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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.

You can put all of today’s apps into two user acquisition buckets.

There are the apps where people push their actions to Facebook and their Facebook friends sign-up for the app (e.g. Instagram, Foursquare, Socialcam, Pinterest) and then there’s everyone else.

Not being one of those “viral” apps is okay; but, if one of your competitors is doing it, you may be in some trouble.

So, how do you evaluate whether you could be one of those “viral” apps? You should consider if you’re app is capable of “many-to-many” sharing.

The First Many

The first many refers to people using your app many times a month.

For example:

  • People walk around with their phones and have reason to takes lots of pictures on Instagram
  • People browse lots of recipe sites, fashion blogs, e-commerce sites and thus pin on Pinterest
  • People go out a bunch of times during a month and have reason to check in on Foursquare

There are many great apps people use that don’t have this first many like TaskRabbit, Groupon and Uber. Those are services you may use every once in a while but most will users won’t use them frequently enough to satisfy the first many.

However, you can do things to encourage your users to take more actions on your app. For example:

  • Instagram gave people tools to take nicer pictures causing them to take more pictures
  • Foursquare has done lots of work to make checking-in as fast as possible to encourage more check-ins
  • Socialcam realizes that people may not have many videos to take and share a month and have thus been seeding their content with YouTube videos like the Dark Knight trailer

The Second Many

The second many referes to a user wanting to share the action they take on your service with not just one friend but many friends (i.e, push to Facebook).

For example:

  • People broadcast their Instagram pictures to their friends on Facebook
  • People push their Pinterest pins to all their friends on Facebook
  • People share their Foursquare check-ins on Facebook

As with the first many, there are lots of successful apps where users don’t share their actions with many friends. For example, most people don’t share their TaskRabbit tasks, Groupon deals or Uber rides with all their friends but may coordinate with a specific friend or spouse.

There are ways to get users to push their actions more consistently to Facebook. Services like Socialcam and Spotify have been very aggressive on this front. They don’t ask users to specify, for each action, whether it will get pushed to Facebook (like Instagram and Foursquare do). Instead, they default to having all actions posted to Facebook. While questionably aggressive, it clearly helps them satisfy the second “many”.

Many-to-Many Sharing

When both sides of the expression get into the “many” territory, assuming it’s not a niche product, you may experience “viral” growth.

This growth is very powerful and it may be worth re-working how your product works to encourage the “many” on both sides of the equation. Clearly, Socialcam and Spotify have done so.

As a word of caution, while it will may help you get to millions of users, this doesn’t speak to retention. It’s likely that the users signing-up because they saw something on a friend’s Facebook feed are much less likely to turn into real long-term users. Also, the more aggressive you are with pushing their actions to Facebook, the more angry you may make your users.

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.

In January 2010, I remember shaking Founder Collective’s Eric Paley‘s hand after pitching Yipit to him for an hour and struggling to smile as we left his office.

The meeting had been a complete disaster.

Founder Collective wasn’t going to be investing. Maybe nobody would. I remember thinking I had been so foolish for having been excited just a few hours before.

Getting the Meeting

Two days earlier, we had met with Chris Dixon of Hunch and Founder Collective and told him we were thinking of raising a small angel round for Yipit. We didn’t have traction but felt like over the previous year we had built a good enough relationship with Chris that Founder Collective might want to invest.

He introduced us to Eric Paley, his partner at Founder Collective, and Eric told us that we should meet with the next time we were in Boston. I immediately responded: “Funny, we’re actually going to be in Boston tomorrow” and we immediately booked two Bolt Bus tickets.

In retrospect, had he really been excited about us, he probably wouldn’t have said “next time you’re in Boston”. But, I guess I wasn’t looking for reasons not to be excited.

The Toughest Meeting We’ve Had

Going into the meeting, Yipit aggregated all types of deals including sales and happy hours in New York and then emailed you the 7 best ones we had found based on your preferences. We had been written up in the New York Times but had only gotten 2,000 users after 6 months.

