I was initially skeptical about starting my own blog. I did not really see the point – who would read it and care what I had to say? I’ve actually found it to be a pretty interesting outlet for crystalizing my viewpoints on subject matter that is interesting or topical to me (and probably many MBA students in my position). I feel it’ll pay off at some point in a way that I would not expect – and for now i’m just enjoying expressing my thoughts.
I’m taking a class this semester with Misiek Piskorski called ‘Competing with Social Networks (CSN)’ and it’s got me to think about my online ‘brand’. I think that a blog is simply another outlet to help re-enforce this brand together with your Linkedin, facebook, twitter, Digg etc profiles – all content that you can control about yourself. A blog can also serve as a way to meet new people who are interested in your thoughts / content and also deepen relationships you have with your current network. I think it would be awesome to have a case on blogging in our CSN course…
Fred Wilson posted a few weeks ago about a blog being a very important part of your online brand and that Union Square Ventures have hired their junior investment staff on the basis of their blogs. Is a blog really more important or useful as a hiring tool than a resume? I see a resume as a collection of brands which leads to a yes/no decision on meeting the candidate. A blog is a much more powerful way of understanding how someone thinks. Resume’s and blogs serve different purposes but I can definitely see the value from a recruiting perspective of having your own blog.
I’ve also been kind of obsessing about the analytics for the site – there are a bunch of free sources that give you loads of information – I use Google Analytics and Sitemeter I’ve been tracking are the details of people who come to the site – Location, Entry Pages, Source of Click. I generally post new blog entries on twitter, facebook and Google Buzz. Facebook seems to get me the most clicks, followed by twitter and then Buzz.
I’ve had old friends reach out to me about businesses they are starting or working on, and I’ve picked up some followers on twitter who are not in my immediate network. It’s been really cool to see the effect of my blog on these old, ill maintained relationships and also in making new relationships and I am looking forward to seeing how blogging will continue to enrich my personal and professional life.
I believe that online businesses have a key edge over offline businesses – they are able to easily gather data on customers, the purchase funnel and conduct iterative A/B testing. Harnessing this data and using it to drive decisions for customer acquisition, product development and generally having excellent management information (MI) is critical to executing a successful internet business.
There are three things that I want to touch on in this post:
Using Metrics to raise financing: While I was working in VC last summer, I encountered many entrepreneurs and it was interesting to see how they all thought about and ran their businesses. It was significantly more impressive and informative when the entrepreneurs understood the right metrics for their business. It allowed them to educate us on the important variables and what the implications were for their business and it also made it easier to compare the business against other models that we were familiar with. I think that it shows professionalism and credibility to be on top of this information and it was definitely something we used to screen entrepreneurs.
Segmenting customer base – yield optimal unit economics: Once the product has been launched and the customer base starts to expand I think it’s really important to start to segment the customer base and understand the motivations and unit economics of each segment. I think you should start by understanding what attributes that you can use to segment customers – demographic information, source of click, etc and then measure these attributes against engagement metrics, revenue per user, social metrics etc. This will allow you to identify different user groups, understand what motivates them (potentially through qualitative studies) and plot their evolution over time. This data would be extremely useful to drive product changes as well as acquire specific types of customers.
For example: I was recently talking to Pasha Sadri at Polyvore (a social fashion site where people create sets or outfits which are shared with the community) and a handful of talented “creators” drive 80% of the traffic to the site (approx. 6M monthly users). If they were able to identify patterns about where these creators come from / demographic it would be easier to acquire more creators and they would drive significantly more traffic to the site.
Product changes – A/B testing: This is a pretty heavily blogged about topic but I think you should use data and metrics to drive and measure incremental product changes. It’s especially efficient when you have a suite of products with similar features and you can leverage learnings from one product change and apply it to the family of products. Zynga are especially good at A/B testing and they have learnt best practice in monetisation/virality and roll out their learnings to new and existing social games very effectively.
Continuing on from my last post.. an MBA looking for a start up opportunity..
I think it’s important when you approach early stage start-ups and Venture Capitalists to clearly articulate what value you could bring (particularly for small ventures) but try and retain humility. You want to make it an easy decision for them to say yes to having a conversation with you.
