The last lecture was rather short but interesting. The topic was “how to be a great founder”. In this class leadership was discussed among other things and persons which have changed the world in the past were taken as an example of great founders. The learning are first of all that there is nothing that can be done if the core is not right. In other words, no amount of tactics is going to make one a great founder if his core is not right. Most of the changes are made within and that’s why the core must be set right. The founder must be willing to go through struggle and adjust to hard situations. The challenge is to build something out of nothing and the struggle will always be a challenge for the founder. It’s the core that needs to be right. For example, the founder must be humble, that is the nature of the startup game as the best way to build anything is to build teams around you. Another example of must have core for founders is courage. The founder must have a lot of courage to make decision and go the hard way and deal with things in non-violence way.

Sam Altman – How to be a great founder
http://startupclass.samaltman.com/courses/lec13/
The perception of a founder is an image of a superwoman or superman but the reality is that the founder is someone who is dealing with a lot of different headaches. The founder is not someone who is born as genius; he actually has to go through a lot of hard times. One secret about great founders is that they seek the network that is likely to solve their problems.

The Founder also has to have the courage to be contrarian. When finding an argument to be contrarian the founder should find out what it is that he knows that the others don’t know and how smart persons actually disagree with his idea? The founder must be open, humble and always looking for feedback. So with the constant feedback, should the founder be flexible or persistent? The answer is both.

The Founder also has to have the courage to be contrarian. When finding an argument to be contrarian the founder should find out what it is that he knows that the others don’t know and how smart persons actually disagree with his idea? The founder must be open, humble and always looking for feedback. So with the constant feedback, should the founder be flexible or persistent? The answer is both.

Guest lecture – Paula Gould – How to get eyeballs on your genius idea!

Paula’s guest lecture was about PR and as it was about PR, the first thing she mentioned was the word ‘story’, “your story is your everything”. Public relations are a lot about communications and story telling. If you have an interesting story, people will want to hear about it, and/or read about it. Other crucial things when working with PR firms or working on PR your self are:
– To know your product, service and offerings.
– Know your market fit.
– Know your industry.

The thing that Paula mentioned here that caught my interest was about the market fit. People or companies tend to think that they are totally unique in the market and that they don’t have any special ‘market fit’. That’s most likely not true. She mentioned that she was working in the entertainment industry earlier in her career and often times the artist had much difficulties finding their market fit. The thing is that it is crucial to position yourself in the market, you must have an vision on how you want people to look at your brand.

People have a lot of choices in the competitive environment these days, so you better find a way to differentiate. As a entrepreneur you should ask yourself these questions:
– How is your service/product different?
– What is better?
– And maybe more important, what is not better?

The media is going to find out what is not better about your product so it is better if you know about before they do.

Shortly after Paula’s lecture I saw an interesting post on the Facebook group “íslenskir frumkvöðlar” (Icelandic entrepreneurs). There was one girl who posted this picture.

This picture is Mark Cuban’s 12 rules for startups. As you can see the rule number 11 is that you should never hire PR firm. Cuban’s argues that it is more personal for the customer to get the companies messages straight from the founders instead of some PR company communicating the messages.

I didn’t ask Paula about her thought on this matter as I saw this post afterwards. However, her answer to the question if you need a PR firm or not was; that it depends on various things, like:
– Do you stand out on your own?
– Do people know your story?
– Do you have media relationship (she found this crucial)?
– Do you have a product/market fit?
– Are you spending all of your time on development?
– Are you spending any time gaining market reach?
– Do you have someone on your team with PR experience?

So if you are in a startup but don’t afford PR firm, what is it you can do?
– Build it into your budget (funding, equity …), hire someone who is good in PR.
– Be resourceful (use what you have). Your friend and team are your PR. Follow journalist covering competitors and the industry. Follow influencers (even competitors). Engage in conversation and develop a network. Set aside time in calendar for pitching and attend events.

After all, PR is input into your startup pitch.

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Lecture from Bala

This lecture from Bala was great. I specially liked when he talked about things you should encourage in your startup and things you should avoid when talking to investors.

In the beginning of your startup journey, you should do things manually until it makes no sense or you have enough cash coming in that you can afford to automate. What you should really be doing is to engage with the users. This is the part of doing things that don’t scale. Avoid hiring people until you have a market fit and always make sure to engage with your users, although they might only be five.

