Founders of Slevomat, DameJidlo, and CZC.cz Invest In StartupYard 2015 Program

StartupYard is pleased to announce that Josef Matějka, founder of CZC.cz, and Slevomat founder Tomáš Čupr’s Bizthusiasm investment company have come on board as investors in StartupYard 2015.

They join Credo Ventures, Michal Illich, and Petr Ocásek, as backers of the 2015 startup cohort. Both Matějka and Čupr have taken an active role in this cohort since the end of 2014, as members of the selection committee. They helped reduce a pool of over 200 applications to just 7 startups, the names of which will be announced publicly next week.

Josef Matějka is the founder of CZC.cz, the Czech Republic’s 2nd leading electronics and IT equipment e-retailer. He expressed his hope to us this week that tech founders of his generation will begin to give back to the Czech startup ecosystem: “Investment in the Czech Startup scene is important, because it supports a creative environment, and the realization of good ideas.” Čupr also expressed the need to give back: “Globally and locally competitive and successful Czech startups benefit all of us,” he said.

Čupr has been involved in one way or another with StartupYard since before his acquisition of DameJidlo’s predecessor, PizzaTime, from the StartupYard 2012 cohort. Čupr transformed that company into a major success, selling it earlier this year to German delivery giant DeliveryHero. Čupr bring years of experience in e-commerce to StartupYard’s mentorship program, having also founded Slevomat, the highly popular Czech coupon platform, and invested in Rohlik.cz, the newly redesigned Czech grocery delivery service.

Čupr is enthusiastic about the StartupYard program. He said this week, via email: “I’ve been following StartupYard for several years, and each year their work has been better and better. I believe in the experience and abilities of their team.”

StartupYard Managing Director Cedric Maloux was extremely pleased with the development, saying: “It’s fantastic to see successful local entrepreneurs stepping up to support this ecosystem, without being averse to risk. The Czech Republic needs more role models like Čupr and Matějka to inspire and support the next generation of Czech tech founders.”

StartupYard’s 2015 cohort will publicly present themselves for the first time at StartupYard Demo Day, on May 28th of this year, in Prague. A press release detailing their names and areas of business will be released next week.

 

What Launching 15 Startups has taught me about “Design Grammar”

“That’s the same homepage everyone has. It’s boring.”

I hear this quite a bit. As our first month of mentoring for StartupYard 2015 rolls along, we have 7 companies preparing to soft-launch their services and products, mostly with new branding, and some with entirely new names, over the next few weeks.

And we have this kind of conversation a lot. As they pick a name and take their first stabs at branding themselves, most of our startups suddenly become ambitious about their marketing language, site design, and logos. I love to see it, really, because it’s a sign of keenness to be bigger, better, and newer than the competition.

As they’ve all been working on their positioning statements for the past few weeks, and have gotten more comfortable with their value propositions, their go to market strategies, and their growth predictions, our startups start to feel that they’re experts on their own brands. As they hear more about calls to action, marketing campaigns, and branding generally, they start to get the itch to experiment with their own theories about their would be customers.

I find myself, on the other hand, being constantly discouraging; constantly talking about “consistent visual grammar,” and the “grammar of your design.” This often elicits blank stares of incredulity. What is “design grammar?” And why do we need that? Our Executive-in-Residence Philip Staehelin suggested to me earlier this week that I write a blog post to try and explain. This is that blog post.

The Great Sameness

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Image by The Logo Company

 

A big part of this settling-in process is our startups exploring the branding of their competitors. They browse websites and check pricing and features, and they get used to what the market is focused on, looking for their edge. Our mentors also suggest competitors and potential partners they should look at, and the startups get very well versed in their market.

And then, it all gets a bit boring. We have a startup that is working on a competitor to Shopify or Volution, for example. Check out those two sites, and you won’t be surprised by what you find. Some variation in the choices of headers, a different call to action: “start for free,” instead of “get started,” or “get started now,” or one of 10 other possible variations. On the surface, they’re much the same.

Whether it’s B2B or B2C, a SaaS or a consultancy, the web has been taken over by a sameness in the way online companies communicate through their websites. Why is that? And why would that be a good thing?

