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.

So, you have a startup idea. It’s going to be big.

You can see it now. Millions of people using your service. You’ve already figured out your mobile strategy. You know the neighboring sectors you’ll expand to first. Your read-write API will hail the transition of your company into a platform company. You’re going to change the world.

The only problem is that your vision is based on having hundreds of thousands, if not millions, of happy users and, currently, you have zero happy users.

If your startup plan is directly based on this vision, you will struggle.

You need a different plan; a plan that doesn’t assume millions of happy users.

You need a first 1,000 users plan. This isn’t just about getting 1,000 users to try out your service. This is a plan about keeping those users.

Unfortunately, looking at how successful startups are currently executing (Facebook, Yelp, Foursquare) doesn’t help because their growth plans are based on the fact that they already have millions of users.

You have to look at their history.

  • Focus on a Niche. By focusing on a small geographical area, a vertical or smaller group of people, it will be easier to build up a meaningful user base in that niche.
    • Groupon just focused on local deals in Chicago, Foursquare was primarily in New York, Facebook was available just at Harvard College, Yelp launched in San Francisco
    • StackOverflow started with Tech Q&A before they launched StackExchange
  • Become a Super User. You should shamelessly become the biggest user of your own service. If your service requires user generated content, you should be supplying 10x what every other user is supplying. You need to do this long enough to kickstart everyone else on the site.
    • Dennis and Naveen, the founders Foursquare, must have added 1,000 tips in New York. Every time I checked-in, I got a tip from one of them. Obviously, they couldn’t do that for the whole world. But, as an early user in New York, I had a great experience
    • Yelp’s founders made all of their friends also become super users
    • Scott Heiferman, co-founder of Meetup, started the largest and most succesful meetup himself (New York Tech Meetup)
  • Wow Users. Your goal is to get 1,000 happy users and that means you can do some things that won’t work for users after 1,000
    • Flickr used to email every user that signed-up to find out what their experience was like
    • At Yipit, we personally over-responded to every customer service and unsubscribe (one of those got us featured on CNN)
    • Yelp threw ridiculous parties for their first users. They still throw them today for their best users but not for all users
    • Even though Foursquare is more about tips and friend-finding, it added a game layer of points and badges so that the early users could use the app even though their friends weren’t on it yet
  • Get Their Social Graph. If you only have a 1000 users but they are all friends, that’s enough to get those friends happy
    • By focusing on just Harvard college, Facebook’s first 1,000 users knew each other and didn’t care that there weren’t 50,000 people using the service
  • Manually Create Marketplaces. If you’re a marketplace startup where you need both sides to come together, you should think about picking one of the sides and manually create it while you encourage the other side to show up
    • Groupon started as a platform for getting people together for group benefits. But, they had success, when they manually created the group benefit by negotiating deals with local businesses and only asked that people sign-up for their email list

The common theme in all of these recommendations is to not be afraid to do some things that won’t scale past the first 1,000 users or aren’t part of your eventual vision.

On your way to millions of users, don’t forget you have to get 1,000 happy users first.

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://blog.botfu.com Kevin Marshall

    Awesome thoughts!

    It got me so fired up and excited that I just gotta add a few more of my own random thoughts to each of your points:

    Focus on a Niche. This isn’t just smarter, it’s also cheaper and easier for a start up. You don’t have to make a ‘The Daily’ kind of push or splash to change the world within a niche…and niche can (and often do) grow into mainsream things over time. (read the history on a company like Nike or PowerBar for even more examples of this approach)

    Become a Super User. This is a great early gut check. If you aren’t a super user of your own system, and you aren’t really fixing a problem for yourself…then chances are VERY good that your business is never going to work. If you have to ‘push’ yourself to use your own thing or it feels too much like work for you, imagine how hard it’s going to be to get others, who have no vested interest in your solution, to do anything. (I have built a lot of projects over my years, and I can say by far the most successful ones are ones that I was a passionate user of…and NONE of the ones I wasn’t survived beyond my limited attention span).

    Wow Users. In my opinion, this is the real key to scaling. Nail this and the word spreads…the faults and ugly spots are overlooked (or at least quickly forgiven)…and all is right with the world. (There’s a reason people put up with Twitter crashing all the time in the early days)

    Get Their Social Graph. This is by far the cheapest way to grow your user base…and to me, is directly tied to ‘wow users’ because the only proper way you get to someones friends in the virtual world is by wow’ing them first. (btw – getting a social graph doesn’t mean just pulling in friends via an API, spamming them, or even just adding a ‘share’ feature…I think what Vinicius means by ‘get’ is to wow them so much that they pull their friends into also being active/passionate users)

    Manually Create Marketplaces. “Fake it until you can make it.”…the secret to automation is to always start by doing stuff manually…figure out a process, what works and what doesn’t…and the real problems (and opportunities) will present themselves through this effort.

    Anyway – love it! Thanks for the energy! =D

    • http://viniciusvacanti.com Vinicius Vacanti

      Wow! That comment deserves its own blog post. Thanks for the addition!

