A tale of two startups

A Tale of

Two Startups (and a half)

By Benjamin Joffe

Going Global From Asia JFDI | Singapore | 2012.02

HELLO! My name is

@BenjaminJoffe!

@BenjaminJoffe

–  In “Asia” since 2000 (JP, KR, CN, SG, MY)

– “Digital Naturalist” & Consultant (+8*) – Angel investor (Cmune, MyGengo) – MobileMonday Beijing Founder (40 events)

– 100+ talks in 18 countries – 100,000+ views on SlideShare – “Mentor” in 5 incubators (SF, MV, PL, CN, SG)

– Startup founder since 2011! (DayDeed.com)

I wear many hats!

Idea #1 ���There is no “Asia”

“Asia” was originally a concept of Western civilization”

Ecosystems & Civilizations

Those are the two important lenses to look through

Ecosystem?

– GDP/capita

– Population –  Infrastructure – Access to talent

– Access to money – Access to advice

Ecosystems encompass elements of economy, workforce, infra…

Idea #2 ���There is no “Global Market”

We are in fact addressing new ecosystems. “Entering China” often equals to “starting a new company”.

How “global” is even Facebook if not in China?

Corollary���There is no Silicon Valley

With Yuri Milner signing checks to Y Combinator startups, whose founders are from around the world, “Silicon Valley” is more of a

network than a place.

Bonus Startup: Newt Games

I will start with the first startup I was exposed to, back in 2003

SoLoMo in 2003!

– Location-based social game – Virtual goods & avatars – 3G

– GPS –  In Japan!

So innovative it is pretty amazing even today

Problems

– Engineers only – No user acquisition strategy

– Data too expensive – Too few compatible handsets

Unfortunately even Japan was not ready for it

What I learned

– “Too innovative” – 8 years too early

– Marketing? – Art vs. Business

And the company was not really ready for business either

Cmune

This is the first startup I have been involved with (almost) from start

UberStrike is the #1���First-Person Shooter on Facebook

It is doing pretty well today, with a very advanced game

Human Instincts

It taps into fundamental human instincts such as…

“…shoo&ng  someone  in  the  face  with  a  gun.”  

Ma#hew  Johnston,  Senior  Producer  ,  PopCap  

Told you.

Demo

Check out http://www.facebook.com/uberstrike

Indicators of Success

•  Least to most important –  Industry recognition

– 20 staff –  Investment by top tier VC – 1M players

– Revenue

Revenue is what marks success, beyond popularity

Going back 4 years

But of course, it was not a straight story

Cmune

– 2 foreign friends in Beijing – “3D real-time collaboration”

It started with 2 guys who needed a tool to work online together

From Delusions ���to Business

– 2008: pitch to Joi Ito – Accidental Widget – Pivot to gaming = kill 4 projects + B2B – Pivot to web-based = dropping the client – Pivot to Facebook = free distribution – Pitch at LeWeb (2008.12) – Upgrade everything! – Pitch angels start at LeWeb (2010.12)

The world changed as the product was being built

Financing for 4 Years

– Year 1 Founders – Year 2 Friends

– Year 3 Team + B2B – Year 4 Min. guarantees + Revenue + Loan – (Year 5) Seed funding + Revenue

How to finance? Cmune has done it all! (except donations, kickstarter and selling cereal boxes)

Living for 4 Years

– Founders experienced + had some savings

– Beijing cheaper to live ($2K/month is enough) – Hiring cheaper has a cost – Building network

How to keep going when you can’t pay people and yourself much?

Personal Costs for Founders

– 4 years with minimal salary, often no salary •  4 x $125K x 2 = $1M

– High risk & high stress times – “Stuck” in Beijing – You’re getting married!

The opportunity cost is significant, and so are constraints (place, co-founder).

Personal Rewards for Founders

1.  Over $1M value created 2.  Own boss 3.  Build something people love

4.  Amazing experience 5.  Meet cool people

When you succeed, it is worth it (of course). If you fail, you still have all except money! (but time is gone!)

What now?

•  Mac App Store (#1 Game, 500,000+ DLs) •  Mobile (call by Nvidia) •  More!

Summary of Problems

– 4 years (somewhat typical in fact)

– Many mistakes (none fatal) –  (almost) ran out of money 3 times – Various crises •  Stock options, mis-hires, biz dev, …

– Hiring juniors: you get what you pay for •  Lots of training, lower quality, less ideas, slower

Advisors can help you through problems Smart people in the team are recommended

What I learned

– “Too innovative” – 4 years too early?

– Networking – Financing – Hiring

Started very early, thankfully the world changed!

DayDeed

This is my own startup project

“One good Deed per Day”���“Wisdom from Friends”���

“Everyone can help!”���“Paying it forward”���

“Facebook without the crap”

Which tagline do you like best?

“I need a dentist!”

(DayDeed pitch)

DayDeed brings you advice from friends: trusted &personalized

“Wisdom of Friends”

•  Not just sharing, doing – “Am Anfang War Die Tat!”

