100 tasks to build unstoppable momentum for your startup from Jason Calacanis and the team at LAUNCH. Click the titles to watch Jason explain each bullet point in detail. Note: This is built on Coda a great all-in one doc. We don’t even scratch the surface of its capability here... if you want to level-up your team go to and they’ll hook you up with a $1000 credit 1) Are you solving a problem that has personal relevance? Will you still care about your product, your company, and your customers after getting beaten down for a year straight? Is the north star mission important enough to you that you will put potentially put everything else in your life second for it? Examples of north star missions: Robinhood's mission is democratizing finance Calm's mission is normalizing self-care and meditation Eight Sleep's mission is improving quality and tracking of sleep Is the problem worth solving to YOU? Not everyone is going to start a company that reduces carbon emissions across the globe like Tesla It's okay if you're building a B2B sales tool, as long as it matters deeply to you! But if you're just in it to get rich or get famous, it's probably not going to work out! 2) Can you build a great product? Do you have these skills: Developer (knowing how to build something) Product manager (knowing what to build, and how to get there) UX/UI designer (knowing what experience the user wants, and how to make it great) If not, you can learn these types of skills for free on the internet → there are no excuses Or you can try out no-code/low-code solutions, and see if you can get to a "Minimum Viable Product" or MVP without using hard code We run a ton of low-code stuff at LAUNCH! We use Notion, Zapier, Typeform, Bubble, Squarespace, etc. 3) Can you recruit elite talent to join your team? Can you recruit one or multiple co-founders that balance out your skillset? Example: if you are non-technical but great at sales and vision you probably want to find a technical co-founder that's can handle product If you can't build a product, can you convince people to work for you that can? Is your opportunity large enough that you can convince world-class engineers, designers, salespeople, etc. to come work for you? Some things that attract high-end talent: Equity: That's how you can compete with big tech salaries Large opportunities: Uber, Airbnb, Stripe, Shopify Meaningful work: Tesla (EVs), Blokable (Housing), etc. 4) Do you understand your ideal customer? The first step in delighting your ideal customer is knowing who they are Being able to identify the makeup of your most engaged cohort of customers could be the difference between finding product-market fit and running out of money How is your customer solving the problem today? What do you offer that is superior? Why will they make the switch? Things to look for: demographics, average time spent on site/in app, how you acquired them, are they likely to recommend your product to a friend? Do you have domain expertise in your industry? This is a controversial issues among investors: Some investors look for domain expertise in a first-time founder However, other investors ( ) actually believe domain expertise is overrated and could be negatively correlated with outlier success Keith thinks that the greatest innovations typically come from outsiders, since industry insiders are usually entrenched in a limited way of doing things Jason calls this "fresh eyes on a problem" Also: your ideal customer might wind up NOT being who you thought they'd be - if that's the case, are you flexible enough to pivot and still succeed? 5) How much personal runway do you have? People underestimate how long it takes to either A) raise money or B) get profitable Ask yourself: What is your personal burn rate? Can you optimize it to extend personal runway long enough? Build a side project on nights and weekends before leaving your day job If you aren't technical, try no-code solutions to see if you can create a minimum viable product If you can get to any amount of revenue while still in "side hustle phase" - that's amazing! Then you can start doing calculations like "When I hit X dollars in profit, that will be ~70% of my salary and I can quit my job and make up the difference" 6) How much are you willing to sacrifice? How resilient are you? Before you quit your job to start a company, do a self-assessment on your personal resiliency Here are ten tips for building emotional resiliency ( ): 1) Practice mindfulness (mindfulness helps with building self-awareness, which is key to emotional resilience, according to the CNBC article) 2) Breathe slowly and deeply 3) Build a robust emotional vocabulary (distinguish between different emotions in yourself and others so you are less likely to react without thinking) 4) Reflect on situations (take responsibility and articulate what you learned and how that will make you wiser in the future) 5) Reframe your mindset (view setbacks as challenges instead of threats) 6) Search for meaning (reframe suffering to create greater meaning for yourself and your team) 7) Forgive (break psychological ties that tie you to your past) 8) Engage your support network (the CNBC article notes that "research shows extroverted individuals tend to be