Peter Thiel’s CS183: Startup - Class 9 Notes Essay Here is an essay version of my class notes from Class 9 of CS183: Startup. Errors and omissions are my own. Credit for good stuff is Peter’s entirely. Class 9 Notes Essay—If You Build It, Will They Come? I. Distribution is something of a catchall term. But for whatever reason, people do not get distribution. There are two closely related questions that are worth drilling down on. The first thing to do is to dispel the belief that the best product always wins. II. Before getting more abstract, it’s important to get a quantitative handle on distribution. Customer lifetime value, or CLVAverage revenue per user (per month), or ARPURetention rate (monthly, decay function), or rAverage customer lifetime, which is 1 / (1-r)Cost per customer acquisition, or CPA CLV equals the product of ARPU, gross margin, and average customer lifetime. The basic question is: is CLV greater or less than CPA? III. A. Consider advertising for a moment. B. C. IV. A.
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Class 8 Notes EssayPeter Thiel’s CS183: Startup - Class 8 Notes Essay Here is an essay version of my class notes from Class 8 of CS183: Startup. Errors and omissions are mine. Bruce Gibney, partner at Founders Fund, gave the lecture these notes are based on. Credit for good stuff goes to him and Founders Fund. Class 8 Notes Essay—The Pitch I. One of the most important things to remember when thinking about pitching is that there are huge numbers of pitches in the world. Conceptually, pitching sounds easy. But it’s not that easy. Humans are massively cognitively biased in favor of near-term thinking. Before you pitch you should have a clear goal in mind. First, you need to raise the right amount of capital. Second, higher valuations aren’t always in your interest. Your subsidiary goal should be to keep control of your enterprise. II. It’s always important to understand your audience. One of the most important things to understand is that, like all people, VCs are different people at different times of day.
Startup = GrowthSeptember 2012 A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. If you want to start one it's important to understand that. Redwoods Let's start with a distinction that should be obvious but is often overlooked: not every newly founded company is a startup. When I say startups are designed to grow fast, I mean it in two senses. That difference is why there's a distinct word, "startup," for companies designed to grow fast. To grow rapidly, you need to make something you can sell to a big market. For a company to grow really big, it must (a) make something lots of people want, and (b) reach and serve all those people. Writing software is a great way to solve (b), but you can still end up constrained in (a). Most businesses are tightly constrained in (a) or (b). Ideas It might seem that it would always be better to start a startup than an ordinary business. The constraints that limit ordinary companies also protect them. Rate Value
The Economics of Attention: Why There Are No Second Chances on the Internet : Tech News and Analysis «In my last Om Says, Why Some Apps Works and Some Don’t, I started to explore one of my core theses — the growing importance of the economics of attention and how it relates the success and failure of Internet (and mobile) applications. I believe that the economics of attention is much more ruthless and unforgiving than the real economic underpinning of a product. What I mean is that you can find money for your company from an investor, but it wouldn’t really matter if you don’t have users’ attention. This is a hard reality that has been obvious in highly competitive and somewhat subjective marketplaces. No Second Chances And just as it is hard for a movie to recover from a bad opening weekend, today’s “apps” are likely to lose their place in the marketplace if they don’t make a good first impression. For nearly a decade, the start-up mantra has been release early and release often,” a concept that first was applied successfully in the development of Linux. Sareen makes a good point.
The Event StrategyJason Cohen has a great post on unfair advantages. One of Cohen’s differentiators — personal authority — is the most useful to first- and second-time entrepreneurs. So the question arises: how do you build strong and scalable personal authority? I’ve heard blogging come up often, but I don’t think this is the way to go for most people. Blogging is hard. Rather, building personal authority through blogging is hard, and at the very least it’s total feast-or-famine. Events are different — when you run an event, you’re in front of the crowd. Starting an event series is daunting, but it’s actually quite a bit easier than it seems. 1) Pick a topic. 2) Build your promotional tools. 3) Find content. 4) Find 2-3 solid venues. 5) Make sure you have great attendees. 6) Play up your social benefit to maintain great content. 7) Leverage your membership to run events for you.
How Growth Hacking Came to BeThe buzz on “growth hacking” has spread all across the world. Classes on growth hacking are being taught in Singapore. Companies from San Francisco to London are recruiting growth hackers. The first Growth Hacking Conference popped up a few weeks ago. One explanation is that “growth hacking” is just a catchy way to rebrand marketers, but this begs the question as to why “growth hacking” went viral in the first place. Startups are facing growth challenges that were not apparent a few years ago. Channel instability The creation and destruction of channels is a common occurrence today. Deloitte’s Shift Index, which tracks economic competitiveness, has shown a long-run decline in a firm’s ability to retain market leadership. Firms across industries have struggled to keep pace with this instability, as new channels usually result in market encroachment. Channel saturation Paid advertising channels follow the same pattern. The best product fallacy Product-growth fit Growth hacking as a response
Class 7 Notes EssayPeter Thiel’s CS183: Startup - Class 7 Notes Essay Here is an essay version of my class notes from Class 7 of CS183: Startup. Errors and omissions are mine. Roelof Botha, partner at Sequoia Capital and former CFO of PayPal, and Paul Graham, partner and co-founder of Y Combinator, joined this class as guest speakers. Credit for good stuff goes to them and Peter. Class 7 Notes Essay—Follow the Money I. Many people who start businesses never deal with venture capitalists. VC started in late 1940s. Venture basically works like this: you pool a bunch of money that you get from people called limited partners. Most of the profits go back to LPs as returns on their investment. VC funds last for several years, because it usually takes years for the companies you invest in to grow in value. There are many dimensions to being a good VC. The standard Einstein line on this is that the most powerful force in universe is compound interest. So consider a prototypical successful venture fund. II.
How to grow a user baseBy Richard Nieva On April 12, 2013 Growth hacking is all the rage. Just yesterday, PayPal acquired not-even-launched-yet startup Iron Pearl to focus its platform of growth hacking tools on expanding the payment service’s user base. But snapping up users is an enigmatic task, right? Well it’s a task that some experts have tried to distill into a more scientific process. Decide what kind of product you’re dealing with Elliot Shmukler, vice president of growth and product at WealthFront, says there are generally two types of products: one where growth is inherently important to functionality, like with a social network. LinkedIn cofounder Allen Blue described the lean times at LinkedIn early on, when the network was not growing as fast as the company wanted. Word of mouth can be built in Yes, a viral product will created some buzz on its own, but that doesn’t mean a product manager can’t help capitalize on that buzz. Internalize the data and move fast The flip side?
9 Ways To Make Your Startup Grow VirallyVinicius 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. 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. 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. Get users to push content they create on your app to Facebook, Twitter. Increasing Conversion Adjust your product to become more mainstream. Conclusion Building a great product is only half the battle.