Almost every startup example that we can use did something that did not scale in the beginning; Airbnb, Facebook, DoorDash, Buffer.

Raising money takes a lot of time and effort. This should not be the priority. The priority should be to create something great and valuable. When you raise money you are giving up equity. Typically when you don’t have a market fit you are giving too much equity. Investors want more of a company that don’t have a market fit, and is not making money, this should be rather obvious and simple. So two points to consider before you go and raise money:
1. You give too much of your company to investors.

2. It’s distracting what you really should be doing, which is building something great and getting to know your customers.

Whatever you do and whatever your choice is, don’t ever go to investor and say “I have this brilliant idea, please give me your money so I can make it happen.”

The Investor wants value and you have to delay the process as much as you can. One way of creating value is to build a traction machine. The minute you got traction then the investors will be pounding on your door trying to invest. The dream situation is to get the investors to knock on your door instead of you knocking on theirs. If your traction machine doesn’t generate money for the startup immediately, it will at least generate customer base. Than it’s up to the founders to figure out the business model of their startup and start generating some revenue. When the startup start generating revenue, the crucial thing, and specially for Scandinavian entrepreneurs (because they tend to do this), is to not get to happy with the startup’s success. The work has just begun.

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Startup Iceland 2015 – Charmaine Li – How should a Startup engage with the Press and Media

I watched the video of Charmaine Li on Startup Iceland the other day, made some notes and now decided to post them to this blog. Her talk was about PR and that’s why these notes are good fit to my post.

First things first. Why do you want the press?
The press can be good for example…
– User/customer acquisition
– Brand awareness
– Attract funding
– Attract talent/key hires

Think about this before you approach any journalist at all. This can help your strategy and helping you achieving your goals.

What is in journalist mind…
– They get a lot of communications (input) from variety of channels.
– They are looking for needle in a haystack.
– They are looking to reach the readers, audience, not themselves.

How do you become the needle in the haystack?
– No right way.

Don’t assume that because your product exists, it’s newsworthy.
– Your blood and sweat are in this product. It’s your baby. But this point is similar like posting baby photo on Facebook.

Think about why your product/service matter. Put your product in context. What makes your product different from other competitors.
This brings the human touch to it.
When you are telling your story it’s important to have it clear and short. Simple. They don’t want to read your startup novel/journey.

Don’t mass-send generic pitches. Innovative, game-changing (this is out). What you want to do is stand out somehow. Keep it simple. Try to not have it to formal.

Get to know the publication you are getting in to, what they stand for and what audience they are trying to reach to. To they focus on certain market or industry.

Do: Build up relationship and be personal with the press.
Start up building relationship before you build up press coverage.

If you met the writer before, mention that in your e-mail. Make an extra effort. It can make a difference.

In last class we had a guest lecture. The guest was Gunnar Hólmsteinn, the COO of QuizUp and founder (and CEO) of CLARA.

This lecture was interesting as Gunnar was trying to show to us how the startup culture is, what is important for startups and what you should do when you are starting a startup. It is very clear that Gunnar has good knowledge about the object.

Gunnar joined QuizUp 2 years ago and is now their COO, interestingly his career started in marketing (Coca-Cola). His first object was marketing-related as he began to talk about QuizUp and how to describe what QuizUp is.

• So what is QuizUP?

Gunnar began to talk about three things that you should have in your speech when describing your startup, those things are:
* Features
* Numbers
* Touchy-feely (yes, touchy-feely)

The Features part is the obvious one, and the one that probably everyone try to cover when they are describing or even selling their startup idea. This part covers what your startup is all about and how it works.

The next part is for the investors, that’s the number parts. If you want investors to be hot for your product, you better have this part pretty clear. For example: QuizUp have 75 million users that have played 5 billion matches.

The third part is the Touchy-feely part. This is the part where you personalize your product/service. Gunnar talked about how this part is becoming more and more important. This part is about stories and emotional parts which you can’t describe with your numbers or with your features. Example: QuizUp is delighted about the letter that they got from the married couple the other day. The letter is about how thankful they are to QuizUp for bringing them together.

Gunnar told us that it is very important to be very good at every single one of those factors. However, His emphasis was on the last factor in our lecture and how you can build up the touchy-feely part in your company. The touchy-feely part is connected to the companies mission and vision.

