startup

10 Good Startup Ideas for 2017/2018

It’s that time of year again. Time to start a new company! No, not me, not yet… I’m still working on http://freebeer.ai, which by the way just made some real money last week (our first time asking for money generated about a 2% conversion rate).

Nevertheless, here are 10 Good Startup Ideas for 2017/2018… according to, well, me.
Why are they good, you might ask?
“Why are they good Dr. Beverly?”
Well…
I have no idea if they are actually good (e.g. will generate sales), which is how I usually determine goodness… but…
These ideas seem: a.) to solve a real problem. b.) to be easily testable c.) to be scaleable and d.) be able to have something that is protect-able.

Here they are, steal them please!

1.) Solar Computers
2.) AI for exercise/fitness (maybe even a martial arts bent to it)… the AI personal trainer.
3.) Solar Bike
4.) AI for price-matching
5.) Solar Gameboy
6.) AI for research (market research, topic research, searches, etc.).
SENSING A THEME OR 2 HERE?
Okay, here is a few more…
7.) VR Cafe / Gym
8.) Smarter Microwaves
9.) VR College
10.) Smarter Dishwasher

More themes? Well, yes. 2017/2018:
AI is exploding
Solar is burgeoning
VR is popping
and Smart is here to stay.

Get crakin’
Oh, and please buy my new book… Lean Startings – a novel about the life of a Lean Startup

Austin Ride-sharing is a micro-monopoly

Regulation in Austin, TX is preventing a free market to exist for ride-sharing. The best companies (Uber and Lyft) cannot compete here because of an onerous regulation put over the town like a dark cloud. Dark indeed, for it creates a micro-monopoly for Fasten and RideAustin, who by their strangeness (and willingness to operate more like a cab company), are allowed in Austin.

I was recently quoted on NPR radio on this topic, and I argue that this micro-monopoly is the only reason they can compete in Austin right now. This monopoly does not exist outside of Austin (except a few other weird cities). As a result, for Fasten or RideAustin to work beyond Austin, they would have to compete in the “REAL” market against Uber and Lyft.

A monopoly gets established whenever there is regulation, unique capability, or brute force creating a disturbance in the natural order of modern economic forces: e.g capitalism. In fact, monopolies are the opposite of capitalism which emphasizes the concept of creative destruction to encourage entrepreneurs and what today we call “startups” and we once called “business” to flourish and compete against each other.

The loser in this war is the consumer, and always is. We are forced with sub-par ride-sharing experiences and higher prices. That’s what happens in a monopoly.

So… catch a ride; kill monopoly! Compete without a monopoly and you will find there are bigger markets than just Austin, waiting for you to come help.

Rural Ride-sharing anyone?

New Year’s 2017: Startup Resolution Revolution

This is an opus, a plea, a dream. This is 2017.
Let us agree to put an end, to the old startup trend.
Old startup was weak, it had a faint reek.
It smelled of false hopes, of untested dreams.

In 2017, we dream big still, but without the frill.
We dream and we test, and leave out the rest.
We give all we have to Lean, Lean Startup I mean.
No false hopes, just tested and true.  Lean Startup starts with you.

It’s a revolution, not just a resolution.
It’s a way of life, not just a passing trife.
Your way is simple, if you choose to accept it.
Just test your idea, before you reject it.

Get started today, if you want to, you may.
Don’t fear the failure spider, to fail is more righter.
It’s right to fail small, so try it all.
Lean Startup is trying, with the minimum of lying.

If your a funder, I plead. Demand more than greed.
Demand proof of their traction, before you do the deed.
Make sure they are tested, and validated and nested.
Make sure their growth, value, and problem, are all three fully vested.

So, this opus to you, this silly sentence so true?
It’s about you and your startup, and starting up too.
Get started with Lean, buy my book to help the team.
Make progress without funding, and deliver the dream!

Harlan T. Beverly, PhD
The University of Texas at Austin

Getting a Job in a Startup

Recently, I have noticed a few misconceptions and confusions about getting a job at a startup.