more resilient because they’re more likely to reach out to others when they need help" so introverts should be extra mindful of this) 9) Express gratitude (gratitude can redirect negative emotions) 10) Take control of your outcomes (YOU control your destiny) 7) Do you have a bias towards action? Complacent people do not make great founders If you enjoy a casual working environment, don't like working long hours, prefer not to work nights and weekends... than being a founder is NOT for you As a founder, you will be forced to put out fires from Sunday morning to Saturday night, and everything in between Some people need oversight, direction and someone else telling them what to do Those people can still be good employees, and can knock off tasks and help your business once you start hitting scale However many successful founders were NOT great employees, and in fact many were tough to manage If you're somebody who takes comfort in having someone above you who could take responsibility and give you a direction, you might not be fit to be a founder There are a lot of people who think they have what it takes But they tend to be hesitant in getting started - often coming up with excuses: They are willing to start companies if you give them money They will start companies if they find a developer to work for free They are willing to start companies, but only if they can make the same money they made at Google These are NOT signals of a great founder Great founders start building now, no excuses! 10) Can you build the startup flywheel? Is it well designed, or is the product clunky and ugly? Do you have a product at all? Do you even know who their customers are? Do you know the pain point they're solving? Can you recruit and hire a team? If the founder can't do these simple things then this is probably not a founder that is going to win 11) Pick a business model that easily aligns with your product or service and customers Your business model will depend on the type of product or service you're offering Today we're going to go through the most popular business models for tech startups, which models investors love and which ones they avoid Imagine if Uber charged a monthly subscription for unlimited rides instead of a marketplace solution... would they have still succeeded? Companies that sell business software should NOT sell it as a one-off, you should always sell it as a subscription so you can have recurring revenue and reduce your churn 12) Keep it simple: FOCUS on a single business model One mistake founders make (besides picking the wrong model) is trying to do too much When founders get unfocused, that's very dangerous for a startup Businesses with multiple streams of revenue can get clunky with less chance of outlier success than focused business models from the start Example of single business models (at the start): Uber → marketplace, takes a percentage of every ride Calm → subscription for meditation Slack → subscription for messaging app Spotify → subscription for music Pro-tip: Here is one way in which you can use to different business models to prop up your startup in the early days: You can use service-based revenues to build out your SaaS business We see this all the time with early-stage startups, and it's a great way to get quick capital to grow your recurring revenue business HOWEVER... make sure you differentiate "service-based" from "subscription-based" when you're talking to investors! Competent investors will always ask about the "quality of revenue" 13) Do you understand why investors love SaaS (Software-as-a-Service)? Because it allows startups to increase revenue on a recurring basis, while keep fixed costs relatively consistent What is SaaS? It's when a business charges a monthly or yearly price per seat for business software This business model creates "recurring revenue" for a startup, which investors love because you start every new payment cycle with almost 100% of your revenue from the last cycle If you sell on a "bottom-up" basis (meaning you sell into an organization from the lower level employees, not top-down from the VP level) your product can spread through a company like wildfire With bottom-up SaaS, you also can have a "cross-pollination" effect, where employees that get addicted to your product move to other companies and then infect THOSE companies with your product 14) Do you understand why investors love the Fintech model (SaaS + Transactions)? This model combines the best parts of SaaS and transaction-based revenues What is the Fintech model? It's when companies charge a SaaS fee AND take a percentage of each transaction (if your product enables transactions) This is a popular business model with Fintech companies like Stripe, Shopify, and Plaid Why? Because 100% of revenue coming from transactions is not as ideal as having as a recurring SaaS component These companies typically charge a relatively affordable monthly or yearly SaaS fee and takes a small percentage of each transaction For example: In Q2 2021 Shopify had $334M in subscription revenue and $785M in transaction-based revenue (they call it "merchant solutions revenue") Shopify had about a 30/70 split between SaaS and transaction-based revenue Shopify's standard plan