Archive for July, 2010

HackNY demo event

July 28, 2010 at 8:03 am · Filed under Startups

Just got this sent to me by one of the organizers:

 

** 2010 hackNY Demo Fest **
 
WHERE: 109 Warren Weaver Hall (Courant Institute), NYU; 251 Mercer Street 10011
WHEN: Friday July 30, 6-8 pm
 
WHAT: The 2010 class of hackNY Fellows invites you to attend our 2010 hackNY Demo Fest Friday, July 30, 6-8 pm in rm 109 of the Courant Institute, NYU (251 Mercer St. between 3rd and 4th street). The class of 2010 will be presenting their accomplishments during their 10 week internships as part of the hackNY Fellows program. Please do come meet the Fellows and hear about what they've accomplished and learned, both working with some of NYC's best startups as well as in lectures from members of NYC's startup community.
 
Please contact info@hackNY.org or visit http://hackNY.org for more information.
 
ABOUT HACKNY:
hackNY is an initiative to mentor and federate the next generation of NYC tech all-stars. During the summer hackNY organizes the hackNY
Fellows program, in which selected fellows are matched with NYC startups able to demonstrate a mentoring environment, with technical needs matched to the skills of the selected Fellow. Fellows also enjoy shared housing and a set of lectures from leaders in the NYC startup
ecosystem, including founders, CTOs, and investors.
During the school year hackNY organizes student hackathons to help students learn about opportunities in NYC's great emerging tech startup ecosystem, as well as to help them meet their fellow members of the student-hacking population.
 
SPECIAL THANKS:
The success of the 2010 hackNY Fellow program would have been impossible without the active support of the entire NYC tech ecosystem, including numerous founders, CTOs, technologists,
educators, investors, and students. Financial support for the 2010 class of Fellows was provided by the Ewing Marion Kauffman Foundation.
Special thanks to NYU and the Courant Institute for their logistical support both with summer housing and with the hackNY student hackathons. We thank as well Alex Qin and Arikia Milikan for assistance throughout the summer, and thank our summer lecturers: Fred Brooks, Kristina Chodorow, Kushal Dave, Chris Dixon, Ann Miura-Ko, Jonah Peretti, Chris Poole, Martin Wattenberg, and Albert Wenger.
** 2010 hackNY Demo Fest **
 
WHERE: 109 Warren Weaver Hall (Courant Institute), NYU; 251 Mercer Street 1=
0011
WHEN: Friday July 30, 6-8 pm
REGISTER HERE: http://hacknydemofest.eventbrite.com
 
WHAT: The 2010 class of hackNY Fellows invites you to attend our 2010
hackNY Demo Fest Friday, July 30, 6-8 pm in rm 109 of the Courant
Institute, NYU (251 Mercer St. between 3rd and 4th street). The class
of 2010 will be presenting their accomplishments during their 10 week
internships as part of the hackNY Fellows program. Please do come meet
the Fellows and hear about what they've accomplished and learned, both
working with some of NYC's best startups as well as in lectures from
members of NYC's startup community.
 
Please contact info@hackNY.org or visit http://hackNY.org for more information.
 
ABOUT HACKNY:
hackNY is an initiative to mentor and federate the next generation of
NYC tech all-stars. During the summer hackNY organizes the hackNY
Fellows program, in which selected fellows are matched with NYC
startups able to demonstrate a mentoring environment, with technical
needs matched to the skills of the selected Fellow. Fellows also enjoy
shared housing and a set of lectures from leaders in the NYC startup
ecosystem, including founders, CTOs, and investors.
During the school year hackNY organizes student hackathons to help
students learn about opportunities in NYC's great emerging tech
startup ecosystem, as well as to help them meet their fellow members
of the student-hacking population.
 
SPECIAL THANKS:
The success of the 2010 hackNY Fellow program would have been
impossible without the active support of the entire NYC tech
ecosystem, including numerous founders, CTOs, technologists,
educators, investors, and students. Financial support for the 2010
class of Fellows was provided by the Ewing Marion Kauffman Foundation.
Special thanks to NYU and the Courant Institute for their logistical
support both with summer housing and with the hackNY student
hackathons. We thank as well Alex Qin and Arikia Milikan for
assistance throughout the summer, and thank our summer lecturers: Fred
Brooks, Kristina Chodorow, Kushal Dave, Chris Dixon, Ann Miura-Ko,
Jonah Peretti, Chris Poole, Martin Wattenberg, and Albert Wenger.

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The Starving Startup

July 19, 2010 at 7:11 am · Filed under Uncategorized

This was published to my letter.ly subscribers on 5/29. I just published another one yesterday called "Zombie startups, fake liquidity, and flailing VCs". Sign up at letter.ly/dave to get them first.

Today I want to talk about something that hit me pretty hard this past week on the last day of the TechCrunch Disrupt conference: for all the talk about Lean Startup vs. Fat Startups, no one was talking about the Starving startup.

Really quick background on what Lean and Fat startups are. "Lean startup" is this idea that startups who don't have product / market fit should stay quick and agile as they iterate and pivot. For example, don't hire an expensive VP of Sales and a 10 person sales team until you know you've got a product you can sell scalably. "Fat startup" is this idea that in some cases you need to spend heavily to win, because the gap between being #1 in a market and everyone else is large.

What I realized is that all this talk about "lean" was being misinterpreted by many (myself included) as "cheap". Stay small, don't hire unless absolutely necessary, figure out the perfect business model… and then raise a bunch of growth capital and ramp up. I think we've taken it too far and created the "Starving" startup. 

A starving startup typically has 1 product & business focused founder and one technical founder. Following the lean startup concepts, they build, test, and iterate on their product. Since it's just the two of them, it can take 1-2 years to find product / market fit – there is only so much 2 people can do, and typically the bottleneck is in engineering early on as the product gets built. After months or years of effort, they finally achieve product / market fit, as greater than 40% their survey respondents say they would be very disappointed if the product suddenly was no longer available. Congratulations!

Here's the problem: 1-2 years is an eternity for consumer web software, because "fast followers" can generally leapfrog the time you spent making mistakes, copy your successes, and be out in the market quickly. Heck, they might even get to product / market fit faster than you, by copying the general direction you're taking but making key innovations. Suddenly, you're fighting for your life in a crowded market… a market you created!

This is a long-winded (sorry!) way of saying I think startups need to raise more seed money than they have been. $200k (or $350k, the amount we raised) is too little. Sure, it keeps you hungry (literally!), but you're just not moving fast enough. If managed properly, an 8-12 person team with $1.5 million in seed money can make dramatic progress. Basically, an experienced and agile entrepreneur + access to capital is a powerful combination, so take the money! 

From an investors point of view, I can understand the hesitation – you want an entrepreneur to turn assumptions into facts and "de-risk" (hate that word, sorry) before investing significant capital. But if you come across an amazing team and a strong market, I think investors need to convince founders to take on more capital and increase burn to $50-$100k / month, while still practicing all of the agile "lean startup" techniques that Eric Ries, Steve Blank, and Sean Ellis have been preaching. Remember, just because you are thinking lean doesn't mean you need to starve.

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