•  Helping friends & getting helped – Paying it forward

It takes social networking beyond simply connecting & sharing: problem solving!

“Social Craigslist”���“Twitter for what matters”���

“Facebook without the crap”

A few other ways to look at DayDeed

Demo

It’s live! Register at http://daydeed.com

1"Create up to 3 active needs

2"See needs from friends Reply or Cheer them

3"

Help and get help from strangers too!

Timeline

•  2011. 5 Failed pitch at iWeekend in Beijing •  2011.6~8 Research in SF + Founder Institute •  2011.9-10 Search in Singapore + events •  2011.11 Hired team & moved to Malaysia

•  2011.12 Alpha •  2012.01 Open Beta •  2012.02 Silicon Valley roadshow

The research phase included many discussions, mockups and “customer development” interviews

Problems

•  I can’t code •  I can’t design •  I don’t have co-founders •  I’ve never done a startup before

How did I do it?

Life Goals

•  I had to do it •  I don’t need a house (yet) •  I don’t need to marry or kids (yet) •  I can afford to lose money (some)

Better check your priorities before you embark on a costly adventure in time and money

What I have

•  Savings (+8* for cash flow)

•  Network (thanks to 100+ talks & 5 years) •  Knowledge (consulting rocks!) •  Concept (original to me ^_^; )

A strong idea and limited resources are enough to start!

What I CAN do

•  Draw mockups (Balsamiq rulz!) •  Write user stories

•  Find great people •  Get feedback •  Hustle

This is all about PRODUCT PLANNING, HIRING, CUSTOMER DEVELOPMENT and BUSINESS DEVELOPMENT.

I think this is the Founder’s job

Options

•  Learn programming •  Outsourcing (India, Slovenia, etc.)

•  Hackers (Hackweekend / Startup Weekend…) •  Freelancers •  Senior developers

I had many options for the technical part, and decided to go for senior developers

What I need

•  Reasonable costs

•  A few smart guys •  Decent infrastructure

The question was who, where and at what cost?

Geographical Options

– San Francisco

– Beijing – Singapore – Berlin

– South-East Asia

Those are the locations I considered. Malaysia won.

It’s all about Ecosystems

•  GDP/capita > English-speaking market •  Population > Large

•  Infrastructure > OK •  Access to talent > Introductions •  Access to money > Self-funding + network •  Access to advice > Founder Institute, network

Malaysia scored well on most parameters

What I learned (a)

•  Prepare well •  Research (usage, customer development interviews) •  Prepare your act (mockups, user stories)

•  Build smartly •  Work with smart people •  Launch fast

•  Track REAL metrics (not vanity) and Act on them

I use Balsamiq, Pivotal Tracker, Mixpanel, Google Analytics and some custom stats. Read “The Lean Startup” by Eric Ries

What I learned (b)

•  Share your idea (leaves stealth to ninjas) – Feedback is super important – Especially negative / dubious – Maybe not a user, but prepares u for questions – No-one will quit their job to do it – Already half a dozen doing it you don’t know about – “Competitors” build the market too

•  Silicon Valley culture is PAYING IT FORWARD You NEED feedback. Your job is (1) Finding who to ask (2) Prioritizing

To get people’s time, HELP THEM FIRST

What I learned (c)

“Design is HOW IT WORKS”

It took me 2 years to understand this phrase. I’ll save you time.

Meaning?

•  Design IS NOT looking good

•  Design IS NOT only solutions

•  Design SHOWS HOW TO USE IT

•  …and EMOTIONS

People understand at once how to use a well designed product. Something ugly can totally be more usable than something pretty (think about those fancy light switches: which one lights up what?

Read “Emotional Design” & “The Design of Everyday Things” by Don Norman

Consequences on Landing page

•  Know in 5 seconds what it does

•  Use it within 5 seconds

•  Prove that it works

•  Feel good: how it feels (UI, copywriting)

Make people happy using your ugly product before making it pretty!

What I learned (d)

•  Specs & Project Management are easy –  Pivotal Tracker

•  Design can come late –  1.5 months AFTER alpha!

•  Black Magic of Copywriting

•  Social Design & Emotions!

Prioritizing is hard. Design & copy matter as they convey EMOTIONS

What I learned (e)

Sign up to

DayDeed.com

For the last tip, sign up to DayDeed.com and give me feedback there!

So can you go global from Asia?

•  There is no Asia

•  Research A LOT then build FAST and keep MEASURING

•  Build connections in Silicon Valley for future resources, users, market access

•  Find a few A-players for your project

So many companies are built in small countries, the 48 countries of “Asia” will not be an exception!

Good luck���& ���

Enjoy the ride!

Reading List

•  Skip the new TV series or funny YouTube video and invest $10 in ideas instead:

– The Lean Startup – The Design of Everyday Things –  Emotional Design – Understanding Comics – Kopywriting Kourse

•  benjamin@plus8star.com