costs $79/month, and they charge 2.9% per transaction for merchants using Shopify's payments processor 15) Do you understand why consumer subscriptions are coveted by investors? Subscriptions make a vertical with historically high churn rates much more investable by creating pricing lock-in and recurring revenue Consumer subscription are when companies charge a monthly or yearly fee for a consumer software Examples: Spotify, Calm, Fitbod Interesting insight: Calm used to sell their app for a "one-off" price of $10 back in the early days When they started to charge $5/month (or $60/year) instead of just $10 for life, they actually saw a jump in downloads and paying customers Why? Because people love subscriptions, even though it makes no logical sense! The brain thinks "Hey, I can cancel this whenever I want." even though you'll likely paying 10x-100x the original purchase price over time! 16) Do you understand why marketplaces are coveted by investors? Marketplaces are hard to get started, but even harder to stop when they hit scale Marketplace businesses take a percentage of each transaction Marketplaces are two-sided, and the two sides traditionally consist of "buyers" and "sellers" These buyers and sellers can appear in many forms, depending on the vertical: Amazon has third-party sellers and buyers (obviously) Uber has drivers and riders Airbnb has hosts and guests Rover has dog sitters and dog owners Hipcamp has private land owners and campers Marketplaces rely on the total amount of all transactions on the platform - typically called GMV (or Gross Merchandise Volume) The GMV in a marketplace determines the revenue that company will make, since companies typically take between 5-20% of the total transaction cost This differs by vertical as well: Uber and Airbnb refer to this metric as "Gross Bookings" In Q2 2021, Uber had $21.9B worth, and revenue was $3.9B (about 18% of Gross Bookings) In Q2 2021, Airbnb had $13.4B worth, and revenue was $1.3B (about 10% of Gross Bookings) Marketplaces eventually become "self-sustaining" once they hit scale! Craigslist, Amazon, eBay, etc. 17) At the most basic level, why do investors love these four business models? The four models: SaaS, SaaS + Transactions, Consumer subscriptions, Marketplaces Because they allow startups to capitalize on the scale-ability and high margins of selling software The power of software: Instagram sold to Facebook for $1B with only 12 employees What advantage does this provide the founder? Founders can keep fixed costs relatively similar while growing revenue rapidly due to simple and scaleable business models Which means they can pour the profits back into building their business Business models of Jason's outlier success: Calm (Consumer subscription), Uber (Marketplace), Superhuman (SaaS), Thumbtack (Marketplace), Grin (SaaS), LeadIQ (SaaS), Fitbod (Consumer subscription) 18) Which business models do most venture capitalists stay away from? Typically these are not "venture scale" businesses, meaning they can't get to $100M in revenue in under 10 years Direct to Consumer or anything CPG (Consumer Packaged Goods) Lower margins and scales slower than software For DTC, you need at least one of these differentiators: 1) Elite product/brand (Ex: Eight Sleep, Warby Parker, Dollar Shave Club, Away Luggage) 2) Elite acquisition strategy (Mastery of TikTok/Instagram/Facebook advertising, or organic) Famous saying: "Hardware is hard" Historically low margin, and scales much slower than software Pro tip: If your hardware item has a software component, you can sell HaaS, or Hardware-as-a-Service, which is much more appetizing to investors Making money through ads on your platform This business model only works if you hit massive scale, which is why investors are typically skeptical Example: Google, Facebook, Amazon, Yelp, Twitter, Snapchat Advertising budgets are also dependent on the economy, as major advertisers cut their ad budgets FIRST after there is a down turn Not venture scale, usually bad businesses for everyone except the founder 19) How soon do you need to identify a business model after starting your company? Most great companies know how they will make money from the start However, your business model can change as new opportunities appear. Some of the greatest modern tech companies have changed their business model. Netflix had TWO business model changes First, they went from mailing physical DVDs for a monthly fee to selling streaming software (their margins and user base increased dramatically) Second, Netflix used to "rent and distribute" 100% of their digital content when their streaming platform first launched They would sign deals with companies that owned the rights to content and pay to list that content on Netflix In January 2013, Netflix CEO Reed Hastings released a memo to employees and investors announcing a commitment to producing original content From the memo: "We don’t and can’t compete on breadth with Comcast, Sky, Amazon, Apple, Microsoft, Sony, or Google. For us to be hugely successful we have to be a focused passion brand. Starbucks, not 7-Eleven. Southwest, not United. HBO, not Dish." Netflix's first piece of original content, House of Cards, launched one month later in February 2013 In Q1 2013 (the same quarter that Hastings released his memo) Netflix had $1B in revenue and only $3M in net income Eight years and three months later, in Q2 2021 (their most recent quarter) Netflix had $7.3B in revenue and $1.3B in net income So in the 8 years since Hastings letter, Netflix has ~7x'ed their revenue and grown their profit ~433x, largely due to their focus on producing original content! 