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.

One of the hardest decisions you have to make, as an entrepreneur, is deciding when to give up on your current struggling project. It’s made especially difficult because you always seem to have an exciting new idea rattling in the back of your head.

The difficulty of the decision is further exacerbated by:

• Conflicting accounts from previous startups. On the one hand, you hear about how AirBnB struggled for years before finally making it. But, then you also hear how the founders behind Stickybits, after struggling for almost a year, dropped the project and built Turntable.fm.
• Sunk cost. You’ve spent so much time on your current project, can you really walk away now? Do you want to tell your friends and family that you’re, yet again, starting on a new project? Do you want to admit you “failed” again?
• New ideas seem better than they are. Your new idea is in the “informed pessimism” stage. It probably has all sorts of complications you haven’t thought about.

What if you quit right before your startup was about to take off? What if that other idea in your head is your Turntable.fm?

You Need a Framework

With such an emotional decision, it’s best to try to be as systematic and rational about it as possible.

The key to making this decision comes down to: (1) quickly iterating the product based on learnings and (2) consistently measuring each iteration based on a defined success metric.

Since things like frameworks work better with examples, I’m going to imagine I had the idea for TaskRabbit, the app where you can post tasks for people to do at a price, and that I was just getting started with the idea and struggling.

Defining a Success Metric

There are many possible success metrics and it depends on your business.

One of the more popular generic success metrics is the net promoter score. Basically, the score tells you how likely your users are to recommend your app. If the majority of your users aren’t “promoters”, you’re not going to make it. For more on this metric, see Eric Ries’s excellent post.

Here’s the net promoter score of some well-known apps:

But, you can use almost any metric like:

• Conversion rate of people who, after clicking on a facebook ad, create an account after demo-ing your product
• Percentage of people that invite friends on your “invite” friend step after they’ve used your product
• Percentage of people that return to the site a week after signing up
• If you are selling something to consumers or businesses, then your success metric is percentage of people who agree to pay for the product

For my fictitious case study (TaskRabbit), I would go to craigslist and find people asking for help and tell them they should put their request on my new site TaskRabbit. My success metric would be the percentage of people who added the task and perhaps, after putting the task up, I would give them a net promoter score survey.

With my success metric defined, I’d be ready to start iterating.

Why You Need to Iterate

Where some entrepreneurs stumble is they are never willing to iterate their product. They have an idea for the product, they put it out, people don’t like it and they throw in the towel. It’s incredibly hard to get it right the first time. You have to iterate.

Other entrepreneurs believe their product will magically work after a while. Unless they are iterating, it’s very unlikely it’s just going to magically take off. You have to iterate, you have to do so quickly, and you have to make sure the iterations are significant.

The changes you need to make must address the fact that your project must not be delivering enough value to the user at the cost you are requesting of them. For example, your emails aren’t valuable enough for them to bother opening. They don’t like it enough to recommend to their friends. They didn’t like it enough to take time out of their day to check it again a week later. In my fictitious TaskRabbit case, it could be that just a few people on craigslist are actually putting up their tasks on TaskRabbit and my net promoter score is negative.

At this point, people will tend to think they have a marketing problem. Not enough people know about it. But, it’s almost certainly that you have a product problem.

Iterating

Before you go trying to fix your product, you should diligently note down where you currently rank your chosen success metrics. You need to make sure you get a big enough sample size to make sure your stats are accurate which can be hard to do by just talking to people in person.

Once you’ve noted your metrics, your goal is to find out why you have a product problem. You need to dig deep into the user psyche and pull out that reason.

You can give people online surveys to take, you can pay people $10 to get on the phone with you and, even better, you can bring in people to talk to you in person (via craigslist, buy their coffee at starbucks, etc.).

In my fictitious case, I finally muster up the courage to find out why TaskRabbit isn’t working. It turns out that potential users don’t trust the people who will be doing the tasks.

So, you go back to your apartment, implement a fix to the problem and release it again.

Compare Success Metrics for Each Iteration

Whatever methodology you used previously, you should do it again with new users and measure where your new product ranks on your chosen success metric.

You may find that your success metric is hugely improved and the product is taking off.

More likely, you’ll find that your success metric improved a little bit, stayed flat, or depressingly gone down.

Regardless, you need to get in touch with these new users and find out why they still don’t really want/need your product. You may find that you didn’t actually solve the problem you thought you were solving.

In the TaskRabbit example, I could have added a small bio next to TaskRabbits to make them seem more trustworthy. But, if the metrics didn’t improve, then I was wrong. I either didn’t actually address their concerns or there were other concerns that I didn’t know about. So, I could do something more dramatic like stating that all TaskRabbits have undergone a thorough background check.

Back to your apartment to iterate again.

Target States

With your various iterations, you’re trying to get to two potential states:

• Success metric takes off. Your product will take off along with it. For net promoter score, it becomes positive.
• Your success metric improvement stalls. You’ve iterated several times and, while they slightly improved your metrics, it hasn’t been enough. You’ve also run out of ideas on how to continue iterating. It may be that people don’t really have the problem you’re trying to solve. Or, the way you’re solving the problem is too demanding on the user and you don’t know how to make it easier for them.

