This is a presentation about internet startup basics I gave at Trade School Vancouver's launch day.

1. Internet Startups 101
Ian MacKinnon (@imackinn)
Saturday, 19 January, 13

2. What is this Talk
It’s for People
• who have an idea for a mobile or web app
• looking to work for a startup
• just want to learn
Saturday, 19 January, 13

3. Warning
• There is a lot of opinion in this
• A lot of relying on industry leaders
• The best people still only success 10-20%
of the time
• I cite where I can, but some bits of wisdom
are hard to pin-down
Saturday, 19 January, 13

4. What is a Startup?
• "The only essential thing is growth. Everything else
we associate with startups follows from growth." -
Paul Graham
• A coffee shop is not a startup, but a coffee chain
expanding, or something that distributes coffee to
thousands of households is
• We mostly talk tech because nothing scales quite
as easily as software
Saturday, 19 January, 13

5. So, you have an idea...
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6. STOP!
• Stop building your idea, start solving a
problem
• Be careful not to have a “made up problem”
• “Customers don’t care about your
solution, they care about their problems”-
Dave McClure
Saturday, 19 January, 13

7. • “Get out of the building” -Steve Blank
• Who needs what you’re making?
• Why isn’t someone already doing this?
• What are people forced to do now that
your product does not exist?
• Will people pay for a solution to this pain?
Saturday, 19 January, 13

8. but but but...it’s secret
• You’re so much more likely to be making
something only you will want than
someone stealing your idea
• Nobody credible will sign an NDA to hear
your idea
Saturday, 19 January, 13

9. What you don’t need
to worry about yet
• Name
• Logo
• Business titles
• Business cards (sorta)
• Business plans
Saturday, 19 January, 13

10. But, I need
something, right?
• Launchrock.com
• Unbounce.com
• Get some seed people; build a mailing list
Saturday, 19 January, 13

11. Incorporating
• You’ll need to eventually, but the best
companies tend to be products first
• Don’t do a partnership, simple corporate
structure
Saturday, 19 January, 13

12. Getting Started
• What is the absolute minimum thing you
make to validate your idea as being useful?
• Put the big assumptions up front
• “Minimum Viable Product”
Saturday, 19 January, 13

13. Minimum Viable
Product
• “The MVP is a version of a new product
which allows a team to collect the
maximum amount of validated learning
about customers with the least effort”
• Doesn’t have to be public
• Deployed to early adopters
Saturday, 19 January, 13

14. But, I’m not a
Programmer
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15. • You can’t outsource your core competence
• If you don’t have tech in-house, you won’t
be able to move as fast
• Investors won’t take you seriously if you’re
dependent on an outside firm
Saturday, 19 January, 13

16. Options for Lone Non-
Technical Founders
• Find old friend who’s a programmer
• Hire Contractor to make an MVP
• Learn yourself (codeacademy, BCIT, etc)
• Network, but tech events are filled with
people like you
• Sell something first
Saturday, 19 January, 13

17. Partnerships
• Don’t split up company right away
• Make sure commitments are taken into
account
• Reverse vesting is your friend. Most
investors will ask for it anyway
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18. Ok, back to making
stuff....
Saturday, 19 January, 13

19. Programming Languages
• Unfortunately, this is an early decision that
has a lot of long-term implications
• “The single worst strategic mistake that any
software company can make: they decided
to rewrite everything from scratch” -Joel
Spolsky
• Determines who you can hire, not just
technically, but culturally
Saturday, 19 January, 13

20. Mobile
• iOS => Objective-C
• Android => Java
• Phonegap
• Titanium
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21. Web
• Ruby on Rails
• DJango/Python
• PHP
• Java
• .NET
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22. Launching
• The product is typically deployed to a subset of
possible customers, such as early adopters that are
thought to be more forgiving, more likely to give
feedback, and able to grasp a product vision from
an early prototype or marketing information.
• You can try for TechCrunch, but sometimes mid-
level bloggers are your sweet-spot
Saturday, 19 January, 13

23. But what if it sucks?
• “If you are not embarrassed by the first
version of your product, you’ve launched it
too late” -Reid Hoffman
• “Your #1 competitor starting out will
always be the BACK button.” -Garry Tan
• If you launch a crappy product, nobody is
going to know
Saturday, 19 January, 13

24. Distribution
• “Get distribution or die trying” -Parveen
Kaler
• How will your users find you?
• Who is going to be your first paying
customer?
• You pay for users or they refer each other
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25. Saturday, 19 January, 13

26. Pricing
• Don’t give your initial customers it for free
• “You get the real feedback after you ask
for $20” -Dan Martell
• Don’t ask “What would you pay for this?”
• “You’ve found the market price when
buyers complain but still play” -Paul
Graham
Saturday, 19 January, 13

27. Validated Learning
• “If you launch it and see what happens,
you’ll succeed -- at seeing what happens” -
Eric Ries
• “The truth is apolitical” -Google Aphorism
Saturday, 19 January, 13

28. Pirate Metrics
(Dave McClure)
• Acquisition
• Activation
• Retention
• Referral
• Revenue
Saturday, 19 January, 13

29. Iterating
• “Your startup is essentially an organization
built to search for a repeatable and scalable
business model” -Steve Blank
• Pivot if necessary
• “It’s not the customers job to know what
they want” -Steve Jobs
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30. Saturday, 19 January, 13

31. Traction
• Loosely Defined, but you can tell when you
have it
• Month-over-month growth
• Customer/market fit
• Ideally a “Hockey stick”
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32. Let me know what it’s
like to have traction :-(
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33. Investing
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34. Should you take
Investment?
• Might allow you to quit your day job
• Investors can ask questions that are illegal
for employers to ask
• Software costs are ridiculously cheap
• You’ll need large market, scalability, exit
plan, value proposition, unfair advantage
Saturday, 19 January, 13

35. Investment Concepts
• Equity
• Convertible notes
• X% of company doesn’t mean X% of
control
• Accredited Investors
• Dumb Money vs. Smart Money
Saturday, 19 January, 13

36. Seed Stage
• 25k isn’t hard to get for credible teams
• A lot of accelerators popping up
• Serious gap in 100,000 to 1,000,000 range
in Canada
• Angellist.co
Saturday, 19 January, 13

37. Raising is Hard
• There are outlier stories, but those come
from established people or teams with
crazy traction
• Takes months
• “Traction trumps everything”
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38. Other Funding Sources
• SR&ED
• IRAP
• CMF
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39. Exiting
• Get Acquired
• acqui-hires
• technology
• strategic
• IPO
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40. Working for a Startup
• If you’re not a dev, you’re gonna have a
tough time
• If you’re a dev, you’re gonna have to adjust
expectations
• Right after a company raises money is a
great time
• Hire slow, fire fast
Saturday, 19 January, 13

41. ...more reading
• Thoughtbot Playbook
• Hacker News
• Paul Graham Essays
• 4 Steps to the epiphany
• The Lean Startup
• 500 Startups Blog
Saturday, 19 January, 13

42. Questions?
Saturday, 19 January, 13