20) Pricing: How much should you charge? Charge too little and people don't think your product is good enough to buy Charge too little and you don't cover expenses Charge too much and people won't give it a shot Charge too much and potential customers might get "sticker shock" - which is why some SaaS companies don't list their prices publicly What are similar startups charging? How do you compare? Are you the affordable solution, or are you the premium offering? At what number of customers and what price can you be profitable at your current burn rate? If you need 500 customers at $20/month to be breakeven, that seems very doable! If you need 3000 customers are $100/month, that might be a little harder, and you might want to lower your burn rate 21) Do you know who you're building for? How can a founder distinguish their "ideal" users vs their "first" users First users: could be your friend from college, a neighbor, your grandma, etc. Ideal users: who your product ultimately solves the problem for, and who is willing to use it the most OR pay you the most money Here is an easy trick to identify early potential ideal customers: Segment your users into cohorts based on an engagement metric like time on site, rides taken (Uber), workouts registered (Peloton), etc. Focus on the top 10% of engaged users What do these users look like? What are their occupations? Why are they engaging with my product? How much time are they spending on the platform? Use this info to create a blueprint for a potential customer Ex: Small business that needs help with web design, but doesn't need to hire a full time software engineer This example would be a blueprint for an ideal customer of a marketplace of freelancers Remember: Winning founders understand their customers deeply Superhuman has an innovative approach to focusing only on potential customers that fit their ICP: CEO Rahul Vohra only on-boards email "power users" due to his product's relatively high price point (~$360/year for an email client) Rahul knows if he onboards a customer who is not the right fit, that customer will likely have a bad experience, churn quickly, and the entire cycle of acquiring that customer will be a waste of time Superhuman actually REJECTS potential customers if they are not a good fit Instead, Rahul chooses to only spend time onboarding and acquiring customers they know will love and utilize their product 22) Can you explain your startup in one simple sentence? Call this "Jason's OSS Rule" - One Simple Sentence Any great company can explain what they do in one simple sentence At its core - what does your company do? No buzz words; just a clean, clear, and crisp sentence that anyone could understand Investors see convoluted, buzz word-y company descriptions often Here are some examples with popular companies: Bad job: "We're a future of work startup leveraging software and integrations to improve workplace communications for the long-term." Good job: "We sell chat software to startups." Bad job: "We're leveraging the blockchain and decentralized technologies to allow any investor to get exposure into the world of cryptocurrency." Good job: "We help people invest in crypto." Bad job: "We use AI and machine learning to connect riders and drivers, disrupting the worlds of transportation and mobility as we know it." Good job: "We help you get rides faster and cheaper." Something to keep in mind: Does all your branding align with your simple sentence? Is the messaging consistent across your website, Twitter, TikTok, etc.? Can every employee explain what you do in one simple sentence? Does your sales team speak clearly? Remember: Winning founders can explain their product simply Einstein famously said: "Everything should be made as simple as possible, but not simpler" Winning founders can do this in their explanation as well as with product development If you can't say what your company does simply, your customers won't understand your value 23) Do you know where to find more customers? Once you have your first 5 customers, you should immediately look for 10, then 50... Too often founders find their first group of customers and quit looking They often get lost building new features or assume the customers will keep coming Winning founders are obsessed with acquiring new customers If you found a way to acquire customers that works - keep doing it! If you find oil, keep digging! So, how do founders go about finding users? What are a few customer acquisition strategies in the early days? Hangout where your users are If you're selling developer tools to software engineers on a bottom-up basis... Post on hacker news and subreddits to try and get early users and feedback Attend live events (like meetups) and talk to the users themselves Create a sense of community around your product Being open and transparent