Planet Startup

Poll on Hacker News Brand Awareness

2010-03-13T21:35:55+00:00

I made this poll on Hacker News a little over a week ago. For some unknown weird reason it didn't make it to the front page, but it still got enough votes for the (non-scientific) results to be interesting.

The poll asked "Which companies have you a) heard of and b) know basically what they do?"

Here were the results (% of respondents that met the above criteria):

Bingo card creator - 82%
Directed edge - 40%
Bluefrog gaming (previously Draftmix) - 21%
Duck Duck Go - 71%
Mibbit - 21%
Mixergy - 79%
Newscred - 8%
Revizr - 1%
Tarsnap - 59%

I chose these choices carefully.

Revizr - this was the top "review my startup" post (by points) that I found on searchyc.com. And yet no one had heard of it. And the people who voted were probably more in the know than just "front page users" because they're people who review new or older stories, i.e. visit pages other than the front page on HN.
Bingo card creator, Mibbit, Tarsnap, Duck Duck Go - these are startups by prominent Hacker News members who also have stories about their startups occasionally on the front page. Within this group, Bingo card creator has the most straightforward name, Mibbit hasn't had a lot of recent posts, Tarsnap has a lot of comments about it and Duck Duck Go has had a decent amount of recent posts on it.
Directed Edge, Bluefrog Gaming - both YC startups, i.e. associated with the program that runs HN. Bluefrog is an older one and Directed edge is newer.
Mixergy - Mixergy has been posted a lot lately. This seemed to definitely make a difference because its name isn't that straightforward.
Newscred - they just had a top story like the day before I posted this. That didn't seem to make that much of an impact in and of itself, sort of like Revizr but before an exponential decay.

OK, tl;dr :)

Just a few posts, even popular ones (Newscred/Revizr), did not create brand awareness.
Recent saturation (Mixergy) can work.
Persistent mentioning and community participation definitely works.
Having a very straightforward name (Bingo Card Creator) is helpful.
Being associated with the core of the community (in this case being a YC startup) contributes to brand awareness.

Steve Welch on Getting Traction

2010-03-09T16:07:45+00:00

Steve Welch is the author of We Are All Born Entrepreneurs, a partner at Dreamit Ventures, and the founder of Mitos, a biotech company that he sold to Parker Hannifin in 2007. Steve talks about the skills required for entrepreneurs to get traction. He also explains how his company got traction through cold calls, creativity at conferences and product development.

This interview is ~30min. If you just want the audio, use the mp3 version. You can also get the video on your iPod/iPhone via iTunes.

For more interviews, visit the Traction Book site.

Garry Tan on Getting Traction

2010-03-09T16:07:39+00:00

Garry Tan is a co-founder at posterous, "the dead simple place to post everything." Posterous was part of Y Combinator in the summer of 2008, and immediately got traction after being launched on Techcrunch. Garry explains how product development, idea generation, YC, previous experience and execution contributed to their success. He also gives advice on press and customer support.

This interview is ~40min. If you just want the audio, use the mp3 version. You can also get the video on your iPod/iPhone via iTunes.

For more interviews, visit the Traction Book site.

Justin Kan on Getting Traction

2010-03-09T15:34:34+00:00

Justin Kan is a founder of Justin.tv, the place to watch and record live video. Justin.tv started out as a reality show, and before that the founders had a YC-backed calendar startup (Kiko). Justin explains how they made two major pivots and translated initial press about the show into the current business. Justin also talks about scaling and idea generation.

This interview is ~40min. If you just want the audio, use the mp3 version. You can also get the video on your iPod/iPhone via iTunes.

For more interviews, visit the Traction Book site.

Angel investing portfolio scenario planner spreadsheet

2010-03-08T14:17:00+00:00

Several friends have told me angel investing is not a good way to make money. If you can do the YC/Ron Conway strategy that is one thing, and if you just want to give back that's another, but doing it at my level is a waste of money.

I do want to give back, but I also want to make money with my angel investing. So I've been thinking a lot about strategies to employ to fulfill both goals. To that end, I've been creating spreadsheets that I'd like to share with you.

First, check out the Angel investing portfolio scenario planner (Google doc spreadsheet). To get an editable copy, select 'Make a copy...' from the File menu (or Ctrl+Shift+S).

This spreadsheet shows you the internal rate of return (IRR) of a fictional set of 10 investments of $25K. Really the amount per investment doesn't matter.

The investments have 5 year time horizons, i.e. the payout happens in year 5 (row 15). And each investment outcome can fall into 5 buckets: lose everything, return money, medium, medium high and high. The payouts of these outcomes are in column B, and the % breakdown (how many investments are in each bucket) are in column C.

If you play around with column C you can allocate different amounts of investments to each bucket and see the effect on IRR (G15). If you want you can also mess with column B to change the payouts of the buckets.

The following are some of my takeaways. I'd love to know yours.

My ambitious goal is for a 30% IRR. The default scenario is one way to get that, which is like the 1/3, 1/3, 1/3 a lot of good investors report. In this case, it's 40% lose everything, 30% return money, 10% medium, 10% medium-high and 10% high.
The return money bucket really doesn't influence overall IRR that much. If you change the default to 70% lose everything, i.e. take all the return money % and move it to lose everything, it only changes the IRR by about 2%. It certainly matters psychologically and it may free up more money to invest, but in this static scenario it doesn't really move the needle.
If you change the outcome of the high bucket (B11) much higher, you can see what it is like to invest in the next Google. You can also see that if it is just one of your investments that's fine, i.e. the oft mentioned 1 in 10 home-run strategy.
If you want 30% IRR, you really need to get a high outcome in there. This leads me to again wonder whether I should only consider events where I can see a realistic path to that high exit going on what is put in front of me.
The time horizon really does matter a lot. I added rows 16 & 17 to show the difference between a 5 year time horizon vs a 4 and 3 year one. VC-backed companies have significantly later exits on average. These scenarios make me wonder if I should really be looking at companies (at least in part) that could make it without VC.