Boring is not Boring

The answer is not sexy. As VWO points out, it’s because landing page design is more science than art. Companies with huge volume in SaaS products, like MailChimp, Mint, Shopify, Slack, and Dropbox, all use essentially the same layout for their homepages, and similar layouts for campaign landing pages. These pages have been tested, tweaked, and perfected using the collected data of tens of millions of visits to similar sites.

Companies with high inbound traffic pay expensive consultants, or use tools like Attensee or Optimizely, to collect fairly precise data on exactly how each piece of text, each image, and each particular call to action performs best- and they have the ability to tweak the site’s appearance for different regions, and even different types of users, to maximize the site’s conversion rate.

We seem to be arriving at a sort of paradox. We know, scientifically, which sorts of things work (or at least don’t fail) on landing pages and home pages, but that makes a lot of these sorts of pages look the same. Boring and safe is the rule. So their boringness, seemingly, would mean that they wouldn’t do as well as they do, because they’re not special. And yet, if they didn’t perform well, they would be changed. So what’s the deal?

Impress Me, but Don’t Surprise Me

This sort of thinking is the sort of thing that many startups struggle with early on. They begin to believe that “different,” and “surprising” are the same as “good,” and “effective.”

A sales director I worked with early in my career gave me a sound piece of advice that I’ve always remembered. He said this:

“If I asked you to show me 4 fingers, what would do?”
I held up 4 fingers on one hand.
What if you held up two fingers on each hand?”
I hadn’t thought of it.
“Wouldn’t that be weird? When your customer gives you their attention, like clicking on your website or signing up for a newsletter, they are usually asking for information. They are not asking to be surprised. They are asking to be persuaded.”

There are many ways to hold up 4 fingers. However, his point was that doing something a customer doesn’t expect, even if it *is* surprising and impressive, is not necessarily going to make them trust you, or buy from you.

A “surprising” website, with a novel design and fancy layout, may make an impression on your prospect. But that impression is as likely to be: “this company is clearly good at making impressive websites,” as it is: “I trust this company to do whatever it is they are trying to sell me.”

Holding up two fingers on each hand might make someone think. But it might make someone think: “this guy is an asshole.”

Rather, “impressiveness” that translates to someone actually buying your product, is found in your descriptions and demonstrations of the product itself. The product should be impressive. The way you talk about the product should be in view of that impressiveness.

If you have a product market fit, then your marketing of your products should get out of the way as fast as possible. And the best and easiest method of getting out of the way, is using a visual design, a way of doing things, a “grammar,” that your prospective customer is likely to be familiar with.

Wanting a “creative,” and “different” website is natural. You want to be different. But “being different” about the way you present your products -if they are good products that the customers actually want to buy- is usually going to be a waste of your, and more importantly, the customer’s time.

Think about it. When you walk into a car dealership, you look around for the person who can answer your questions about the car. You expect that person to be in a suit, maybe with a nametag, so that you can recognize him or her easily. If someone came up to you in cutoff jeans and a bolo hat, smoking a cigar, you’d certainly remember that. But would you want to buy a car from them?

My guess is no. Because you didn’t come into the shop to appreciate a creative salesman. You came into the shop to appreciate and learn about a car you’d like to buy. The salesman wears a suit because he doesn’t want to distract you from doing exactly what you want to do anyway.

That is where the sameness of design comes from. As products get better, more specialized, and more powerful, the trappings of how we talk about them, and how we present them online actually get more straightforward. As we are all more comfortable with the ideas and the types of products we are discussing, the need for bells and whistles slowly diminishes.

A Mature Market Means a Shorter Sales Cycle

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My father once took me with him to buy a car, when I was a little boy. This was in the early 90s. The salesman called the morning of the visit, and we spent hours talking with him about the cars my father was looking at. He took us to lunch, and on a drive in the car my father wanted to buy. They went through pages of options for the car, discussing all of them. They haggled some more, and they had coffee. They discussed financing. We spent 6 hours at the dealership.

This year, 25 years later, I bought the first car I could call my own, for my own family. The saleswoman was pleasant, and offered me coffee. The meeting took less than an hour, including the test drive.

