What’s the best way to get more customers for your product?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
OccupyAppStore – AVC

“We can’t figure out how to get on the leaderboards. The app stores aren’t working for us as a distribution channel.” To which I replied “All the app stores use a leaderboard model which makes the rich richer and everyone else poorer. We are in the 99%, wishing we were in the 1%.”

What’s the best way to create your strategy?

Bubba Murarka (Partner @ Draper Fisher Jurvetson (DFJ))
Part 1 of 2: Should you build for the Apple Watch platform? — Medium

Over the years I’ve been using a framework to evaluate new platforms: Technology enablement — Can something be done that wasn’t possible or easy to do before? Distribution — How does the platform help you gain new users and engage existing users? Business model — Does the platform provider have a clear business model that you can align with to sustainably share in the value created?

What’s the best way to create a platform/embed strategy?

David Sacks (CEO at Zenefits)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

when YouTube started, the way they got distribution initially was to embed videos inside MySpace, which is exactly the tactic that PayPal had used inside eBay, we embedded our auction logos inside of eBay auctions. Basically turning larger sites into involuntary platforms for our applications, we figured out that distribution model.

What’s the best way to create a platform/embed strategy?

Mark Suster (Managing Partner at Upfront Ventures)
Download • Snapchat

It’s really hard in the app store. It’s controlled by people who pay a lot for distribution. The key is to find alternate distribution. I’ve seen success with business apps going through slack to get downloads. If you have an app you need to think about other means of distribution. Think imgur, think facebook, think reddit. If you’re a business company you can distribute via HubSpot or Salesforce

What’s the best way to get more customers for your product?

David Jackson (Founder, Seeking Alpha)
The three steps to building a great company, and why most startups fail on the first step | A Founder’s Notebook

Why do we move prematurely from “build a product people love” to growth? (i) It’s easier to measure user or revenue growth than it is to measure how much users love your product. (ii) Since sustainable growth is impossible without a successful product, growth metrics assume product success; so we think we can measure product success by measuring growth. (iii) Growth is the true measure of startup success, and entrepreneurs (and particularly VCs) … (read more)

David Jackson (Founder, Seeking Alpha)
If you have low retention, don’t scale and keep your costs low | A Founder’s Notebook

If you have low 90 day retention, then you don’t have product-market fit. But 90 day retention might not be sufficient on its own to demonstrate product-market fit. Consider also user engagement, your net promoter score, whether your product is liked or loved, and the ease of closing sales.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Growth vs Retention – AVC

It’s hard to grow if you are churning your users. You might think you have product market fit and so you scale up your hiring, your marketing, your sales, and your capital raising and spending. But if you can’t retain a healthy percentage of your users past ninety days, you don’t have product market fit yet and all the investment you make in your business is just money down the drain. So focus first on retention, then scale.

Jason Lemkin (Managing Director at Storm Ventures, SaaStr.com)
Jason Lemkin: The Right Metrics For Your SaaS Startup | InsightSquared

Overinvest in customer success – that’s my #1 growth hack. That doesn’t get you to your first 10 or 20 or 100 customers, but that’s the best way to turn those 100 customers into 1,000.

Josh Elman (Partner at Greylock Partners)
Building your growth model and Ladder of Engagement — Medium

Purpose: What is the core purpose of the product? Users: Who will care about that core purpose? Inception: How can I get people to hear about this product for this purpose? Adoption: What does someone need to do to get the product to fulfill this purpose for them? Habit: How frequently should the person use the product, and how can we get them to adopt the habit?

David Jackson (Founder, Seeking Alpha)
Sustainable growth vs. growth hacking | A Founder’s Notebook

Most people think about growth in terms of Acquisition and Activation: “How many signups and activations have we had?” “How can we get more signups and activations?” But they should focus on Retention and Referral: “How can I retain an insanely high percentage of my users?” (= product-market fit); “How can I get them to refer their contacts to my product?” (= virality)

Paul Graham (Co-Founder & Partner at Y Combinator)
Default Alive or Default Dead?

