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THEWEBSTARTUPSUCCESSGUIDEBobWalshTheWebStartupSuccessGuideCopyright2009byBobWalshAllrightsreserved.
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ISBN-13(pbk):978-1-4302-1985-9ISBN-13(electronic):978-1-4302-1986-6PrintedandboundintheUnitedStatesofAmerica987654321Trademarkednamesmayappearinthisbook.
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ContentsataGlanceFOREWORDxiABOUTTHEAUTHORxiiiABOUTTHETECHNICALREVIEWERxvACKNOWLEDGMENTS.
xviiINTRODUCTIONxixCHAPTER1INTRODUCTION:WHATWASISNOTWHATIS1CHAPTER2VALUEISTHECOREOFYOURSTARTUP25CHAPTER3SOMANYPLATFORMS,SOMANYOPTIONS49CHAPTER4TOOLSANDGROUPSFORSTARTUPS99CHAPTER5MONEY:RAISE,MANAGE,MAKE145CHAPTER6SOCIALMEDIAANDYOURSTARTUP209CHAPTER7CLARITYMATTERS267CHAPTER8GETTINGITDONE297CHAPTER9SIXWISEPEOPLE.
341CHAPTER10WHAT'SNEXT399INDEX407ContentsFOREWORDxiABOUTTHEAUTHORxiiiABOUTTHETECHNICALREVIEWERxvACKNOWLEDGMENTS.
xviiINTRODUCTIONxixCHAPTER1INTRODUCTION:WHATWASISNOTWHATIS1PleaseInsertChipintoBrain.
1What'sChangedSinceMicro-iSV:FromVisiontoReality2TheNewOnlineEconomicRealityandYourStartup3ARidiculouslyShortHistoryofSoftwareStartups3So,What'saStartupAndWhyWouldIWanttoBeOne8StartupFlavors—TakeYourPick9WhenIstheRightTimetoJump14NeilDavidson,BusinessofSoftwareConference15DonDodge,Director,BusinessDevelopmentatMicrosoft.
.
.
.
17Recap23CHAPTER2VALUEISTHECOREOFYOURSTARTUP25ValueandProblems,ProblemsandValue.
25BeginningattheBeginningIsJustaBeginning25Wally'sStartupLaw27ImplicationsofWally'sStartupLaw.
33HaveaGreatStartupIdeaHmm.
MaybeNot.
36WhereDoYouFindProblems41TenStartupsNottoDo,andWhy.
43Recap46ContentsviiiCHAPTER3SOMANYPLATFORMS,SOMANYOPTIONS49ThenandNow49EverybodyWantstoBeinthePlatformBusiness50EvaluatingPlatforms:AChecklist.
51SoftwareAsaService.
53SaasEnterpriseRealityCheck:RickChapman,Softletter56PlatformAsaService59LovingGoogleAppEngine.
62Microsoft'sAzureServicesandMeshPlatforms.
64SocialNetworksAsPlatforms.
69Mobile.
72AndreyButov,AntairCorporation76EricChu,GoogleMobilePlatformsProgramManager79Hybrid.
80JeffHaynie,CEO,Appcelerator83PeldiGuilizzoni,BalsamiqStudios.
85OpenSource/CMS89MacDesktopandWindowsDesktop.
91ScottMorrison,Founder,Indev92GwenHilyard,Cofounder,Brisworks96Recap97CHAPTER4TOOLSANDGROUPSFORSTARTUPS99BackintheDay99ToolsforStartups100SubscriptionStartupCommunities119RobWalling,TheMicropreneurAcademy120GeneLandy,IT/DigitalLegalCompanionAuthorandAttorney.
127StartupOrganizationsandGroupsOnlineandOff128ShaheroseCharania,Women2.
0132StartupGroupsNearYou—OfflineandOn133LargeVendorProgramsforStartups.
139Recap143CHAPTER5MONEY:RAISE,MANAGE,MAKE145FollowtheMoney145RaisingtheMoney146UnderstandingtheFundingLadder147YouAreNotAlone149TheBasicsoftheFundingGame.
151TheArtofRaisingAngelCapital,byGuyKawasaki151TheTopTenLiesofEntrepreneurs,byGuyKawasaki161ContentsixRebeccaLynn,Principal,MorgenthalerVentures.
165JoAnneMiller,Partner,MilkStreetVentures169CindyPadnos,ManagingDirector,IlluminateVentures173StephanieHanbury-Brown,FounderandManagingDirector,GoldenSeeds178StartupIncubators181ManagingtheMoney183GeneLandy,AttorneyandAuthorofIT/DigitalLegalCompanion184MairtiniNiDhomhnaill,SeniorVicePresident,AccretiveSolutions188MakingMoney.