  • http://blog.botfu.com Kevin Marshall

    Awesome thoughts!

    It got me so fired up and excited that I just gotta add a few more of my own random thoughts to each of your points:

    Focus on a Niche. This isn’t just smarter, it’s also cheaper and easier for a start up. You don’t have to make a ‘The Daily’ kind of push or splash to change the world within a niche…and niche can (and often do) grow into mainsream things over time. (read the history on a company like Nike or PowerBar for even more examples of this approach)

    Become a Super User. This is a great early gut check. If you aren’t a super user of your own system, and you aren’t really fixing a problem for yourself…then chances are VERY good that your business is never going to work. If you have to ‘push’ yourself to use your own thing or it feels too much like work for you, imagine how hard it’s going to be to get others, who have no vested interest in your solution, to do anything. (I have built a lot of projects over my years, and I can say by far the most successful ones are ones that I was a passionate user of…and NONE of the ones I wasn’t survived beyond my limited attention span).

    Wow Users. In my opinion, this is the real key to scaling. Nail this and the word spreads…the faults and ugly spots are overlooked (or at least quickly forgiven)…and all is right with the world. (There’s a reason people put up with Twitter crashing all the time in the early days)

    Get Their Social Graph. This is by far the cheapest way to grow your user base…and to me, is directly tied to ‘wow users’ because the only proper way you get to someones friends in the virtual world is by wow’ing them first. (btw – getting a social graph doesn’t mean just pulling in friends via an API, spamming them, or even just adding a ‘share’ feature…I think what Vinicius means by ‘get’ is to wow them so much that they pull their friends into also being active/passionate users)

    Manually Create Marketplaces. “Fake it until you can make it.”…the secret to automation is to always start by doing stuff manually…figure out a process, what works and what doesn’t…and the real problems (and opportunities) will present themselves through this effort.

    Anyway – love it! Thanks for the energy! =D

    • http://viniciusvacanti.com Vinicius Vacanti

      Wow! That comment deserves its own blog post. Thanks for the addition!

  • Alexander Taub

    Vin-

    Great post, as usual!

    Your thoughts on getting/keeping your first 1000 users are described so clearly that they can really be applied to any type of startup.

    Keep the good posts coming.

    Alex

    • http://viniciusvacanti.com Vinicius Vacanti

      Thanks Alex!

  • Alexander Taub

    Vin-

    Great post, as usual!

    Your thoughts on getting/keeping your first 1000 users are described so clearly that they can really be applied to any type of startup.

    Keep the good posts coming.

    Alex

    • http://viniciusvacanti.com Vinicius Vacanti

      Thanks Alex!

  • http://twitter.com/anchoivy Andrew Choi

    Holy shit, great article. +1000.

    • http://viniciusvacanti.com Vinicius Vacanti

      Thanks!

  • http://twitter.com/anchoivy Andrew Choi

    Holy shit, great article. +1000.

    • http://viniciusvacanti.com Vinicius Vacanti

      Thanks!

  • http://mikekarnj.com/blog Michael Karnjanaprakorn

    Great article. One of the best I’ve read in a while.

    Check out this article too: http://www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php

    • http://viniciusvacanti.com Vinicius Vacanti

      Nice article. Thanks for sharing.

  • http://mikekarnj.com/blog Michael Karnjanaprakorn

    Great article. One of the best I’ve read in a while.

    Check out this article too: http://www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php

    • http://viniciusvacanti.com Vinicius Vacanti

      Nice article. Thanks for sharing.

  • http://www.jauntsetter.com dorothy_mcgivney

    This is awesome advice and has gotten me thinking. Especially the “Wow users” part. I’ve held back from doing events for my small but (now) rapidly growing subscriber base because executing well done parties for people in New York City is a profession unto itself. But there’s no reason I shouldn’t fête my early readers, 90% of whom live near me and each other. Just one thought this article has sparked … thanks again!

    • http://viniciusvacanti.com Vinicius Vacanti

      Remember that Yelp parties made sense for them because then people would review the restaurant/bar where the party was at. Maybe a Jauntsetter party at a place you have highlighted on your blog?

  • http://www.jauntsetter.com dorothy_mcgivney

    This is awesome advice and has gotten me thinking. Especially the “Wow users” part. I’ve held back from doing events for my small but (now) rapidly growing subscriber base because executing well done parties for people in New York City is a profession unto itself. But there’s no reason I shouldn’t fête my early readers, 90% of whom live near me and each other. Just one thought this article has sparked … thanks again!

    • http://viniciusvacanti.com Vinicius Vacanti

      Remember that Yelp parties made sense for them because then people would review the restaurant/bar where the party was at. Maybe a Jauntsetter party at a place you have highlighted on your blog?

  • http://www.bablingo.com Kate Hiscox

    Excellent post as usual and a good reminder in terms of building a following locally before taking on the rest of the world. Thank you!

    • http://viniciusvacanti.com Vinicius Vacanti

      Thanks. Remember that locally can also mean an interest group.