In practice there is surprisingly little connection between how much a startup spends and how fast it grows. When a startup grows fast it’s usually because the product hits a nerve, in the sense of hitting some big need straight on.

David Cancel (CEO, Co-Founder at Drift)
3 Warning Signs That Your Product Sucks

If you repeatedly hear any of the following comments, chances are you are not solving a critical problem [for your customer]: “If you made your app easier to use I would start using it. ” “I’m really busy right now but I’ll start using your app soon. ” “If your app was cheaper I would start using it. “

David Jackson (Founder, Seeking Alpha)
Sustainable growth vs. growth hacking | A Founder’s Notebook

If your growth is all based on hacks, then your growth is a function of how much effort you can keep putting into these hacks. If your growth, which is a derivative of customer base, is itself a function of your customer base, you will grow exponentially. And that growth curve comes without you having to spend money.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Word of mouse

…at the heart of real growth is a simple idea: People decide to tell other people.

Andy Johns (Current VP of Growth at Wealthfront. Formerly growth at Facebook, Twitter, Quora. Ex-EIR Greylock)
Real Engines Of Growth Have Nothing To Do With Growth Hacking | TechCrunch

Understand where your success is coming from today and double down on what is already working. If these channels are working for you without any real effort on your part, then there are huge opportunities to expand on them.

Andy Johns (Current VP of Growth at Wealthfront. Formerly growth at Facebook, Twitter, Quora. Ex-EIR Greylock)
Real Engines Of Growth Have Nothing To Do With Growth Hacking | TechCrunch

Real growth is about finding and removing friction. The opportunities to eliminate friction are usually huge… they can take years to fully uncover.

David Jackson (Founder, Seeking Alpha)
Andy Johns on how to build a winning product | A Founder’s Notebook

Be clear about your target user. Force yourself to articulate your value proposition. Double down on what’s working by removing frictions.

David Jackson (Founder, Seeking Alpha)
The three steps to building a great company, and why most startups fail on the first step | A Founder’s Notebook

In my experience, the most common fatal error made by entrepreneurs (often encouraged by their VCs) is to focus insufficiently on building a product users love. We move from core product development to growth — prematurely. This is a mistake we’ve made numerous times in Seeking Alpha.

David Sacks (CEO at Zenefits)
New Sales Models – David Sacks, Founder and CEO of Yammer – YouTube

You have to innovate on distribution, not just product. Do you have a viral strategy? Do you have a platform strategy? Do you have an embed strategy? At PayPal, we had a viral strategy for acquisition through email. We bootstrapped off the eBay platform, and we embedded PayPal logos on eBay auctions.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Winback Campaigns vs New Customer Acquisition – AVC

As mobile becomes a more difficult environment to grow in (maturing market, more competition, growing dominance of the leaders), we see companies spending more and more money on new customer acquisition. While that is necessary, it is not likely the most capital efficient way to grow. Winning back churned out users can be a lot more cost effective if done right.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Retention – AVC

You can email or spam in some other way your inactive users and that might work. But what you do once they come back is way more important. You have to figure out how to make the experience better than it was when they used it previously. Some of that will likely be that the product is much better because your and your team have improved it a lot. But some of that should be an engaging experience that somehow they did not get before.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Fallacy Of Zero Sum Game Thinking – AVC

The cool thing about these marketplaces is that the sellers (or project creators in Kickstarter’s case) are the primary marketing engine. Sellers bring the first time buyers. And then many of them stick around and transact again and again, often with sellers other than the one that brought them in the first place. It is a commons where everyone (or most everyone) benefits from the expansion of the marketplace.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Search Vs Social – AVC

At some point, I became convinced that websites would eventually see more acquisition traffic coming from social than they were seeing from search, which was the king dog of Internet traffic at the time. It was a hotly debated issue but, again maybe because of how long we were on Twitter, I was convinced social would be king some day. It’s kind of funny to think that we wondered and debated about such things back in 2008 and 2009. It’s not a deba… (read more)


Fred Wilson (Co-Founder and Partner at Union Square Ventures)
OccupyAppStore – AVC

“”We can’t figure out how to get on the leaderboards. The app stores aren’t working for us as a distribution channel.””
To which I replied “”All the app stores use a leaderboard model which makes the rich richer and everyone else poorer. We are in the 99%, wishing we were in the 1%.””