Three minutes into the meeting, I knew Founder Collective was not going to be our first investor.

He astutely pointed out three critical flaws with Yipit.

  • Couldn’t scale to other cities. There was a lot of manual work combing blogs and business websites to find about all the deals happening in a city and it would be really hard and expensive for us to scale that to 50 cities.
  • We didn’t have a viable business model. While we could do some email advertising, we were never going to get bars, restaurants and other small businesses to pay us for each offer we sent out. The performance wasn’t trackable and building a local sales force is unbelievably expensive.
  • Groupon had way better deals than we did. Groupon was really taking off and their offers were superior to our happy hours. For us to beat them, he said we would have to have 10x more Groupon-type deals than they had.

In an hour, he had shaken every last bit of confidence I had in our startup ever working out.

On the long, silent, 5-hour bus ride back to New York, I wanted so badly to think he was wrong, that he didn’t know what he was talking about, but I couldn’t. He was right. I felt defeated.

Reacting to Criticism

No one likes hearing criticism. And, when someone is pointing out flaws in the thing you quit your job for, the thing you’ve invested all of your time into, it hurts.

Hearing Eric dress down our startup was tough. But, on that ride back from Boston and the days following, we went from feeling sorry for ourselves to brainstorming how to address the flaws he had pointed out.

We had met with Eric on January 18, 2010. Just three weeks and many white-boarding sessions later, we re-launched Yipit as a daily deal aggregator.

The new version of Yipit tried to address all three critical flaws he had pointed out in the old Yipit:

  • We launched the new product in 5 cities
  • If we were successful, we could get affiliate revenue from the deals
  • By being an aggregator, we had many more Groupon-type deals than Groupon had

In the next week, we got as many users as the old Yipit had gotten in the last 6 months. Three months later we raised $1.3 million of funding. A year after that, we raised $6 million, moved to new offices and have expanded our team (we’re hiring!).

Getting Critical, Honest Feedback

It’s actually really hard to get people to criticize your startup.

People know how badly you’re struggling to get your startup off the ground and almost everyone will tell you they like your idea when they don’t. People think you need encouragement but what you really need is honest feedback.

Unless you have traction, your idea or your process is broken. You need to find out what is wrong.

When you get that criticism, I know it’s going to hurt. But, you should really be grateful for their honesty and start to dissect what they’ve said.

It’s also important to get multiple people pointing out issues with your idea. Rob Go, of NextView Ventures, a few weeks before our meeting with Eric had pointed out some of the issues Eric had identified. That really helped us avoid dismissing their advice given that we were getting it from two different and respected investors.

And, for everyone out there who entrepreneurs come to for advice, please don’t tell them you like their idea if you don’t. You’re doing them a great disservice. Tell them you believe in them but be honest about your opinions of their idea and how they are approaching it.

It’s those few meetings where someone really lets you have it that can help save your startup. It helped saved ours.

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.

If you want your start-up to become the next big thing, it’s not good enough to just build a great product. Unless you can afford to buy users, you’ll have to grow virally.

The difference between getting one of your new users to convince one friend to sign up and that person getting two new friends, is huge. Assuming you start with 1,000 new users, after 9 months, it’s the difference between having 9,000 users and 511,000 users!

Below are 9 ways your start-up can grow virally:

