Dear founder,

Thank you for picking up a copy of Advisoray Guide for Launching a Startup. Advisoray is a group of professionals who want to help startups succeed, so that their innovations can be brought to market and enrich peoples lives. This guide is a distillation of many conversations among the professionals within our network. The end result is 35 pieces of honestsometimes contrarianadvice that you can use as you take your new products or services to the marketplace. Every startups situation is di erent, so we dont expect all these pieces of advice to apply to everybody equally, but we hope you will nd a few of them insightful and relevant. We also hope you take advantage of Advisoray.com as a companion website to this pocket guide. You can search for terms or jargons mentioned in this guide and nd advisors that may be willing to work with you directly for free or for a fee, as well as give you valuable feedback that is tailored to your unique situation. The members and sta of Advisoray are here to help. We hope to hear from you, and good luck on your new venture!

How this guide is organized

HONE YOUR IDEA DESIGN YOUR PROTOTYPE STRUCTURE YOUR COMPANY BUILD YOUR PRODUCT SPREAD YOUR MESSAGE GROW YOUR TEAM

01 05 10 16 23 30

HONE YOUR IDEA

HONE / YOUR IDEA

Find a metaphor, not just an analogy

One of the biggest mistakes startups make, is to compare your product or service with another popular startup or website:

Often the thing that you compare yourself to is obscure in the sense that many have heard of it, but they may not understand the full capabilities of the site unless they have interacted with it and formed an intuition of what that comparison site does. This vastly diminishes the uniqueness of what you do, as others have to understand what your comparison company does and why they are unique before they understand what you do.

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Instead of using an analogy, use a metaphor. A metaphor is something you compare to the real world. For example, a pinboard is a metaphor for Pinterest, and people saw this as a replacement for pinboards they would use in real life. With a metaphor, you have a much bigger and richer vocabulary you could draw from but if you compare yourself to another site you are limited by that sites limitations. Writers are often good at coming up with metaphors. Talk to them about your idea and see what connections they can make to real world concepts.

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HONE / YOUR IDEA

Brainstorm and test out your idea with someone who has done it before
One of the funnest activity you can do as a startup founder is brainstorming: Lets talk about new product ideas! Cool design concepts! Disruptive marketing hacks! Maybe even throw in a famous spokesperson for our company! The truth is that brainstorming is really less about coming up with new ideas, but more about sifting out the gems from the pool of ideas. Then, you will need to synthesize a cohesive set of goodand doable ideas that can form the foundation for a viable new business. This is harder than it looks. What you need to do is to nd an experienced entrepreneur and pretend he or she is your co-founder. Brainstorm, or even argue with this person for an hour or two. An experienced entrepreneur usually have a good feel of which ideas are good and

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which are bad, as they have been burned by similar bad ones in the past. Be prepared to go through 3 or 4 generations of your idea because your rst idea often sucks. Under-thinking areas that are new to you, and over-thinking areas that you know a lot about often skews the results of brainstorming towards your comfort zone and not towards the market opportunity. So, before you commit resources to building out an idea, work with someone who is experienced in making your ideas better, quickly.

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HONE / YOUR IDEA

Answer the question: Why you?

Once you have honed in on an idea that you believe is the right one, you must be prepared to explain to yourself and others why you are the right person to run this venture. Look at this as an application essay for yourself as the CEO of this company. It could be because of your prior experience, educational background, lifelong passion, circumstances, skill sets, or a combination of all of these. The key is to convince someone who must be sold on the idea that there is no other person in the world better than you for the job. Outcome 1: Your narrative is natural, it makes sense, and it becomes your personal story behind founding the company. Investors and customers are convinced that you are the only one for this role.

03
Outcome 2: If you cant convince someone that you are the right person for this, then its not for you. Go back to the drawing board to nd something else to invest your time and energy. Startups are often a manifestation of everything you are. You cant do a startup when you are not the right person to do it, or when you cant convince others that you are.

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HONE / YOUR IDEA

Get as many reactions as you can to everything you have made

How a person reacts is more important than what they say after you stop speaking. Read their face and their body language. In a marketing study, you would have a one-way mirror, but when you are having dinner with prospective customers, have a team member attend dinner with you. Have one person pitch while the other observes how the prospective client or investor reacts to the product. There will be some things that worked better than you thought they would have, and others that will work less well. The goal is to get as many reactions as possible as these reactions will give you perspective on how your idea would translate when a random person on the internet or a mobile device interacts with your product. People are really good at picking up cues and adjusting

04
their stories based on these reactions, so after you have about twenty of these dinners and discussions, you will be able to quickly adjust your pitch to what works well. A dinner with someone is essentially a pitch to someone, and by the time you have done it twenty times, it will be easy for you to stand in-front of a room to pitch what you do. Alternate who does these pitches; through a number of permutations, you may get mutations of the ideas. Pay careful attention to how your pitch develops over time because honing in on the new ways in which you pitch your product may help you rene the function of your product as well.

