Startup School and back

By Gregg O'Malley · California Event Startup Talk

I tend to find that the things you remember most are those which involve a certain element of disaster. I’m not trying to suggest for one second that a disaster is a prerequisite for having a good time but they sure stick in your memory. Therefore, given the immediacy of things going wrong on my 5000 mile trek to Startup School, I was hoping this symbolism was something refreshing rather than the gloom I was feeling.

There cannot be anyone anywhere in the world that has not experienced an “oh no” moment, however, I’d like to think that there are not too many at 36,000ft!

As I was going through the steps in my mind of the day ahead I realised that there was a problem with one of them, namely picking up the car, as I had conveniently failed to pack my driving licence. Some rapid cancelling of hotels and subsequent rebooking closer to public transport was hastily carried out on a layover at Philly. So by the time I reached San Francisco sleep was just about the only thing I could think about.

The next morning was the day of Startup School and I’d tasked myself with taking notes to see what, in my opinion, advice also applies to startups here in Scotland (although obviously many of the points will inevitably apply more broadly).

One reason often cited as to why The Bay Area has been so successful in producing startups is the culture. This was brought home before I even arrived at the auditorium. Sitting quietly having some breakfast at a cafe in Palo Alto I noticed that I just happened to be sitting directly next to Paul Graham. In Scotland there is no way you will ever be sitting in a random cafe where people are talking about startups, never mind sitting 5 feet away from one of the most well known investors and a founder of the most successful startup accelerator. I then happened to bump into one of the speakers (Joel Spolsky) on the way to the auditorium, both of us apparently lost, and had a little chat with him and his buddy – wonder if he ever did get that backstage spa treatment he was hoping speakers would be offered!!

To be honest, I could probably end this post here and it would be immediate as to why basing your startup outside The Valley is more likely to be a tougher route to success. However, given that the single most consistent message of Startup School was that startups are hard, well, what the hell. As Jessica Livingston (a partner in Y Combinator) emphasised: startups are hard, NOT IMPOSSIBLE.

As to be expected, a significant amount of the information being disseminated was based on obtaining investment in the form of VC or angel money. I’m not convinced how useful this info is to a startup in Scotland, given that big liquidity events in Scotland are rare (non-existent?), and therefore large investments of this type will be few and far between. That said, a quick summary would be: delay taking money for as long as you can (because then you’ll have more control over the terms), it’s not a deal until the money is in the bank, and investors only tend to be interested if other investors are interested (a chicken-and-egg problem).

So what can Scottish startups do then? To be honest, this is hard to say (and take), but work harder and be sure to be building something you believe in. Many of the founders did not see any kind of traction for over 6 months and even then it was slow. Patrick Collison of Stripe said that everything happens much much slower than you think it will. Weebly took 20 months before any real sign of traction – this was despite being featured on Newsweek, TechCrunch and Time. Weebly founder David Rusenko’s best piece of advice was that you can’t succeed at anything if you quit in 6-12 months, also reiterated by Ben Silbermann (Pinterest). Even apparent overnight successes like Facebook took over a year to get a million users.

Great, so work harder, as if you didn’t know that already, but what else? It was noted by Ben Silbermann that Pinterest’s lack of traction was only really addressed when they acknowledged that the problem wasn’t an engineering problem and instead a community problem. When they engaged their potential users by creating (and sponsoring) events the site took off. Tom Preston-Werner also provided a similar message with regards to Github. Interestingly, one of Facebook’s marketing tactics was targeting universities that already had a product similar to theirs, hence they knew there was a market, and gave these communities something that was much better than the existing solution. So, take time to think about the people that will use your product and invest in them. Above all else you need to focus on the data and listen to what these users are saying, i.e. measure everything.

Now, what about those thinking about about doing a startup? As Ben Silbermann’s wife said “just do it or stop talking about it”. The dependent variable was him, the only reason it wasn’t happening was because he wasn’t committing. It’s worth stressing again though that you have to make sure you are creating something you believe in. Mark Zuckerburg was creating Facebook because it’s something that he wanted to use. There is no doubt that it’s difficult and as Ben Horowitz said “there are two emotions euphoria and terror”.