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: “Our biggest problem is awareness”

If your startup, your non-profit or your event is suffering because of a lack of awareness, the solution isn’t to figure out some way to get more hype, more publicity or more traffic. …the solution lies in re-organizing your systems, in re-creating your product or service so that it becomes worth talking about…you can dramatically impact the ‘more awareness’ problem by investing heavily in a funnel that doesn’t leak, in a story that’s worth s… (read more)

Sam Altman (President at Y Combinator)
Startup Playbook

Ask your [power user and really good] customers where you can find more people like them.

Rob Go (Co-Founder and Partner at NextView Ventures)
Very Basic Startup Marketing – ROBGO.ORG

The best marketing is customer success. That’s why I think it’s incredibly important that the functions of product and marketing not be thought of as two silos. The job is not done when you’ve gotten someone to pay. It is done when you have delighted a customer to the point that they can’t help but tell others about you.

Rob Go (Co-Founder and Partner at NextView Ventures)
Ain’t Nothing Like The Real Thing – ROBGO.ORG

I’ve been on a bit of a quiet campaign to meet a bunch of really strong user-acquisition folks at different startups in Boston and New York. One thing that is surprising is that many of these people have limited marketing experience. What they do have is a highly analytical background and a mentality around experimentation. On the flip side, more experienced marketers often enter a startup setting wanting to employ an older playbook to stick to t… (read more)

Sam Altman (President at Y Combinator)
Startup Playbook

Experiment with different user acquisition methods like SEO/SEM, ads, mailings, etc. , but try to repay your customer acquisition cost (CAC) in 3 months.

Avrom Gilbert (COO Seeking Alpha)
Israel’s Subscription Challenge

It’s likely that at some point you will reach a point with your customer acquisition cost where it will be hard to improve it significantly. However, if you keep improving your product then your lifetime user value can keep growing indefinitely, which keeps growing your net lifetime user value. This in turn means that you can choose to increase profit or, more likely, spend more to take more market share (even at the risk of increasing your custo… (read more)

Tomasz Tunguz (Partner at Redpoint Ventures)
How Customer Success Meaningfully Reduces Cost of Customer Acquisition

When discussing customer success for SaaS startups, the conversation focuses mostly on retaining customers and reducing churn. These are two fantastic benefits with meaningful return-on-investment. But great customer success organizations can meaningfully impact another critical part of the customer lifecycle, customer acquisition, by catalyzing evangelists to refer new customers.

Sam Altman (President at Y Combinator)
Premature optimization – Sam Altman

The most sustainable (and cheapest) kind of growth is word-of-mouth growth. It’s dangerous to spend all your mental energy on incremental improvements when what you really need is a step change.

Sam Altman (President at Y Combinator)
Startup Playbook

If you have a free product, don’t plan to grow by buying users. that’s really hard for ad-supported businesses. You need to make something people share with their friends.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Mobile Downturn (continued) – AVC

So if you want to launch a new consumer mobile app, what do you do? The best answer I have heard to that question came at breakfast yesterday with an entrepreneur. He said he plans to build mobile web experiences that can go viral and build adoption of his product and use that as a funnel to drive adoption, over time, to his native apps. I’ve seen that work.

Sachin Rekhi (Group Product Manager at LinkedIn)
How to Find Your Ideal Customer | Sachin Rekhi

Take an inward look at your existing customers, using available customer registration data, your analytics tool’s demographic segmentation capabilities, customer surveys, tools like FullContact, Clearbit, Pipl, ZoomInfo, and MaxMind’s IP Address database, and interviews with sales reps, account managers, and customer service reps.

Sachin Rekhi (Group Product Manager at LinkedIn)
How to Find Your Ideal Customer | Sachin Rekhi

Determine the most meaningful attributes by which you can segment and cluster your candidate customers. Some of the most common segmentation attributes include use case, role, demographics, firm characteristics, and psychographic

Sachin Rekhi (Group Product Manager at LinkedIn)
How to Find Your Ideal Customer | Sachin Rekhi

Evaluate the attractiveness of each of your determined customer segments based on attributes that you’ve developed. Typical evaluation criteria include segment size, resonance with value proposition, willingness to pay, strongest delivered value, acquisition strategy, and strategic fit.