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DESIGN YOUR PROTOTYPE

DESIGN / YOUR PROTOTYPE

Invest in a beautiful set of screenshots that show what your site or app does
Invest time in this and make it great. You will use them over and over again as marketing materials, and in meetings with partners, customers, investors and even with the press. This should not be a owchart, a set of wireframes, or even a concept animation. These screenshots should look like it is taken from the real site, so the viewer will know exactly what your site does. The screenshots need to contain most of the features of your site even before it is built. They should be explorable and understandable by anyone without a narrative. Annotations and descriptions are helpful but the screenshots in linear order should describe the business to someone that has neither seen nor heard of your business before. Dont fret if its not perfect, after all, you dont have a

05
nal brand that you need to stick to yet. You will edit these screenshots on an ongoing basis; however, this doesnt negate the fact that your screenshots must stand alone. This will help dene your business and your value proposition to everyone. Just from looking at this, investors and customers should be able to give you concrete and valuable feedback that will help you build and rene your site or application.

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DESIGN / YOUR PROTOTYPE

Find the epicenter of your product and devote all your e ort towards it
When we interact with most products or apps, we tend to only interact with a very small portion of the product, but with an extremely high frequency. These most used and useful features can be regarded as the epicenter of the product. Devote a larger amount of time, energy and money to this epicenter and then work on the supporting features to make your product minimally viable. Do not waste too much time on features such as login, account page or dashboards. Use it instead on the epicenter and make that part of the product exceptional. The way to ensure that the epicenter is correct is to try as many productive variations on this epicenter as possible. It is worth making ve variations of a composition, narrative, or structure with slightly di erent foci and

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angles, and test them with your friends and customers before investing in any of the designs. How you choose to approach the epicenter will a ect everything else around it. The epicenter is the largest furniture in the roomits style, size, weight and function will a ect all the other furnitures in the room. Dont waste your time and money on the small things until you get the big piece gured outyou live and die by the decision of what the epicenter is and how it works.

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DESIGN / YOUR PROTOTYPE

Conceptualize for the future, but prioritize for the present

Once you have honed in on your idea and developed some concepts of what you want to build, create a minimum viable product (MVP). This is a small product that users can use to see if your hypothesis is working. Prepare a list of all the things you want to get done in inverse priority order. This process gives you the chance to think through what is most important and most appealing. It enables you to reect on the broad capabilities of this service and perhaps build and present these these capabilities in wireframes or prose form. Talk to prospective customers to get as much feedback on your intuitions as possible before translating them into actionable steps for another person to build. Your development goal is to make an MVP. Thus, having a reasonably complete set of concepts or cohesive

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product will make it a lot easier. You can now give the product back-log of to-dos to your technical co-founder or an out-sourced product development team to build your MVP.

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DESIGN / YOUR PROTOTYPE

Build a version of your product by writing the fewest line of code possible
If you can build the rst version of the product without writing any lines of code by simply pointing and clicking, then...Congratulations! you have won the Grand Prizeyou have built the minimum viable product (MVP) in no time! Any written line of code will deduct from the grand score of writing no lines at all because more code introduces more testing, more costs and more time expended. Worst of all, the more code you write for the rst version, the harder it is to move away from this code since you have invested so much in it. It is likely that the rst version of your product or your supposedly minimum viable product (MVP) turns out to be not viable. Despite your best e orts, you might have picked the wrong epicenter or built the wrong product or chosen the wrong brand. So the less you invest in it the better.

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The most e ective way to limit the code written is to limit the time you give the programming team to deliver the rst version. Engineers, especially the resourceful ones, can come up with creative solutions and fulll your requirements within extreme time constraints. After all, you might end up throwing this rst version out, so dont fall in love with it.