Why? Because I had spent time at home configuring the car I wanted to buy on the company’s website. I had printed out the options I wanted, so when I got there, the deal was practically done already. She gave me a few pieces of advice, trying to upsell me on a few items. That was about it.

A car salesmen of a century ago would have been expected to take their clients to dinner, visit their homes, and work a sale for days or weeks. That was done because customers weren’t familiar yet with what they were buying. Trust in the dealer translated to trust in the product. But today, a Google search is a click away. Trust is statistical; scientific.

The web has followed a similar evolution: today, people expect the sales cycle to be short, and they’ll punish you for making them jump through any hoops. Every step between the customer and the content, or between the customer and the purchase, is a step that some customers would rather skip, and a step that is likely to diminish trust, rather than enhance it.

Clean and Frictionless are Two Separate Qualities

In our last cohort, one of our startups showed me a landing page that was nothing but an image, and a headline with a provocative question. It was something like: “Do you believe in True Love?” There were two large buttons: Yes, and No.

“Ok…” I said. “And now what?”
“Well,” the founder said, “It inspires you to click on it to give your answer.”
“Ok,” I said. And I clicked “no.”
Another text appeared: “Are you sure?”
:Facepalm:

I got what he was trying to do. Our generation has been raised on a diet of “interactive,” that promotes the idea of interaction without actual engagement with anything. It’s a ploy. Like having a popup in a video game that says: “press X repeatedly.”

But at least in a video game, the designer would be trying to trick you into feeling like you’re having fun after you’ve bought the game. We can tolerate trickery of this kind. It’s expected, and we’re already invested in the product. But for a landing page?

First, the visitor has already clicked a link or entered a URL to get to the site. That’s 1 action. Now they’re being presented with an “activating” action that doesn’t accomplish anything they haven’t already decided to do.

Would the prospective user be much more likely to download the app or buy the product after being activated twice? Not likely. Would the person who clicked “yes,” then be significantly more likely to download the app, than that same person would have been, if they had not been “activated” in this way? I don’t think so. And there would be no way to test it anyway.

Second, this sort of landing page is a conceit that people recognize for what it is. But whereas we’ll accept this kind of trick in a video game as part of the experience, a landing page has no “buy-in” from a visitor that ensures they’ll put up with your nonsense. They would have to click to get to the site, then click “yes,” and only then would you even get a chance to persuade them to buy or look at or download something.

That’s like making your prospective car buyer pay for a test drive. Only a highly motivated buyer would bother. I told the founder that if he did that, he could expect a >50% bounce rate on the landing page, and no positive effect on the bounce rate for the homepage it was linking to.

He launched the page and payed for Facebook ads, and the bounce rate was high as I had predicted, with no effect on the download rate for users who passed the first design hurdle. So he took the page down, and let users go right to the homepage. Lesson learned.

From Design to Content

Design in any mature medium, over time, becomes less baroque. Less “unique” in broad strokes. People learn what works. Everything gets to be more shorthand, and conventional. Gone are the salad days of edgy web design, with MySpace pages and GeoCities domains, replaced by white space, edge to edge. The new watchword for web design best practices is “clean,” not “shiny.”

Take a look at a prime example of an historically “edgy,” homepage, that has become progressively more conservative over the years. There’s a good chance you’ve visited. It’s Apple.com.

Do you sense a trend here? Discounting its first few iterations, which reflected the lack of clear web design principles in the age of GeoCities (and clearly before Apple considered e-sales to be vital to its strategy), the site had a “brochure” layout that was common in its time. The first web designers were, after all, magazine and textbook publishers, and those design principles migrated from the older media.

What’s interesting is when Apple introduces, around the time of the release of OSX, an “OSX Skin” for its websites. Here, the company is clearly trying to impress the visitor with the overall visual appeal of its operating system: a taste of what you’ll get when you buy a Mac.

In today’s terms, then, this would be like turning the Apple homepage into the screen of an Apple Watch or a mockup of iOS, and making the visitor navigate the operating system, to see how impressive it is. Surprising, yes. But would that be a boon to sales?

