How To Make It as a
First-Time Entrepreneur

How to Make it as a First-Time Entrepreneur

Vinicius Vacanti is co-founder and CEO of Yipit. Next posts on how to acquire users for free and how to raise a Series A. Don’t miss them by subscribing via email or via twitter.

Family, friends, journalists, potential investors and palm readers will tell your idea is brilliant or foolish but they don’t really know. Very few ideas are clearly amazing. The success of most ideas is very much unclear.

So, how can you find out if your startup idea is good or bad?

Fortunately, there are people out there who can definitively tell if your idea is good or bad. They are brutal, selfish and don’t really know what they want. But, if you put a version of your startup idea in front of them, they’ll either use it or quickly lose interest.

Those people are your potential users. The people whose problem you’re solving and they alone, through their action or inaction, will tell you if your startup idea is good or bad.

The problem is that it takes months to get a working prototype ready. Well, not if you are ready to take a few shortcuts.

The Idea

In late January of this year, we had noticed two things:  people loved Groupon and there were, at that point, around 15 competing daily deal services of which 7 had launched in the last 30 days.

The problem we identified was two-fold: people didn’t want to sign-up for all these new deal services getting 15 emails a day and didn’t want to keep getting deals that weren’t relevant to them (e.g., guys didn’t want spa deals).

We wanted to create a product that would allow users to tell us what kind of deal categories they wanted (restaurants, not spas), every day we would grab all of these new daily deals announced in their market, filter the deals based on the user’s preferences and email the best ones in just one email.

How We Tested It

We could have sat around for a few months asking people what they thought, writing a business plan, modeling out what it would like in five years, thinking about where our headquarters would be, and other irrelevant things.

Or, we could create a very simple prototype as fast as possible. We could see if potential users would sign-up. And, if they did, whether they would open our daily emails, click on the deals or just unsubscribe from our emails.

Building a Prototype in Three Days

We had a long list of features we wanted for Yipit but we cut everything except for the bare minimum:

  • Landing page to sign-up
  • Page to collect category preferences
  • Page to recommend Yipit to others
  • Page where you could see all of the deals in our system

In retrospect, we could have done without creating the page where a user could browse all of the current deals.

On the back-end, we needed:

  • Script that would send out a daily email with the deals that matched their preferences
  • Crawler to grab all the deals from the various sites and put them in our database

All of the above is actually very easy to build.  The only problematic one was the crawler to grab the deals from the various third-party sites.  Each site was different, the urls were weird, duplicate deals would be a problem and categorizing the deals accurately is a hard problem to solve. We quickly realized the crawler was going to take us weeks to build poorly and months to build correctly.

But, what we concluded was that the whether we could build the crawler wasn’t a risk. We could; it would just take time. The real risk was that people didn’t want to use our service.

The Shortcut

So, we said, screw it, we’re not building a crawler. We’re just going to do the deal entry manually and eventually build the crawler if people actually liked our new service.

We created a simple admin page where a deal could be entered in (title, picture, price, etc.). We then hired a part-time person who would wake up every morning, go to the 20 daily deal sites and manually type the deals into our system and assign them to categories like restaurants, massage, spa, etc.  Crazy? Yes. Scalable? Probably not. Did it matter? No.

Finding Out If Our Idea Was Bad

Three days later, we were ready to put our prototype in front of potential users. Much to our delight, people started signing-up and started getting and clicking on our email. They were implicitly telling us they liked our idea! (I’ll write a future post on how to get these early users but basically you get them wherever you can. You don’t need that many to know if your idea is good or bad).

If people hadn’t signed-up or hadn’t clicked on our emails, we would have found out right away that there was something wrong with our idea. But, that would have been okay because we hadn’t spent months on it; just a few days.

