The Blog of Matt Gornick

experiments in building businesses, lifestyle design, and social hedging

Working at a startup (and notes from WashU talk)

This week I had the opportunity to speak with some great students at Washington University in St. Louis.  As apart of "Alternative Career Week", they brought in Aaron Papermaster (Moxie) and I to talk about starting your own company while in college and working for a startup once you graduate.

I've noticed that I keep referencing the same books, videos, and people so I decided to make a page to have all of this information in one place.  

This information can be found at:

Simple ideas can be profitable

I love receiving (and giving) feedback on startup ideas, pitches, and product demos.  It allows people to look for ways to improve their product as well as see their startup from objective eyes.  I think the biggest deterrent to creative feedback comes from people that discount ideas simply because ... they appear to be simple.

I love this quote from Paul Graham's Essay "How to Start a Startup" (http://paulgraham.com/start.html):
"In particular, you don't need a brilliant idea to start a startup around. The way a startup makes money is to offer people better technology than they have now. But what people have now is often so bad that it doesn't take brilliance to do better."

In my experience, some people like to think that all the easy problems have already been solved and thus you should only look at solving the huge and complex problems.  Unbeknown to most, there are tons of horrible (any annoying) solutions for rather simple problems.  Additionally, these companies might have completely solved the problem wrong to begin with and it is just up to you to create a simple and elegant solution.

Here are some great examples:
  • Groupon (http://www.groupon.com/) - People have been able to get coupons before, but never before has a website made it so easy and enjoyable to look at deals and new venues in your city.  The solution is amazingly simple so much so that thousands of Groupon clones are starting to take over internet.  Great idea, simple solution, $1+ billion company.
  • 37signals (http://37signals.com/) - For those using MS Project, you know the pain and angst that is involved with doing the most simple task.  37signals didn't set out to destroy MS Project, but rather just focus on the customers that just wanted to manage a small team or project.  The overhead and headaches of MS Project allowed 37signals to solve the problem the correct way.  
  • Inventables (http://www.inventables.com/) - For years, people scoured big material books, bids, and online to find things like 'squishy magnets' or 'water proof coatings' when building new products such as cars, running shoes, airplanes, etc.  Inventables is changing the way people find these unique materials buy offering a digital marketplace for buyers and sellers to interact and discover new materials.  Buying materials isn't anything new, but enabling people to easily find and buy them is.
  • Snuggie (www.getsnuggie.com/) - As most people on this earth already know, the Snuggie is amazingly well-known and is an incredibly simple idea (essentially a backwards robe or a blanket with sleeves).  Not only was this idea easy to create, manufacture, steal, and reproduce (if someone was so inclined), but it was a wild success and has generated millions of sales.
In a quote from Twitter user heathwblack, "Sometimes the best inventions don't reinvent the wheel, they just make it roll better."

3 Tips to Win a New Venture/Business Plan Competition

Recently, the OrangeQC team entered the Cozad New Venture Competition at the University of Illinois at Urbana-Champaign.  I was very, very skeptical considering the negative connotation with startups in these competitions (see Techcrunch article).  We eventually decided to compete since we were 1. already a new venture, 2. already generating revenue, 3. were looking to expand and we weighted the expected return to be in our favor (didn't have to give up equity, not time consuming, networked with some great people, etc).

Here are some 3 tips that I feel helped OrangeQC win the competition:
1. Have a customer/user: So this might seem a bit backwards to talk with potential customers before you have a product.  In reality, if you aren't talking to your potential customers on Day 0, then you have a very high chance of completely building the wrong thing that no one will pay for.  Since OrangeQC was already a business focused on generating revenue, we were talking with potential customers before we even built the product.  This ensures that 1. someone will actually pay for your product/service and 2. that you build it (almost) correct the first time.  All too often, plans have the profitability as a big unknown.  If you are talking with someone before you build your product you are lightyears ahead of everyone and more importantly have a better chance of building a business.

2. Have a product/prototype:  Having something that can be shown in a presentation is critical.  In our semi-finals round, we barely talked about our product that we built which makes the judges think we had just an idea.  If you have a product, show a video demonstration, bring it in, or make it live so judges can see that you actually have more than just an idea.  Many of the people competing have just an idea, several people have professional looking mockups, and very, very few people have actual products.  If you don't have a product, start building it immediately.  

3. Ensure your team can actually build the business: I've noticed that many of the teams were built with great co-founders.  Be sure that everyone can contribute to building the venture and that you or a co-founder is not just 'the idea guy' (see 37signals post).  If you're in Computer Science, be sure you can sell your product and talk to customers.  If you're in Business, be sure you can build a product and not 'just be the boss'.  Ideas are a dime a dozen in these competitions and the judges are in charge of making the most bang for the buck.  They want to 'fund' companies that have a high chance of being successful and 99% of that comes from the team.

Overall, the competition was a lot of fun and would recommend it to any (already existing) student startup that wants an unbiased opinion on their business, wants to network with great student entrepreneurs and judges, or wants to use some of the winnings to build a better business.  Now get back to talking with customers.

Disclaimer: This was a Midwest competition and not a Silicon Valley competition.  Just as the location chances, I'm sure the game changes for these competitions.  Luckily, if you follow these steps you could lose the competition and still have a successful business!