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DESIGN / YOUR PROTOTYPE

Design version 1 on a hunch, and version 2 on the basis of hard data

Most people want to research and gather facts and gures to support the decision they are making in designing the rst version. How big is the market? How likely are people to use a product like this? What are the preferred ways of communicating with customers in a target group? While these data points are sometimes useful, they could also lead you to a conclusion that moves you away from the epicenter of your product. Before your rst product exists, the data points you can collect are from other peoples products. They are hypothetical o erings and vague generalizations. Without a real product that is collecting granular data about its actual usage, these indirect data points may cause more harm than good. Instead, you should follow your intuition or hunch based

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on real conversations with real people, and design the rst version of your product. You will get some parts right and some parts wrong. You will know which parts you got right or wrong by precise data about what users are doing with your product. These are direct data points that can condently be used to tweak or change your product in the second version. Sometimes if you have a successful launch of a rst version, you may be tempted to trust your instincts when you build the second version of your product. Its okay to use your hunch on new feature additions, but its better to rely on hard data for feature improvements.

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STRUCTURE YOUR COMPANY

STRUCTURE / YOUR COMPANY

Dont look for an ideal cofounder, look for someone that can help you right now
Think about nding a co-founder as nding a husband or a wife. Nobody goes around the city asking someone to marry them on the spot. You start by taking someone out on a date, and see what happens from there. Similarly, when it comes to looking for a co-founder, date them rst. Start working with di erent people that can satisfy your immediate needs. It will be clear who the right people are and a co-founder (or two) will eventually emerge. It could be someone you are paying, bouncing ideas o of, or someone that is just willing to help you out. Before you agree on any paperwork, understand and communicate about your goals and ideas, ensure your working styles are compatible because, as already stated, making someone a co-founder of your startup is like marrying someone.

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On a related point, you should make someone your co-founder based on what you need in order to gain a unique advantage. Choose someone that could help you take the next two or three steps and get you o the ground. This is sometimes a technical co-founder, but in other cases could be a marketing person, or a business development person. Remember, you can always bring in other skill sets or talent as your business matures at much less of a cost than a big chunk of your equity.

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STRUCTURE / YOUR COMPANY

Lock down the company structure before things get interesting

Before you get in the trenches and get your startup o the ground, you need to test people. Ensure that the companys interests and the interests of all the individuals align. Once the idea you have talked about stabilizes, your goal is to use the process of locking down shares, vesting agreements and collaboration agreements to test the strength and collaboration of the people around you. This is early enough in the process that you can risk everything to be scrapped. Separate the idea stage from the execution stage of the company. Before this point, it could be gentlemens handshakes or pinky promises, but the formation of the company will dene what the next 3 or 4 years will look like. You will need to do this only once. This is a rigorous process assisted by each persons

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legal representative and a lawyer for the company. It will protect everyone and allow disagreements to play out. Better for it to be early than to have it happen later when everyone has invested quite a bit in your company and it creeps into your future. Speak about share distributions, the diluting process, who gets to vote, who doesnt and vesting. This could be the last exit, and you could all agree to go separate ways. Its probably smart not to invest too much more time until there is a good legal structure underneath your startup.

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STRUCTURE / YOUR COMPANY

Choose a corporate structure to optimize your short-term tax implications

To form a company, either a lawyer or an accountant can help you talk through the benets of each type of corporate structure, e.g. S Corp, C Corp or LLC. One of the most important things is the tax implications in the rst two years of your startup. Decide how you want to be taxed, and this will determine the type of company you will be building. Tax implications are often more important than where you decide to incorporate (although most startups do end up incorporating in Delaware). Deduct company expenses from your income. Any tax money you save becomes capital you can use to invest in your company. A tax professional can give you a better idea for your specic needs. Make your expenses clear. Separate home o ce expenses from personal expenses.

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The attorney can put additional paperwork on top of your now formed structure to determine the collaboration agreement among your other founders. This would have implications if you get venture funding, but once there is external funding, the cost of changing the corporate structure to t the venture capitalist agreements will be negligible. This is often included in the cost of closing a round, so worry about the immediate tax implications rst, and adjust to your future investors preferences later.

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STRUCTURE / YOUR COMPANY

Dont feel guilty when it comes to using your unique advantages

While most startups lack cash to pay vendors and accelerate growth, some founders, especially those that are working professionals, may have quite a bit of cash exibility. While you might want to preserve capital, when you have cash, spending it wisely really does accelerate your progress and elevate the quality of your product if you get the right people to work for you. If you are currently a student, you can get a lot of free help from classmates and you should plan to engage as many people as possible in your circle while in school. Though most people are not as driven as you, they want to feel like they are part of something exciting that could become big one day. These are examples of obvious advantages you may have. The key is to look deeply and honestly on every

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potential advantage that you and your co-founders have and maximize its use. Only by fully exploiting your unique advantages are you on par with everybody else and going forward. You will be playing a game of recognition of opportunity and tailoring your strategy to optimize them. You should play all your trump cards as early as possible because they will get you more connections and opportunities. In turn, you will be rewarded with more trump cards that will get you further along.