Dollhouse

A startup is not like a dollhouse!  It is not simply a smaller version of a house (e.g. like a dollhouse).  A startup is not a small version of a company.  There are usually no departments (it’s almost always 1 person per role).  There is no such thing as “that’s not my job”, everyone does whatever is needed at a startup, and that can change week-by-week.   So, stop thinking you can apply to be the “strategic financial analyst” for a startup.  That job doesn’t exist, be the CFO or Direct of Marketing instead… since those titles mean “you do everything”.

That said, there are two phases where you can join a startup, the founding phase, and the funded phase.

Founding Phase 

In this phase, you are too early to get paid.  You won’t.  There is no money.
However, you will be able to call yourself a “cofounder”, and you will (or should) get stock.  A “founders share” which is somewhere between 10-20% or so.

The key here is believing and showing that for now, you can you do the whole thing!  What thing?
One of four roles:

  1. Technical – you can build the prototype (yourself, no help)
  2. Sales – closing deals, has a network in the industry and can get the sale. (especially important in B2B companies)
  3. Marketing – All aspects of marketing, including “making the website look pretty” along with: target customer, research, brand, design, lead generation (especially in B2B), content, business cards, etc.  Also, Sales, in the case of B2C (because sales and marketing are basically the same thing in B2C direct startups)
  4. Finance/Ops (rare) – this is not often needed, but sometimes a founder needs help with finance/ops.  You’ll have to do it all: accounting, finance, planning, manufacturing, legal, etc. (FYI: the original idea person is the founder, the others are cofounders)

By the way, yes, you can work a side-job during this phase, but usually at least 1 of you needs to be “full-time” on it. (or you won’t get hungry enough to make it actually launch)

Funded Phase 

During this phase, you get “hired”, and have to “interview”.  You have to”apply” to a job opening.  Good news is, you will get paid (usually less than market rates).  Bad news is, you will not get “much” stock (just a few stock options, like less than 1/4percent, maybe more if you are an executive).

How do you get a job in the funded phase?

  1. Know your role: in this phase, it’s still about what you can do for the company… it has to fit into a box of either: sales, marketing, tech, or ops.  And you have to be willing (and eager) to do anything “legal” to help the company succeed, including get coffee/etc.
  2. Find the job: by networking for sure, but even more so, just by looking on LinkedIn or even craigslist.  Find the open position somehow!  Then apply to it.  By resume, usually, and even better by referral (hence the networking).  Make sure the referral has your resume too though, even startups use those.
  3. Interview: yep. You’ll have to do that.  We’re looking for passion, excitement, and SHOW US how you “have done this job before”.  That is critical.  Don’t apply for a job at a startup that you’ve never done… we don’t (usually) have time to train you.

Transitioning from Founding to Funded Phase

Not all the cofounders join the company in a “paid role” once you get funded.  Usually just 1 or 2 do, then more as the company grows.  Some cofounders never get a paying job out of it… and that’s normal.  (hey you get to keep your stock though, at least whatever % you have vested).

Why Startup vs. Enterprise/Big Company

Simply because it is more fun.  Why?  Because you get to do more things!  Everyone is passionate. And most importantly, what you do matters (to the big picture of the company)!

So, get out there, apply already, and have fun doing it!

8 Startup Things I learned from Austin Game Conference 2016

This year I was delighted to be asked to put together a panel for the 2016 Austin Game Conference.  It was a revival of an old conference that has been sorely missed in Austin.    My Panel, “Why your game company can’t get funded” was highly attended, and I think (hope) highly rated.  The slides are attached below.

However, one of the main reasons to participate in a conference isn’t to “preach” but to “learn”.  I learned a lot by going to this year’s #AGC16, here are 8 things I learned about startups.

1. Games need funding.  Not just game companies (which is what 3 of the 4 people on my panel talk about), but games themselves, small indy studios.  I’m so glad I had Mike Wilson of Gambitious on the panel to talk about how he supports indy games.  When I asked, almost the entire room was seeking funding for their game.  That’s like over 200 people!  Cool!  Gambitious can help!

2. Companies that help games are fundable.  There were several companies at AGC who were “supporting games”, and their business models are not hit-driven, since they make money when the game sells.  I had previously listed one such company here, but took it down due to their request to NOT say their pricing.  I’m disappointed at that, but have removed it to respect their wishes.  That said, I cannot recommend a company that is going to be obtuse about pricing… so I will not be recommending that company.

