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Things I Wish We Talked About More Often

Tuesdays_with_Morrie_book_cover

The book Tuesday’s With Morrie, which I read in middle school, was life changing. It got me to think and talk about all the things that I think now are some of the most important things to think and talk about.

Mitch, in the book, meets with Morrie every Tuesday, and each week they talk about a different topic:

  1. The World
  2. Feeling Sorry For Yourself
  3. Regrets
  4. Death
  5. Family
  6. Emotions
  7. Fear of Aging
  8. Money
  9. How Love Goes On
  10. Marriage
  11. Our Culture
  12. Forgiveness

How often do you talk about these things? Are these the most important things to talk about?

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Everything I Wanted to Know About the Government Shutdown

Honestly, I’m sick of hearing about the Government Shutdown. Republicans hate Obamacare, Democrats are hating the Republican’s taking the Government “hostage”. I’m not here to point out who’s right or wrong. I’m more interested in why this is happening.

That’s when I came across this amazing article: This Government Shutdown Won’t Be Our Last. The article goes on to compare the current situation with past empires and manages to identify a pattern. This is an excerpt quoted in the article from Lieutenant Colonel Greg Mosser’s US Army War College Master Thesis from 2009:

Nations that reach global supremacy have economies that were built upon years and years of positive forces, all cumulatively pushing to a crescendo that is powerful and resilient. Once at the pinnacle, however, a nation’s attitudes and collective values often change and slowly dampen the powerful economic force that propelled it to its state. These same attitudes and values often result in behaviors that enable another nation to build its economy to one of global superiority. With slight variations on the precise factors, the cycle perpetuates throughout history.

Nations that grow to dominance have repeatedly failed to slow their spending as they reach a plateau, leading to collapse through financial meltdowns. In 60 BC, Statesman Cato filibustered deals to get what he wanted in a government budget negotiation (Rome was having financial problems at this time too). In the 16th century Renaissance Spain, the Hapsburg empire grew so large, they declared bankruptcy 4 times. The Ottoman Empire too, has serious budget problems as it neared it’s end.

Basically, as nations grow larger, they spend more to maintain it. Individuals who have gained political power often do so by promising many things to many people. This leads to a culture of overspending, not caused by the government itself, but by the disparate motives of individuals in the government.

Of course this argument has it’s flaws (as you can read in the comments of the linked article), I think it bring up very good point. We need to spend less, just look at our government deficit over the last 33 years:

Screen Shot 2013-10-09 at 10.52.04 AM

The first step to change is measuring (collecting data), and the next is to understand it. My favorite way of getting an understanding of complicated problems is interactive infographics!

Start by checking out Washington Post’s Charting the Change in 2013 Federal Budget, you can click on any of the boxes to see historical changes over time.

Then, check out these two infographics that breakdown the 2014 budget proposals:

Screen Shot 2013-10-09 at 10.43.32 AM

 

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Top 10 AngelList Syndicates You Want to Check Out

music-making-angels

This post is for the rich wanna-be-passive-angel-investors out there. If you haven’t heard of Angel Syndicates, you should read up on this new service that AngelList recently started offering in private beta: Angels Get Carry for Helping a Startup Raise Money with AngelList Syndicates (TechCrunch).

What’s Equity Crowdfunding?

Equity crowdfunding is fairly new. It’s similar to the crowdfunding you hear about on Kickstarter or Indiegogo, but instead of rewards, you get equity. As of now, only accredited investors (read: rich people) can participate in an equity crowdfunding round. Sites for equity crowdfunding include AngelList, Crowdfunder, Fundable, and many more.

Where Do You Do It?

IMPO, as of now, AngelList is the only site you need to look at if you’re looking to invest in high-growth tech startups. You’ll find most major startups and angel investors from the tech world listed on there. (There are also niché sites, for example, like Quirky that focus on inventions).

So… Angel Syndicates?

Even with equity crowdfunding, however, a new angel investor might have difficulty filtering through the noise and doing the due diligence. That’s where Angel Syndicates come in.