Get Your Users to Spread the Word

  • Get users to tell others about your app simply by using it.  This is probably the best on this list and one of the hardest to achieve. It’s generally true of communication and content-creation apps.
    • Tumblr. People create their tumblrs and link to to it on their email signatures and Facebook and Twitter profiles. When those visitors come, at the top of each tumblr page, is a pitch for the visitor to “Join Tumblr”.
    • About.Me. Users can create beautiful landing pages for themselves. Like Tumblr, they link to their pages on their social media profiles. But, as you’ll see below, there’s a reason why Tumblr has grown much faster than About.Me.
  • Get users to push content they create on your app to Facebook, Twitter. This is a recent and huge phenomenon. However, users won’t just push any content they create, just content that they are proud of or think their friends will find interesting.
    • Instagram.  Probably the best example of a site taking advantage of this trend by enabling their users to take beautiful pictures which they then share on Facebook, Twitter.
    • Foursquare.  People want to tell their friends where they are, especially at high-profile locations like sporting events and music concerts.
    • Tumblr. When people create a new post, they share it on Facebook/Twitter.
  • Get users to generate content that you optimize for search engines. While this isn’t traditionally thought of as a viral growth strategy, it’s very important. Millions of potential new users are searching on Google and, if your users create content that addresses these search needs, you’ll be able to pitch those searches to join your service.
    • Wikipedia. Probably the best example of this. Wikipedia users create massive amounts of really strong content that Google searchers access every day.
    • Yelp. Did an amazing job of turning local business reviews into great business listing pages that Google often places at the top of their search results.
    • Quora and StackOverflow. Users answer questions that are then presented on Google search results for the millions of people asking those same questions.
  • Make it in your users’s best interest to invite their friends. If your strategy is to ask users to invite their friends just because, they won’t.
    • Twitter. By giving every user a follower number, it encouraged people to tell others to “follow them on Twitter” including many users that hadn’t yet signed-up for Twitter. Twitter also became a way to retain fans so that they could push content to them at a later date. The same dynamic applies to Facebook pages.
    • Kickstarter. When people create their Kickstarter project, they email all of their friends and families to contribute to the project.
    • Groupon and Gilt. Since both services have a high-enough user value, they can afford to give their users a referral credit for telling their friends.
    • Dropbox. Gives users extra memory for their dropboxes in exchange for inviting friends.
  • Get celebrities to use your app. Celebrities have huge followings. Early Facebook didn’t take advantage of this as it was all about just your friends but, with fan pages, they have tapped into this strategy.
    • Twitter. Twitter has done an amazing job of courting celebrities to use their service with some of the most high profile celebrities having millions of followers.
    • MySpace. While they have done many things wrong since, they created THE page where bands resided online and, with bands, came their legions of fans.
  • Get content created on your app to be newsworthy. If the content created on your app becomes interesting for journalists to cover, you can tap into something more valuable than traditional PR.
    • Twitter. Celebrities are constantly tweeting things they shouldn’t and journalists have a field day every time it happens.
    • Kickstarter. Successful projects on Kickstarter like the Robocop statue in Detroit transcend the service and are covered by journalists and bloggers.
    • Groupon/Living Social. Whether it’s Amazon, Whole Foods or GAP, these deals will get covered by journalists.

Increasing Conversion

  • Adjust your product to become more mainstream. It won’t help much to have all your users constantly telling everyone about your service but most people aren’t interested. If you want to reach millions of users, millions of people have to potentially want your product. For instance, About.Me has very strong viral potential (as described above) but not everyone wants their own page (at least not yet) and so their conversion rate suffers.
    • Instagram. This could have a been a niche product but by making it so easy that even an absolute beginner could take a beautiful picture, it went from a niche to a mainstream product.
    • Tumblr. Blogging platforms have been around for a while but Tumblr makes it so easy to blog that they’ve been able to convert many from non-bloggers to create a Tumblr.
  • Get your users to use your app everyday. The more your users visit your app, the more likely they are to invite their friends, create content, etc. A great example of this struggle is Plancast which, while being a product that created content, it wasn’t content that was created everyday.
    • Groupon and Gilt. Because there’s new content every day, they email their users everyday.
  • Optimize your sign-up and referral funnels. If you are getting one extra user a month and optimize your landing page and referral funnels, you’ll cross over into viral territory. It’s not uncommon to see conversion rates double after a few optimization experiments. (At Yipit, we use Google Website Optimizer).


Building a great product is only half the battle. Take the time to think through how you can build in as many viral growth opportunities. It’s worth the effort to go from linear to exponential growth.

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.

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.

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.

Adam Smith, in Wealth of Nations, talked about an “invisible hand“.