As we push forward in time, Apple stubbornly sticks to its “Mac Os” skinned visual design, but the design departs further and further from the actual contemporary operating system. The design settles, starting in the late 2000s, into a hybrid of the magazine and top margin button layout that we’re all familiar with. It’s sleek, it’s Apple, but it’s also ordinary. You know it when you see it.

While we can be sure that Apple actually had a hand in making this the prototypical design for most tech company homepages, we also see that once it’s set in place, it dithers less and less, and experiments become less frequent. We have found something that consistently works. The design has become the background. Our focus is on the content of the pages.

Design is the Background: Content is Everything

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As our experience of the web has fragmented between tablets, mobile, browsers, apps, Social Media platforms like Facebook, the individual “design islands,” that used to constitute individual websites, have become more and more difficult to distinguish.

Publishing platforms like Medium or even Wikipedia do away with as much design as is possible, leaving only room for the content they contain to be found, catalogued, and displayed.

So, “impressive” design has become anathema to the web experience, as the quality and volume of the content available on the web has increased. We don’t want people looking at our websites anymore. We want them going straight to our content and products.

Because unlike 15 years ago, our content and our products can sell themselves; people are familiar with the notion of online business, and they don’t need to be reassured, they need to be given frictionless access.

The web has transformed from a “global village,” of boutique shops, to an expo, where everyone has essentially the same amount of space to display their wares: and the quality of their offerings determines everything.

That fragmentation and decentralization away from home pages can be seen in many places- particularly in SaaS products. How many people who use Dropbox actually go to Dropbox.com?

Instead, Dropbox has made itself integral to many of the things people do all over the web. Likewise for Twitter. I doubt that many web services 10 years ago would have imagined that they could activate and maintain customers, for years, without those customers having to bother ever visiting their websites.

Increasingly, traffic and eyeballs are concentrated on a handful of central platforms like Facebook, Google, or Reddit, from which the majority of readers browse the content of other pages.

This is becoming true of e-commerce as well, with e-shops being migrated directly onto Facebook. There may come a day when launching a successful SaaS will not even require a dedicated website. That day may be sooner than you think.

Why This Makes Design More Important

You may have concluded by now that I mean to suggest that the grammar of your of your site design, your product design, and your marketing are becoming less important. On the contrary. As users become more and more fluent in up-to-date principles of web design, they become attuned to deviations from the norm.

That attunement can be to your detriment if your design is sloppy or jarring. Or you can turn it to your advantage, by trusting your site visitors to follow clear, consistent, and focused visual and messaging cues. Trading flash for subtlety is just the first step.

StartupBootCamp Smart Transportation & Energy FastTrack, April 9th

StartupYard is pleased to announce that our friends StartupBootCamp, the Berlin based accelerator, will be visiting Prague soon!

On April 9th, Startupbootcamp Smart Transportation & Energy will be in in Prague for a “FastTrack” event, meeting with local startups who are interested in getting funded, and attending the Berlin based accelerator. Startupbootcamp is looking for cutting edge projects in smart transportation and energy.

 

 

Hosted by StartupYard’s homebase, Node5, FastTrack is the perfect opportunity to pitch your idea to experienced mentors, gain feedback and do networking, while learning about Startupbootcamp’s top­ notch accelerator program. If you are interested in joining the 2015 Startupbootcamp Smart Transportation & Energy Accelerator

 

Male Founders: Make a Woman Your First Hire. But Don’t “Hire a Woman”

It’s now over two weeks into StartupYard’s 2015 cohort, and by now our startups have broached topics with our mentors ranging from their go-to-market strategies and branding, to their pricing models and customer acquisition costs, to the exact wordings of their positioning statements.

The real challenge, in fact, is that these conversations have to happen over and over again, in widening and tightening spirals of detail, until the startups can conduct pro/con arguments about every aspect of their short and medium term strategies in their sleep.

Hiring Ain’t Easy

One thing that I think doesn’t come up quite often enough at StartupYard, and probably at most accelerators, is hiring. We know from our own survey of startups at December’s LeWeb conference in Paris, that hiring ends up being the bane of most startups’ existence within the first two years, and certainly after a largish funding round is closed.