Passive angels can now back Angel Syndicates, which operates much like a VC fund, except there is no management fee. Carry is comparable, and as of now the standard is being set to 15% (compared to the normal 20% a VC takes). The lead angel of a syndicate also has to cover, with their own money, 10% of however much they’re raising for the syndicate (aka: more skin in the game than a VC fund manager).

As a backer, you commit $1,000 or more per deal for X number of deals with a specific angel syndicate. Any time that angel is making an investment, you’re *automatically brought in on that deal for the amount you specified. (*you technically have 72 hours to opt-out, which you can only do under special circumstances – conflict of interest, etc.)

Why I’m So Excited About This

AngelList Syndicates are a great way for new angel investors to start investing in tech startups because they can hedge their bet across a large number of startups, and they can do this without doing due diligence on hundreds of startups, rather do due diligence on a handful of credible angels who have syndicates.

Making it easier and less-riskier for non-savvy rich folks to invest in tech startups leads to more total money available for tech startups globally. More money available for tech startups makes it easier for founders to raise money, and therefor allows them to focus on growing their companies and spreading their innovations.

Top 10 AngelList Syndicates

My methodology is quite simple. There are only 268 Syndicates currently listed, only 10 of them have 10+ backers. If you’re actually going to back a syndicate, I urge you to do your own due diligence. However, relying on a due diligence of others who are putting their own skin in the game is a great place to start (#CrowdsourceEverything).

*Stats from morning of 10/3/2013 – this is going to get outdated real soon…

Kevin Rose – 335 backers for a total of $1,461,100
It’s interesting to note that his carry is listed as 0%, perhaps why he has so many backers. What he’s signaling: that he’s in it not to make money, but to make more funds available for startups.
Confirmed investments on AngelList: 42

Dave Morin – 211 backers for a total of $923,800
Confirmed investments on AngelList: 68

Jason Calacanis – 173 backers for a total of $719,600
Confirmed investments on AngelList: 42

Brad Feld (FG Angels) – 119 backers for a total of $224,401
While it’s currently listed as Brad Feld, this is going to be a Syndicate by FG Angels (part of the Foundry Group). Read more about this on Brad Feld’s blog post here. With plans to invest in over 50 startups by the end of 2014, this is going to be one of the most active syndicates early on.
Confirmed investments on AngelList: 27

Betaworks – 49 backers for a total of $241,500
Confirmed investments on AngelList: 75

MG Siegler – 33 backers for a total of $162,000
Another Syndicate w 0% carry (like Kevin Rose). Probably worth noting that both MG and Kevin are Partners at Google Ventures.
Confirmed investments on AngelList: 46

Elad Gil – 29 backers for a total of $79,000
Confirmed investments on AngelList: 26

Naval Ravikant – 26 backers for a total of $175,500
In case you didn’t know, Naval is the Founder & CEO of AngelList.
Confirmed investments on AngelList: 107

Tim Ferris – 24 backers for a total of $253,000
His next book: 4-Hour Angel Investing. Probably not.
Confirmed investments on AngelList: 30

Andrew Chen – 18 backers for a total of $43,000
Confirmed investments on AngelList: 6

Sundeep Ahuja – 10 backers for a total of $44,000
Confirmed investments on AngelList: 7

For more opinions on AngelList Syndicates, check out this PandoDaily article: AngelList syndicates are changing seed investing whether VCs like it or not.

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Live an Epic Story

We all die and our bodies are handed back to Mother Nature. What is left of us then?

I have a little booklet I keep for an exercise I call “You are who you’ve met.” It lists everybody that’s had an effect on who I am and one sentence about what I learned from then. It includes my family, friends, foes, and even fictional characters. Sometimes the sentence I write down is the same, but the person it’s attached to gives it a different context, and therefor a completely different meaning.

The idea here is that we pass on values to others simply by interacting with them. Those values are then passed onto others. I think this is what makes us immortal. While our bodies may no longer exist, we passed on values from many beings to many others.

Sometimes, our name is attached to these values. Think historical figures, and how they’re existence is a symbol that signifies the values we pass on when telling their story. Religion and story tellers (like Disney) use stories to pass on values. It’s because we humans remember experiences, and stories are a way for us to experience someone else’s life. Values taught through stories are “stickier”.