How to Find Out if Your Idea is Good or Bad

My main pieces of advice are:

  • Build a very simple prototype for your idea and get it in front of potential users. You’ll learn more the day you talk to your first user than the months you’ve spent pontificating
  • Don’t be afraid to do things manually at first like we did
  • Build a landing page with screenshots that describe your future product and see if people will sign-up for your invite list. Dropbox did that before they had a product and signed-up 100K people.  Clearly, they were solving a problem people had!
  • Cut every feature except for the core feature.  Seriously, you don’t need any of those extra features.
  • 95% of startups are able to have a prototype built in less than two weeks.
  • Don’t write a business plan.

It’s very likely your idea is bad. Find that out as soon as possible so you can evolve it to a better idea.

Vinicius Vacanti is co-founder and CEO of Yipit. Next posts on how to acquire users for free and how to raise a Series A. Don’t miss them by subscribing via email or via twitter.

  • http://www.perryblacher.com/ perryblacher

    You should run a sideline doing this for other people Vin. I would definitely pay on subscription for your three day prototyping service…

    • http://viniciusvacanti.com Vinicius Vacanti

      Would definitely be fun.

  • http://www.perryblacher.com/ perryblacher

    You should run a sideline doing this for other people Vin. I would definitely pay on subscription for a three day prototyping service…

    • http://viniciusvacanti.com Vinicius Vacanti

      Would definitely be fun.

  • http://twitter.com/SheetalDube Sheetal Dube

    Great post. I work as a User Experience and Customer Insights specialist and the one thing that keeps me awake is finding better ways to get feedback from customer, early on in the process. Your post provides some good guidelines on how one can do that. I am very keen to learn more about how you get those early users. That is the struggle I have with most of my projects. Thanks!

    • http://viniciusvacanti.com Vinicius Vacanti

      Definitely seems like a topic people are interested in. Will write a post on some strategies.

    • http://www.twitter.com/ebellity Emmanuel Bellity

      I read this yesterday which you may find interesting – about the concept of “ghetto testing” used by Zynga: http://bit.ly/hYEWdK

      • http://viniciusvacanti.com Vinicius Vacanti

        Thanks for sharing. Zynga is great about MVP testing.

  • http://twitter.com/SheetalDube Sheetal Dube

    Great post. I work as a User Experience and Customer Insights specialist and the one thing that keeps me awake is finding better ways to get feedback from customer, early on in the process. Your post provides some good guidelines on how one can do that. I am very keen to learn more about how you get those early users. That is the struggle I have with most of my projects. Thanks!

    • http://viniciusvacanti.com Vinicius Vacanti

      Definitely seems like a topic people are interested in. Will write a post on some strategies.

    • http://twitter.com/ebellity Emmanuel Bellity

      I read this yesterday which you may find interesting – about the concept of “ghetto testing” used by Zynga: http://bit.ly/hYEWdK

      • http://viniciusvacanti.com Vinicius Vacanti

        Thanks for sharing. Zynga is great about MVP testing.

  • Anonymous

    LOVE your posts Vin. Super inspiring.

    • http://viniciusvacanti.com Vinicius Vacanti

      Thanks! Hope all is well!

  • Anonymous

    LOVE your posts Vin. Super inspiring.

    • http://viniciusvacanti.com Vinicius Vacanti

      Thanks! Hope all is well!

  • http://www.twitter.com/ebellity Emmanuel Bellity

    Still your business really falls into that category where you can do that pretty quickly… (you don’t have to find the deals yourselves, and don’t need critical mass of users in order for the service to be interesting)

    I can’t wait for the post on “getting early users” – we’re launching Opismart tomorrow !

    • http://viniciusvacanti.com Vinicius Vacanti

      While our business made sense, I do believe that people often over-build their initial prototype. They should be taking more shortcuts.

      Good luck on the launch!

      • http://www.twitter.com/ebellity Emmanuel Bellity

        I agree but it’s hard to admit :)

        also it’s a bit different on mobile when you can’t have a public beta and cannot iterate as easily – if you first version sucks it’s hard to make people come back

        • http://viniciusvacanti.com Vinicius Vacanti

          Haven’t done much with mobile and know its definitely harder to iterate with apple’s app store policy.