David Jackson (Founder, Seeking Alpha)
Why mobile traction is getting harder, not easier | A Founder’s Notebook

It’s hard to acquire meaningful numbers of new app users from app stores and other marketing channels. In contrast, over 500,000 dedicated users of our website downloaded our app in 2013, and we expect that number to increase in 2014.

David Sacks (CEO at Zenefits)
New Sales Models – David Sacks, Founder and CEO of Yammer – YouTube

I believe in the law of successful distribution arbitrage. Successsful distribution techniques are copied until they are no longer unusally effective. That’s why this is such a tough problem. Overtime users get used to techniques and they become less effective. The same techniques that got LinkedIn or Facebook to millions of users would not work today.

Paul Graham (Co-Founder & Partner at Y Combinator)
Default Alive or Default Dead?

Founders tell themselves they need to hire in order to grow. In fact the large staffs of successful startups are probably more the effect of growth than the cause. And partly because when founders have slow growth they don’t want to face what is usually the real reason: the product is not appealing enough.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Bootstrap Your Network With A High Value Niche Use Case – AVC

So if you want to build a peer to peer network, you have to find the use case that is high enough value that some people will do things (like put content into your application) that most people won’t. If you nail that, and win the hearts and minds and activity of that small high value user base, then you will have to opportunity to go mainstream. If you aim for the mainstream users first, you are setting yourself up for failure.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Mobile Web Is Top Of Funnel, Mobile App Is Bottom Of Funnel – AVC

Mobile web unique visitor growth is faster than mobile app visitor growth and the lines are diverging. This is because your mobile website is the top of the funnel for your user acquisition on mobile. It is where people land when coming from search, email, social media, text links, etc, etc.
The mobile web scales much better. You can build a large audience on mobile web much more easily than via mobile apps.

What’s the best way to create your strategy?

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
Programming Your Culture – Ben’s Blog

The primary thing that any technology startup must do is build a product that’s at least 10 times better at doing something than the current prevailing way of doing that thing. Two or three times better will not be good enough to get people to switch to the new thing fast enough or in large enough volume to matter. The second thing that any technology startup must do is to take the market. If it’s possible to do something 10X better, it’s also po… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Carlota Perez Framework – AVC

[Carlota Perez] found was that there are two phases of every technological revolution, the installation phase when the technology comes into the market and the infrastructure is built (rails for the railroads, assembly lines for the cars, server and network infrastructure for the internet) and the deployment phase when the technology is broadly adopted by society (the development of the western part of the US in the railroad era, the creation of … (read more)

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
The Case for the Fat Startup – Ben’s Blog

As a result, the top two priorities are always to: (1) Find the product that 1,000 enterprise or 50 million consumers want to buy and grab those customers before your competitors do. (2) Raise enough cash and spend it intelligently so that you don’t go broke along the way.

Bubba Murarka (Partner @ Draper Fisher Jurvetson (DFJ))
Part 1 of 2: Should you build for the Apple Watch platform? — Medium

Over the years I’ve been using a framework to evaluate new platforms: Technology enablement — Can something be done that wasn’t possible or easy to do before? Distribution — How does the platform help you gain new users and engage existing users? Business model — Does the platform provider have a clear business model that you can align with to sustainably share in the value created?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Return and Ridicule – AVC

I saw Bill Gurley say that you can only make money by being right about something that most people think is wrong. His logic was that you can’t make money by being wrong. And you can’t make money by being right about something everyone else knows. So you have to be right about something that most people think is wrong. I really like that framework.

Jeff Bezos (Founder & CEO of Amazon)
The Institutional Yes

I very rarely get asked “What’s not going to change in the next five to ten years?” At Amazon we’re always trying to figure that out, because you can really spin up flywheels around those things. All the energy you invest in them today will still be paying you dividends ten years from now.