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When Gunnar started at QuizUp the company was going through hyper growth and needed help with scaling. He sat down with every employee and asked three questions:
– What is going well?
– What is not going well?
– What is not talked about?

These questions were good both for the company and the employees, and the results were actually quite interesting for bother parties.
1. Fun, talent, inclusion, growth -> This was the bright side.
2. Objectives, information flow, areas of responsibility -> This was the dark side.
3. Retention, planning, vision and culture -> This was not being talked about.

From these answers Gunnar began to work with the staff and working on things within the company, and this is how people in QuizUp operate:
“ Every action we take is completely in sync with our vision and we question things that aren’t. We’re smart, rational, and we speak our mind. Taking risks is in our DNA and we’re not afraid to play big.”

They wait for nothing and get things done.
In the end Gunnar basically told us that if they stopped doing this their audience would leave.

I really like this. The employees have a clear structure in their workplace, what they stand for and how they make their decisions. On the other hand, having the employees so highly involved with the company operations gives them a lot of freedom that can be misused. The need for trust in QuizUp is high, but I like it, and I think this is the kind of environment that everyone wants to work in.

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The next object Gunnar talked about was model called The Five Dysfunctions of a Team. I haven’t read the book after Patrick Lencioni but that book will probably get close to the top on my “to read” list after the final exams as Gunnar made some excellent points in his lecture.
https://www.youtube.com/watch?v=509V7Z9OUQA

It’s a crucial to have some structure when working and as a leader this model can be your structure in your workplace. The five dysfunctions of teamwork are:
– Absence of trust
– Fear of conflict
– Lack of commitment
– Avoidance of accountability
– Inattention to results

The structure of Gunnar’s lecture was that he talked for 45 minutes and than he did a short break in his lecture. In the break he would split up the class and give the groups an object to talk about. When he did this he was probably trying to get the class to share things and be more open for discussion.

The first object he gave us was to describe a beautiful morning. That was an easy and fun task. As the lecture went on the task would get more demanding and the final task was to talk about the last time you cried in front of another person. In my opinion the final task did not work very well. The reason for that is probably because Gunnar didn’t set an example himself before asking us to show vulnerability. As a leader the most important action is to demonstrate genuine vulnerability first, so that your team will take the same risk.

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In general I really liked this guest lecture and Gunnar seems to be intelligent guy. QuizUp are doing some very interesting things these days and it was a privilege to be able to look inside their culture. Gunnar was very open about everything and it was always possible to stop him at any time and ask him questions. He even gave the class information about current problems that QuizUp are trying to solve (basically gave the class a huge opportunity). I have nothing more to add on, I learned a lot from listening to him and would most likely attend an event if he were a spokesperson.

Haukur and Bungalo

In the 7^th lecture Haukur Guðjónsson came and visit us. Haukur is an entrepreneur and the founder of Bungalo. Before Bungalo he had already founded four companies; Hressingar, EVO, hlutabref.is and think big. Today he is focusing on Bungalo which has offices in 3 countries; Iceland, USA and Canada.

Today’s topic was how to build a product that users love and doing things that don’t scale. In Iceland we have a lot of limitations so Haukur wanted to talk about how to build a products that users love with no money and how to start a company in Iceland and scale it out.

If you’re starting a company in Iceland you must believe that at some point your can get it International. The problem with Icelanders are that they tend not to do this. They would rather copy something that someone else is doing abroad and do it in Iceland. So this was a critical point in Haukur’s lecture, doing things that don’t scale while thinking internationally.

Haukur started Bungalo 5 years ago. He wanted to rent a cottage in Iceland but it was very hard for him. So he thought of starting a business that had a solution to this problem (Bungalo). He said himself that the sound of a good idea is usually really bad as the good idea is usually based on solving some really annoying problem that no one wants to think of.

At this time, Iceland had just gone through financial crash and this was a very bad time for Haukur personally. He often find people finding excuses for not making their idea a reality. The financial crash had left Haukur on the edge of bankruptcy, he was in very bad shape and almost had a nervous breakdown.