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STRUCTURE / YOUR COMPANY

Business plans should be bottom-up, not top-down

People with professional experience of making business plans for larger businesses often make the mistake of talking about the size of the market. This is a top down approach and it is a waste of ink and paper. A startup is certainly not in a position to take any percentage of any market since your biggest struggle is to exist at all. Your business plan should be based on what you believe you can realistically achieve with actions your team will perform to get to quantiable success. If you are thoughtful about the tactics you can chain them together to achieve your short-term and medium-term goals. Then it may be inspiring to talk about the larger macro climate and discuss how you could be a big player in a big market somewhere down the line. However, even if you have your eyes on changing the

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healthcare industry, you still have to show in your business plan how you can win your rst 100 customers. As for the long-term outlook, it is more important to show what you have in common with other startups that have made it to the big time with huge adoption, rather than straining to justify why you can capture 4.6% of a billion-dollar market with a PowerPoint slide.

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STRUCTURE / YOUR COMPANY

Dont put anything in your terms of service you wouldnt talk about in public
Think of your terms of service as a deal you are o ering your customers that they can accept or reject. The norm on websites is that you either automatically agree with the terms or need to check o the box before using the site. This seems like you could add any terms you wish at any time to benet yourself. Dont do this. Make this deal you are o ering fair, mutually benecial and most importantly, comfortable to you. You should never translate something you are not comfortable asking in person onto a legal document. Experienced lawyers will always nd ways to maximize protection for you without compromising the deal you are making with the users. Before you speak with one, write out the gist of the deal in terms you can understand. Discuss feedback from your rst customers in

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person and a viable skeleton of your terms of service and privacy policy will emerge. As a bonus, you may want to put a summary of your deal in human-readable terms on your website as well.

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BUILD YOUR PRODUCT

BUILD / YOUR PRODUCT

Build half of a polished product, not a half-assed product

In an industry that is enamored with shipping features, every startup is working with an in-house or outsourced engineering team shipping stu at lightning speed. Therefore, it could be a rare advantage to build a highlypolished product that actually works and works well. It cant be emphasized enough the importance of identifying an epicenter of your designyou can concentrate your e ort on polishing and rening that to ensure that the end product is as perfectly-crafted as possible. Engineering and writing real code is too costly of a process for randomly trying things out. When you start building your product from your epicenter outwards, you have a better chance of achieving polish. Wording matters. Spacing matters. Handling exceptional ows matters. When you bring out a product that is polished,

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customers, especially those outside the traditional tech-startup-early-adopter crowd, will really appreciate a real tool they can use on a day-to-day basis. That daily usefulness will be innitely more important than the promised future features for your early customers.

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BUILD / YOUR PRODUCT

Make your product too good to be true

The di erence between too good and good is the surplus from which you can extract value. To extract value, it needs to be at least better-than-good. The better you make your product, the more surplus you can extract from your customer. Once you have gured out how to make your product too good to be true, you have found your business model. This means that the business model is simply a part of your service or product that has excess value of which you could charge for that value. People are willing to pay for it. In a freemium model, everyone could get some free storage, but if you want unlimited storage then you would have to pay. Therefore, your business model must incorporate excess value people are willing to pay for.

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If you present your product to a prospective customer and they jump at a particular aspect of your idea and say thats awesome! that is where you can extract value from your customer. Nothing that is too good to be true is free. Once it is too good to be true, it is understood that the extra value will be charged. You want to overwhelm your customers with goodness and the excess of this good-will is where the price or a premium can be applied.

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BUILD / YOUR PRODUCT

Use a mobile screen as a thinking frame about what your user would want to do
You may not be building a product with a mobile use case, but using a smaller screen such as a smartphone or a tablet as a thinking frame, will keep your product focused on its epicenter. This is likely how someone will interact with your product. The person will desire immediate pay-o and will only devote limited time to your product (a minute or two tops). If you are successful in making your epicenter come alive given the mobile limitations, you know that you have found the right focus. Obviously, having a mobile strategy helps with the narrative of why this company is relevant and valuable. The mere thought of a person holding the mobile device in his or her hand, at a particular time of a day, with a particular need to fulll, helps ensure that you keep your product focused on the epicenter.