It’s Okay to Start Something New

Hopefully your various iterations will take your project to where it needs to be to take off with your audience.

However, if you are iterating, your metrics aren’t improving and you’ve run out of ideas on how to address your users’s concerns about the product, it’s okay to throw in the towel and start working on a new project. You’ll have learned a tremendous amount from your first go around and will be in a much better position to make your next idea successful.

See discussion on Hacker News.

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.

Hustling from our shared workspace cubicles

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, what do you do?”

Ugh. I hated that question.

The truth was that we were trying to start a new venture but we hadn’t really made any progress.

But, instead of just muttering something, I would force myself to enthusiastically pitch our current struggling idea. They would nod along but the skepticism on their face was hard to ignore.

And, when I was done, they would sometimes hit me with: “So, is that your full-time thing?” Ugh. What that really meant was: you’re trying to tell me that you spend all your time working on that ridiculous idea?

The Grind

We left our finance jobs in the summer of 2007, and we worked really, really hard. By February of 2010, it had been over two and half years of hustling on no salary. What did we have to show for it? Nothing.

We hadn’t made a dollar of revenue. We had been rejected by every investor we talked to. We hadn’t been able to recruit anyone to join our team. We hadn’t gotten traction with any of our ideas.

We had failed to get more than 10K monthly unique visitors for Yipit for the last two years despite trying several ideas with it. We were going sideways:

On a personal level, my life savings was disappearing. I kept getting hit with late penalties on my credit card. Not because I didn’t have the cash to pay it, but because I just didn’t want to think about it. It was too depressing to look at my depleting bank account that I had worked so hard to build up. I remember withdrawing all the money from my 401K account and having to confirm that I did, in fact, understand the massive penalties I would incur for doing so.

In all honesty, I probably would have given up earlier. The only reason why I didn’t was out of loyalty to my co-founder, Jim, who had also quit his finance job. He had passed up many amazing job opportunities to work alongside me and I wasn’t going to quit on him.

Everything Changes

So, it’s now February of 2010, over two and half years since we started, and we have yet another idea: build an aggregator for the early but quickly growing daily deal industry. The idea was sound, timely and right up our alley since we had been doing local deal aggregation for the last 9 months.

And, in just three days, everything changed.

We launched the new idea in a three-day scramble, got some initial press, users loved it, and four months later raised $1 million from amazing investors. A year after that, we’ve raised $6 million, made real revenue, attracted hundreds of thousands of users, and recruited amazing people to join our team (we’re hiring! join us!). And, best of all, we’re just getting started.

So, what happened in those three days?

I’m convinced that if we had the idea for a daily deal aggregator back in 2007 or 2008 or even 2009, we wouldn’t have gotten traction because we would have messed it up.

But, after two and half years of failing and learning, we knew exactly what to do:

• Product strategy. We had become a part of the lean startup movement. I had gone to the New York lean startup meetups from the beginning, read Four Steps to Epiphany, and knew we just needed to build a minimum viable product.
• Coding the prototype.  I had taught myself web development over the last few years and Jim had taught himself front-end development. We didn’t need to find an outsourcer, we just quickly built it ourselves.
• Designing the user interface. We had already designed a bunch of prototypes. We knew how to design the landing page to collect user email addresses, the sign-up flow to collect preferences and to ask our new users to spread the message.
• Getting initial press. We knew how to craft our story in a way that would get journalists interested. We got featured on TechCrunch and Wired giving us a strong initial boost
• Getting investors interested. We had built relationships with many New York angel investors over the last few years and we were able to quickly drum up some interest based on our traction since they already knew who we were.
• Building buzz. We had become involved in the New York tech community and our friends in the industry really helped us build initial buzz for Yipit

Now that I look back, I realize that I was wrong to think that we had nothing to show for two and half years of hustling. While we didn’t have outward signs of success, we had learned something very important: the art and science of starting a new venture. It took us almost three years to know what exactly we had to do during those three days.

And, so, to everyone out there who’s struggling and feels like they have nothing to show for it, I hope this post keeps you going. You’re learning every day. And, when the inspiration strikes, you’re going to be ready to pounce on it.

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.

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.

Back in November of 2006, before NY Mag and TimeOut put startups on the cover, before the “tech bubble”, before Twitter and Foursquare were popular, before working at a startup in NY was considered a reasonable thing to do, I was a private equity investor for a $1.6 billion fund called Quadrangle Group.

It was just my third year out of college and I made a little over $250,000. For a Brazilian immigrant who spent most of his childhood kind of worried he would have to do physical labor, I felt like I had really made it. My job was challenging (making investing decisions always is) and I worked with some really smart and motivated people.

But, beyond “making it”, I was comfortable. After a year of private equity investing, I felt like I was good enough to do it for the long haul. While I’m sure there would be a few unexpected twists and turns, I sort of knew what the next 20 years of my life were going to be like and it looked pretty good.

There was only one little issue. It turned out that I didn’t really love money.