Most of our teams are composed of friends- people who worked or studied together, and see their relationships as organic and natural. They sometimes naively believe (or simply refuse to doubt) that this same cozy, non-confrontational arrangement will slowly snake its way out into their ever expanding network of collaborators, and that they’ll never really face tough hiring decisions.

The Happiest Team is Not Always the Best Team

But there are multiple points of failure in this approach, and we’ve seen them happen with our startups as well. While a team of friends is essential to starting your business, that doesn’t mean that this will translate into the perfect team to grow that same business.

Companies that get some funding, and already have a team of friends in place, are in danger of falling into the same patterns they developed as a scrappy startup. It worked before, so why not now? Well, in scrappy startups, everybody does everything, and productivity is assumed to measured by the creative output of the group.

That’s the “move fast and break things,” part of a startup’s life cycle. But once a capital injection has been received, there are going to be other metrics for success- and these new metrics are going to be measured in very different ways. In the same way that the old wisdom goes: “you have to move out to move up,” so it can be with hiring: you have to look outward to grow.

Challenge Your Assumptions

So why should hiring a woman be among your first priorities? Now, let’s all slow down for just a second, and I’ll explain what I mean by this. “Hiring a woman,” and hiring a woman, are two separate things. And while I don’t personally look as askance upon “hiring a woman,” as some very persuasive people do, hiring a woman just to have hired a woman shouldn’t be your goal in this endeavor.

We can get far ahead of ourselves, and decry the idea of hiring women in non-technical roles simply because we feel that they transform our work environments into more pleasant places to be. I don’t see why that’s a bad motivation to hire a woman, but it certainly shouldn’t be the sole, or even the primary motivation either.

Hire a Woman. Don’t “Hire a Woman.”

For every study showing that simply having a mix of men and women on your team and in your work environment makes you more productive, more friendly, more honest, and happier, there is a legion of female engineers who find those things incidental to the fact that talented people, including women, deserve to be hired on their merits alone.

And those who point out that focusing on the productivity benefits of hiring women tends to depersonalize and dehumanize the actual women who are hired because they fit that bill, are right to do so. That isn’t my personal experience, but my personal experience is limited, by necessity, to being a man who has had some very skilled and seemingly well adjusted and happy female co-workers in technical and non-technical roles.

I’m sure that if you asked them, they might very well feel differently than I imagine. I’m not a mind reader, after all. It’s all enough to inspire quite a bit of handwringing from first-time male founders who genuinely want to do the right thing, but are seemingly boxed in by devils on either shoulder.

Don’t Have an Existential Crisis Over It

Either you risk not being progressive by not being proactive, or you risk being condescending without even realizing it. Some may remember American Presidential candidate Mitt Romney, and his “binders full of women” gaff. He was (rightly) lampooned for objectifying women, but he was also trying to do the right thing- in an admittedly half-assed  way.

It’s quite possible that as a male founder, you will simply be unable to avoid mistakes in this area. Being the boss isn’t easy. You could just keep your head down and hope for the best, or you can stick your neck out. I feel obligated to push for the latter move: hire a qualified woman to whatever role you first need to fill.

And by a qualified woman, I mean exactly that. Search for and find a woman who is qualified to fill the role you need filled- whatever it is. Don’t take the first woman who comes along, and make her your office manager, just to check the box. Although you may eventually hire a female office manager, that isn’t the point of the exercise.

Avoid Douchiness

At the same time, don’t hire a woman who isn’t qualified to fill the role you want to fill- and don’t then pay that woman less than you’d pay the person you wanted to hire. That’s just douchey. Pay this woman the amount you set aside for a qualified, valued candidate. Because that’s the only type of woman you’re going to hire.

Men who are hiring often feel that they understand other men more easily. I think few would argue that it’s easier for men to evaluate the skills and talents of other men, because men tend to think and act in ways that other men can easily recognize.

Plus, if you’re a newly-minted male founder who has never managed a team before, managing a bunch of guys might seem easier. It’s more like schoolyard football, and many of us men aren’t that far removed from a schoolyard mentality.