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Another reason why you should try designing for a mobile device is that it allows you, and your user experience designer, to draw inspiration from a rich array of great iPhone or iPad apps that users have come to love. Dont be surprised if some of the elements of your mobile design, even ones you dont intend to build right away, end up inuencing your core web or desktop product in a positive way.

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BUILD / YOUR PRODUCT

Write your user interface, dont just draw it

A common misconception of user interface design is that it is best done by a graphics designer. This is probably because a well put together user interface looks like a picture and not a novel. The truth is, most of us interpret the user interface and learn how to use the system by reacting to the words on the screen rather than looking at the color and texture under the words. We all somewhat know how to write. Try to explain how you can engage an end user exclusively with words. Imagine that your beautifully constructed website has gone down, due to some hosting problems, but you have the ability to fulll all the features on your website over e-mail or instant messenger. You can write a dialogue between two people on both sides of the conversation and gure out the words they would use. These words should be used in your user interface designs.

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Your visual designer, or even your user experience expert, who is drawing your wireframes, will greatly appreciate this type of human dialogue artifacts. They can extract the words in those conversations and give them the correct visual treatments and emphases that would ultimately create a user interface that speaks to end users in a personal way.

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BUILD / YOUR PRODUCT

Capture data about what your users do as soon as your site launches
Why? Because you will never get another chance to capture this data once it has happened. Poof! You dont need to have sophisticated tools to analyze or mine the data and provide beautiful data visualization; those can come later. What you need is to instrument your product to collect data in fairly granular units and store the data somewhere. It would give you a history of how users interact with your site that will form the foundation of the objective criteria of which future features are designed and prioritized. While standard web packages like Google Analytics are a good start, more application-specic analytic tools like Mixpanel provide a much more precise capture of what your users are trying to do. Some other analytics packages allow you to automatically send e-mails if your user

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performs certain actions over a specic amount of time. There are literature and blog posts available on how best to capture and use behavioral data. While some may seem very technical, the insights from the raw behavioral results are actually pretty easy to understand. It is unlikely you will do a lot of automation based on the data points, but having a good core competency in data analytics will distinguish your product as one that is actually listening to its customers one click at a time.

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BUILD / YOUR PRODUCT

Its not just about the code. Seek to understand the big picture of technology.
Talk through your technology options with a Chief Technology O cer-level person. Most startups would be happy to have access to a programmer on the founding team or a vendor that can build the rst version of the site. This person is likely to use the tools he or she knows to minimize risk. Once in awhile, you may get lucky, and the persons skill sets matches the technical needs of your product perfectly. But most of the time there are better ways to build the product, especially beyond the rst version. There are technologies that are more appropriate, easier to evolve and ultimately scale better if your product is successful. While you dont need to implement many of these technology considerations right away, as getting your rst version out is still the most important task, it is probably worthwhile to look one or two years ahead and talk

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with someone that is a broad technologist. Get informed about the tools on the marketplace and the techniques available in the talent pool you can leverage with when the time comes. Knowing where you may be going helps you understand whether your short-term choices are pointing towards a future destination or a legitimate compromise in the name of getting to the initial launch. Getting a big picture of the technology landscape gives you an insight that will help you make your day-to-day decisions. It also gives you the terminology and skill sets as you look for potential talents in your daily encounters.

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BUILD / YOUR PRODUCT

Failure is overrated. You can iterate by succeeding in succession.

People sometimes conate the need to iterate with the need to fail. You should try not to fail because failure means wasting time and chance. There are ways to reduce your chance of failure by avoiding traps and by reaching out to people who have done it before. One of the most valuable resources available to a startup are professionals. Most professionals who are on solid career paths in various functions and industries all wish in some ways they were in for some exciting startup venture. They just may not be ready to jump in head rst the way you have. However, they may be very excited to play an advisors role and share their professional knowhow and experience with a newcomer in exchange for a fun experience of dipping his or her toes in the startup world.

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This is the most benecial resource for startup leaders as most mistakes that startups make are not unique to startups. They are often legal mistakes, or mistakes related to accounting, technology, communication or management. If you can talk through your plans and your scenarios with the right professionals, you fail on paper but avoid it in reality. You can get a corrective course of action or alternate recommendations that you can implement. You may be lucky to have 9 lives in a startup. Use them wisely. Recurring failure, despite being a learning experience, demoralizes the team internally and may tarnish your reputation externally. On the other hand, successive wins build up momentum and create more goodwill that gets you more access to talents who want to be involved in a winning team. Failure is sometimes unavoidable, but you should avoid it at all cost.