3. Companies around games, get acquired.  While at the show I stopped by the twitch booth, who was there?  Curse.  Apparently, Twitch bought Curse that week, really cool!

4. Big traction, even without great monetization, can lead to exits!  See the above point about Curse being bought by Twitch.  Twitch understands monetization, and Curse needed that help.  Smart buy Twitch, smart!

5. Huge ideas, get funding in a big way.  This was the first I was exposed to the company called MAGIC LEAP.  They are hiring in Austin, and I’m intrigued!  Some kind of stealth AR company, funded by Google, a $1B valuation.  Yep!  Big!

6. Great ideas need to be launched to become great.  I ran into an old friend, and they had to take a break from their startup.  As a result, their startup kinda stalled.  Fortunately, they are back at it, but it reminded me: unless and until you launch, you aren’t really doing it.  So DO IT!  Launch!

7. Not every company should do a conference.  There were a large number of booths with no point.  Not hiring, not fundraising, and frankly, looking a little bored.  If you are going to do a conference, have a reason!

8. A conference is a startup too! This one was a reboot of an old conference, but to me it really did feel like home.  All the old-school folks, and a lot of the new folks too, all making new connections and renewing old ties.  The venue was great, the A/V worked, and everything (especially the opening night party) was great.  The only part that was missed (for me) was water for the speakers… Chris promises me they’ll fix that next year!  All-in-all, a great start to a great conference, I hope it lasts for years to come!

Defining Entrepreneurship and Startup

This is a call for a more universally agreed  on definition of entrepreneurship, startup and small business.

My proposal is simple:
Startup – a new business of any kind (big, small, or entrepeurial)
Entrepreneurship – the study of “novel” businesses which has the opportunity to “grow big”
Entrepreneur – a person who has founded or cofounded a “novel” startup which could or did “grow big”.
Small Business – a private non-novel business, with a known risk/reward profile based on prior businesses of that type.
Discuss…

The Lean Startup Toilet Bowl Trap of Getting Nowhere Slowly

Progress.  That’s a nice word.  “We’re making progress…”, says the workers cutting the road through the forest.   Then, a wise leader climbs a tree and says “but you’re going the wrong way!”

That’s all fine and good, and a good lean startup does this often.  It’s called “Pivot” and it’s central to the Lean Startup concept.  But what happens when you just keep pivoting?  Aren’t you chasing your tail?  Suddenly, you have a road to nowhere, or worse, a road that goes in circles.

This is a TRAP!  Your “lean startup” just got into a slowly dieing spiral of doom.  Your dream is getting flushed in the toilet because you keep climbing that tree and realizing that you’re going the wrong way!

Here’s an example of the Lean Startup in the Toilet Bowl Trap:

  1. You build a website and collect some preorders (yeah, progress!)
  2. You ship the preorders and get feedback from customers that they love/hate certain features (yeah, progress!)
  3. You fix the product based on the feedback, and nobody buys it (yeah, progress!)
  4. You PIVOT to a new product and collect some preorders (yeah, progress!)
  5. Jump to step #2, repeat, all the way to the toilet’s flush.

So, how do you get out of this toilet bowl trap?

First, remember, the definition of insanity is doing the same thing expecting different results.

You have to do something different!

In many cases, the problem is not ‘your product’ or ‘your idea’, but the marketing instead!

Instead of constantly pivoting on “product” you might need to pivot on some of the other 4 P’s of Marketing:

  1. Place: Maybe your lack of orders is because it’s not available where the customers are… and particularly where the customers are that are in the buying mood for what you offer!
  2. Price: Maybe your lack of orders is related to the pricing or pricing structure of your product.  Maybe you need to sell it in parts, or with different options.  It could even be too low!
  3. Promotion: Maybe your lack of orders is related to how you are attracting customers.  Sure, you’re getting a lot of ‘views’, but are those customers: the right ones, in the right mood (buying), with the right goals, with the right problems, with enough education about your solution, etc.?  Or Maybe, your just not reaching your right audience, or just not ‘appealing’ enough to their needs (messaging).
So, avoid the Toilet Bowl Trap: run Lean Startup Experiments on more than just ‘the product’…
Enjoy!