  • http://twitter.com/ebellity Emmanuel Bellity

    Still your business really falls into that category where you can do that pretty quickly… (you don’t have to find the deals yourselves, and don’t need critical mass of users in order for the service to be interesting)

    I can’t wait for the post on “getting early users” – we’re launching Opismart tomorrow !

    • http://viniciusvacanti.com Vinicius Vacanti

      While our business made sense, I do believe that people often over-build their initial prototype. They should be taking more shortcuts.

      Good luck on the launch!

      • http://twitter.com/ebellity Emmanuel Bellity

        I agree but it’s hard to admit :)

        also it’s a bit different on mobile when you can’t have a public beta and cannot iterate as easily – if you first version sucks it’s hard to make people come back

        • http://viniciusvacanti.com Vinicius Vacanti

          Haven’t done much with mobile and know its definitely harder to iterate with apple’s app store policy.

  • http://www.showmeapp.com San Kim

    Great stuff as always. One thing that I’m sure entrepreneurs would love to hear is some more detail on the Finding Out If Our Idea Was Bad section: namely, how you went about putting your prototype in front of potential users.

    Did you just send your link out to friends/family? Did you do Adwords/FB-based SEM? Did you drop flyers from a blimp?

    Acquiring “alpha” users is a creative process for sure, and will be unique to every case. Still, it’s helpful to hear concrete examples from successful experiments.

    • http://viniciusvacanti.com Vinicius Vacanti

      Will be writing more about it but there’s no secret sauce. It’s more just about hustling and getting people into your beta. Fortunately, you don’t need that many people using it in order to get statistically significant feedback.

      • http://twitter.com/gmansoor Ghazenfer Mansoor

        Vin: Thanks for sharing these tips. These are awesome and inspiring too.
        what do you consider a good number of initial users for yipit type of site? Eagerly waiting for your post on getting early users.

  • http://www.learnbat.com/ San Kim

    Great stuff as always. One thing that I’m sure entrepreneurs would love to hear is some more detail on the Finding Out If Our Idea Was Bad section: namely, how you went about putting your prototype in front of potential users.

    Did you just send your link out to friends/family? Did you do Adwords/FB-based SEM? Did you drop flyers from a blimp?

    Acquiring “alpha” users is a creative process for sure, and will be unique to every case. Still, it’s helpful to hear concrete examples from successful experiments.

    • http://viniciusvacanti.com Vinicius Vacanti

      Will be writing more about it but there’s no secret sauce. It’s more just about hustling and getting people into your beta. Fortunately, you don’t need that many people using it in order to get statistically significant feedback.

      • http://twitter.com/gmansoor Ghazenfer Mansoor

        Vin: Thanks for sharing these tips. These are awesome and inspiring too.
        what do you consider a good number of initial users for yipit type of site? Eagerly waiting for your post on getting early users.

  • http://technbiz.blogspot.com paramendra

    Great story.

    • http://viniciusvacanti.com Vinicius Vacanti

      thanks!

  • http://technbiz.blogspot.com paramendra

    Great story.

    • http://viniciusvacanti.com Vinicius Vacanti

      thanks!

  • umkcguy

    Hi Vin,

    That is an awesome article, and really nice of you to share your start up experience. Could you share approx. how much money you invested on your prototype – considering the traffic expected , where to host the web portal and capacity/avalaibility aspects?

    thanks

    • http://viniciusvacanti.com Vinicius Vacanti

      we build it ourselves, so not much money spent. As for hosting, we used Amazon which was around $100 / month.

      • umkcguy

        since am still a n00b when it comes to options for website building. are there any risk if i want to try my prototype using social network building sites like ning,socialgo.com etc. are there any risks associated with those that I am not thinking?
        thanks

        • http://viniciusvacanti.com Vinicius Vacanti

          Depends on the project. Could be hard to transition those people over to your new site.