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SPREAD YOUR MESSAGE

SPREAD / YOUR MESSAGE

Craft a brand name that summarizes the promise of your product in one word
Perhaps the greatest mistake a startup can make is to fall in love with a cute word and then struggle to nd a product to fulll the promise of that word. To avoid this trap, startups should rst determine a resonating product concept and then discern a brand name using various naming and branding techniques. The most successful brand names become commonlyused verbs for a products main function. In the 1980s, o ce workers began to xerox copies. In our own day, to google has become the worlds favorite way to search the Internet. A brand name should be a natural nickname for people to remember via a mnemonic device. A brand name is for recall and not for introduction. It should come from your product. It should not dene your product.

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If you engage a logo designer for the brand, you will typically go through a creative brief with him or her. You will be asked about the nature of your target audience, the reaction you are seeking from the audience, the purpose of your website and the message you are seeking to convey and more. It will be di cult to answer those questions if there was not a thinking process behind the word around which your logo is built.

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SPREAD / YOUR MESSAGE

Claim your name everywhere before others can hold you ransom
Building a brand in these rst decades of the Internet can be a bit like oil prospecting in the American West in the mid-1800s. Its a race to get there rst. After you determine your product and select your brand name, it is imperative that you claim that name in every corner of the World Wide Web. This includes registering your domain name with the common domain su xes (.com, .org, .net, .tv, etc.) as well as securing the brand name (as close as possible) on all of the social media sites. If your chosen brand names are already taken, pick a variant of the name you can get everywhere and stick to it. This will reduce confusion for customers searching for you in the social media space. It is helpful to create a unied email account to manage all these resources. Never share access to an email ac-

24
count so you can always reset and re-claim an account if the security is breached. A note about social media sites: it is important that your logo has an attractive rendition in a square format that will work well on Facebook, Twitter, etc. Sometimes, even the most beautiful logos do not translate well into a square format. The Facebook Timeline cover and the Twitter graphic space are valuable real estate. Its important to keep them in mind during logo design to enhance brand identity and aid recall.

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SPREAD / YOUR MESSAGE

Measure your market through early advertising

Can you only advertise when you have something to sell? Absolutely not. In the rst weeks and months in the life of your startup, it may be advisable to advertise a product that is coming soon to gauge the level of interest in some of its features or toolsas well as to test various advertising messages. You will nd your audience may react favorably to some features and messages and poorly to others. Getting this feedback at an early stage can help you build your product and hone your message in alignment with the needs of your target market. Dont build a product that people dont want. Google AdWords can be an inexpensive means to test and validate your product, brand name and message. These ads could lead a user to a landing page where you

25
can start collecting names, e-mails and other details. From these ads, you can learn what topics and words are being searched and what leads users to your page. You could nd basic statistics of the search volume for specic words even before an ad click. As you create an ad, it forces you to succinctly summarize your value in a few words. Do this continuously and concurrently with your design process as it allows you to validate your assumptions without restricting your ability to dream big ideas.

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SPREAD / YOUR MESSAGE

Tell a compelling story about your company and people will repeat it
Hollywood producers and New York publishing executives will tell you the same thing: the key to selling a story is creating sympathetic characters in the midst of a compelling story. The audience needs someone to root for. Perhaps the same could hold true for even the most utilitarian startup. Your product is your star. And it needs a compelling reason to exist. How is your product going to change the world? How will it make life easier for the masses? Once you are a success, you can hire advertising agencies and public relations professionals to help craft your message. But, before Don Draper joins your team, spend some time thinking about the story you will tell about your product (and maybe even yourself and your team). The default state of the public toward your product

26
is apathy. To make the people care, you must relate your o ering to market trends or current eventsand convince your audience why the status quo desperately needs to be changed. Instead of waiting for the New York Times or the Plainville Gazette to call you, begin telling your story on a blog and through social media. Test out di erent angles and approaches. If you are able to hit a nerve with even a few people in the blogosphere or on Twitter, you may get helpful comments and a respectable number or retweets. The messages that resonate are the ones you later pitch to the professional media.