Basically, by businesses pursuing their own interests, they end up helping society much more than they had intended, led by an “invisible hand”.

“…he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention… By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.”

This same “invisible hand” is behind the success of many of the most popular web and mobile services that exist today. And, by understanding how it works, it can dramatically change your initial product decisions.

What is the Invisible Hand of the Internet?

The best way I can explain is to use an example almost all of us are familiar with: Delicious.

The amazing thing about delicious wasn’t that it allowed you to save and tag your bookmarks on a site. I liked that functionality and it was useful. But, ultimately, not everyone really needed that service.

The truly remarkable thing about delicious was that when enough people saved and tagged their bookmarks, you could see what the most popular bookmarks were for a tag like “python“. That collective wisdom was truly amazing.

But, users weren’t really uploading their bookmarks to the site and tagging them so that others could benefit from them. They were uploading their bookmarks out of their own self-interest. People wanted to save a bookmark with tags so that they could easily search for them next time they needed it. If people really didn’t need to tag their bookmarks, most of them wouldn’t have done it just for the benefit of the overall site.

The self-interested actions of delicious users ended up promoting the interests of the delicious community much more than they had intended to, led by the same “invisible hand” Adam Smith talked about in 1776.

How Does it Affect You?

I was recently talking to some struggling founders. They were telling me about how great their startup was going to be.

Founder A: “Once users start doing X, imagine how awesome the aggregated data will be for everyone.”

Me: “That does sound interesting but why would a user do X in the first place?”

Founder B: “Because they will be contributing to the aggregated data.”

Me: “But, if you assume they are selfish and busy, why would they do it?”

Founder A: “I guess we’re still working on that.”

People are largely driven by their own self-interests. As entrepreneurs, it’s too easy to fall into the mentality that people will use your product because it will help the overall community of your product. They won’t.

Do not get caught underestimating how much your product needs to personally reward a user for their actions. People’s time is a zero sum game and you’re competing against Facebook, YouTube, pictures of LOLcats, and way much more.

Before you can start thinking about how big your network effect will be, you need to really nail the single player interaction.

And, hopefully, if enough people use it, you can create an even more powerful service by leveraging all of their individual uses, just like Delicious did.

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.

Your launch will have very little to do with your startup’s eventual success and you probably spend way too much time worrying about it.

That being said, a successful launch can be used to gain thousands of early users if you did your job right when they show up. It won’t make or break your startup, but it will help.

There’s great advice out there on how to pitch a tech blogger. My favorite is this post by Mark Hendrickson, a former TechCrunch blogger.

However, it can also be helpful to look at actual examples of pitches that worked. So, I’m including here two tech pitches that Jim Moran, my co-founder, and I submitted to TechCrunch for two projects we worked on before Yipit.

A Little Background

Before we launched Yipit, we worked on two side projects called 140it and UnHub. We built both in a weekend and were looking to get some broader exposure for them.

The problem was that we didn’t have an “in”. It’s always best to get a warm intro to a blogger from an investor or friend. We just didn’t have it.

So, we decided to try TechCrunch’s startup submission form which didn’t look promising. I pictured the other side as an endless stream of terrible pitches that TechCrunch authors dreaded and probably didn’t look at.

Less than an hour after submitting 140it via their form, we get out this email from TechCrunch writer Jason Kincaid:

Hi Vinicius, looks cool, am trying it now and writing up a post.   Please lift the password in around 20 minutes or so (let me know once you have).


It was up on TechCrunch shortly after and thousands of people tried out the site, got the bookmarklet, tweeted about it, and started using it. While we never intended to turn 140it into a business, it was a great experience and gave us the confidence to keep pushing forward.

Months later, TechCrunch also covered, another weekend project of ours. Again, we applied via their submission form.