197DaveCollins,Founder,SharewarePromotions201Recap207CHAPTER6SOCIALMEDIAANDYOURSTARTUP209It'sAllAboutAttention209TheBigIdea211SettingUpYourSocialMediaBasicRadar.
212TheStartupCompanyBlog219AndyWibbels,SixApart.
226WelcometotheLandofTwitter230TheNewNewsMedia232MarshallKirkpatrick,LeadWriter,ReadWriteWeb235TheEditorIsIn236AlHarberg,President,DPDirectory,Inc.
239SoIstheReporter241LukeArmour,PRCoordinator,blogtalkradio.
com244StartupPRtheRightWay246YourOtherTitle:ChiefCommunityOfficer247GinevraWhalen,TypePadCommunityManager,SixApart248MattJohnston,VPofMarketing&Community,uTest,Inc.
250VeronicaJorden,CommunicationsManager,Blellow.
.
.
251MariaSipka,CEO,Linqia254Recap265CHAPTER7CLARITYMATTERS267IfYou'reNotClear,You'reNotSelling267TheUniqueSellingPropositionPattern269CaseStudy:Mint.
com275CaseStudy:RescueTime283Recap295ContentsxCHAPTER8GETTINGITDONE.
297ThisMightHurt297GTDinSummary298DavidAllen,Author,Speaker302MattCornell,ProductivityExpert315OnlineProductivity316DeveloperProductivity321StartupFounderProductivity333Recap339CHAPTER9SIXWISEPEOPLE341SomePeopleYouOughttoListenTo341DharmeshShah,Founder,ChiefSoftwareArchitect,HubSpot.
.
.
342EricSink,Founder/Ceo,SourceGear353JoelSpolsky,CEOandCofounder,FogCreekSoftware.
362PamelaSlim,AuthorandCoach.
374LouCarbone,FounderandChiefExperienceOfficer,ExperienceEngineering383GuyKawasaki,AuthorandFounder,Alltop.
392Recap396CHAPTER10WHAT'SNEXT399IntrototheOutro399ThereHaveNeverBeenMoreOpportunitiesforaStartuptoSucceed399TheQualityoftheIdeaBehindYourStartup'sProductorServiceIsParamount400YourIdeaHastoHoldRealAppealtoatLeastOneSpecificMarketSegment401SeriousValue+GreatCustomerExperienceMeansYouGetTakenSeriously.
402IfYouPlaybyEveryoneElse'sRules,YouLose.
402SocialNetworksAreKeytoYourSuccess403HaveaPlantoGetThroughtheBootstrapValleyofDeath.
.
.
404MoneyIstheLifebloodofStartups—ManageItWell.
405OneFinalBitofAdvice.
405INDEX407xiForewordLastsummer,PaulGrahaminvitedmetostopbyhisplaceinCambridge,Massachusetts,foranintimatedinner.
Justhim,hiswife,andthefoundersofthreedozenextremelyyoungstartupsintheYCombinatorprogram,abootcamp/incubator/angelinvestmentthingy.
"Wouldyoubewillingtospeaktothesefoundersabout,Idon'tknow,maybepricing"Paulaskedme.
"Sure!
"Isaid,andhewhistledloudlytogeteveryonetoquietdown.
Ididn'treallyhaveaspeechprepared.
TherewasnoPowerPointoutlineIcoulduseasacrutch.
Theroomwasjam-packed.
Alleyeswereonme.
Ididn'tknowwhatIwasgoingtosay.
IthoughtI'dtryagambit.
"So.
.
.
"Isaid.
"Anyquestions"Tenhandsshotup.
"Goahead,"Isaid,pointingtoakidinthefrontrowwho,Iimagine,hadjustgottenhisbracesofftheweekbefore.
Andforalmosttwohoursstraight,thesepoorkidsaskedmethemostbasicquestionsimaginableaboutthebusinessofstartups.
Pricing.
Features.
Marketing.
Invoicing.
Theyhadsomanyquestions.
IgavethemasgoodabraindumpasIcouldoneachtopic.
Theysatraptlyandaskedintelligentfollow-upquestions.
Theseweresmartkids,mindyou:usuallytopcomputersciencegrad-uatesandplentyofexperiencedprogrammers.
Butforalltheircodingskills,theydidn'treallyknowthefirstthingaboutmakingabusinesssuccessful.
WhichisOK.
They'lllearn.
It'snotthathard.