David Jackson (Founder, Seeking Alpha)
Why the Facebook threat to most media businesses will only get worse | A Founder’s Notebook

The litmus test for the survival of a media business is: “If someone is interested in [the area we cover], why do they have to read our content?” If you can’t answer that question, you’ll lose to Facebook, because it has become the daily content aggregator for most people.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays: One More Thing On Sustainability Before We Move On – AVC

Do not use Wall Street tools to evaluate investment decisions in your companies. Use the tools that animals use. Survival instincts. What will it take to ensure that your company is around in ten years, fifty years, 100 years? That’s how to think if you want to stay in business forever.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Winner Takes Most – AVC

We strongly believe in network effects at USV and look for them as the primary form of defensibility in the investments we make. We don’t always get things right and we certainly don’t always end up investing in the company that wins the market. Lately, we’ve been wondering if there is an end to this pattern on the Internet and mobile. We think it is possible that an open data platform, in which users ultimately control their data and the network… (read more)

Peter Thiel (Co-Founder & Partner at Founders Fund)
Peter Thiel’s CS183: Startup – Class 3 Notes Essay

Great companies do three things. First, they create value. Second, they are lasting or permanent in a meaningful way. Finally, they capture at least some of the value they create.

David Jackson (Founder, Seeking Alpha)
Using exhaustive lists to get unstuck | A Founder’s Notebook

Making an exhaustive list requires you to write things down; that in itself increases clarity.

Sam Altman (President at Y Combinator)
Startup Playbook

A related trap is thinking about problems too far in the future i. e. How are we going to do this at massive scale? The answer is to figure it out when you get there. Far more startups die while debating this question than die because they didn’t think about it enough. A good rule of thumb is to only think about how things will work at 10x your current scale.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Exhaustive lists as a reliable tool for unstucking yourself

When in doubt, or when it’s just not good enough, make an exhaustive list. Every successful product in this category that you’ve ever used, and why. Every reason your current project might not work. Every reason you can think of to use what you’ve made.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
What Is Strategy? – AVC

Don’t think you are going to win in business with a better product, more capital, or a bigger team. You can’t just throw resources at a market and expect to win. The winner in a market most often has the best strategy and exectutes it well.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
How To Be In Business Forever: Week Two – AVC

Businesses don’t operate in a vacuum. They operate in a dynamic ever changing market that is going to make things difficult for you, especially if you want to be in business forever.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
No Battle Plan Survives The First Enemy Fire – AVC

I always encourage entrepreneurs to get on with the business of putting their product in the market. All the planning and designing and strategizing and grand plans of taking over the world are no match for reality.
The real world is messy. Stuff happens that you could never imagine. And then you are reacting to all of that and your grand plans are in tatters. That’s reality. It happens to everyone.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
What If Web And Mobile Apps Are Like TV Shows? – AVC

Network effects are powerful in both directions. They can help you grow exponentially. But when they are going against you, they work just as fast. Myspace’s decline was mind blowingly quick. RIM’s has been as well. Who is next?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Utilities vs Networks – AVC

Networks beat utilities in the age when everyone is connected to everyone else. This is a big opportunity for startups.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Crowd pleaser is not the only option

Crowd pleaser is not the only option. You could choose crowd changer. Changing is far is more difficult and more important than pleasing the crowd. Crowd disturber. Crowd inspirer. Crowd connector. Crowd calmer. And for that matter, you can skip the crowd and just go for: She mattered to me.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Ten questions for work that matters

Ten questions for work that matters
What are you doing that’s difficult?
What are you doing that people believe only you can do?
Who are you connecting?
What do people say when they talk about you?
What are you afraid of?
What’s the scarce resource?
Who are you trying to change?
What does the change look like?
Would we miss your work if you stopped making it?
What do you stand for?
What contribution are you making?
Hints: Any question … (read more)

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Half measures

If you’re hungry, half a meal is better than no meal.
But if you need light, half a lightbulb is actually worse than none at all.
If you’re hoping for an 8% return on your investment, 4% is a lot better than zero.
And half a home run is worse than nothing.
We make two common mistakes:
Refusing half when it’s a whole lot better than nothing, and,
Accepting half when we’d be better off waiting for what we really need.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Fast Followers, Copy Cats, and Ripoffs – AVC

I think it is best to understand that all great innovations will be copied, expect it to happen, and understand that the best response is to go out and out-execute the copycat. Getting stuck in time and money losing litigation may be emotionally satisfying for a while but it often doesn’t end well for anyone.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
How Would An Entrepreneur Attack Your Business? – AVC

This is a question I like to ask our more developed portfolio companies who have built large markets/networks/user bases. I ask them “if you were a startup and you wanted to compete with our company, how would you go about it?”