After 18 years, my mom had successfully passed along an immigrant guilt towards buying anything lavish for myself. So, my expenses weren’t really growing in proportion to my income. And, at least for me, I didn’t see money as a metric of success the same way Warren Buffet does. When it’s all said and done, I didn’t want to be measured by how much money I had accumulated but by what I had built.

But, when you’re making more money than you know what to do with, you tend to procrastinate on any big decisions. Well, at least until you’re reminded of what else is possible.

How I Woke Up

My company, Quadrangle, organized a private conference every year for the media and telecom industry. This was not just another conference, it was ridiculous.

I realized how ridiculous it was when I got an email with the list of attendees. Every major media company executive was coming. Brian Roberts from Comcast, Steve Ballmer from Microsoft, Jeff Zucker from NBC and media celebrities like Katie Couric, Jerry Seinfeld and Harvey Weinstein. While journalists weren’t allowed to cover the conference, Andrew Ross Sorkin, of the NY Times, was given permissions to write-up a quick blurb about the conference.

I was really excited and had barely slept the night before. The dress code was business formal and I walked into the Pierre Hotel wearing my best suit and power red tie.

I soaked in the scene for a few seconds trying to find the first person I was going to talk to. And, then, it hit me. Why would they want to talk to me? They were the heads of major media companies, I was a 25 year-old finance guy. They didn’t want to talk to me, they wanted to avoid me. I wasn’t doing anything important, anything that could impact their companies. They didn’t care about my suit or my power red tie.

So, for the next 30 minutes, I just awkwardly walked around the room trying to listen in on the conversations people were having. When the panels started, I took a lonely seat in the back.

After listening to a few panels comprised of 50+ year-old media executives, the audience was looking forward to the fresh perspective of the next panel on new media.

The two guests were in their 20’s. I almost couldn’t believe that two people roughly my age had been invited to talk in front of all of these important people. And then, even more shocking, they had all of their undivided attention. All of the 50+ year-old media executives were mesmerized, excited and scared of what they had built and what it meant for them. One was Chad Hurley, fresh off his recent sale of YouTube to Google, and the other, wearing sandals, was a still unknown pre-“The Social Network” Mark Zuckerberg.

When the panel ended, media executives came up to them to talk about working together, get advice on their business. I just stood in the background watching.

I was floored.

They were building something. They were changing how the world communicated. And, they had done it in just a few years without raising significant capital to get started. They willed their services into existence.

What was I doing? Could I do what they had done? Could I build something as significant as they had?

Yeah, right.

I had never built a tech startup. I had never even built a website. What did I know about product management, web development, and user interfaces?

I had a high-paying finance job. I was on my way. It was too late. I had no idea what it meant to start a company and the most likely outcome was failure.

On an expected value basis, the obvious decision was to stick with finance.

I was where I should be.

But, as the days went by, I kept thinking back to the conference. A scary idea started creeping into my thoughts: what if I could build something? Wouldn’t I always wonder? Wouldn’t I regret it? Wouldn’t it eat away at me over the years?

And, that’s when I realized that I didn’t actually know if I was good enough because I hadn’t really failed in life (at least not professionally). Most people don’t really fail. We tend to take the job that we think we’ll succeed in. We are hesitant to reach. And, if we do reach and succeed, then we don’t reach again.

The only way to know how good you might be at something is to fail trying it.

And, that’s when I decided it was time to test my limits. It was time to really reach. It was time to quit my safe job and walk straight into almost certain startup failure.

I had no idea how to start a successful tech company, but I was going to try. I was going to step into that arena. And, whether or not I triumphed or got knocked down, I didn’t really care much. I wanted to know the bounds of my abilities.

So, What Happened?

It’s now 4 years since I left Quadrangle. Did I fail? Hell, yes. I got knocked down many, many times. For the first 2 years, I had no idea what I was doing and was just swinging blindly. But, every time I fell, I learned why.

After two and a half years of failure, we launched the third version of Yipit and it took off. We’ve now raised funding twice including the most recent $6 million round this summer. Yipit is growing, we have a strong vision of where we’re going and we’re building an amazing team (join us!).

But, perhaps, one of the sweetest moments was that I was invited to the latest Quadrangle conference. Not as a panel speaker, we’re nowhere near that. But, as part of a session where three startups pitch Barry Diller for 3 minutes and then he grills you with questions in front of the entire audience of media executives. It was clearly terrifying but it went well. At the end of the session, Barry picks the startup he thinks is most like to succeed and he picked Yipit.

When I stepped off the stage, still kind of shaking from the presentation, media executives came up to me talk about what we were working on and how we might be able to work together. I couldn’t believe they were coming to me (and I wasn’t even wearing my power red tie).

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.

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.

How do you know if your startup idea is the next next big thing?

It’s easy. It isn’t.

Most Great Companies Started With Bad Ideas

Most great companies started off with very different ideas that were either not very good or impractical. Very rarely does a startup actually start with the idea that makes them the next big thing.