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SPREAD / YOUR MESSAGE

Create a video that can stand alone as a piece of entertainment

The best way to demonstrate the functions of your product is to show it in action in a video. But, the days of boring industrial lms are over. You cannot create a video that simply demonstrates what your product does. You need to create a dynamic video that both illustrates your product and is at least somewhat entertaining in its own right. Most product demonstrations can be realized as a series of screenshots, possibly stitched together into a single page narrative (see how Apple explains the features of a new product on its website). When making a video, choose one unique aspect of your product that would wow people. This is not the time for an exhaustive description. Staying focused in this way could reduce your time spent and costs while increasing

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the chances a user will hit the share button. Focus on something that would entertain. If even you are bored with the video after three views, it will not go viral.

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SPREAD / YOUR MESSAGE

Reect your best thinking on your front page

The front page of your website needs to reect the best of what you have to o er. If your product is clean and smart, your front page should reect that. If your product is quirky, your front page should be just as unique. You need to build a front page that presents to the world what your product and service is about and allows you to build a list of prospective users even at an early stage of development. Is your front page a personal invitation to a fewor a yer for all? Thats something to keep in mind through the various stages of design. Dont fall into the trap of speaking to no one in particular. Consider how specic you need to be in di erent steps of your launch. Make it a conversation. As you unveil your product and your message evolves,

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change your front page to reect those developments. It is easy to neglect your front page since most of your product development e orts are usually focused on the guts of your app. Be sure to nd a way to showcase the new features as they are released. You never know if a minor feature upgrade becomes a major reason why a prospective customer starts using your product.

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SPREAD / YOUR MESSAGE

Love those who love you back

In business, as in life, sometimes our early presumptions turn out to be wrong. Sometimes the customers or users whom you presumed to be your target market fail to swoon over the result of your hard work. At the same time, its occasionally the unexpected user who sends you love notes. To quote the songwriter: Love the one youre with. It is the people who fall in love with your product rst that you need to love back and give them everything they want and need to move your product from an idea to a thriving business. To identify who is loving you back, look for signals of unexpected success or messages saying you have solved a real problem. Strive to be a breath of fresh air.

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It is tempting to identify a group of people as early adopters, especially people that follow tech blogs or inuential bloggers in your eld. However, as everyone is gunning for their attention and a ection, their needs are largely well met. There is often a neglected population (that doesnt have a product constantly pitched to them) that would be happy to use a new product that solves their problems. These people can be hard to nd so you have to spread your net wide, looking for signals of unexpected success. When you nd a beacon of excitement and appreciation, you should use all the communication tools at your disposal to make this group of people fall in love with your product. These are people investing in your brand and your mission and they deserve all the love you can give them. They will love you back in return and propel your product to the next stage.

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GROW YOUR TEAM

GROW / YOUR TEAM

It is better to get the best person for 2 hours than a mediocre person for 20 hours
There is a saying among software engineering managers that the best programmers are 10 times more productive than an average one. Building software is a high leverage activity, for example, a little bit of improvement for the speed of the website, may yield a lot more purchases because the site responds quickly and you can breeze through the shopping process. A lot of the jobs surrounding a startup are also high leverage ones. Creating a blog post that becomes viral because it is just entertaining enough to spread virally, the return of that 500 words may be a 100 times what a run-of-the-mill blog post would be. Essentially, instead of trying to ll roles that need to be done and evenly allocate money to the di erent roles, you should look for exceptional people and

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compensate them disproportionately to see if they can create something that has 10 times more leverage than a similar competently executed work. Regrettably the marketplace is full of average people, but keep your eyes open for great talents and be ready to sacrice coverage of roles for a few of these exceptional results. Once the bar has been raised, and the gems created, you can push average people to emulate and do better work.

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GROW / YOUR TEAM

Build the smallest possible team you can get away with

The greatest enemy to productivity is communication overhead. The success of your startup depends on what you produce and not who produced it. The most valuable players in a startup are what we call unicorns. They are the rare group that are simultaneously two things. They can do two roles or morea marketer who can build their own web page, a designer who can write very well, or a salesperson with a law degree. You want to condense the skill sets to the fewest number of people to cover all the needs of your organization. To reduce the communication overhead, you should carefully design and delegate responsibilities, so projects dont have a lot of dependencies on getting everyone on the same page. Agree on a philosophy for your company that is consistently applied against projects to judge their success or failures. The best projects happen when

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you pick the right person to do the work, and the right person to oversee it. Finding alignment between people and their talents is arguably more important than any process of status checks or formal reviews.