Key Tactics

I’ve included both TechCrunch pitches below but wanted to highlight the key tactics we used in our submission:

  • Tell a Story. For UnHub, we reference the much talked about new Skittles corporate website had just launched as a decentralized experience. UnHub was a way for anyone to create that Skittle experience.
  • Ride Current Trend. For 140it, in 2009, lots of people were building Twitter tools to “fill holes”.
  • Reference Blogger’s Previous Posts. For both UnHub and 140it, you’ll see that we picked out a previous TechCrunch post where the author had made a point that was consistent with the project we were pitching.
  • Exclusivity. TechCrunch would much rather cover a new startup that hasn’t been covered before. So, we password protected both 140it and UnHub and told them we wanted them to cover our project first.
  • Concise. Do not go off and write huge essays. Get to the point of what your startup does right away.
  • Humility. With both 140it and UnHub, we were careful to admit the simplicity of the project.
  • Admit competitors. You have competitors, admit them. The blogger will have to look them up if you don’t. That means they will have to do more work reducing the chances they cover your startup.
  • Give them assets. If the site is private, give them beta invites. Create a demo video so they can add it to their post about you (we did that for both 140it and UnHub). They don’t have to be professionally done. Just record yourself using the site with a voiceover. If it makes sense, create an example account on behalf of the blogger as we did with UnHub for Michael Arrington. Throw in some screenshots if you don’t have a demo.

Below are the two pitches we submitted.

140it TechCrunch Pitch

Company Name: 140it
Submitted: January 26, 2009 at 11:55 AM PST

Description: 140it helps twitter users reduce their tweets to less than 140 characters.  It abbreviates words, converts company names to their StockTwits ticker and shortens URL’s using  Its intended use is as a bookmarklet so that the user can use 140it without ever having to leave Twitter.  Please see our demo video at (The password for the video is 140.)

Note: is currently password protected.  The login credentials are:
username: friends
password: 140

Additional Info: This was a weekend project for us and we aren’t trying to make money off of it.  We just wanted to give back to the Twitter community.

We were inspired by a recent Arrington post where he said:  “this is the way to fix Twitter, directly via the user interface, not from a third party site that users will forget to go to.”

We built 140it to work as a bookmarklet so that the user would never have to go to our site.   We also made it a bookmarklet so that it would work on all browsers including Chrome which has become our de-facto browser.

Also, we would love to get 140it to as many people as would like it and are thus happy to have TechCrunch be the first to reveal the project.

Competitors: Twonvert:

But, unlike our competitors, we made our utility work as a bookmarklet.  We also convert company names to their StockTwits tickers and shorten URL’s using the API.
Tags: twitter, utility, bookmarklet


UnHub TechCrunch Pitch

Company Name: UnHub
Submitted: March 6, 2009 at 11:16 AM PST

Description: We were really excited about the new Skittles website, so we made a way for anybody to have one. Your UnHub URL allows others to navigate your profiles, photostreams, channels, etc with a persistent bar at the top of their screen. When we saw the Skittles’ website on Monday, we thought its user interface would work well for individuals who wanted to showoff their web presence; and, three days later, we are releasing UnHub.

Your UnHub URL makes a lot of sense for the “Web” entry on your Twitter page. As an example, we made one for Michael Arrington: and we also made one for Josie’s Restaurant here in New York:

Overall, we wanted UnHub to be a dead simple, lightweight way to display your “decentralized me” to others.   On that topic, we enjoyed your post ( and some earlier discussions by Robert O’Brien, Loic Le Meur, et al.

Additional Info: We don’t think UnHub is technologically remarkable in any way (iframes have been around for a long time). That said, we’re excited about it for the same reason we were impressed with Skittles: it could be a new way for companies and individuals to showcase their online presence.

In addition to individuals using UnHub, we also think businesses should take a page out of Skittles’ book. UnHub is a simple (and free) way for them to start.  A restaurant’s UnHub could include a link to their current web page, but also to a google map of their location (for directions), yelp profile (for reviews), menupages (menu), opentable (reservation) and seamlessweb (ordering online).  See

Soon we’ll allow people to replace their UnHub URL with a custom domain name, which should make the experience more personal. We’ll also start delivering analytics.