In the beginning Bungalo has no funding. Haukur spoke about many ways to be creative when funding your startup, and in secondary markets (like Iceland) this is necessary. For example, they drew on paper how their website should look like and how it should work so it would be clear to the programmer what should be done (to save cost). When it came to hiring the programmer, they didn’t have the budget and no programmer was willing to work for them for free. That didn’t stop them, Haukur simply bought some books and thought himself to program. After three months (in the end of 2010) Bungalo launched it’s website. The website was not great work but at least they launched and were able to get some feedback. As a founder you must have in mind that time is very valuable, so don’t spend to much time building your product and website (and so on) if you have not gotten any feedback. Haukur stated that usually the problems with founders is that they might know how to build a product but they often times have problem selling it. And by the way, the best feedback you can get is money. If someone is willing to pay for your product, you have a pretty good feedback.

The more things you do yourself, the better it is for the company. Every dollar you spend on your company is going to effect your company.

The first two years of running the company they had little or no revenue. This is part of the process. In fact, there was nothing or little that told them that this would actually work. The first two years they worked from Café so they wouldn’t have to spend money on office space. As for marketing those first two years they used Facebook and didn’t spend a dollar on advertising, it has changed now with Facebook and probably you could not so easily get away with this. They always tried to find creative ways to solve money problems and saved costs as much as they could. This is the part where you have to stay strong mentally. At this stage you are usually the only one who believes that your product/idea can go all the way, the others will believe that you will fail. You must always be hustling and finding ways to get some income (Haukur worked side project for his company). You must always be hustling.

Last year Bungalo expended their business to Canada. Usually when businesses from Iceland expand they expand to the Nordics. However when you think about it the Nordics are really small, with different languages and a hard market to get into. When Haukur was asked how they managed to do that his answer were that they basically went to Canada and started knocking on doors, making sales. Expanding into new markets is kind of like starting all over again. In Canada they had to learn everything from scratch. Haukur had been in Canada for about 5 to 6 months when he got his first investors there (got no funding in Iceland). As Haukur said in the end, Iceland is a great place to start your company but it’s very limited and you have to have that in mind from day 1.

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Learnings

* No one believed in his idea, he was alone for a very long time in a huge, huge struggle with his startup. That’s probably because he had a very good idea. When he started his business there was no AirBnb. It’s fair to say that Bungalo’s concept is very similar to AirBnb concept. Airbnb expected revenue this year is $850.000.000 (http://www.wsj.com/articles/the-secret-math-of-airbnbs-24-billion-valuation-1434568517).
It’s fair to say that Haukur was right and the others were wrong. It’s hard to have a vision for the future, but if you do, this story motivates you to keep on going no matter what. If there is something you can’t stop thinking about and really want to do, the others shouldn’t be in your way. Just do it.
* Another point is that this story is a very good example of how to start a startup in Iceland, doing things that don’t scale while thinking internationally. Iceland is a very small country with the population around 300.000. However the networking here is like nowhere else. You can basically get in contact with anyone you want to get in contact with in Iceland (even the president). This fact is true if you really think about it. This is a very good argument for starting your startup in Iceland and I didn’t realize it before I took this class although I have lived in Iceland all my life. The best kept secret in town, as Bala describes it, is that you can get in contact with the people you need/want to get in contact with really fast and you can start talking to your future customers (the customers you want to target) really fast. The networking affect in Iceland are unbelievable and the opportunities are all over the place. For example, everyone in Iceland are on Facebook, everyone.
* If the argument for not starting a startup in Iceland is because of how small the Icelandic market is, than the argument is very weak. From this lecture I learned that sometimes you have to be willing to do things that don’t scale. Quoting Peter Thiel (author of Zero to One) – “Every startup should start in a small market.”

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Notes from lecture:
The best way to start a monopoly is to start in a very small market.
Iceland is not a good test market is you think Iceland is like any other market. If you understand Iceland can validate that you idea has any value or not, than Iceland is a great test market.

The Iceland is in my opinion the best place to start a startup. The entire country is on Facebook, you have a bread of a country on one Network. You can buy one ad and hit everyone in Iceland.
Before you have a product you can spend a money and validate if you have a value or not, that’s a huge value.

In Iceland everybody knows everybody. You can get to the president in Iceland through one person. That’s hugely valuable. Because you can find people that you are searching for. You can for example get to your potential customer very quickly. This is the best kept secret in town.
This is what startup founders in Iceland always miss. Have you met the right person yet? If not, you are wasting time. This is hugely valuable.