Jonah Peretti (Founder & CEO at BuzzFeed)
Is History Repeating Itself? — Medium

1) Technology. Technology has replaced geographic- and spectrum-based distribution monopolies as a competitive advantage for publishers… This [our tech platform] is a massive investment that is very difficult to replicate, and it creates a virtuous cycle where a growing number of talented people use increasingly powerful tools to do their job. 2) Scale. At the start of the golden age of publishing, a circulation of 1 million readers was considere… (read more)

Zach Abramowitz (CEO & cofounder @replyalldotme)
Is your company truly disruptive? Try this simple litmus test

Disruptive companies should be able to answer this question: Five years from now, people will not know how they managed without [company x] because before [company x] existed people did __________, and now that [company x] exists people do _________.

April Dunford (Sales and Marketing at DataMirror (acquired by IBM), Janna Systems (acquired by Siebel Systems), Sitraka (acquired by Quest software), Watcom (acquired by Sybase))
Clarifying your strategy using a simple template | A Founder’s Notebook

What is it? The shortest possible statement that describes what you are. The key here is to keep it really short and use plain English words. Target Segment – The specific target market you are targeting in the short term. The trick here is to focus on who you will sell to over the next 6 months. Market Category – The market that you compete in. It’s important because often startups have a choice of multiple categories that they could compete in … (read more)

Y Combinator (a startup accelerator based in Mountain View, CA.)
Apply to Y Combinator

Product-market fit: 1. What’s new about what you’re making? 2. How do you know people need what you’re making? 3. What substitutes do people resort to because it doesn’t exist yet (or they don’t know about it)? Competitive advantage: 1. Why did you pick this idea to work on? 2. Do you have domain expertise in this area? 3. What do you understand about your business that other companies in it just don’t get?

Jeff Bezos (Founder & CEO of Amazon)
Jeff Bezos (@JeffBezos) | Twitter

We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.

Jeff Bezos (Founder & CEO of Amazon)
Jeff Bezos (@JeffBezos) | Twitter

There are two kinds of companies: Those that work to try to charge more and those that work to charge less. We will be the second.

What’s the best way to create your competitive advantage?

Paul Graham (Co-Founder & Partner at Y Combinator)
Mean People Fail

Startups don’t win by attacking. They win by transcending. There are exceptions of course, but usually the way to win is to race ahead, not to stop and fight.

David Jackson (Founder, Seeking Alpha)
Your biggest competitor may not be who you think it is | A Founder’s Notebook

The real challenge is creating a compelling user experience, rather than being incrementally better than an existing competitor. This is why “worry more about your customers than your competitors” is good advice.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Wasted kindling

You need significant…things that keep the system working without a constant stream of promotion. A few: (a) a remarkable product that users enjoy talking about; (b) a product with virality built in–something that works better when my friends use it too; (c) a community orientation, so that each new user enhances the value of the community, creating a virtuous cycle; (d) economies of scale in both production and marketing – as you grow, things … (read more)

Michael Mauboussin (Managing Director and Head of Global Financial Strategies at Credit Suisse)
Michael Mauboussin: “The Success Equation:Untangling Skill and Luck” | Talks at Google – YouTube

If you’re in a competitive interaction, what you want to do is simplify the game to the areas where your skill will overwhelm that of your competitor. If you are the underdog, the weaker player, what you want to do is complicate the game. Add battlefields. You’ll still be the weaker player but it dilutes the strength of your competitor.