In our schoolyard mentality, we want girls around for us to show off to. We want lunchladies and moms. That’s not sexist, as much as it is infantile. But startups are not typically judged on the basis of their emotional maturity.

What we don’t understand is frightening to us. If you’re hiring a woman, seeing her for her true talent and value might be difficult for you. Embrace this difficulty, and try to do it anyway. You could make better decisions than you would by following your gut.

What This Accomplishes

First off, it’s no secret that women are chronically undervalued in the tech industry. Surveys collected by Quartz show that women make up only around 12% of the engineering workforce of large tech companies. They fare better in non-technical roles, and at smaller startups.

In part, this reflects the rate at which women graduate from engineering programs in the west. However, it may be the opposite of the trend one might expect: that in the meritocratic, and egalitarian environments of big tech, the best performing women might find more jobs than in bro-dominated Startupland.

So, we can surmise, there should be *more* qualified women looking for jobs in startups, in proportion to men, because women are less likely to occupy technical roles at large companies, where the security of a steady paycheck draws many a coder. There are probably even more qualified women looking for work in non-technical roles.

And here’s a bonus: women are generally paid less than they deserve in these non-technical roles, so you have the opportunity to recruit women from jobs that they would otherwise be content to stay in, by offering a competitive salary. By holding out for the well qualified female candidate, you’re likely to find someone more talented than if you simply latched onto the first guy who came along.

StartupYard 2015, Week One: Feature, Product, Company

StartupYard is now officially underway, and our cohort of 7 exciting startups have now joined us at Node5, to begin an intensive month of mentoring.

How it works

 

Typically, our mentoring days are hectic. Startups have to study and think about who they’ll be meeting with beforehand, so they’re prepared for many different kinds of conversations in the same day. We require our startups to be present and ready to meet with mentors, who come in during the morning, and begin meeting with the companies one-by-one. They meet with meetings can run as short as 20 minutes, or as long as an hour or more, with some mentors and companies never really wanting to suspend the discussion. Each mentor comes into the experience with different motivations and priorities. Most have backgrounds or a great deal of experience in business, sales, and marketing, and that can be a big challenge for startups that are usually dominated by technical founders. But as we like to tell our startups: you can teach an engineer business skills much more easily than you can teach a businessperson to think like an engineer.

The job of the startups, and particularly their CEOs, is to be like a sponge, absorbing not only what the mentors have to say about their products, their companies, their markets, and themselves, but also how the mentors react to their ideas, their plans, and their work so far. Hopefully, mentors and startups will “click,” for whatever reason, and the mentor will slowly form a relationship with the startup, becoming a resource and a touchstone for future conversations and connections. In the best cases, the mentors become long-term advisors and even sometimes investors in the startups. These meetings are, in part, auditions for that kind of chemistry. To help reinforce these relationships, we require the startups to report on their discussions, with notes and key insights for each meeting, as well as next steps with each mentor (if any). Not every meeting is a home run, but the startups have plenty of chances to meet the right advisors.

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We start the first week of the accelerator with a tool we adopted last year, the Positioning Statement. This is a simple but powerful tool for stating, as clearly and as concisely as possible, what a company’s place is on the market. It isn’t a feature list, or a business plan, but more of an orientation about the type of company a startup is and will be, and its relationship to other companies, or to potential customers. The positioning statement format looks like this:

Product Positioning Statement:Our Product isFor (target customers):

Who (have the following problem):

Our product is a (describe the product or solution):

That provides (cite the breakthrough capability):

Unlike (reference competition):

Our product/solution (describe the key point of competitive differentiation):

It is the job of the startups to turn these essential points into a brief, declarative statement about the company. Though they’re not always accurate in terms of what a company has accomplished up to the present moment, they represent what the company would like to be when it enters the market.

 

Why a Positioning Statement?

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Ian the intern and Philip Staehelin on Day One

 

What we find time and again when it comes to startups that are just beginning to think about raising funding for their ideas, is that they are unequipped or unready to talk about their ideas in ways that make sense to different types of interested parties. And being unable to clearly discuss their ideas, they’re often equally unsure or unaware of what aspects of the business they haven’t considered fully, or well.