Thehardestpartisreal-izingthateventhoughyou'remakinganInternetcompany,writingthecodeandgettingittoworkisonlyasmallpartoftheeffort,andnotnecessarilythemostcriticalone.
Thebusinesssideisjustascrucial.
ForewordxiiThere'salotyou'regoingtoneedtolearntomakeyourstartupawesome.
Andthisbookthatyouholdinyourhands,thisverybook,isasplendidintroductiontothetopic.
Heck,I'vebeenrunningFogCreekfornineyearsnow;IthinkIknowathingortwoaboutathingortwo,andIlearnedsomethingnewoneverypage.
Everysinglepage.
Yes,eventhatpagewiththeinterviewofme.
Thisbookisafantasticresourceforanyonedoingawebstartuporasoftwarestartup.
BobWalshwillteachyouhowtomakeyourstartupsuccessful.
Buyit,readit,putitunderyourpillow.
Thenbuycopiesforyourcofounders.
Andgooutthereandnailitwithakillerstartupthatmakestheworldabetterplace.
JoelSpolskyCEO,FogCreekSoftwarexiiiAbouttheAuthorMynameisBobWalsh(bob.
walsh@47hats.
com),andIbelievethatstartupsandmicroISVs(one-personsoftwarecompanies)representthefutureoftheglobalsoftwareindustryandofthebillion-personInternettowhichweareallnowconnected.
Ibelievethissostronglythatthisismyfifthbookonthesub-ject.
MypreviousbooksareMicro-ISV:FromVisiontoReality(Apress,2006),ClearBlogging(Apress,2007),MicroISVSitesThatSell!
(ebook,2008),andTheTwitterSurvivalGuide,withKristenNicole(ebook,2008).
Inaddition,IdoapodcastwithcohostPatFoley(TheStartupSuccessPodcast,athttp://startuppodcast.
wordpress.
com)andwriteablog(47Hats,athttp://47hats.
com).
IalsocomoderateJoelSpolsky'sBusinessofSoftwareforum(http://discuss.
joelonsoftware.
com/default.
aspbiz).
MydayjobisconsultingwithstartupsandmicroISVsonhowtoincreasetheirsalesbybetterexplainingtheirsoftwareontheirwebsites.
Butmyrealjobsince2007hasbeentorecreatemyselffromaWindowsdesktopdeveloperintoaRailswebdevelopersothatIcanbuildandlaunchafasterwayforstartupstosucceed:StartupToDo(http://startuptodo.
com).
BeforeIgotintoalloftheforegoingactivities,Iwasacustomsoft-waredeveloperfor20-plusyears,andbeforethatareporter.
IlikewhatI'mdoingnowalotmorethaneitherofthosepastcareers!
xvAbouttheTechnicalReviewerThomasRushtonhasbeenprogrammingsincehegothisfirstcomputer,aSinclairZX80.
Hehasprogressedthroughcreatingcomplexworkflowanddocumentmanagementsystemsforfinancialandlegalorganiza-tions.
HehasaBScincomputersciencefromDurhamUniversityandspentsomeresearchtimeinthefieldofsoftwarequalitybeforemovingintothemorefinanciallyrewardingITcareerrolesofprogrammer,DBA,andconsultant.
HewillsoonbeputtingsomeofBobWalsh'stechniquesintopracticebycreatinghisownmicroISV.
Whennotslavingawayoverahotkeyboard,heenjoysspendingtimewithhiswife,Sarah,theiryoungson,William,andhisdoublebass.
xviiAcknowledgmentsWritingabook—especiallythewayIdoit,whichistoaskalotofknowl-edgeablepeoplealotofpeskyquestions—meansyouhavealotofpeopletothankformakingitpossible.
FirstamongequalshastobeJoelSpolsky,whoin2005helpedopenthedoorformeatApressandwhowaskindenoughtowritetheForewordtothisbookandtogivemealonginterview.
NextIwishtothankPamSlim,LouCarbone,DharmeshShah,EricSink,DavidAllen,andGuyKawasakiforsharingfirstwithmeandnowwithyoutheirtime,knowledge,andinsight.
Butwait,there'smore!