So if you want to pass on the values that you believe make the world a better place, live a story worth telling, one that teaches the values you feel blessed to have learned from others. Be immortal. Live an epic story.

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Making Sense of Agile

Disclosure: we have a 2.5 hour workshop on Agile Tools with Patricia Anglano coming up at Coloft on October 8th, which inspired me to write this article. Read more about it here. In this article, I tried to link to the most helpful Agile articles I found for people just getting introduced to the concept.

Though I’ve coded on and off for some time now, I can hardly call myself a developer. I’ve barely collaborated with others on a project. I’d love to find time, and when I do, I’d love to try Agile.

I’ve been reading up on Agile Software Development, but honestly it’s still very confusing to me. I just can’t manage to fully imagine what the process looks like. What I understand is that it’s good for iterative software development, which works well with the lean startup method.

Who uses it?

It seems like most dev teams I know (both startups and dev shops) use Agile or at least some aspects of it. The most neutral survey on agile adoption I could find was this Forrester survey from 2009:

35% of respondents stated that Agile most closely reflects their development process, with the number increasing to 45% if you expand what you include in Agile’s definition.

In a more recent survey from 2012, 84% of respondents (software development professionals) said their organization is using agile development. The number seems quite high to me, but this Annual Development Survey is pretty to look at and has a lots of interesting info, so I highly suggest you take a look.

Should I learn it?

If you’re a software developer or a project manager at a startup, I would say yes. If you touch any part of the product development cycle, I would say at least a little. While I’ve had people tell me you’re either agile or not agile (you can’t be “kind of” agile), plenty have told me otherwise. Either way, it seems like there are lessons to be learned simply from understanding how it works.

I also think it’s great for business managers and CEOs should familiarize themselves with the concept of Agile (I agree with this rather long Forbes article, The Best-Kept Management Secret on the Planet: Agile).

I was also introduced to this TED video about how Bruce Feiler implemented agile practices with his family and the benefits he saw in doing so. So perhaps there are lessons learned for any organized group.

In an effort to balance my bias, I found this article that provides some guidance into whether your organizations strengths are better suited for waterfall or agile. This Quick Introduction to Agile Software Development also highlights some cases where you might not want to go agile.

How do I learn Agile?

I can only imagine the best way to learn agile is to join a team who already uses it. If you’re looking to start using agile in your organization, there are consultants you can hire to help you implement. Another costly solution is getting certified, but I think it makes more sense to learn by doing.

If you want to start learning on your own, the Quick Introduction to The Quick Introduction to Agile Software Development is the most comprehensive, yet simple guide I’ve found so far online. You should check out the original Manifesto for Agile Software Development and the 12 principles listed, but it doesn’t guide you in implementing. It’s always worth reading the Wikipedia article if you haven’t. If you Google “agile development”, it’ll take you down a rabbit hole filled with lots of information, but it will take some time to make sense of it all.

Apparently there is such a thing as Good Agile and Bad Agile. I’ve found some tips from somebody whose experienced agile at multiple companies, Agile Development: the quickstart guide to doing it right.

That’s why when Patricia Anglano of Agile Media Consulting, who helps companies implement agile, approached me with her hands-on workshop to let people experience agile in a night, I was quick to set it up at Coloft.  The 2.5 hour workshop is coming up in October and you can find more info here.

I know there are other opportunities to learn Agile (General Assembly does classes, but none are currently upcoming in LA) and I’m sure there are great resources I’m missing. Please don’t hesitate to share any you know of in the comments.

I’d like to end with a fun presentation that introduces the essential concepts of agile by comparing it to Tetris: Improving Agile Development Through Tetris.

 

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Idea: Github for Music – The Open Source Music Project

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Update: Found it! Two weeks later, this article popped up on TechCrunch: Splice Is GitHub for Musicians. (I wrote this article on Sept 26, TechCrunch article is Oct 9)

What if I could take a bass beat that you created, and a strum that let’s say Julie created and create my own song directly on a web app? It would automatically give attributes to people’s sound-bytes or full songs that I used to build my song.