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GROW / YOUR TEAM

Partner with people who need access to technology

Sometimes startups want to build partnerships with other startups because they feel like the recognizable names of similarly hip ventures will improve their standings within their hierarchy or respectability. The truth is the respectability does not translate to customers and acquiring customers is the real measure of success in turning your startup into a real business. Instead of pursuing partnerships within the echo chamber of technology or even social media, try to o er your startup to old world organizations that may not have the same access to technology and the new markets. O er to be their partner to provide a conduit between their existing base of customers and the new tools and opportunities that your business has to o er. Winning these more traditional partnerships will allow you to show traction and give you a compelling story

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about transformation. If you can bring a part of the incumbent market into your vision, then you can certainly expand on that and be a leader in bringing together the new entrants to the market as well. Devote time to explore these partnerships with less sexy companiesthey may just be the hidden gem that gets your ball rolling.

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GROW / YOUR TEAM

Establish a fair employee stock compensation structure by being formulaic

The founders collaboration agreement should have been decided upon at an early stage of structuring the company. It is important to include in the founders shares a vesting agreement so that people have the incentive and expectation to contribute and carry the load of the new venture for at least a few years. Beyond the pool of founder shares, you should establish a very formulaic strategy of allocating stock to employees who join the company after the founders. There are various literature online that describes the model to fairly distribute equity but the basic idea is the sameemployees that join around the same time get an equal slice of the stock that is allocated for that year. Every year that goes by, you get exponentially smaller slices. This encourages people to get involved early and rewards them disproportionately with a potential upside. The

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exact number of shares and percentage in the formula can be tweaked and you can nd online calculators and modelings to help you arrive at a fair number. The key is that equity compensation should never be varied by perceived value of the individual because it is di cult to get that right before people can show what they can do. Thus it is best to allocate them depending on how early or how late they join the venture. You can always issue additional equity reward as people step up and ll in greater roles and non-performers are possibly going to leave some unvested shares on the table.

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GROW / YOUR TEAM

Game the real estate market to get the workspaces you need
In the age of web products and apps, it doesnt matter where you build your product. Many successful startups started in garages and out of peoples homes. Converting a founders residence into a temporary workspace is often the most cost-e ective working option at the early stage of development. It is important that everyone is comfortable while working but be sure to keep boundaries between personal and shared space. If this arrangement isnt possible, co-working space is a more expensive alternative. As your space needs grow beyond what a private residence can accommodate, subletting o ce space from companies that has excess space is preferable over getting startup incubator space that is much more dense and sometimes noisy. On the other hand, the coworking or incubator space does have perks of shared

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conference space that would be important for meetings with your boards and key customers. When looking for o ce space to sublet, explore your personal network. Sometimes companies that are not doing well are more likely to share their unused space. Commercial real estate agents may be willing to help you game the system and get some unusual o ce space in the near term. They are hoping when your company needs a larger space in the future, they are in for a large commission when you sign your rst big o ce lease.

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GROW / YOUR TEAM

Look for trust and honesty in your Board of Advisors

Do not give equity to people only because they are a big name. A seat on your Board of Advisors should really be a reward mechanism for non-employees that have contributed generously throughout the formation process of your company and your product. They may be a friend that has been doing work for free, a partner that has been giving you advice, or someone that has made key introductions. In each case they have interacted with you and your business and have a deep understanding of it. Unlike your Board of Directors, these advisors dont provide oversight as your superiors. Instead, they provide suggestions as a peer. They should be the people you respect and trust for their brutally honest feedback. There are many ways to nd people who can help or

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advise you along the way. Advisoray hopes to provide you with tools to make these connections. When these relationships mature and your company starts to bear fruit, the small equity reward that is the typical share is one of the sweetest gifts you can give to someone who has earned it. We hope you nd just the right mix in your Board of Advisors that can give you an edge in this journey that is your startup.

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TAKE THE NEXT STEP

If you nd the advice gathered in this guide useful, then we think you and your startup will benet from the collective knowledge of our growing network of advisors and professionals, covering the areas of business strategy, technology, design, law, accounting, marketing, real estate, to name a few. To nd the right advisors for your needs, you can: Search Advisoray.com for advisors using keywords listed on the bottom of each page in this guide, or by areas of expertise or services o ered. Browse the interactive version of this guide at advisoray.com/startup and look for advisors that have listed their proles there. Let us play matchmaker for you by sending an e-mail to ask@advisoray.com describing your situation and what problems you need solved. We hope you have enjoyed this pocket-sized guide. Follow us on Twitter (@advisoray) to keep up-to-date as we roll out new content and expand our services to serve you and help your startup succeed.

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