Here are just a few examples of successful companies that had very different and troubled initial ideas:

• Initial idea: Allow groups of people to band together to accomplish a goal called ThePoint
  • Eventually: Groupon
• Initial idea: HTML5 supported location-based service
  • Eventually: Instagram
• Initial idea: Web-based massively multiplayer online game called Game Neverending
  • Eventually: Flickr
• Initial idea: Compare two people’s pictures and rate which one was more attractive
  • Eventually: Facebook
• Initial idea: People to share photos and get grouped based on locations in an app called Color
  • Eventually: To be determined

At Yipit, our initial idea was a local search site focused on furniture in New York. Today, we are the leading aggregator of daily deals like Groupon, LivingSocial and the 485 others.

What Does This Mean For You?

When you stop expecting that your startup idea has to be the next big thing, you can draw some valuable conclusions:

• Stop waiting for the perfect idea. The perfect idea isn’t coming. You just have to pick a problem you are passionate about and start working on it. Over time, you will evolve your startup into the next big thing
• Your idea isn’t the real value, it’s you. The value lies in your ability to learn from potential customers, iterate based on those learnings. Those iterations will determine whether or not your startup will be successful, not the initial idea
• Don’t worry that your first idea will fall flat. It falls flat for almost everyone. Your idea is based on so many assumptions, it’s bound to be full of issues. Figure out what’s wrong and fix it.
• Get your prototype out there as soon as you can. Don’t spend six months releasing your first prototype. It’s going to fall flat. Instead, get a prototype into the hands of your potential customers as soon as you can. You need to learn as quickly as possible what’s wrong with the idea so you can fix it.
• Don’t write a business plan. Within a month, your business plan will be irrelevant. Instead of spending that time writing a business plan, spend it getting your prototype into customers hands.

Your initial startup idea isn’t the next big thing and that’s okay. Just get out there and start working on a big problem that you’re passionate about and you may eventually turn it into the next big thing.

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.

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.

Getting feedback on early versions of your prototype is crucial to a startup’s success. You’ll learn more the first day a user tries out your product than the previous 2 months you’ve spent thinking about it.

But, aside from getting user feedback, we really benefited from getting the chance to show Yipit to experienced entrepreneurs and investors.

We would often come back from those meetings and make major changes to our initial prototype plans.

But, it’s hard, especially as a first-time entrepreneur, to get their attention. Their time is their most valuable asset and they can’t meet with everyone.

Plus, even if they do meet with you, it doesn’t mean they will spend real time thinking about your product — the kind of time it usually takes to yield breakthrough product and marketing ideas.

So, how do you get their attention? Well, it seems like one answer is to get into TechStars.

TechStars Mentors

This is my first year helping out with TechStars as a mentor and they have been emphasizing that what makes TechStars different from other programs is their impressive list of mentors.

At first, I was definitely skeptical that the list of mentors was just that, a list.

I’ve come to see that the program, spearheaded by David Tisch, does a fantastic job of getting mentors involved.

They organize one-on-one meetings with the various companies in the program and get mentors to pick a specific startup to actively mentor.

I fully realized the power of the program when I get an email from one of the startups asking for feedback on their prototype.

I opened the email and the “to” field blew me away.

When I had sent a similar email about the first version of our prototype, it was to five college friends, my brother and my mom. His “to” field included:

• Fred Wilson, partner at Union Square Ventures
• Andy Smith, co-founder of Daily Burn
• Michael Galpert, co-founder of Aviary
• Rachel Sklar, Editor at Large of Mediate
• Josh Stylman, co-founder of Reprise Media
• Nate Westheimer, NYTM organizer and formerly head of product at AnyClip
• Eric Friedman of Foursquare and former associate at Union Square Ventures
• Amish Jani, founder and managing directory of FirstMark Capital
• Matt Galligan, co-founder of SimpleGeo
• Jeremie Miller, inventor of Jabber

Seriously?! That’s a ridiculous list of people to send over your initial prototype.

Aside from getting great feedback from them (both on the product and vision), if some of them start using the product in ernest, they could bring many more additional users.

I wish we could have sent Yipit to a list like that.

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.

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.

The good news is that it’s easier than you think to get 1,000 people to try your site.

The bad news is that it’s really hard to get those people to turn into users, users that create an account, users that come back repeatedly and users that tell their friends about your site.

This post is about how to get 1,000 people to try your site so you can find out what isn’t working, iterate and keep trying to build a site that people, other than your mom, actually come back to. I’ll write a future post on how to retain those users.

Get Yourself a Domain Name and a Splash Page

You should set up your splash page today. Not tomorrow, today. In terms of the domain name, it’s okay if you don’t love your domain name; you can change it later though it’s always easier to pick a good one from the start.

Once you get your domain name, you should use a service like unbounce to create a simple splash page. You don’t need a programming background to create this page.

The goal of the splash page is to collect email addresses from visitors. How do you do that? The splash page tells a user very clearly what problem your site will solve for them. If the user submit their email address, you’ll give them early access to the site when it’s ready. For Yipit, the splash page said: “Get All the Best Daily Deals in Your City”. For Tumblr, it’s “The Easiest Way To Blog”.

Those email addresses become your early test users. When your prototype is ready to be tested, you’ll email a portion of these users and get them to test-drive your prototype. You’ll iterate and invite more users from your list till the product works.