I think Iceland is that market, city and a county. You can knock on every door literaly and meet everybody.

Iceland is perfect for doing something that does not scale and building something that users love.

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Building great products
Your product is the best way to show your personality. Your product has to connect with your customers and for that to happen you have to sweat the details so your customers don’t have to. Try to understand what problem customers are really trying to solve and see it from their point of view. You have to feel it, feel those things, show empathy. Empathize with the users and show your true personality.

Like Paul Grahams (his blogpost tase) friends wanted his students not only to be good technicians, but also to be able to use their technical knowledge to design beautiful things.

There are some people who restrict change, until the whole world changes and they join it. That’s why you got to have some bravery and believe in your project and design.

Doing things that don’t scale. Every successful startup recruit their first users manually. Make sure that they are happy. Build relationships with your early users. Startups can afford to be humble.

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Paul Graham blog post taste

“Saying that taste is just personal preference is a good way to prevent disputes. The trouble is, it’s not true. You feel this when you start to design things.”

“Whatever job people do, they naturally want to do better. Football players like to win games. CEOs like to increase earnings. It’s a matter of pride, and a real pleasure, to get better at your job. But if your job is to design things, and there is no such thing as beauty, then there is no way to get better at your job. If taste is just personal preference, then everyone’s is already perfect: you like whatever you like, and that’s it.”

“As in any job, as you continue to design things, you’ll get better at it. Your tastes will change. And, like anyone who gets better at their job, you’ll know you’re getting better. If so, your old tastes were not merely different, but worse. Poof goes the axiom that taste can’t be wrong.”

Good design is…

Good design is simple.
Good design is timeless.
Good design solves the right problem.
Good design is suggestive (everyone makes up their own story about Mona Lisa, Lego).
Good design is often slightly funny (this might not always be true).
Good design is hard.
Good design looks easy.
– In science and engineering, some of the greatest discoveries seem so simple that you say to yourself, I could have thought of that. The discoverer is entitled to reply, why didn’t you?
Good design uses symmetry.
Good design resembles nature.
Good design is redesign.
Good design can copy.
Good design is often strange.
Good design happens in chunks.
Good design is often daring.

Growth and attraction

Good lesson from the course and mentioned before in my blog posts, when starting a startup you should not focus on competition. You should be aware of what your competition is doing, but your competition should not be the base of what you are doing. You need to think about your customer and how to create ten times the value. The thing is that when you become successful, people will start copying what you are doing, and that is when you need to get paranoid and keep on innovating. The competitive advantage you gain from value creation and excellent product development will buy you some time and money to innovate.

We had a great guest lecture from Xiaochen the co-founder of Guide to Iceland, where she discussed the growth of a startup. The lecture was not only practical but also motivating as Guide to Iceland have recently been through the process, from startup to a successful business.

She began her lecture by talking about consumers. Travelers today don’t want to be called tourist, they want to be called travelers and get local. This was (or is) their concept. When starting out, they were thinking about travelers not about the business. Because when you are starting a business you need to think in value, when you have value then people will come to you (pull strategy). Networking effects come from true value. She found it critical to think about the bigger community. Everyone in Iceland want to take a piece of the tourist industry in Iceland. Last year around 1.500.000 tourist came to Iceland, where only 300.000 people live. If you don’t get networking effect in the tourist industry you will have a difficulty. By putting up a community, solving problems, adding value, you will increase your changes of getting networking effect. One other strong point in value creation is that if you create value for your customers, they will be willing to pay the margin.

One part of growing is hiring new team members and spreading the responsibility. When looking for team members she found it important to look for people that will make through the hard work emotionally. The lack of sleep alone will make you very edgy. It is important for the startup to hire the right employees and it is import for the employees that their co-workers find out what motivates them, what makes them happy and what their mission is (motivation and appreciation). You should definitely not hire cheap, it is very hard to deal with frustration of employees and if you don’t have the money you should think about other things that the employees might be interested in.

In my past blogs I have been writing a lot about lecture where the importance of building great products and problem solving have been given some thought. Now I think it’s time to quote the Startup Iceland Blog, traction trumps everything.
“Getting to traction is not a function of money, although in some cases it could be. Time and time again I have found startup founders not focusing on this. Building a great product is important and solving a big problem is also important, but all that would be moot if you are not able to show growth.”