Also, Twitter has temporarily disallowed iframes, so we’re redirecting to Tweetree for now.

As far as our backgrounds, please check our new unhub pages: and

The site is password protected, so please use the following login information:
username: techcrunch
password: techcrunch

We had a great experience with techcrunch announcing our twitter tool 140it and would be thrilled to have you guys announce UnHub.

Competitors: Social network aggregators, and there are some great ones like, and Friendfeed, pull in content from other sources to a single profile page. However, our goal is to “stay out of the way” of dedicated sites that specialize in a single aspect of your web presence (e.g., Flickr for photos, Youtube for videos, etc.). We’d never be able to replicate the functionality of these specialty sites, nor effectively marry their diverse user experiences. That’s why we don’t have an UnHub profile page, just a persistent bar that sits on top of the ordinary browsing experience.

Also, you can include any site in your UnHub (e.g., your company website that was built 10 years ago or your Halo 3 player profile), not just those sites up to speed with Data Portability. Aggregators are great at bringing content into a single place, but UnHub is about sharing multiple places at once.

In theory, another competitor is blogs: some folks devote a lot of energy on their blogs and think of them as their primary web presence. They can designate their blog as “home” on UnHub, so when people follow their UnHub URL their blog will appear – in addition to a persistent navigation bar with which to explore their other locations (Twitter, Yelp, Flickr, etc). Blog widgets / links serve a similar linking purpose, though if a visitor clicks to a blogger’s Flickr stream, it’s unlikely the visitor will go back and check out other sites the blogger has invested in.
Tags: socialnetworkaggregator, sharing, identity, lifestream, socialnetworknavigator

Hope you find these two pitches helpful. If people have examples of other pitches that worked, let me know below in the comments.

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.

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.

Goldman Sachs CEO

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.

It has recently been reported that Goldman is investing $500 million in Facebook at a lofty $50 billion valuation.

After several small sales on SecondMarket at a $50 billion valuation, TechCrunch’s MG Siegler stated that “With this investment, that valuation has just been validated.

He’s wrong. It’s not a fair market valuation. Goldman actually values Facebook at way less than $50 billion.

Why? Goldman will make hundreds of million dollars in fees from their new relationship with Facebook.

In many ways, this isn’t a financial investment in Facebook, it’s a strategic investment by Goldman.

Hundreds of Millions of Dollars in Fees

Goldman will get a ton of extra benefits from cementing this relationship with Facebook. Some are even suggesting that fees Goldman will generate from Facebook eventually could pay for the whole investment.

If you factor in how much those fees are worth, you’ll can get a sense of what Goldman actually valued Facebook:

  • $1.5 billion special purpose vehicle. As part of the deal Goldman gets to create a $1.5 billion special purpose vehicle to allow private wealth management clients to invest in Facebook with a 4% placement fee.
    • Value to Goldman: $60 million to $135 million. 4% placement fee is $60 million; 5% of profits, assuming Facebook valuation increases to $75 billion, that’s $37 million; at a $100 billion valuation, that’s $75 million
  • IPO and Corporate Banking Fees. Deal positions Goldman nicely to lead their eventual IPO and be their preferred investment banker on all large financial transactions including debt raises, acquisitions
    • Value to Goldman: $100 million to $300 million. IPO fees (6% of offering) alone can be $100 million. Then you get secondary offerings, debt raises, acquisition advisory and all other financial transactions
  • Private Wealth Management for Mark Zuckerberg. Positions Goldman nicely to manage the private wealth of Mark Zuckerberg and the hundreds of newly millionaire Facebook employees
    • Value to Goldman: $30 million per year. Assuming 1% fee, on now $12 billion of value to Mark Zuckerberg, this could potentially lead to $120 million.  However, since most of the money is tied up in Facebook stock, it won’t all be actively managed.

The above valuations are highly speculative and don’t take into account costs associated with generating those revenues, the chance that Goldman doesn’t end up getting all of the business above or the fact that Goldman was likely to lead the IPO already.