Now, how do you get people to visit your splash page?

How To Drive People to Your Splash Page

There is no shortage of ways to get people to your splash page. The following are things we at Yipit did and things we’ve seen our friends do:

• Add Link to Your Email Signature. Seems obvious, but most people don’t do this. You should have your value proposition at the bottom of your email with a link to your splash page. For us, it was: “Get All the Best Daily Deals in Your City: http://yipit.com”
• Add Link to All Your Web Profiles. Add a link to your splash page on your Facebook, Linkedin, Twitter and every other account you have. Now you might see why it helps to be a high profile social media user.
• Create a Demo Video. Even if your prototype isn’t ready, create a demo video of what your prototype will be doing. Dropbox did this and their video appeared at the top of Digg giving them 100,000 email addresses wanting access to their site. You can also add this video to your splash page to help increase conversion of people submitting their email addresses
• Be Full Entrepreneur. When I went to tech events, friend’s drinks, family gatherings, I would pitch everyone on Yipit. Painful, yes. But, it got me good at pitching Yipit and those people would go home and sign-up to check it out.
• TechCrunch and other tech blogs. It will be hard to get press for your site if you can’t give the blogger a prototype to use. But, if you do have a working prototype, this the easiest way to get people to your splash page. For all three of our projects, 140it.com, UnHub.com and Yipit.com, we were able to get TechCrunch to write about us just by submitting it to through their news submission form. If you can give the bloggers some beta codes for their readers, that makes it more likely they’ll write about your site. Just make sure you’re ready for it. If you have a very good demo video, they might be willing to write about you without the prototype.
• HackerNews. HackerNews is a great community of entrepreneurs who are willing to give you good advice on your startup. You need to have a working prototype and let them look at the site directly, though. Here’s some great advice on how to submit to HackerNews.
• Facebook Ads and Google Adwords. This is actually really hard and often pretty expensive. We were never able to really pull this off despite several attempts.
• Start a company blog. The blog should be focused on providing helpful advice on the problem you are helping consumers solve. Kissmetrics, a startup focused on helping websites with analytics, runs an excellent blog on helping startups think through user acquisition. This strategy involves a lot of work so only do it if you have a really good idea for the content you want to create and think that users will appreciate it.

Some final tips and notes:

• Your list will get stale. The longer you wait to invite people to your prototype, the smaller the percentage that will respond to your invite email. You can try to keep the list active by sending them occasional updates on the product.
• I recommend you give the users a survey after they submit their email address where you collect information from them regarding what they are hoping your site will accomplish for them. I have heard good things about surveymonkey
• Encourage users to tweet, share on facebook, or email your site to their friends. One way people have done this successfully is to promise the user earlier access to the prototype if they invite 3 friends.

Now that you know how to get people to your site, I’ll write a future post on what you need to do to make sure those 1,000 people actually stay on your site.

If you have employed any other techniques that have worked well, comment below and I’ll add them to the list.

Like working with big data sets?

We’re aggressively expanding YipitData and looking for:

• Data analysts (consultants, financial analysts)
• Data product managers (technical and can work with analysts and engineers to build a system)
• Data engineers (can build complicated systems to collect and process very large data sets)

Email me personally and we’ll meet up! I’m at vacanti at gmail dot com

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.

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.

As a current or aspiring entrepreneur, you should be meeting with a ton of people (potential customers, investors, biz dev partners, employees, journalists).

You will often get introduced via email or you are cold-emailing them.

You are probably excited to meet with them and correctly assume that they are busier than you.  So, like the nice person you are, you want to be as flexible as possible.

And, that’s when you make the mistake of saying: “I’m pretty free the next two weeks, let me know when works for you.”

You may think you are being nice and flexible; but, you’re actually frustrating them.

What you actually just said: “Hey, why don’t you spend some time going through your schedule, pick out some times that work and email them to me. I’ll then sit back and pick one that I like.”

If you really want to be respectful of their time (and you should), your goal is to have them do as little work as possible to get the meeting arranged.

Eric Friedman made some good suggestions on how to most effectively set up an appointment and I’ll reiterate them here with some additional tips based on my experience.

You should do this from the very first communication to reduce the back and forth.

Suggest Possible Times

Go through your calendar and suggest possible days and times that work for you. For instance, I do the following:

The following dates/times (EST) work for me:

Monday, 1/24: 11am – 12pm EST; 2pm – 3pm EST

Tuesday, 1/25: 2pm – 4pm EST

Friday, 1/28: 10am – 12pm EST; 2pm – 4pm EST

Some additional tips:

• The more time slots you suggest the better
• Make sure you specify your time zone (people will assume they are in your timezone)
• The busier the person is, the farther out your suggested time slots should be

Suggest Meeting Location or Phone Number

If it’s a phone call, I always say: “My number is 212-555-0001 but I”m happy to call you.” If you’re trying to set up a meeting with several people, you should get a free conference call number and include the dial-in information.

If it’s an in-person meeting, you should suggest going to their office (confirm their office address in the email) or picking two coffee shops or restaurants (if it’s a breakfast or lunch meeting) that are near their office.