Someone could then take the song I created, sample bits of it into another song. This would again, automatically attribute me, but also you and Julie.

Since musicians are already doing this, why not create a platform that allows people to easily collaborate and build songs on top of other people’s song, but with proper attribution?

Here are a few awesome open source music sites, but nothing’s quite there.

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15 Notable Venture Capital Firms in Los Angeles

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[Update 9/24] Added TenOneTen Ventures to the list, so now it’s at 16.

Whether you call in Silicon Beach, the LA startup community, or the Los Angeles tech scene, it’s pretty much one and the same. What fuels it? Money. Here are a list of notable local Venture Capital firms, links to find out more about them, where they’re headquartered, and some notable investments they’ve made.

*This list does not cover 100% of VCs in LA. Notable VCs and Investments are decided by the author based on factors including size of investment, recent activity, or notability in LA.

Come by Coloft anytime to hang out with me and work on resources like this :) I’m also currently working on breaking down which industries and stage they invest in so keep an eye out (or reach out to help! – yohei@coloft.com).

Sources: Crunchbase, The Startup Universe

A-Grade Investments
HQ: Los Angeles
Notable Investments: Fab.com, SocialCam, Getaround, Couple
Website | Crunchbase | Startup Universe

Anthem Venture Partners
HQ: Santa Monica
Notable Investments: Beachmint, Scopely, SurfAir, BUZZMEDIA, Big Frame
Website | Crunchbase | Startup Universe

Baroda Ventures
HQ: Beverly Hills
Notable Investments: Science Inc, Surfair, Fab, Retention Science, Dog Vacay, Letuce, 20JEANS, Chromatik
Website | Crunchbase | Startup Universe

CAA Ventures
HQ: Century City
Notable Investments: 20JEANS, NuORDER
Website | Crunchbase

Canyon Creek Ventures
HQ: Santa Monica
Notable Investments: Amplify LA, Invested.in, At the Pool
Website | Crunchbase | Startup Universe

Clearstone Venture Partners
HQ: Santa Monica
Notable Investments: The Rubicon Project, Glossi, At The Pool
Website | Crunchbase | Startup Universe

Crosscut Ventures
HQ: Santa Monica
Notable Investments: Docstoc, GumGum, StyleSaint, Lettuce, Eventup
Website | Crunchbase | Startup Universe

Karlin Ventures
HQ: Westwood
Notable Investments: Invested.in, Amplify LA, ChowNow, PageWoo, Bitium
Website | Crunchbase | Startup Universe

New World Ventures
HQ: Chicago (LA Office: Westwood)
Notable Investments: Truecar, Beachmint, Big Frame, Eventup
Website | Crunchbase | Startup Universe

Palomar Ventures
HQ: Santa Monica
Notable Investments: Fulcrum Microsystems, ExteNet Systems, Predixion Software
Website | Crunchbase | Startup Universe

Rustic Canyon
HQ: Santa Monica
Notable Investments: Science, Docstoc, LoopNet, Chromatik
Website | Crunchbase | Startup Universe

Redpoint Ventures
HQ: Menlo Park (LA Office: Westwood)
Notable Investments: Twilio, PandoDaily, Machinima, Stripe, Path, Heroku, SocialVibe
Website | Crunchbase | Startup Universe

Siemer Ventures
HQ: Santa Monica
Notable Investments: Technorati, Vator, Ranker, Amplify.LA, Surf Air, Stack Social, 20JEANS
Website | Crunchbase | Startup Universe

Steamboat Ventures
HQ: Burbank
Notable Investments: Merchant Circle, EdgeCast Networks, GoPro, Photobucket
Website | Crunchbase | Startup Universe

TenOneTen Ventures
HQ: LA
Notable Investments: Kaggle, Ranker, Nearwoo, Divshot, Surfair, Scopely
Website | Crunchbase | Startup Universe

Upfront Ventures
HQ: Century City
Notable Investments: TRUECar, Factual, Maker Studios, Adly, NuORDER, DailyLook
Website | Crunchbase | Startup Universe

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