One thing I recommend more than anything else about Startup School is to go just to get a feeling for the atmosphere and culture in Silicon Valley. It will not provide you with a sudden great revelation with regards to your product but talking with so many like-minded people is refreshing and motivating. Even my bumpy start could not take that away. It feels like you are part of something and this is what we really need over here more than anything. So don’t be put off by doubters as they will always doubt. If you’re going to do it then throw away the distractions and concentrate on building something great. As Ben Silbermann’s said “the future is unwritten“.

Videos from the Startup School 2012 speakers can be found on the Startup School website and you can comment on this post on HackerNews.

http://www.jamiemchale.co.uk Jamie McHale

Really excellent post – building http://seeu.at is taking far longer than I thought it would. Getting feedback, changing, and improving all take time. I guess it’s a matter of learning how to speed up this process – and having the confidence to go out there and take action.
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Max

Gregg, I really don’t think being in Scotland is as big of a disadvantage as you think.

Though you might not run into PG at the corner office, your costs are considerably lower, and your customers don’t give a shit where you live. It also might be a big advantage for hiring/retention to keep your team out of the bay area. You can always visit and take meetings.

I went to startup school, and one take away from it (and after talking with YC alumni, etc.) was the whole VC thing is getting tired. As PG says, they are looking for black swans, and if you aren’t one of them, you aren’t anything. Not one of Ben’s 15 $100M companies a year? Sorry, as they say, you won’t be successful. Why subject yourself to that?

Just keep your head down and make something people want. Good luck!

Gregg

Hey Max, thanks for the comment, I’m not saying it’s some major hurdle that can’t be overcome, in certain circumstances. In fact, my point is the opposite.

However, if you are working on an idea that requires large amounts of capital in some form or another, then there is a clear advantage of being based in The Valley for several reasons.

The first is that many investors and angels will not invest outside of SV and therefore the pool of money available to invest is much smaller, and therefore your locale becomes a disadvantage.

The second is that there are far more people interested in starting up (or have already created something big) in SV than there are in Scotland, and as such your network of mentors/enthusiasts tends to be much smaller. You can drift into a cafe in SV and chat to someone about what you are working on, and obtain invaluable feedback and technical advice. This almost certainly would not happen at a random cafe in, say, Glasgow. Social sites have alleviated this to an extent but nothing beats face-to-face and is bound to lead to at least some disadvantage.

There are many other little things like this that just add up when you start counting them. You can never hope to compete with SV but then again my point is we shouldn’t be trying to. Just because you’re at a disadvantage it doesn’t mean that something is impossible to do.

Max

I think there was a post/comment about this recently, but SV investors will absolutely invest outside of the SV area, so I don’t think that’s quite true.

The other things are nice to have, definitely, but I’d be wary of correlating those “nice haves” with “success.”

I guess I don’t consider being located out of the bay area a disadvantage. It’s just different. I’m still able to sell and make money from anywhere in the world, my customers couldn’t care less.

Ender St. John-Olcayto

The biggest impediment to any start-up in general is funding – but not VC funding. I’m talking about the sums needed to buy yourself beans, bread, and toilet roll. Given the constraints on VC money outside of the major centres (and the fact that a lot of start-ups don’t go to VC even if it is available), the lack of the above is what will determine whether you can continue with your idea or not. Ever wonder why so many tech start-ups are in their 20s? It’s because they live with their parents and / or are in tertiary education. These conditions may last until you are in your early 30s and you have a tolerant spouse / partner. This tolerance ***will*** wain as life throws stuff at you (which is not all bad.)

Also, I’m constraining the use of the word “tech”. If your “tech” requires joining and shaping of pieces of metal, plastic, and the use of various chemicals, then you are likely to require much money indeed, irrespective of what life’s stage you find yourself.

With regards to generating the “pole of attraction” effect, I’m getting the impression that Glasgow is taking off. Perhaps I’m just self-selecting and I read all the posts from the likes of E-Spark and Rookie Oven but there’s definitely more of a buzz since I came back to the city three nearly three years ago.

The other thing about the “tech” start-up community is perhaps not enough attention is paid to the “metal-bender” side of the start-up community. The buzz is led currently by the mobile / web people and those into the lean start-up movement (that’s not a criticism – my own start-up has been boot-strapped from the very beginning.) Perhaps more engagement with the metal-benders is required?