HackFwd Build 0.8 - Berlin December 2011
In this presentation, Om Malik says that he’s here to “bring the perspective that you get with grey hair.” He explains to the audience why startups are hard.
“We all think that startups are so cool, but there is a lot of work involved in them. [Having] seen at least 4 bubbles in my life, I feel privileged at least in that I can see patterns,” he explains, and he spends the first half of this talk demonstrating the differences between founding a startup today and founding a startup in 1999.
The greatest challenge to founding a startup in 1999 was the cost of entry. There were fewer hardware providers, and equipment, tools, and bandwidth were expensive compared to today. However, this at least meant that the number of competitors was limited. Furthermore, startups in 1999 had fewer choices: there was one platform, the internet, and a very small number of browsers. In addition, there were fewer customers: entrepreneurs in 1999 were essentially catering to the early adopters – people who had the same sorts of needs as they did.
Things are much more complicated now, ironically because it has become so easy to found a startup. “Social+cloud+open source = startup,” says Om, meaning that there are very low barriers to entry now. That means that in 2012, startups are easy to start but harder to keep going. The number of platforms has grown, the customer base has diversified, and, most challenging of all, the number of competitors in the market has exploded.
As a result, Om says, every single decision today’s startups make must be thought through very carefully. “Startups form their DNA early in their life,” he says, “you must be very careful how you spend that initial investment.” He gives the example of Instagram, which chose to concentrate on the iOS platform only, and as a result has benefited from lots of exposure in the Apple community. He mentions another (unnamed) company that is focusing on Windows Mobile and Blackberry because they want to focus solely on the enterprise market. Om suggests that startups exploit whatever local knowledge they have to choose an appropriate platform.
His second piece of advice is to be mindful of your company’s unique strengths. “Simple and elegant startups always win,” he says. “When you start a company have a goal for your product in mind: choose one thing to do and do it really well.” That’s the only way to stand out from the millions of apps on the market, he says.
His final piece of advice is to focus on emotion. “Every single product has to elicit some kind of an emotion and that emotion either can result in anger or happiness.” If your product makes someone smile or helps them to achieve their goal, they’re likely to love your product, he says. And if they love your product they’ll talk about it.
He finishes with advice on how to get the attention of the technical press. He shares his insights in detail but distils them down to this: “You’re not making an app to be written about, or to make money. You’re making an app to fix a problem your customer has and, typically, when you do that, you always win.”