7 Key Lessons Entrepreneurs Should Learn from CES 2016

I just got back from my 10th year of CES the biggest consumer electronics show in the USA.  Here are the things entrepreneurs messed up heartily!
1. Lesson one
Be prepared for success. At least a dozen startups in Eureka park (the startup area of CES) had run out of fliers and business cards by day 3.  Seriously?  There are investors walking around as well as buyers and distribution and you have no card for them?  (P.s. See our website is not an answer). Kinko s is an answer.
2. Lesson two
Not everyone is important. In fact most of the joes walking around cannot help you.  So, what do you do?  You have to ask people about them before you tell them all about you.  If you learn they are a reporter, great! Share the vision.   If you learn they run a recipe website (like me) maybe you don’t need to share your founding story, just tell me what you do and be polite.
3. Lesson three
For goodness sakes make it easy for people tonl figure out what you do!  I should not have to read your entire wall and your brochure before I it out.   Make it a one line statement, big and bold and in front of me.  This will help a lot with 1 and 2 above by the way…  The important people will find you. Others who figure you out may not need that flier you ran out of.  And for goodness sakes don’t make it a goal to hand out fliers!
4. Lesson four
Have a goal!  Many of the 200’or so startups I spoke to had no goal for the show, none.   “We’re just here showing our stuff off” is not a goal.  Get Press, sales, investment, leads, those are goals.
5. Lesson five
Let people know your goal and do stuff that will help you get that goal.   An hourly giveaway is not going to attract investors.  A party?  Hah!   How about setup meetings in advance?  How about have a “investor area” of your booth to chat with any that come
by?
6. Lesson six
Do not drink on the job.   It’s sloppy and shows a lack of selfcontrol.  If you drink, do so after the meetings and don’t overdo it… CES is a long show, and being late to open just looks really really bad!
7. Lesson seven
Don’t hire or bring show workers who know nothing about your products or services.  Especially don’t leave them alone.  “Im sorry, nobody is here who can answer that” is not a good answer.  You just lost a huge sale, forever.
So, was CES a good show for me?  Yes!  I leave CES 2016 feeling great about technology!  The future gets cooler every year, and it is no surprise nor secret that it’s startups leading the charge!

Harlan Teaching “Lean Startup Essentials” at the University of Texas Austin – Spring 2016

This coming semester, I will be teaching Lean Startup Essentials!   The 2-3:30pm section (section 2) still has seats open.  
NOTE: THIS COURSE IS OPEN TO ALL UT STUDENTS ( from any College, not just McCombs School of Business )!
LEAN STARTUP ESSENTIALS (MAN 337) – SPRING 2015
 Tuesdays & Thursdays from    2pm-3:30 in CBA 4.344

If you are a UT Student, you can login with this link to register:

https://utdirect.utexas.edu/apps/registrar/course_schedule/20162/results/?ccyys=20162&search_type_main=INSTR&instr_last_name=Beverly&instr_first_initial=H&x=34&y=20

Want to know what this course is all about?   
First, hear what some students had to say:
  “great class”
  “awesome teacher”
  “course was awesome”
  “most practical class … at UT”
  “unique content and very useful”

Okay, interested?  Here’s the course description:

This course uses the “Lean Startup” concept as a canvas to give students the essential knowledge needed to either start their own business or join a startup and be a major contributor.  In addition to learning about entrepreneurship, the legal aspects of starting a business, and the life and experience of working at a startup, students will get hands-on skills they can use in any startup or to start their own business.  Every student will practice these skills in-class by building a real startup business (based on a pre-set collection of products and services).  This course focuses on the “Lean Startup” methodology, but will also cover the traditional new venture development and the entrepreneurial process (problem identification, innovation, business plans, fund raising, launching, and managing a startup). This course will also cover the essential knowledge derived from entrepreneurship research covering proven keys to success as well as scientific research about what it takes in an individual and group to succeed in entrepreneurship.  The final project is one of the pre-set business ideas, up, running, and operating in the build-measure-learn cycle that is the core of the “Lean Startup” methodology.

Prerequisites: None.

Need more?  Here’s a link to the syllabus for this Spring: https://drive.google.com/file/d/0B19bmn5A18VtMTVONVpoSFl4TFU/view?usp=sharing 

Got a question, email me!
harlan.beverly@mccombs.utexas  (and dot edu of course)

Small Thinking; why Austin entrepreneurs need to think bigger!