That’s why the first term in the positioning statement template we use (first pioneered by Geoffrey Moore in his book Crossing the Chasm), is about “who.” If there’s one aspect of a startup’s market that they’ve probably given less consideration than is needed, it will be the customers. We often hear: “we are our own customers,” as if that is an explanation that warrants no further examination at all. Often ideas seem very natural once you’ve lived with them and thought about them for months, or even years. But you will never be inside the head of your potential customer, because you thought up your product. It’s better not to pretend that you can have any objectivity about it; you have to talk to customers -a lot of them- and intellectually understand how they relate to your products and to your company. The thing that sells your customers on your products may be totally unrelated to what motivated you to make the product in the first place. Maybe you wanted a more efficient process, or a more beautiful and intuitive experience. But your customers may respond only to price. Or it may be the exact opposite. You have the opportunity to make a thousand avoidable errors by assuming you know your customers better than you really do. Knowing them takes an enormous amount of input, and it can’t be done any other way than with feet on the pavement, and by calling and writing to as many people as possible. The positioning statement begins as a projection of who you think your customers are: but that is a point of discussion, and the mentors will have ample opportunities to challenge those assumptions, given their years of experience with customers themselves.

That’s all normal, and it’s necessary too. Most startups are built around the kernel of an idea: a feature, rather than a whole product, much less a fully formed company culture, a business plan, and a go to market strategy. We probably wouldn’t take a startup that only wanted to “be in X business,” hoping that they’ll find a niche, simply because there’s money to be made. Rather, we take startups that have a laser focus on one small aspect of a much larger industry. It’s that singular focus that allows some startups to grow so quickly: they do one thing extremely well, and they do everything else well enough that they’re able to make a business out of it. That one thing makes their company a success, and they pick up the other nuances as they grow. The positioning statement is about drawing their attention towards all the things that they need to do well enough to survive and grow on the market, from the earliest stages. Knowing their customers is the first and possibly the most vital thing that they have to do well enough to survive, and which they will have to do very well to thrive.

Feature, Product, Company

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The teams meet mentors on Startup Day.

 

Each of our startups, to varying degrees, are somewhere along the road between a Feature, a Product, and a Company. Few are real companies, although some are getting close. The danger for many startups, and we see this very often in our selection process, as well as outside mentoring, is that they skip one of these steps- most often the Product step.

 

Often we meet interesting, brilliant founders who have devised very impressive solutions to obvious problems. However, we usually leave these meetings with a single impression: “It’s a feature.” While starting with a key feature is usually the key to a startup’s early growth, a lot of startups stop right there. They build the company too exclusively upon the idea of a single functionality, making it both more vulnerable to competition, and less saleable as a product. You can convince customers to use your calendar app, for example, if it does most things about as well as Google Calendars, but has one feature that Google doesn’t have. However, if it has that killer feature, and doesn’t do any of the basic functionalities of Google, then it will be nearly impossible to actually sell. It might be interesting to customers, but it won’t sell itself. And worse, many startups actually get themselves into this situation on purpose: they tailor the product to a hyper-specific feature set, because they think that that will save them from comparisons to established products. “We can’t compete with Google, so we don’t even try.” Certainly they will have saved themselves from any positive comparisons to the competition. Now all the comparisons will be about what the product doesn’t do. Though many startups will answer this by saying that their product doesn’t have competition, our answer is always the same: there is always competition. Competition is either another product, or doing nothing. A feature list that is too narrow to justify the time necessary to use your product, has laziness or disinterest as an indigenous form of competition.

Startups have to be focused on their key differentiators, but there’s a minimum threshold that a product needs to breach to be called “a product,” and to justify someone paying for it, or adding it to the list of things they will use on a regular basis. And even if a startup hits a homerun with a small, absolutely killer feature, there is little stopping competitors from noticing the demand for that feature, and simply adding it themselves. Job done. This is one of the toughest things for our startups to face, and it’s one of the real values in the mentoring sessions: the mentors help them to understand how they can exist in a competitive marketplace. Finding that recipe of focus is the first monumental challenge for any company that wants to grow like a startup has to.