If you do all of the following, not only will the meeting get quickly arranged but, by making it less frustrating for the person you are emailing, it also increases the chances of getting the meeting set up in the first place.

Update: Great comments over at hacker news including another reason to do this is that it suggests you respect your time. I know that sounds like a bad excuse but, unfortunately, appearances do matter.

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.

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.

From a PR perspective, I like to think of the internet as an ocean full of schools of fish. There’s the TechCrunch school, the NY Times school, Lifehacker school, HackerNews school and thousands of others.

When one of these services feature your startup, their respective school of fish will suddenly and dramatically swim directly towards your startup. And, as fast as they come, they will swim by you even faster.

You are a fisherman, your startup is your net and your goal is to catch as many of these fish as possible.

If your net (your startup) isn’t well-built and ready for them, the fish will swim right by you and they’ll never come back. It’s tragic and a huge blown opportunity. It happens to so many startups and you can see it in their traffic.

But, some startups have built a good net and they overnight acquire thousands of new happy users.

Here’s how we made sure Yipit, a daily deal aggregator, had a good, strong net to catch as many of these potential users as possible.

“Net” Strategy Depends on Your Stage

Startups are generally in one of the following four stages.

• Stage 0: Visitors Come But Leave
  • They might click around but they don’t activate into a real user. For Yipit, that means they don’t subscribe for our daily email
• Stage 1: Visitors Sign-Up But Don’t Come Back
  • A visitor will like your site enough to create an account but they con’t come back. For Yipit, they pick their city and provide us their email but don’t open / click on our emails.
• Stage 2: Visitors are Retained
  • Not only does a visitor sign-up, but they are coming back regularly. For Yipit, they either come back to the site to see new deals or, for most of them, they receive our email recommendations.
• Stage 3: Visitors Refer Others
  • They either like your service so much they tell their friends or the service itself encourages them to refer others. We didn’t have a great way to track referrals though we could see it with google searches for “yipit” and direct navigation.

Stage 0 and Stage 1: Create Splash Page

Most startups are in stage 0 or stage 1. You should not be actively seeking PR.

Before Yipit pivoted to focus on just aggregating daily deals, we were at stage 1. Users signed-up for our service but they weren’t clicking on our emails, they weren’t using the deals we were recommending and they weren’t referring others.

So, we would direct new visitors to a splash page where they would sign-up for our waiting list. We would then invite them to the site and see if they signed-up and came back. When they didn’t, we would offer them $10 to get on the phone and explain why they didn’t like it.

We got visitors to Yipit in a bunch of different ways: meet people, google ads, facebook ads, some current users would refer new users, friends, people googling us. The fortunate thing is that you don’t need that many users to figure out what’s wrong with the service.

Every startup in stage 0 or stage 1 should build this splash page today. It’s a great source of early test users and, more importantly, you get their emails so you can follow up with them.

I recommend you use Unbounce to build it.  You don’t have to have any technical background to do it.  We didn’t use it because it wasn’t around but would use it today.

Some tips for the splash page:

• Have one concise, huge phrase that explains what problem your startup is addressing. For Tumblr, it’s “The Easiest Way To Blog”. For Yipit, it was “All the Best Daily Deals In Your City“
• The email sign-up form should be on the splash page
• You should A/B test it with different messages
• Have an image or video that explains what the service will do
• See About.Me’s splash page, it’s awesome. Not only do you sign-up for their waitinglist, but you reserve your username. So smart.
• Dropbox had 100,000 users just off of their splash page

Stage 2 and Stage 3:  Ready For PR “Launch”

Based on our all our conversations with users, we pivoted to focusing on aggregating daily deals in February of this year.

Right away, we knew we were in stage 2. Our early users liked the new service, we liked it, they were buying deals, they were telling friends. We were ready to launch.

We made a PR push and got TechCrunch, Wired and a few other companies to cover our launch. When those users came, we converted them into our first five thousand users.

The only caveat for not launching in stage 2 is if you can quickly do a few things that will dramatically increase your referral rate (like integrating with Twitter or Facebook). If that’s the case, implement the low hanging fruit before launching since it can potentially double / triple the impact of your PR efforts.

Had we grown impatient and tried to launch before we were at stage 2, we would have crash and burned after launch.

(For more on the stages of a startup, I recommend Dave McClure’s amazing Startup Metrics for Pirates.)

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.

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.

When Jim and I quit our finance jobs to start the next big thing, we were really unprepared for our startup journey.

We didn’t have startup experience, we had no real domain expertise (our startup wasn’t going to be about finance) and we didn’t know any investors in the tech community.

There was very little reason for them to want to invest in our startup.

Exactly three years later, we raised $1.3 million for Yipit, a daily deals aggregator, from Ron Conway and David Lee’s SV Angel, RRE, DFJ Gotham, IA Ventures and a handful of other amazing tech investors.

This post isn’t about the tactics we used once we started getting interest, I’ll share that with you later and you should check out VentureHacks. The point of this post is more to share how we put ourselves in a position to get interest from high-profile tech investors. Hopefully, it well help you as you try to do the same.

