Last week we published our Top Three Takeaways from Week 5 of Stanford’s How to Start a Startup course. If you are sitting hear wondering, “what the heck is How to Start a Startup?” see below. Otherwise, scroll down to see our top three takeaways from week 5 of How to Start a Startup. Learn lots and enjoy!
Over the next several weeks, Y Combinator President, Sam Altman, is teaching a Stanford course lecture series designed to be a one-class business course for people who want to start startups. It is “everything [they] know about how to start a startup, for free, from some of the world experts.”
The caliber of founders and startup gurus lined up to talk is impressive. Several of our Maestronauts decided they wanted to follow along and learn from the successes and challenges that are shared. So over the next several weeks we are meeting before work to watch and discuss the lectures.
1. Take test drives.
All of the speakers have said it. Your hires, especially your first hires, are critically important. So when you are hiring, take a test drive to help determine whether the candidate is employee material by working with them on a project over several days.
Even people who are good interviewers will struggle to fake it for a week. You can figure out if they really have the expertise they say they do and if their work style and personality fit the culture you are trying to build.
This is especially helpful when you are hiring for a position where you are not an expert. If you are a software engineer turned co-founder of a company, hiring a CFO is most likely uncharted territory. So, when you think you have found a great candidate, take a test drive to confirm (or challenge) your thoughts on him/her.
2. It’s a user-run market.
Historically the CIOs or some other decision-making tech-savvy position determines what technologies will be used by everyone in the company. But today it’s a user-run market. Individuals choose the technology they want to use and adopt into their daily routine. So now more than ever before, everything you do is all about the users.
Caution!! Yes, it’s a user-run market and yes, all your efforts should focus on them. However, this doesn’t mean that you should necessarily give them everything on their wish lists. …hmmm, was that confusing? It doesn’t have to be. Turn to user feedback as your guide and use it to create effective solutions and iterate on your product in ways that will delight the user unexpectedly. Give them what they don’t know they want.
3. Look for changes, find the slivers, make a wedge.
One of the best ways to find new business opportunities is to look for things that are changing in your environment or market. Then, find the slivers or parts of the changing market that no one else is doing well. Create a business around those slivers, starting small and solving a very specific problem. Then, build a wedge out of your successful sliver to grow your company.
As Box founder Aaron Levie pointed out, ZenPayroll is a great example of this. They found that for small businesses, payroll is a “complicated and incredibly annoying process” using the same vendors as decades ago to get it done. Forget trying to get a receipt via email or see graphs of your salaries, they provided zero data. ZenPayroll decided to focus on the payroll management process, the most painful sliver that no one was doing well, and make it “dead simple” to accomplish. Now they are able to “move up market over time as well as deliver new services over time.” Look for changes, find the sliver, make a wedge.”
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