on Twitter is becoming more popular It is a great way to find users with word of mouth You can also build publicly on Indie Hackers and engage that community Are you solving a problem that your network suffers from? Do you have ideal customers you can easily reach out to? Alex Tew, co-founder Calm used a strategy to attract users by building an interesting viral site called - and it's still live today! The virality of the non-product drives traffic back to the product He did this with Calm by creating a simple website that asked if you could sit still for 2 minutes If you moved the mouse or touched keyboard it would say "Fail" People shared their scores, and he collected ~100k emails of engaged users (in a few days) before ever launching Calm There is also the waitlist strategy Obviously, you need serious demand in order to create a waitlist in the first place Companies like Superhuman have perfected the waitlist You should create a waitlist if: You want to gauge the level of interest You want to limit the amount of customers you're on boarding You want to build up hype and demand for your product Once you have a few hundred users on the waitlist, you can utilize growth hacks like: Enticing users to move up the waitlist by referring other people to sign up, which creates a virtuous cycle 24) Do you have founder-product fit? Ask yourself "Are you using your own product?" Are your employees using your product? Do you truly understand the problem you are solving for the end user? There are several benefits to "eating your own dog food" 1. You can quickly help your team find bugs before impacting customers 2. It strengthens your relationship with the customer Everyone at your company understands the customer experience You'll build credibility by knowing all the work flows and pain points 3. It keeps your company on the same page Engineering gets to hear feedback from users (even if they are internal) Marketing knows how the product works to better strengthen campaigns Sales better understands the problems the product solves when talking to customers Executives stay involved in the day to day functionality of the product Fitbod is a great example of this: Fitbod's co-founders Allen and Jesse originally built their product for themselves Or, in other words, they were their own ideal customers In this case: hardcore fitness enthusiasts with disposable income that wanted a data-driven approach to exercise Do you know your one key feature and how that feature is being used? What is the main way that you use your own product? Fitbod's key feature was their workout recommendation engine This was a machine learning model that would put together your next workout It was based on your preferences, past workout fatigue, available equipment, and more When you know who your ideal customer is, what your key feature is, and you use the product yourself regularly You can build marketing campaigns and sales strategies around these markers 25) Do you know how people are using your product? We've established that you and your employees are using your product... But are your customers using it in the same way? This goes back to the first point today - do you know who you are building for? Remember, winning founders understand their customers deeply Are the features you think are most important the same ones that your customers think are most important? STEEZY uses their customer support tickets to inform their product roadmap Are customers having to work around clunky UI/UX that is making their lives harder in your app? If you are dog-fooding your own app you'll identify issues sooner and prioritize a fix Being able to proactively tell a customer something like: "In our latest release, you can now save your most common view - you don't have to click this sequence of buttons anymore - it should save you 5 minutes every time you log in" This builds trust that you understand their problem and your own product And solving a problem your customer may or may not have known they had goes a long way Look at the data whenever possible to understand your customers Understand who logs in and when What pages are they on longest? What actions are they taking? Where do they get stuck or lost and log out? Study patterns across users Grouping your users into cohorts to track trends is helpful You can segment users based on when they signed up, the industry they are in, or any way that might be valuable to slice your user base for insights Quantitative data like this is extremely valuable But so is qualitative data... which leads us to: 26) Do you know how to conduct customer interviews? Are you talking to your customers regularly? Are you solving their problem? Winning founders solve big problems for their customers Use every interaction with your customers as a way to gather this data You do not need to provide a formal "interview" to gain valuable insights A simple email to check in and see if they have any needs, thoughts, or questions can provide a lot of great information When you release a new feature let your customers know about it and be excited FOR THEM... "I think you'll love this new feature, it is going to make your life easier by doing XYZ - would love to know what you think! What did we