  • http://www.bablingo.com Kate Hiscox

    Excellent post as usual and a good reminder in terms of building a following locally before taking on the rest of the world. Thank you!

    • http://viniciusvacanti.com Vinicius Vacanti

      Thanks. Remember that locally can also mean an interest group.

  • http://twitter.com/djdan85 Dan Rumennik

    nice post

  • http://twitter.com/djdan85 Dan Rumennik

    nice post

  • http://www.enterthegroup.com Sal Pellettieri

    Very timely and interesting post for me as i’m in that scenario now. I try to add all new users as friends on the site. I also email new users asking if they have any questions or want help getting started. It’s really hard when you have a service that people need to get familiar with and trust before they start using. However if you can get people to enlist their friends and they start using it, chances are they will use it for a long time (I believe).

  • http://www.enterthegroup.com Sal Pellettieri

    Very timely and interesting post for me as i’m in that scenario now. I try to add all new users as friends on the site. I also email new users asking if they have any questions or want help getting started. It’s really hard when you have a service that people need to get familiar with and trust before they start using. However if you can get people to enlist their friends and they start using it, chances are they will use it for a long time (I believe).

  • http://twitter.com/Boostria Boostria Team

    We are kind of lost on what is the next step to run our startup. This article gives us some guidance. Thanks

    • http://viniciusvacanti.com Vinicius Vacanti

      That makes writing posts worthwhile. Good luck!

  • http://twitter.com/Boostria Boostria Team

    We are kind of lost on what is the next step to run our startup. This article gives us some guidance. Thanks

    • http://viniciusvacanti.com Vinicius Vacanti

      That makes writing posts worthwhile. Good luck!

  • http://twitter.com/ParkGrades ParkGrades

    Thoughtful and concise overview of how to solve the chicken-and-egg problem — required reading for every startup in this position!

    Our startup certainly has the “wow” factor in some cities, but the “huh?” in others (where we don’t have good data yet).

  • http://twitter.com/ParkGrades ParkGrades

    Thoughtful and concise overview of how to solve the chicken-and-egg problem — required reading for every startup in this position!

    Our startup certainly has the “wow” factor in some cities, but the “huh?” in others (where we don’t have good data yet).

  • http://www.magnity.com David Shantz -Magnity

    Insightful post sir. I have to poke some holes however. A cautionary note to the weary: Becoming your own biggest super-user has a risk. You will not see the flaws in your systems, UI and User experience with any objectivity. If you have created work-arounds and short-cuts that are non-intuitive you’ll never see them as roadblocks for adoption and use. I would add:

    Have an objective UI/UX design firm engaged and regularly ask pointed, incisive questions of your user-base (not as your closest friends who give you the warm fuzzies).

    Secondly, I would add that it has been my experience that the first users often come along on their own. They are often not actually indicative of how mainstream users act. I regularly see applications and sites that quickly get the first 1000 and even 100,000 users and stall. The next chapter is by far the biggest challenge. Intrinsic, systemic growth happens when some remarkably intangible factors are aligned. You have to test and iterate to find the things that cause sharing and the exponential growth that comes from a passionate user base. We have uncovered some clues to the secret sauce. What makes Flixster so popular? How did PicPlz and Instagram grow so quickly? Angry birds – you never share anything, yet it’s part of the vernacular in a matter of months. You could say SIMPLIITY and clarity of PURPOSE. But there is more to it than that…

  • http://www.magnity.com David Shantz -Magnity

    Insightful post sir. I have to poke some holes however. A cautionary note to the weary: Becoming your own biggest super-user has a risk. You will not see the flaws in your systems, UI and User experience with any objectivity. If you have created work-arounds and short-cuts that are non-intuitive you’ll never see them as roadblocks for adoption and use. I would add:

    Have an objective UI/UX design firm engaged and regularly ask pointed, incisive questions of your user-base (not as your closest friends who give you the warm fuzzies).

    Secondly, I would add that it has been my experience that the first users often come along on their own. They are often not actually indicative of how mainstream users act. I regularly see applications and sites that quickly get the first 1000 and even 100,000 users and stall. The next chapter is by far the biggest challenge. Intrinsic, systemic growth happens when some remarkably intangible factors are aligned. You have to test and iterate to find the things that cause sharing and the exponential growth that comes from a passionate user base. We have uncovered some clues to the secret sauce. What makes Flixster so popular? How did PicPlz and Instagram grow so quickly? Angry birds – you never share anything, yet it’s part of the vernacular in a matter of months. You could say SIMPLIITY and clarity of PURPOSE. But there is more to it than that…

  • Anonymous

    Fantastic read. Since we’re at the cusp of launching, and brainstorming on exactly this issue….extremely timely article for us. Thanks!

  • Anonymous

    Fantastic read. Since we’re at the cusp of launching, and brainstorming on exactly this issue….extremely timely article for us. Thanks!

  • http://twitter.com/PreplyCom Preply.com

    Awesome article)
    “Build it and and they will come” approach does not work nowadays