Tomasz Tunguz (Partner at Redpoint Ventures)
The 3 Competitive Defenses of Enduring SaaS Companies

[to create a competitive advantage try] data network effects, [customer] network effects, ecosystem creation.

Boris Wertz (Founder of version one ventures)
Marketplace dynamics: buyer mindshare is key to building a moat – Version One

A marketplace can adopt two strategies: protect the supply and protect buyer mindshare. When it comes to supply, you can give your sellers little reason to seek out other marketplaces. For example, you can lower listing/transaction fees for unique inventory, tie sellers to your site through reviews (which cannot be transferred to other marketplaces), or find some other innovative model like Uber’s leasing model.

David Jackson (Founder, Seeking Alpha)
Who has more power in the media business, celebrities or platforms? | A Founder’s Notebook

Platforms have power because (i) it’s hard to build traffic from scratch, and (ii) they benefit from network effects.

Paul Graham (Co-Founder & Partner at Y Combinator)
How to Make Wealth

When you’re running a startup, your competitors decide how hard you work. And they pretty much all make the same decision: as hard as you possibly can.

Peter Thiel (Co-Founder & Partner at Founders Fund)
First-mover advantage is over-rated | A Founder’s Notebook

Moving first is a tactic, not a goal. What really matters is generating cash flows in the future, so being the first mover doesn’t do you any good if someone else comes along and unseats you. It’s much better to be the last mover. Last movers build non-commoditized businesses. They are relationship-driven. They create value. They last. And they make money.

Mike Cassidy (Four successful exits – Ruba, Xfire, DirectHit, StylusInnovation)
What They Don’t Teach in Business School about Entrepreneurship – YouTube

Speed is the primary business strategy. Any average chess player can beat the best player in the world if they get to move twice for every time the grandmaster moves.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Differences Matter – AVC

being different matters. But you have to be different in ways that users will feel right away. From differentiation comes defensibility. And in the hyper-competitive world of social media, that’s a good thing.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Where Is The Value In The Tech Stack? – AVC

You need data to provide defensibility and differentiation. And so most of USV’s investments have been companies that combine software and data to provide a solution to the market that we believe is defensible, usually via network effects which are a data driven phenomenon.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Where Is The Value In The Tech Stack? – AVC

I also don’t think data alone is the new oil.The new oil is going to be found in various places in the tech stack where software and data come together to produce a service that has high operating leverage at scale and is defensible by the network effects that the data provides. That’s a mouthful. Software is the new oil sounds a lot better. But the mouthful is more accurate.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Emerging Architecture Of Internet Applications – AVC

The most important things to understand about this blockchain stack are the overlay networks (most of which are still emerging), and the shared data layer and the shared protocol layer. Differentiation and defensibility and network effects will be much harder to obtain with this architecture. Most things will work like email. Take your keys from one app to another and all your data and relationships come with it.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Dentist Office Software Story – AVC

software alone is a commodity. There is nothing stopping anyone from copying the feature set, making it better, cheaper, and faster. And they will do that. This is the reality that Brad and I stared at in 2003 as we were developing our initial investment thesis for USV. We saw the cloud coming but did not want to invest in commodity software delivered in the cloud. So we asked ourselves, “what will provide defensibility” and the answer we came t… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Privacy As A Competitive Vector – AVC

And if that is the case, are there other big product categories out there other than search where privacy could be used as a competitive vector? How about email? How about messaging? How about maps? How about browsers?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Mutual Company – AVC

Maybe the creators of these networks ought to mutualize so that their users, who are creating the value, can participate in the upside. We have not seen anyone do this to date. We have talked to a number of startups and networks about the idea. We have not seen any takers yet.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
What Is Strategy? – AVC

Products, how it acts within a market relative to its competitors, or other aspects of the business. Specific approaches may include: Differentiation, in which products compete by offering a unique combination of features.
Cost, in which products compete to offer an acceptable list of features at the lowest possible cost.
Segmentation, in which products are tailored for the unique needs of a specific market, instead of trying to serve all consu… (read more)

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
The Case for the Fat Startup – Ben’s Blog

If you are a high-tech start-up, your value is in your intellectual property. Don’t stare at your spreadsheets so long that you get confused about that.