I teach a class at UT Austin called “lean startup”, I also help run the UT Texas Venture Labs and I volunteer at Capital Factory.  I mentor or advise dozens of startups.  I also run my own startup and have started 3.   All this is to say, I am plugged in to startups in Austin.  As with all my blog posts, this is not anything official from UT or anywhere else, just my own opinions.

I see probably 50 (or more) startup pitches per year.  One thing I have noticed recently, since Venture Capital has mostly dried up in Austin and worldwide, people have stopped thinking big.  I see so many deals where “the startup” is really “a product or service”.  For example, your app idea, your IoT idea, your new restaurant concept, and so on.  If it could be done on Kickstarter or bootstrapped in a year or two, it’s probably not big thinking.

This article is a call to get entrepreneurs to THINK BIGGER!  It is also hopefully a few tips for entrepreneurs to do just that.

First, let me explain what I consider ‘small thinking’.  Small thinking is when an entrepreneur is so focused on ‘the first product’ or ‘getting to revenue’ that they fail to communicate (or possibly fail to think) what the big picture is.  If you are not thinking past ‘your first move’, you are playing Startup Chess with a massive handicap.  If you don’t have ‘a second move’, you are failing to plan.  In both cases, you are not THINKING BIG!

Now, let me explain what I consider ‘big thinking’.  Big thinking isn’t doing, it’s thinking, and maybe talking.  Doing is what you are doing first and now (probably being Lean and Agile and building an MVP and focusing on Getting Customers and Feedback)… all very smart and important stuff.  However, while you are off ‘Doing’ that important stuff, you should be ‘thinking’ and probably ‘communicating’ your big vision a bunch more than you are.

Big thinking is having a big vision for wanting to ‘change’ something.  ‘Change’ is the operative word, and it implies a disruption in the status quo.  Big thinking is having ‘the end in mind’ before you begin.  This is more than a personal financial goal (which is also important).  This is understanding where your company might play in the big picture of the world.  This requires understanding ‘the world’ e.g. your market today, and where your market will be after you have risen to power and achieved your ‘big vision’.

Here’s the problem.  Many companies in Austin simply do not have this ‘big vision’ in mind for their company.  I ask you, how is your company going to change the world?  How are you going to “shake up” your industry.   If you do not have an answer, then you are not Big Thinking.

I urge you now, go out, and think bigger!  If you do it, WHILE staying focused on “DOING LEAN” there are so many awesome benefits.  Here are some personal examples I will share.

At my first company, Bigfoot Networks, our “big vision” was to End All Lag!  In fact, we even had a website, t-shirts and events, all around “Ending Lag Now!”.  We had a clear big picture mission, near 0-latency & 0-lag online gaming.  We were going to change the world… and as a result:

  1. The press cared about our story… even though many didn’t believe we could do it, it was still a story (rather than a non-story).
  2. Employees LIKED working for Bigfoot Networks… we all understood our mission and it gave us energy to tackle the day-to-day “Doing” because we knew where we were ‘Going’.  
  3. As a result, my attrition rate was lowest at Bigfoot Networks than any other company.  And my recruiting was the easiest.
  4. I was able to raise ‘big’ VC money, not because of our results (which were average), but because of our vision (and technology to back it up).
At Karmaback, my second company, our vision was also clear… we wanted to ‘Prove Social Marketing Works”, and create analytics behind social network marketing.  What is interesting here is that we did so many ‘day to day’ “Doing” that did not line up with this goal (to pay the rent) that we ultimately lost sight of this vision… when that happened, we had to sell the company.  It just wasn’t honest to say “this contracting job” had anything to do with our vision.  Had we stayed truer to our vision, Karmaback probably would have been even bigger and sold for much more.
So, I hope you can see where I am headed.  Have a big vision, execute on a plan towards doing it, and change the world!   If your company does NOT have a ‘change the world plan’… maybe it needs to get one.  Personally, I am on a mission to make sure all my endeavors have one.  At U.T. Austin, “what starts here changes the world”… and I’d like to see all of Austin take the charge and “THINK BIGGER”!
Harlan T. Beverly, PhD + Daughter, think BIGGER in Denali National Park