miss, what works for you?" You'll quickly get feedback without people even feeling the need to commit to an interview Building relationships and checking in with customers before you "need" anything also builds good faith and confidence Offering additional value and Providing great customer experience by being available is a way to stand out from competitors And when you want to conduct interviews, people are more willing to participate if you have a relationship So, how to find the right customers to interview? Use the segmented customer engagement data we talked about before Take the different cohorts and select a random sample of customers This should range from your most engaged cohort to your least engaged Reach out via email or phone If necessary, offer them a gift card, or something relatively meaningful for their time You want to hear from a wide variety of users But make sure to weigh your "super users" input more heavily What kind of questions should you ask? What do you think about the product? What would you change about it? What does our product allow you to do that you couldn't before? How would you feel if you couldn't use our product anymore? What should we stop doing? Would you recommend our product to a friend or colleague? Have you? Why or why not? Listen to their answers and ask follow up questions that keep them talking "Can you say more about that..." "Can you explain what you mean by that..." "Would you elaborate on why..." Do not interrupt your customer's feedback! You can also conduct listening labs Where you have the customer test out the app and think out loud while they explore You can ask them questions like "What are you looking for..." "Did that do what you expected it to do when you clicked on it... why?" "What do you need to do next..." You can also take interviews in another direction and create a Net Promoter Score survey... 27) Do you understand Net Promoter Score? Net Promoter Score (NPS) is a way to measure customer experience Winning founders are obsessed with metrics Measuring, tracking, and making decisions based on data is important Instead of the open ended discussion questions you can ask users to answer on a scale This makes it easier to compare answers and group results Customers rate their experience with your company on a scale from 1-10 Something like, on a scale of 1-10 how likely are you to recommend our product... Here is how it's explained at They are loyal enthusiasts who will keep buying and refer others, fueling growth They are satisfied but unenthusiastic customers who are vulnerable to competitive offerings They are unhappy customers who can damage your brand and impede growth through negative word-of-mouth You find your NPS score by taking your percentage of promoters minus your percentage of detractors This means your NPS score can range from -100 to 100 You can use NPS results to anticipate churn or drive customer outreaching NPS for major brands (via ): Delighting customers is the ultimate goal You need to be able discover answers to questions like: What problem are you solving for them? Do they feel you are solving it adequately? What sets your product apart? Which features do they love? Which do they want removed? Do you make their job or life easier, faster, or better? Why do they use your product? What do they wish was better? Do the customers recommend your product to others? A savvy way to increase NPS through a growth hack is with referral programs Robinhood had one of the best referral programs ever You might know it as the "Free stock" program Every time you'd refer a user to sign up, both you and the new user would get a free stock on the platform! This created a huge surge of sign ups in the early days No other brokerage had ever done anything like that before Delighting customers is a vital part of the Startup Flywheel Collecting customer feedback is a great way to gauge how you are doing 28) Should you start with a free or paid product? This is a very common question And it depends on your business model Are you going to be a free app that generates all your revenue via ads? Think, Google, Facebook, etc Are you SaaS, consumer, or a marketing place that needs people to pay you to survive? It also depends on how much runway you have from the start It is best to turn on revenue as soon as possible Is growing customer base or growing revenue more important? Ideally you're growing both! Free users, without skin in the game often provide high frequency, low value feedback Free users speak with their words and their engagement Customers who are paying, have skin in the game and are invested in your product Customers speak with their words, wallets, and engagement What signals should you look for that tell you it's the right time to turn on revenue? You've figured out the pain point your company solves And are seeing early signs of product-market fit You've run successful free or paid pilots with happy users During customer interviews they indicate that they would pay to continue using your product You have a waitlist that includes a price users will pay for your product How do you shift from a free to a paid product? There are ways to roll this out
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