Makes sense doesn’t it?

19 channels to reach to your customers:

1. Viral Marketing
2. Content Marketing
3. Community Building
4. Engineering as Marketing
5. Public Relations(PR)
6. Business Development
7. Search Engine Marketing (SEM)
8. Search Engine Optimization (SEO)
9. Social and Display ads
10. Offline ads
11. Targeting Blogs
12. Email Marketing
13. Affiliate Programs
14. Unconventional PR
15. Speaking Engagements
16. Offline Events
17. Trade Shows
18. Existing Platforms
19. Sales

http://startupiceland.com/2015/02/03/traction-trumps-everything/

Building great products

“Design is not what it looks like and feels like. Design is how it works.”
– Steve Jobs

Every company must have something to offer, some service or product that the customer is willing to pay for. If you build something that customer’s really like, your startup will have something valuable to offer to customers. However, let’s not confuse product vs. business model, those two things are totally different. There are several methodologies to discover a repeatable business model but very few methodologies to build products. The Lean Startup is one of my favourite.

The lean startup starts with an idea, than you start building your product. When building your product you will use tests (unit tests, usability tests), from those tests you will get results and than the next step would be to analyze the data you will get. From your analysis you will get feedback, gain learning and understanding and take that into account when you start developing your product (constant innovation). The Lean Startup is a good model to use in today’s environment where there is need for constant innovation. Today’s customers are very demanding and companies must constantly be innovating and finding strategic ways to deliver value to their customers. If you want to be the leader is space, you need to rethink business from scratch. Apple did not take Nokia phone and ask them selves how do we make it better. They started from scratch.

Value is a cornerstone for all business transactions. In order to get part of customer’s wallet, you must offer them some kind of value in return. Value Proposition Canvas is a useful tool for company to use when they are developing a new product or in the middle of a value creation for the customers. The tool is a fantastic to use when looking at the User-Product relationship and that’s why I prefer to have it in mind when blogging about building a great products. The Value Proposition Canvas is a part of The Business Model Canvas invented by Alexander Osterwalder. The Youtube video below (link below) explains The Business Model Canvas in 2 minutes. I highly recommend readers to dig deeper and really go through the canvas with their ideas.
https://www.youtube.com/watch?v=QoAOzMTLP5s

Value Proposition Canvas –The User-Product relationship.
Let’s first take a look at the customer section. Analyze the customer’s needs, wants and fears. When developing a brand new product, a product that is ten times better than the substitutes product, it’s useful for developers to use the Canvas for analysis. The creator can use the canvas to make analysis of the current substitute product (could be his own product), or the product that the customer currently buys. When finished with his analysis the creator should have the benefit, features and experience of the current product as well as recognizing the current customer wants, fears, and needs (also hidden needs). If the creator is still sure after the analysis that he has a product that is ten times better than the substitutes product, he has most likely built a great product that is going to give him competitive advantage, or his analysis are totally wrong.

“It is very easy to be different, but it is very difficult to be better” – Jonathan Ive

Design Sprints

Design Sprint is a 5-day process where critical business questions are answered. They questions are answered through design, prototyping, and testing ideas with customers. Teams get great data from day 5 (test, feedback, success/failure) which they can use in their advantage (mentioned earlier in the blog). Often times the failures provide the greatest return on investment and it is good for entrepreneurs to do it this way, because they learn it the hard way without the “hard way”, or in other words they don’t have to spend a lot of time or money in order to get those feedback.

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Monday – On the first day the team needs to know how to work together. So they divide their parts so each member can do what he does best.

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Tuesday – On Tuesday team members will work individually and sketch up their ideas. After sketching, the team will use structured critique and vote for the best ideas.

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Wednesday – Now the team has selected a problem or idea they want to work on. Now the team will draw storyboard to prepare for Thursday and select research participants to prepare for Friday’s interviews.

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Thursday – Now it’s time for the team to get productive and build a realistic-looking prototype in just eight hours.

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Friday – The team will show their prototype to real customers in 1-on-1 interviews.

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Build great products and make your customer your ambassadors.