  • umkcguy

    Hi Vin,

    That is an awesome article, and really nice of you to share your start up experience. Could you share approx. how much money you invested on your prototype – considering the traffic expected , where to host the web portal and capacity/avalaibility aspects?

    thanks

    • http://viniciusvacanti.com Vinicius Vacanti

      we build it ourselves, so not much money spent. As for hosting, we used Amazon which was around $100 / month.

      • umkcguy

        since am still a n00b when it comes to options for website building. are there any risk if i want to try my prototype using social network building sites like ning,socialgo.com etc. are there any risks associated with those that I am not thinking?
        thanks

        • http://viniciusvacanti.com Vinicius Vacanti

          Depends on the project. Could be hard to transition those people over to your new site.

  • http://giffconstable.com giffc

    right on Vin :)

    • http://viniciusvacanti.com Vinicius Vacanti

      Thanks Giff!

  • http://giffconstable.com giffc

    right on Vin :)

    • http://viniciusvacanti.com Vinicius Vacanti

      Thanks Giff!

  • http://webshake.tv Dominik Szarek

    great post Vin!
    i’m doing it just like you described and see if it’ll work in my case :) and this is the best lesson from this post – if you want to, you can launch your startup in just few afternoons!

    • http://viniciusvacanti.com Vinicius Vacanti

      That’s exactly right. If you can find the right shortcuts, almost any idea can be quickly prototyped and launched.

  • http://webshake.tv Dominik Szarek

    great post Vin!
    i’m doing it just like you described and see if it’ll work in my case :) and this is the best lesson from this post – if you want to, you can launch your startup in just few afternoons!

    • http://viniciusvacanti.com Vinicius Vacanti

      That’s exactly right. If you can find the right shortcuts, almost any idea can be quickly prototyped and launched.

  • Dhruv Gk

    Its just amazing……just superbbbbbbbbbbbbbbbb…..seriously m speechless

  • Dhruv Gk

    Its just amazing……just superbbbbbbbbbbbbbbbb…..seriously m speechless

  • Jm

    Great article. Thanks for sharing! I’m curious. Do you think this is also true for B2B and Enterprise software and SaaS? It seems to be mostly applicable to consumer web.

  • Jm

    Great article. Thanks for sharing! I’m curious. Do you think this is also true for B2B and Enterprise software and SaaS? It seems to be mostly applicable to consumer web.

  • http://twitter.com/BetoIII Beto Juarez III

    The landing page is the new hot Lean Startup implementation.

  • http://twitter.com/BetoIII Beto Juarez III

    The landing page is the new hot Lean Startup implementation.

  • http://webbroi.com Casey

    Love this post post. Really what I needed right now. Stoked to get cranking. Best of luck with everything.

  • http://webbroi.com Casey

    Love this post post. Really what I needed right now. Stoked to get cranking. Best of luck with everything.

  • http://twitter.com/zachsbuzz Zachary Smith

    This strategy makes the MVP accessible to almost anyone due to low tech nature which allow for speed and simplicity.  I look forward to testing out this model.   

  • Faprusso

    hey Vinicius, Felipe from Brazil here. Did you write any post on how to get people to try your prototype? I am creating a website and I definetely need to know with they will like it or not!
    tks

  • Anonymous

    Excellent post! The ability to test an idea quickly and with less risk makes it super easy to exit. The problem with most is that we often stick to the same idea unwilling to budge and let it go. It’s the process of ideation and innovation that makes it fun. Why build just one thing? 

  • http://www.radiovybe.com/ Val Ezeani

    This is simply inspiring 

  • http://www.sedighian.com/ Sam Sedighian

    Great post! specially like the last bulletin point: “Don’t write a business plan.”

  • http://www.facebook.com/steve.quinn.921025 Steve Quinn

    Excellent post! This blog is very good. Thanks.