 

Overkill To Kill Objections

2009-07-08 18.47.11The positioning statement frames that “window into the mind,” by establishing the company’s (and therefore the product’s), place among other products and in the market as a whole. It establishes, in broad terms, how the startup will go from a killer feature, to a product people will buy, to a company that people will trust, so we make sure that our startups spend quite a bit of time hammering out, refining, going over, and rehearsing their position statements, listening to what the mentors say in response, and paying attention also to what they don’t say in response. The objections that mentors raise will be about basic concerns, many of which the startups have not previously considered. Are there legal complications? Do they understand the market well enough? Is the business plan workable? Do the costs make sense? Do they have the right branding? Would the mentor buy from or invest in the company? These are all objections that add value in experience for the startups- they will have to work to answer all of them, and more that they haven’t even begun to think about. Eventually, these problems will begin to find their solutions, and the startups will be able to incorporate the answers into their pitches, their marketing, and their business plans.

So answering objections is important, but a lack of objections is also key- do the mentors not object because they are convinced, or because they don’t understand? This is a sense that our startups have to develop over many sessions, repeating and refining until they find the exercise to be a waste of time, and desperately want to move on. That’s when we know they’re ready to present.

 

 

Microsoft Profiles StartupYard Alum Gjirafa.com

Last week Microsoft profiled the Albanian language Search and news aggregation service, and StartupYard alum, Gjirafa.com, in a glowing “customer story,” which revealed key details of Gjirafa’s startling growth in the Albania/Kosovo region.

Gjirafa Logo

Gjirafa.com By The Numbers

Among the highlights (you can read the full article here), were some amazing growth statistics: Gjirafa now aggregates over 15,000 Albanian language news articles a day, from 170 news portals. It has fully catalogued 100,000 bus schedules in the region, and created a trip planning functionality that has never been available before in the region, on any platform. In addition, Gjirafa now indexes 33 million pages,  and has nearly 250,000 unique visitors per month, for a total of over 3 million page views, despite launching less than six months ago. Gjirafa’s founder and CEO Mergim Cahani says that Gjirafa expects over 1 million unique users per month within a short period. The service has garnered 112,000 likes on Facebook within the last half year.

(The above numbers were all lower in the Microsoft report, which was published less than 2 weeks ago- Gjirafa has added 800,000 views per month, and has upped its number of bus schedules by over 200%).

The Microsoft customer story also reveals that Gjirafa has made significant headway in user acquisition by becoming the leading indexer of used cars for sale in the Albania/Kosovo region, practically overnight. Gjirafa now lists about 70,000 cars, collected from local listings, and is expanding to job listings, real estate, and mobile phone sales. Cahani credits Microsoft, and the Microsoft Azure credits obtained through the StartupYard program, with allowing Gjirafa to expand at such a fast clip, saying: “It would take us many months to build indexes like this if we were larger and had to manage our own infrastructure.” Gjirafa entered into a partnership with Microsoft shortly after completing the StartupYard program, when Microsoft took interest in the service, noting that it was consuming an unusually large amount of server capacity.

Gjirafa HomePage

For Albanians, By Albanians

Since we last interviewed Cahani, Gjirafa has continued to experience rapid growth in its user base. The service depends on Albanian speakers taking pride in home-grown competition for search goliaths like Google, Yahoo, and Yandex. Cahani said of the service’s patriotic nature: “The first [Albanian speakers] they like about Gjirafa is that it’s their language, and that it’s an Albanian/Kosovar company. They’re really proud of that fact, and they think it’s past due, frankly. They feel that Gjirafa is theirs and they identify themselves with it – and that’s exactly what we want. We are for Albanians, and the reaction has been really strong.”

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Mergim Cahani Unveiled Gjirafa at a Press Event last year.

 

Gjirafa met its investment goal for an angel round last fall, following participation in StartupYard 2014. They are now working on expanding and perfecting their search platform, attracting more users to the platform. They also plan on bringing new e-commerce and search solutions to local Albania/Kosovo regional partners, and making themselves central to the growing online market in the region.