Sam Altman (President at Y Combinator)
Startup advice, briefly – Sam Altman

Have a strategy. Most people don’t. Occasionally take a little bit of time to think about how you’re executing against your strategy. Specifically, remember that someday you need to have a monopoly (in the Peter Thiel sense).

Noah Kagan (Founder of AppSumo)
Mint Sales And Marketing: How Mint Beat Wesabe | OkDork.com

We spent countless weeks figuring out what people really wanted before we launched our beta. Guess who we found out Mint’s biggest competitor was? No one. Apathy. This shocked me! Most people would rather not track anything and just see how they are doing when they go to the ATM. Guess who was #2? Ms Money, Intuit, Wesabe? NOPE. Microsoft Excel. Who would have believed that!

Paul Graham (Co-Founder & Partner at Y Combinator)
Beating the Averages

A startup should give its competitors as little information as possible.

Peter Thiel (Co-Founder & Partner at Founders Fund)
Peter Thiel’s CS183: Startup – Class 11 Notes…

The basic challenge is to find things that are hard but doable. You want to find a frontier. It’s worth making a rough division between two different types of secrets. There are secrets of nature and then there are secrets about people. Natural secrets involve science and the world around us. Secrets about people are different. These are things that people hide because they don’t want other people to know about them. So two distinct questions to … (read more)

David Jackson (Founder, Seeking Alpha)
Why the best products don’t always win, AKA how to build a moat around your business | A Founder’s Notebook

If you want to build a moat around your product, make sure it has high switching costs and network effects, and lock up distribution. Many successful companies have done this. But as customers, we fear and resent lock-in. The alternative strategy is typified by Amazon: relentless focus on generating value for customers, resulting in remarkable trust and brand promise.

Sam Altman (President at Y Combinator)
Stupid Apps and Changing the World – Sam Altman

The value of a network grows as a function of the square of the number of nodes. So the value/importance of the service grows hyper-exponentially. There is all sorts of emergent behavior as something grows in importance a million-fold in a short period of time.

 

What’s the best way to create a platform/embed strategy?

David Jackson (Founder, Seeking Alpha)
How paid content site De Correspondent acquires users from Facebook | A Founder’s Notebook

The right strategy for publishers is therefore to convert Facebook (and Twitter and LinkedIn) users to a higher engagement channel in the publisher’s control.

Mark Suster (Managing Partner at Upfront Ventures)
Download • Snapchat

It’s really hard in the app store. It’s controlled by people who pay a lot for distribution. The key is to find alternate distribution. I’ve seen success with business apps going through slack to get downloads. If you have an app you need to think about other means of distribution. Think imgur, think facebook, think reddit. If you’re a business company you can distribute via HubSpot or Salesforce

David Sacks (CEO at Zenefits)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

when YouTube started, the way they got distribution initially was to embed videos inside MySpace, which is exactly the tactic that PayPal had used inside eBay, we embedded our auction logos inside of eBay auctions. Basically turning larger sites into involuntary platforms for our applications, we figured out that distribution model.

Vinicius Vacanti (Founder and CEO @ YipitData)
9 Ways To Make Your Startup Grow Virally | Vinicius Vacanti

Get users to tell others about your app simply by using it. Get users to push content they create on your app to Facebook, Twitter. Get users to generate content that you optimize for search engines. Make it in your users’s best interest to invite their friends. Get celebrities to use your app. Get content created on your app to be newsworthy.

Tony Haile (CEO at Chartbeat)
Chartbeat CEO Tony Haile: What You Get Wrong about the Internet

A widespread assumption is that the more content is liked or shared, the more engaging it must be, the more willing people are to devote their attention to it. However, the data doesn’t back that up. We looked at 10,000 socially-shared articles and found that there is no relationship whatsoever between the amount a piece of content is shared and the amount of attention an average reader will give that content.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Easy Come Easy Go – AVC

SEO and Facebook timeline integration is “best practice” on the Internet. You should do both. They can be great free acquisition channels. But they are not great retention channels. Because easy come easy go.
Be your own bitch.