There seems to be some negative feeling (arrogance and entitlement) associated with HBS MBAs in the start up community in particular and it’s our collective responsibility to try and quel that sentiment. My proposed approach is to be totally honest about your expectations and motivations for wanting to join the start-up and be flexible on compensation, equity and your job title. I think it’s really important to emphasize (and actually believe) that you are motivated by the same things as your potential colleagues and being honest and flexible upfront is the way to understand your compatibility as quickly as possible.
In general, I try and think about things from the eyes of the person receiving your message….
An important part of a Venture Capitalist’s job is to help recruit talent for his/her portfolio companies. I think you should make it as easy as possible for them to forward your application over to their CEOs. These guys are often busy and do a lot of work from their mobile devices – if your story is compelling and your credentials look good, I don’t see why they would not send your message to their portfolio companies.
A couple of guidelines that I use (in chronological order):
- Introduce yourself clearly and highlight your current situation (when you graduate) in the first line
- State which particular companies in their portfolio you are interested in
- Articulate what you would like to do/what skills you bring based on some sort of expertise
- Identify why these skills/expertise would be important for the portfolio company
- Show that although you have a value proposition you are willing to be flexible
- Ask to speak with the VC – they will most often not have time but are awesome people to get advice from
I think the same principles apply to when you are approaching a venture directly, but I try and talk a little bit more about why I like the product/company. Founders/CEOs are pretty emotionally attached to their products and it’s always nice for them to receive positive feedback from their users.
I am of the opinion that no conversation with a smart, successful person in a field that you are interested is a wasted conversation and each one will help you understand a little more about what you want and perhaps open up new opportunities – you never know!!
I’ve had reasonable but not exceptional success with this approach so would love to get other peoples’ thoughts – would be good to share the collective wisdom.
Like many MBAs out there, I’m looking to work for a start up when I graduate in June – a recent survey showed that appox 15% of our 2010 HBS class feels the same. I really like new/innovative technology and the internet and so I’ve narrowed my search to that area with a focus on the Bay Area.
I wanted to share my approach to finding start-ups with the rest of you. In my opinion, it’s really similar to being a Venture Capitalist for yourself with a couple of adjustments depending on your goals and personal risk tolerance.
If you don’t have a background in technology, it probably makes sense to work for a bigger start up (with a solid brand) to give yourself a bit more legitimacy in the market. I think there are loads of solid opportunities out there and I’m also looking at these companies. Some examples of the size of companies I’m taking about are Gilt, Linkedin, Zynga and Facebook. These guys are pretty well-established but still pre-exit and are low risk, in my opinion, but with great people and learning opportunities.
My general approach for finding smaller start-ups is something Ben Holmes
(Partner at Index Ventures who sat on the Playfish Board) taught me this summer and he writes about it on his blog.
- Market – Is the market big enough ($1Bn+) and can you see this venture being a leading player (with 10%+ mkt share) in the next 3-5 years?
- Technology – has the company got a differentiated product/technology?
- Team – has the company got an exceptional and complementary team?
- Traction – has the company got positive user and/or revenue traction for their product?
Ben’s philosophy, and something that I’ve tried to apply when thinking about ventures, is to find companies which are exceptional (A++) in one or more category, not companies that are a ‘B+’ in every category.
I keep a prioritized list of these companies and try and find ways that I could be connected to the management team through my network. If there is no connection, then I will often email the VC on the board or the management team directly.
There are a couple of things that I think are also important when making your choices:
- ‘Go where you want to live’ Joe Lassiter told me that in a meeting I had with him last semester – it’s important to start building a network at a local level
- Understand what the advantages and disadvantages of joining a small vs. bigger company:
- Small company – IF you build a great product and company from a small scale and have a successful exit I think you build a lot of credibility and it’ll be easier to be a co-founder in your next venture
- Bigger company – you get the advantage of good branding and learning a specific set of skills from people who know what they are doing
- Try and be as flexible as possible on your salary, equity, and job title if it’s a company and product that you are really passionate about – I figure all that stuff will come if you do a really good job
I will write again in the next couple of days about how I think about approaching companies and VCs.
Thanks for reading!