Note:  We didn’t think of raising money as a goal. I highly encourage you to consider starting a boot-strapped cash-flow positive business. For us, the ideas we working on needed scale before we could monetize them which required us to raise funding.

How We Did It

Below are the the key moments in our journey:

1. Realized we needed traction. This was key. Unless you’ve successfully started another company or have serious domain expertise (we didn’t), you need traction. Traction is essentially positive momentum in customer growth. For us, it would mean sharp user growth. Trying to raise money before traction is largely futile. So, we stopped putting together business plans and powerpoint presentations and set out to build a prototype that would get us traction.
2. Built relationships with potential investors. While we built our prototype, we started meeting with potential investors.  To be *very* clear, we were not asking them for money and didn’t bring presentations. We just wanted them to know who we were and what we were working on. The first two investors who committed to our round came from these early meetings. I also remember another investor positively commenting that “we were known entities”. In other words, they were more comfortable investing in people they had known for a while.
3. Released our prototype. The initial version of Yipit was an aggregator of all sample sales, happy hours, deals happening in New York.  We put out a private beta in June of 2009 and publicly released it in December of 2009. By end of January, we had a few thousand people signed-up.  Not bad, but we didn’t have real momentum.
4. Decided to raise a small seed round. At this point, we had been living off of our savings and had decided to finally raise a small seed round to cover our expenses and start paying ourselves a small salary to end our savings leaking. We met with a few investors and they weren’t interested.  We didn’t have traction. So, we immediately canceled meetings with other investors. We instead turned to people who were willing to invest in us because they believed in us: our friends and family. We quickly closed the round in late January.
5. Pivoted to focus on aggregating just daily deals. During our meetings with investors, we heard two business critiques: we couldn’t easily scale to other cities (this was true) and it would be hard to monetize beyond basic email advertising (also true). Fortunately for us, while we spent all this time organizing deals, a very successful company launched called Groupon that created deals in cities. By late January, there were 12 companies now doing exactly what Groupon did. We then pivoted Yipit in February to just focus on aggregating these new daily deals. The new version addressed the two main concerns we had heard from our investors: we launched in five cities and we could monetize via affiliate relationships.
   

   Successful Pivot (Y-Axis is Subscribers)

6. Pivot got us traction. As you can see from the chart, our user growth shot up and we now had real momentum and traction.
7. Investors started calling. By April, we started getting calls from investors wanting to know more about Yipit. At this point, we were getting buzz in the press, signing up users and the industry was on fire as Groupon and LivingSocial were raising huge rounds and there were now 40 plus daily deal services.
8. Decided to raise large seed round.  We decided to raise around $1 million round to build out the team and give us 18 months to hit certain milestones. Because we had built up relationships with investors, we didn’t have to cold email anyone. We just reached out to them and met with the investors that were calling us.
9. Demonstrated we weren’t naive. As a first time-entrepreneur, investors are worried you are naive about the challenges facing your startup over the next 12 months. Every startup has risks and your startup and our startup are no exceptions. When an investor would bring up a risk, we wouldn’t vigorously defend ourselves saying it wasn’t a risk. Instead we would tell them that it was a real risk for us and we were very focused on mitigating that risk over the next 9 months by doing X, Y and Z.
10. Got first lead investor.  RRE was the first to commit to investing in us and it all got really easy from there. The social proof of having an investor with a great reputation backing you does wonders for your fundraising process.
11. Closed up the round. We had calls, meetings with potential investors almost every day in May and closed the round at the end of June. Aside from investors reaching out to us, the best source of investor leads is to ask the investors who are committing to recommend other investors that might be interested. We also used VentureHack’s AngelList at the very end. (Will be sharing more about our experience closing the round in future posts).

Getting Traction was HUGE

As you can see, getting traction was huge for us. But, we were also well-positioned to take advantage of it because we had built relationships with investors and had been keeping their feedback in mind.

If you’re trying to raise money as a first-time entrepreneur, I really recommend you get a prototype out there and find your traction before you spend time creating decks and pitching investors. And, if you need to raise money in order to build a prototype, you are underestimating what you are capable of.

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.

Lastly, what are we doing with the new round of funding? We’re expanding the team.

This is the first part of a series on becoming your own technical co-founder. In 2008, we couldn’t find a technical co-founder for Yipit.  I’m writing about how I became our technical co-founder. Hopefully, I’ll encourage other entrepreneurs with a dream but no technical co-founder options to take their destiny into their own hands.

Disclaimer: If you know a great technical co-founder that wants to work with you, join them. This series is intended for everyone else who has a dream but can’t find a technical co-founder.

We Were Screwed

As the summer of 2007 came to an end, I had one of the most depressing and humbling weeks of my life. Just a few months before that, I had left an office facing Park Avenue making an absurd amount of money for a 26 year-old to start an internet-based company. I was now sitting in my apartment realizing, for the first time (and not the last), that I had absolutely no idea what I was doing.

We had been working on a site to help people share links with each other in private groups and had been using an outsourcer to build the first version. We wanted to do something in local but thought this site would be an easy way to quickly test our relationship with the outsourcer and get our feet wet.