ForalltheirhelpIalsoofferheartythankstothefollowing:NeilDavidson,DonDodge,WallyWallington,PaulTyma,ShawnAnderson,ShaneCorellain,CoreyMaass,SteveGrundell,StephenFewer,SimonShutter,CedrikSavarese,RickChapman,DaveWestwood,PatFoley,AndreyButov,GavinBowman,EricChu,JeffHaynie,PeldiGuilizzoni,ScottMorrison,GwenHilyard,RichardWhite,RobWalling,GeneLandy,AlvinTse,especiallyShaheroseCharania,JoanneYates,BrandonZeuner,RebeccaLynn,JoAnneMiller,CindyPadnos,StephanieHanbury-Brown,MairtiniNiDhomhnaill,AlainRaynaud,AmyHoy,DaveCollins,MatthewBleicher,IanLandsman,AndyWibbels,MikeGunderloy,MarshallKirkpatrick,RafeNeedleman,AlHarberg,LeslieSuzukamo,LukeArmour,GinevraWhalen,MatJohnston,VeronicaJorden,MariaSipka,AaronPatzer,TonyWright,MattCornell,andTimHaughton.
Inaddition,I'dliketothankThomasRushtonforagaindoingagreatjobontechnicalreview,SofiaMarchantformanagingthisproject,JonathanHassellforproddingmewhenIneededprodding,ElliotSimonforcopyeditingmyproseintosomethingreadable,andLauraCheuformanagingthebook'sproduction.
Finally,asalways,IgivedeepthankstoTinaMarieRossiforhersupportandlove.
xixIntroductionAllIwasdoingbackin2005waslookingforabookonAmazon,honest!
I'djustfinishedwritingMasterListProfessional,aWindowspersonaltaskmanager,ofwhichIplannedtosellamillioncopiessothatIcouldretireforeverfrommycontractprogrammingjob.
Onlyoneproblem:Icouldn'tfindabookonAmazonthatexplainedhowtosellthosemillioncopies.
After20+yearsofdealingwithclientsandcorporations,specsandcustomapps,Iknewzipaboutmarketing,branding,positioning,softwaredown-loads,creditcardprocessing,smallbusinesslegalities,andthelike.
Ineededthatbook.
Ididn'tfindit.
SoIwroteMicro-ISV:FromVisiontoReality(Apress,2006).
Itdidwell.
IstartedspendingmoreandmoretimetalkingwiththekindofpeopleIliked,comoderatingaforumonthebusinessofsoftware,conductinginter-viewsforapodcast,andthenworkingforactualmoneywithstartupsandmicroISVs(self-fundedstartups).
ThenIwroteanotherbook(onblog-ging),followedbytwoe-books,andthencreatedanewpodcast(thistimemyown,TheStartupSuccessPodcast,withtheablehelpofmycohost,PatFoley).
Ilikestartups.
Startupfoundershaveadream,apassion,adesiretomakesomethinghappen,notjusttodowhatothershavedone.
Butbymid-2007Ihadcometorealizethreethings.
First,therehadtobeabetterwaytobootstrapasoftwarebusinessthaneithertohiresomeoneexpen-sivelikemyselfortoflailatitweekafterweek.
FromthisrealizationwasborntheideaofStartupToDo.
Second,IrealizedthattocreateStartupToDoI'dhavetogofrombeingaWindowsdesktopprogrammertobeingaRubyonRailsdeveloperconver-santinJavaScript,Linuxserveradmin,CSS—allthethingsI'davoidedupuntilthen.
Ithoughtitwouldtakesixmonthsforthis—ha!
Twoyearslater,andwiththehelpofalotofpeople,I'mjustabouttolaunch.
IntroductionxxThird,IrealizedthatMasterListProfessional,thoughagreatprogram,wasnevergoingtosellthosemillioncopiesandnolongeroccupiedcenterstageinmylife.
Itwastimetomoveonfromit,fromWindows,andfromdesktopprogramming.
ThusIwrotethisbook.
TheWebStartupSuccessGuideiskindoftheKillBillVol.
IIofwhatittakestocreateasuccessfulstartup.
Ihavewrittenitforallthosedeveloperswhoarereadytostepupandcreatemorethanjustanalternativetoprogrammingformoneyforsomeoneelse.
There'sawholeotherstorynowtobeexploredandtold,onebeingwrittenbytensofthousandsofdevelopersontheWeb,onmobileandsocialplatforms,evenondesktops.
Rightnowit'sastoryunfoldinginfrontofabackdropofglobaleconomicdisruption,whichparadoxicallymakesitagreattimeforstartups—disruptioncreatesopportunity,engendersnewneeds,andchangesoldideas.
Ithinkthisbookturnedoutverywell,thankstotheseveralhundredpeoplewhowerekindenoughtoanswermyquestions,correctmyassump-tions,andsharetheirexperience.
IhopeyoulearnasmuchreadingitasIdidwritingit,andIlookforwardtohearingaboutyourstartup'ssuccessesinthedaysahead.