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.

Two users. That’s it.

It had been a week since we had announced to friends and family our latest idea, LinkFalcon, and only two of them had bothered to try it.

I thought LinkFalcon had some real potential. It solved a real problem for me and one that I hoped others had.

Complete disaster. Failure. Six months down the drain. Back to our real jobs.

That’s what should have happened; but, thanks to the Lean Startup movement, that wasn’t the case at all. Here’s why.

The Idea

I had the idea for LinkFalcon while watching a very terrible version of the highlights of an Arsenal soccer match on YouTube.

I knew there had to be a better version of these highlights but didn’t really want to go searching for them. And, that’s when I had an epiphany. What if there was a browser extension that would detect the highlights I was about to watch and offer to redirect me to a better version of the highlights?

It didn’t just have to be for soccer highlights, it could be for music videos, movie trailers, speeches, anything! The internet needed a better video redirector!

What’s Our First Version?

Certainly, we needed to build a system that, if given a url of a video, it would return a url with a higher quality version of that video.

We could build a very sophisticated algorithm that would crawl videos and figure out better version of them. The only problem: I had absolutely no idea how to build that.

Alternatively, we could build a crowd-sourced system where users would recommend better version of videos. Perhaps we could start with a small niche like movie trailers and slowly expand to other verticals. This seemed reasonable though it would be a ton of hard-work building that community and the tools they would need.

But, there was a third option: what if we didn’t build the system?

What was the first assumption we need to prove to ourselves? Was it that we could build the system? Was it that we could figure out a way to monetize it? While those were issues down the line, none of those were the first challenge we had to overcome.

The first assumption we needed to prove was that people actually wanted to use LinkFalcon.

Providing this service was not going to be easy so we needed to make sure people really wanted it.

We needed to see that people would actually go through the trouble of grabbing our bookmarklet and using it to get higher quality versions of videos they were watching online.

We Launch Our Experiment

So, we launched a simple landing page with a bookmarklet saying it would return a better version of the video they were watching.

But, when the user submitted a url, we didn’t actually have a better version ready.

The system would just email us the url and the user who submitted it. We would then frantically search for a better version and email it back to them.

Why did we do this? We wanted to find out as quickly as possible whether people actually wanted to use the product. If they really wanted the product and submitted hundreds of URLs, we would be willing to spend the months building the backend that would actually deliver the product.

By not building the system, we were able to test our key hypothesis in one day of coding and not six months of hopeful coding.

We weren’t launching a company, we were conducting a simple but very important experiment.

The Results of the Experiment

After one week and just two submitted URLs, we knew our hypothesis had been wrong. People didn’t really need this as bad as I had thought. It just wasn’t worth continuing to work on the idea.

But, that was okay. We had many other ideas to work on. And, because we tested this idea in just a week, we could actually get to those ideas. (One of them was Yipit, a three-day experiment, that turned into a VC-backed startup. (We’re hiring!)

An Important Other Benefit

Almost every entrepreneur has heard the advice to get user feedback as soon as possible. But, many don’t for many reasons. One of the biggest reasons for me was fear of failure. What were my friends and family going to think?

But, by thinking of it as a quick experiment, that fear tends to go away. The beautiful thing about experiments is that disproving your hypothesis isn’t thought of as a failure. It’s thought of as progress. And, getting early user feedback, even negative, is definitely progress.

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.

  • guest

    Out of curiosity, what did you use to get traffic to LinkFalcon?

    • http://viniciusvacanti.com Vinicius Vacanti

      Just emailing it to lots of friends and family.

  • http://www.stevemz.com/ Steve Mieczkowski

    Great post and thanks for sharing an idea that failed!

    This is really solid advice, and a person can apply it within their own company as well (even if they aren’t running a startup).  We’ve been using this same idea for a lot of developer oriented improvements to a lot of success. Its much easier to run a quick experiment to prove out a concept and its usefulness than it is to try and make a case that 6 developers should spend several months working on a “mega tool” that could get thrown away or be obsolete in a few months.There is a lot of traction around this idea recently.  I’m excited to see where it leads.

    • http://viniciusvacanti.com Vinicius Vacanti

      That’s a great point. Definitely applicable inside a larger company.

  • http://profiles.google.com/barun.saha04 Barun Saha

    That’s a potential advice! Thanks!

  • http://twitter.com/cavezza cavezza

    Thanks for the story.  I’m very interested in the numbers.  Was it 2 users out of 100, or 2 users out of 1,000?  

    • http://viniciusvacanti.com Vinicius Vacanti

      It wasn’t even 2 users, just 2 url submits after sending it around 1,000 users who were in our target demo.