That being said, it’s aslo likely that Goldman will generate more benefits than I’ve outlined above.

Goldman Actually Valuing Facebook at Way Less Than $50 Billion

Considering that Goldman is only investing $375 million and assuming Goldman will generate $100 million of value, it implies Goldman valued Facebook at $36 billion, not $50 billion.  At $250 million of value, it implies a $16 billion valuation.

And, of course, it’s also likely that all of the fees pay for the whole investment thus saying nothing about Facebook’s valuation.

In other words, this was a strategic investment in Facebook, not a financial one.

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.

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.

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.

Naming your startup sounds fun and awesome.

Let’s say you have a music sharing idea, so you’re going to grab  Wait, that’s probably too obvious. I’ll be creative. Let me try Oh, taken. How about, taken. Songster, taken. Songly, taken. Beaster, taken. Uh, oh. That’s when you realize something we’ve all at one point realized, EVERYTHING sensible is taken.

Before you know it, instead of spending time getting your prototype out, you’ve spent way too many days on instant domain search,, polling friends, telling yourself you’re not going to spend anymore time on it, wondering if a .net domain is all that bad, telling yourself google was a terrible domain name so you shouldn’t care that much, trying to reach someone in Russia who owns the domain you want, finding a domain that’s actually available, buying all 10 spelling variations, realizing 5 minutes and $50 later that you don’t actually like the domain.

We went through all of the above when trying to name Yipit and we came up with a long list of terrible names and these were the ones we actually bought: streetcake, frankencity, 1gotham, citybat, noocher, zaxme. Ugh.

Needless to say, we were very unhappy with our final list and, even worse, we had spent way too much time on it.

So, after the fifth time we had told ourselves we weren’t going to spend any more time on it, we decided to come up with a different strategy.

Bottoms Up Approach to Finding a Domain

We wanted something short and we decided we wanted the domain to end in “it”.  We figured people say  “google it”, and we hoped that one day, if we got popular enough, we could make it easier on people by having the “it” as part of the name. I will be both very happy and very sad if, one day, I hear someone say “yipit it”.

So, I wrote a simple python script to generate every [consonant][vowel][consonant]  With 21 consonants and 5 vowels, that resulted in 2,205 possible domains.

Obviously, I wasn’t going to look those up individually. Fortunately, godaddy has a bulk uploader that lets you check 500 domains at the time. (If someone knows of a better bulk upload checker, comment below!)

Of the 2,205 domain combinations, around 400 (in May 2008) were available. As you can expect, the ones that were available had Q’s in them with no accompanying U’s and other horrible formations.  It was disappointing. The available domains were terrible but, amongst the trash, we spotted the needle in the haystack:

The best part, it took us just 30 minutes to find our domain!

We both liked it and asked a few friends and family what they thought.  They all really liked it. I couldn’t believe our domain search was over. Yipit was our new company name.

(Hilariously, that same week, we had asked a creative friend of ours to come up with names and she had come up with 20 fun names one of which was “yipit”.)

How to Come Up With Your Own Script

Good available domains are like needles in the haystack. They are really hard to find by trial and error but this scripting technique combined with the bulk checker, lets you get to those needles fast. I recommend you do the following:

  • Come up with a prefix or suffix that you like.  For us it was “it”, maybe for you it’s “get” or “un” or “ster” or “me”.  It doesn’t have to be a real prefix or suffix, it could be a suffix like “mo”
  • Write a script or use excel, to generate combinations of your prefix / suffix with two / three letter combinations or actual lists of words
  • Run them through godaddy bulk uploader and see if a great domain falls out

Hopefully this will help you find your domain and get back to doing what actually matters, building your prototype.

I went back today and ran the script again. I checked all the combinations through the godaddy bulk uploader tool to see which ones were still available and put the available domains in this google doc. The pickings are slim.  My favorite one is Vopit though it sounds a little bit like vomit.

(If anyone else tried a similar approach to naming their startup, let us know below in the comments!)

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.