Competition

When building a startup focusing on competition is the worst thing you can do.
You should not focus on competition.
You should be aware of what your competition is doing, but your competition should not be the base of what you are doing.
Economics tells us that competition is a good thing and we should encourage competition. Economic history is rather short so we should be careful of accepting all economic theories. Because we are constantly told that competition is a good thing, we start to believe it. The perception is that all companies are similar and are in competition with their competitors, but the reality is that differences are deep. Some companies are dealing with a lot of competition while others are in a monopoly.

So which is better for startups?

“Creative monopoly means new products that benefit everybody and sustainable profits for the creator. Competition means no profit for anybody, no meaningful differentiation, and a struggle for survival.”
– Peter Thiel

Startups should aim for monopoly. Monopoly gives them competitive edge. It gives them differentiation, they are able to show the consumer true value and sell their products on higher margin. Their high margin (money) will give them time, which is a huge advantage for the company. They can use the money and the time to innovate and make their products better, rethink their business model or strategy, or even start a new startup. All this comes for creating a true value for the consumer and by doing that the startup doesn’t need to worry so much about competition and wasting their energy on thinking about what other companies are up to.

For further understanding on this object, I highly recommend watching this short video clip of Peter Thiel talking about monopoly or reading the chapter: The Ideology of Competition in his book Zero to One.
https://www.youtube.com/watch?v=zI7hbEuopLI

Visit to QuizUp

The class visited the startup QuizUp in Laugarvegur and had a listen to the QuizUp team talking about their learnings in making QuizUp for Android. This was their schedule:
17:30 – Welcome to QuizUp
18:00 – QuizUp for Android Saga
18:15 – Cleaner Code
18:30 – RxJava in Android land
18:45 – Couch to 65k
19:00 – Q&A

I enjoyed the visit although I did not understand what the programmers were talking about. The visit gave me an insight into the Programmers culture, how they like to work, what it is that they are really doing, how they think and what they like to do at work. For example I learned that if you give programmers some free time to hold a “hackathon” they will be very pleased. My major is Marketing and for obvious reasons this is not taught in marketing. However it is important to know. In the near future I will probably be work with Programmers and it is important for me to be able to understand them and work with them. I believe that after our visit to QuizUp my communications with the programmers will get better then it has been in the past.

Idea, product, team and execution. Those are the four things that every startup must have. As taught in second lecture, when you start something the first and the most crucial decision you make is whom to start it with. Furthermore founders should share a prehistory before they start a company together, otherwise they are just rolling dice. In the book Zero to One, Peter Thiel (author and co-founder of PayPal) writes that the reason why the early PayPal team worked well together was because they were all the same kind of nerds. They all loved science fiction and were obsessed with creating a digital currency that would be controlled by individuals instead of governments. Since then the team has become known in Silicon Valley as the “PayPal Mafia” for the reason that they have gone on to help each other start and invest in successful tech companies.

Startups needs structure to decrease the likeness of team members fighting for power. Peter Thiel lines up three concepts to anticipate likely source of misalignments.
– Ownership: who legally owns a company´s equity?
– Possession: who actually runs the company on a day-to-day basis?
– Control: who formally governs the company´s affairs?

Communication is the key, only on paper do the divisions work smoothly and there are no possible conflicts. This is not the reality and that´s why it´s crucial for startups to have structure and for team members to know each other well before they start the startup.

Link to the second lecture -> https://startupiceland.files.wordpress.com/2015/08/hsst-lecture-2.pdf.

Unicorn is a business that is valued more than $1b dollars. This was one of the first lesson taught in How to Start a startup course in RU (Reykjavik University). When people think of startups, I doubt that many think of $1b dollar businesses, and maybe that´s understandable, for the known fact that most of startups fail to succeed. However, I think it’s critical that entrepreneurs think in big terms. It don’t necessarily mean that their startup must be a $1b dollar business within some years (though it might happen), but entrepreneurs must believe that their startup can deliver value for their customers for the next decade and that the company captures some of the value it creates. If it don’t, then why even bother to have the startup in the first place.

I personally am not a big fan of ideas, as it turns out everyone has them but they are rarely any solutions to problems. The definition of ideas in the first lecture where that ideas identify the gap in the market. This definition is interesting and explains why most of the ideas sounds really bad in the beginning. Of course it all starts out with an idea, but as taught in the first lecture a startup needs to have four things: Ideas, product, team and execution.

I assume we will get deeper into the process of how to start a startup and I will blog about that journey.