  • Sanjay

    Thanks for sharing it. Could you please give some idea about the amount of traffic to your landing page? I am also running similar experiment and driving traffic through AdWords, I am seeing very low conversion rate, however not sure at what point I should conclude the experiment. 

    • http://viniciusvacanti.com Vinicius Vacanti

      You want to see if those users that are converting really love the product. You should do a user survey with them and get a net promoter score.

  • Anonymous

    awesome post dude! also feel very strongly about experimenting before building. at phoundit, we have a similar mentality: http://elanmiller.com/post/16360061321/on-social-experiments

    • http://viniciusvacanti.com Vinicius Vacanti

      nice!

  • http://giffconstable.com giffc

    Vin, can I get you back in front of the lean meetup in late Feb to talk experiments with the group?

    • http://viniciusvacanti.com Vinicius Vacanti

      of course!

  • Anonymous

    This is a good example of an experiment, but not sure it’s the right example for a startup. Have a cool concept, trick, gig? You should open source it and get some cred for it. But launching a startup should be a deep passion about something that the world *needs now*! A successful startup will take 5-10 years of your life and all waking hours. The lean startup concept is a good way of determining of your go-to-market, messaging, product vision cuts mustard. Not to throw stuff at the wall and see if it sticks.

    Just my 2 cents….

    • http://viniciusvacanti.com Vinicius Vacanti

      That’s great advice. People need to be passionate about the startup they are looking to solve. Regardless, if you are passionate about a problem, you should launch an experiment.

  • http://twitter.com/nadahalli Tejaswi Nadahalli

    2 out of 1000 is not a bad CTR imho. The question is, how was your conversion. Did either of your 2 users come back? If not, was it because of the “delayed result” experience?

    And when you sent targeted emails to friends and family about this service, I assume that there was a flurry of activity then; which you are discounting in your 0.002 result.

    • http://viniciusvacanti.com Vinicius Vacanti

      It was going to be very difficult for us to build this system and we needed to believe there was very real interest. The reaction we got wasn’t: “This is awesome!” It was: “Meh”.

  • Mike

    How do I do such an experiment?  I’m trying to launch liveflea.com

    • http://viniciusvacanti.com Vinicius Vacanti

      First, figure out what your key assumption is. Here it seems that more important for you to prove people will come check out liveflea.com. If you have people, businesses will come.

      Second, try to prove or disprove that assumption. If I were you, I would get a bunch of businesses on there without charging and see if you can generate traffic to the site once you have those businesses.

      • Mike

        I am taking your advice.  Fortunately for myself I have a few good contacts already in the industry.  I’m just hoping I can pull it off.  Thanks so much for the great information and opinions.

  • Han Gu

    Been reading a lot of your posts. They are immensely helpful. Always wanted to thank you. So here it is: Thank You. =)

    • http://viniciusvacanti.com Vinicius Vacanti

      :)

  • http://twitter.com/MarkHall123 Mark Hall

    Another great example of how today’s entrepreneurs will do greater things than yesterdays. Thanks Vinicius for such a great post, further simplifying how Lean Startup methodologies can help any entrepreneur is often thinks of the ideas that plague their lives, but don’t always equate to a good business concept. Keep up the great work!

    • http://viniciusvacanti.com Vinicius Vacanti

      Thanks!

  • Anonymous

    I think there might be a small flaw in you experiment, that is the element of TIME.

    I’d LOVE to have a service that points me to a better quality video right there and then. I have less need for a service that provides an email with a link for a video I may have already forgotten about, from few hours ago.  

    What do you think? 

    • http://viniciusvacanti.com Vinicius Vacanti

      That’s a great point but people weren’t even willing to try it.

      • Alejandro Lopez Lara

        Thats exactly his point. They werent even willing to try it because they needed to provide an email.

        • http://viniciusvacanti.com Vinicius Vacanti

          Sorry, wasn’t clear. they didn’t need to provide an email. they were just asked to provide an email after they submitted their URL. They had no idea an email was required until after they had tried the product.

  • Anonymous

    Thank you for sharing this. I love seeing practical examples of these kinds of experiments. Would you mind saying how you drove traffic to your landing page?

    • Anonymous

      I just found the answer on your other very enlightening post about getting the first 1000 users.

      http://viniciusvacanti.com/2011/02/08/how-to-get-your-first-1000-users/

      And then I happened to notice your answer to the very same question from 2 months ago. Sorry for the spam!

      I am new to your blog, and new to the field. But these two posts combined are a very clear actionable approach to ramping up. Excellent and thank you!