After handing them an 80-page product spec months earlier, we were able to finally test the site five weeks later than scheduled– so much for quickly testing our relationship. Nothing worked. In fact, you couldn’t even share a link. As depressing as that was, it was made worse by the fact that the outsourcer told us he had tested out the site and “found no bugs.” I remember reading the email and then looking over at the other tab I had open with 16-pages of bugs we had found in 4 hours of testing. We were screwed.

Learning Python

While we continued to work with the outsourcer for a month and a half, we knew it wasn’t going to work in the long run. It wasn’t even really the outsourcer’s fault, it was our fault. We definitely weren’t managing them well. But, more importantly, we didn’t know what we were doing as entrepreneurs. I started reading Steve Blank and Eric Reis and realized we were going to have to do ton of iterating and having an outsourcer in the middle was going to make it really hard to be successful. We needed to iterate quickly and, thus, we needed someone on the team to do the iterating.

So, it was now October and, after failing to find a good technical co-founder, we knew we had to make a decision. Either we give up or one of us would become our technical co-founder. Since I had taken two intro CS courses in college, we decided I would become the technical co-founder and Jim would help out on the front-end development (HTML/CSS) side.

I was terrified. I had never built a site and hadn’t written a line of code since my freshman year of college (7 years ago). I thought we were doomed.

But, to my complete surprise, six months later, I was able to build almost any prototype we wanted. Really.

Why You Can Become Your Own Technical Co-Founder

It turned out that it was a lot easier than I had expected.  At least it became easier when I realized that the goal wasn’t for me to become Yipit’s CTO.  My goal was to build a prototype that got traction. (By traction, I mean that visitors convert into users of your site, those users come back to the site and they refer their friends) Once we got traction, we had investors and great technical co-founders knocking on our door.

Another way to think about it is that you’re just going to be a temporary technical co-founder. You just have to know enough to build and iterate on a prototype to get traction.

Here’s what I found that makes it much easier than you would expect:

• Minimum Viable Product (MVP). To get traction, you don’t have to build a complete product. You just have to build some small, core aspect of your idea and get people to start using that. That means you can get something out much smaller, get traction and then bring in a real CTO to help you expand the product. The version of Yipit that got us traction was built in 4 days. It took us a year of customer learning to know what to build. But, from a technical perspective, the MVP that got us traction took us just 4 days.
• Don’t have to worry about scaling and security. Scaling and security are really complicated technical challenges that you don’t have to actually worry about (this assumes you aren’t working on a project where scaling or security are a core aspect of the business). Getting traction doesn’t involve signing-up 1 million users. By the time you run into scaling issues, you’ll have an awesome CTO to help you fix it.
• Doesn’t have to be perfect. I used to worry that my code had to be perfect. Guess what? It’s going to get thrown away and re-built by your future CTO. It doesn’t have to be perfect or pretty, it just has to work. I remember playing with an early version of Foursquare and getting MySQL errors. It didn’t matter because they now have an awesome tech team that re-built it all.
• User interface and experience is more important. You’re not going to be working on your own complex sorting algorithms or MapReduce. Most web startups are CRUD apps. The technology is simple in the back-end, the value created is primarily in the user interface and user experience. UI / UX is a real challenge, just not a technical one.
• Django and Ruby on Rails. There are amazing advanced web frameworks out there that make building a website much easier. A lot of the stuff that would have been a nightmare 8 years ago is trivial now.
• Community help. Whenever you run into bugs / issues when developing, do a google search for the bug and you’ll find someone has already posted it and someone answered it. With StackOverflow, that’s gotten even better.
• Systems Administration help. Setting up your server, dev environment and production environment can be really frustrating and tedious. But, you can hire someone who has already done it and have them set it up for you in less than 10 hours. That’s what I did a year and half ago and that person became our awesome CTO.
• Open source apps. It turns out that pretty much everything you are trying to do on your web app has already been done by someone else. Want to integrate with bitly, someone built that library client. Want to add comments to your site, someone’s built that plug-in. Best of all, they are all free and open source. Worried you’ll pick the wrong one? Who cares. As long as it works, move on. You can always change it later.

I hope this list gives you some confidence that becoming your own temporary technical co-founder is not as hard as it may seem. Of all the reasons I gave above, the most important one is to remember that you just have to hack something together that works. Once it works, get people using it and keep hacking till you get traction. It doesn’t have to be perfect, scalable or secure. It just has to work.

Like working with big data sets?

We’re aggressively expanding YipitData and looking for:

• Data analysts (consultants, financial analysts)
• Data product managers (technical and can work with analysts and engineers to build a system)
• Data engineers (can build complicated systems to collect and process very large data sets)

Email me personally and we’ll meet up! I’m at vacanti at gmail dot com

This is the second post in a a series on becoming your own technical co-founder:

1. Guide to Finding a Technical Co-Founder
2. Why You Can Become Your Own Technical Co-Founder
3. Should You Find a Co-Founder, Hire a Programmer or DIY?
4. Big Picture Overview of All the Components of a Web Service
5. More to Come…