Here are my notes from Saturday’s Startup School at Stanford (cos the world really needed more, but heck I wrote them so might as well share them).

I didn’t make notes for every speaker, as I kept getting distracted by Justin, but I covered Mike Mandel, Max Levchin, Mitch Kapor, Mark Zuckerberg and Ali Partovi. Hope these make sense.

My favourite talk was Paul Graham’s (‘Why Not Not to Start a Startup’), closely followed by Max’s entertaining talk and Mark Zuckerberg’s.

Thank you to Jessica for all her hard work in setting up the event!

1. Michael Mandel - Chief Economist, BusinessWeek

- The US is at an advantage to the rest of the world because it encourages people to take chances, rewards people well if they succeed, and because it allows businesses that fail to go under
- China’s debt is apparently near $1tr
- Not worried about issues like Social Security, Medicare, the Trade/Budget deficit, but is worried about a slowdown in US productivity growth, which is apparently as low as it has been since 1997.

2. Max Levchin - Founder, Slide, PayPal

Max gave a very useful crash course in product management.

- Engineers aren’t good at the details, hence interfaces become harder than need be
- User Interface is 80% of the problem
- The trick about being a good product manager, is the ability to sit in front of a computer and lose 80% of your IQ, and imagine how a 15 year old may use your site. It’s similar to having an ‘out of body experience’, and being able to think like “she’s not gonna type anything, so we need a big button, which say ‘Get yours now’”
- Recommends everyone takes at least one stats class
- 20 ppl (typical usability testing group size) is not statistically significant sample. Really need to be able to model large scale users behaviour
- MEASURE EVERYTHING. clicks, mouse overs, funnels, exits, you have to build your own tools to do this well. As an engineer you’ll understand the patterns you see in the stats.
- In the stats, tail the logs, graph the results, look for troughs, find the anomalies, because somewhere in there, there’s a hint about what your users want to do
- Definition of an entrepreneur: a person who doesn’t really care what company they are starting, they just want to start a company.
- When metrics are flat, throw in towel, learn how to figure it out
- Don’t confuse things which are hard but not valuable. Most valuable things are hard. Most hard things are worthless
- Friendster’s really complicated friend mapping vs. “Is in my extended network” in MySpace

(I thought this example was hilarious)

- 8.5% Male is red/green colourblind, so don’t use that colour combination on your site
- Blue is reliable as a design colour
- Can design for scrolling now, as most people use scroll wheels now
- When you’re thinking about your product, ask yourself, is this is going to fit into a 7 deadly sins bite?
- When figuring out motivation for users, think about the 7 deadly sins. Think about envy.
- Let the user do some work before getting the payoff. If it’s really simple, they aren’t going to believe it’s valuable.
- Get the trade-off right between overcommitment vs. undercommitment
- eBay’s sign up page has an 80% drop-off rate

3. Ali Partovi - Founder, iLike; CEO, GarageBand.com; Founder, LinkExchange

Ali and his brother discussed the criteria for assessing new business ideas/opportunities.

- Is idea a winner?
Can I easily explain what people want in 1 or 2 sentences. More important to explain a customer need. Better than marketing and so on.

- Does it scale?
Can we double revenues without doubling costs? (increasing returns to scale).

- Am I creating added value?
Co-opetition: Size of pie with me in game vs. without me, does it increase?

- Will users naturally recruit new users?
Pure use of something will naturally cause new people to use it.

- Will the value for each customer increase as new people join?
Network effects.

- Am I passionate about this idea?
“Success is 99% perspiration, 1% inspiration”, Edison

Things an entrepreneur should do:

1. listen to customers (put yourselves in their head), e.g. Zappos, everyone works in customer service for 4 weeks when they join
2. Stack rank top problems and top people every few weeks
3. Frugality is easy without VC money, (think of it as a loan)
4. Moving quickly, split decisions amongst founders
5. Have a strong CEO, it makes a big difference to have the best sales person to deal with outside view of the company, titles are not important internally.
6. Focus, ideas are abundant, don’t spread yourself thin
7. Hiring and recruiting at top of priority list. This is not taught at school, taught stuff like problem sets. Judging people is the most important skill you can learn in life.

Things an entrepreneur should not do:

1. Press - keep it in context, it’s a tool, not the goal. Netscape anecdote, where they became obsessed with press releases and took their focus off the product
2. Company culture - natural tendency is set to become political. At about 20 ppl, it sets in, and then can’t get rid of it. So focus on this early on.
3. Better to have any deal, than none. Make them quick. No need to be perfect.
4. Way better to miss potential good guys than hire potential failures. Firing people is good for morale. Other people figure it out if you have slackers around. Get rid of them quickly.

4. Mitch Kapor, Founder, Lotus

Single most demotivating thing for team, is when you make promises and create expecations that you cannot match. What you can do?

1. Take Culture Seriously
- every action and inaction sends a message

2. Walk the walk yourself
- reduce gap between stated values and actual practice

3. Hold people accountable
- are you tolerating abusive behaviour by star performers?

5. Greg McAdoo, Sequoia Capital

His criteria for assessing entrepreneurs and investment opportunities:

1. How succinct can you be? Can you have clarity with everyone? (investors, customers, partners)
2. Know your business - encapsulate what you do in 5/6 words
3. Define the problem and solution, he is looking for intellectual honesty and the ability to understand the audience. Can you effectively communicate solutions?
4. Get out early and iterate
5. Know your competition - are you thoughtful and honest about them?
6. Understand the market -ecosystem, trends, dynamics, leverage, speed, distribution, customers. What wave are you riding?
7. Size the Market, for Hardware companies, they want to see the opportunity to get to $1bn revenues, for Services, $2-3bn (because of lower margins)
8. Know yourself - the ability for introspection is rare. Do you know if you are a Functional Contributor, interim executive, or want to go for the distance?
9. Don’t try to compete feature for feature with big companies. Look for customers, who’s hair is on fire, and you wanna sell them the firehose.

e.g.
Market size for vitamins $5bn
Pharmaceuticals $156bn

6. Mark Zuckerberg, Founder, Facebook

Mark’s talk was fantastic. He had two themes:

1. The importance of being young

Young people are smart. Young people have simpler lives, they have no family, no mortgage and no car to worry about. This allows you to be idealistic, and focus on the important things.

Never compromise intelligence for experience. Equally important that they care about what you’re doing.

2. The importance of being technical

Anecdote about Matt Cohler, who when they first met, used SQL queries on the database to look at the stats instead of asking Mark lots of questions about it. Being technical gives you leverage.

General points:
- Everyone who you work with, who isn’t young or technical, will likely play it down. Experience has value, but the converse is true as well.
- Don’t add things to the development process that slow things down
- Give power to people who want to iterate
- Facebook is deeply a technical company, they have 1.5bn pageviews a day, and the newsfeed processes 300m news clips a day, which is more news than all other media has had over all time (though of course, it’s a different kind of news)
- Philosophy: break things. If you don’t break things, you aren’t going quickly enough. The way ppl learn is by making mistakes.
- Humanity organises itself through its social ties. Information is filtered through people. Having knowledge of the social graph, is going to be important in knowing what’s relevant in the world

This is a rushed post because I just realised my second Viewpoint went up on the BBC, and I haven’t actually mentioned Auctomatic yet on this blog.

So, this is the quick pitch:

1) The feedback we got from Boso members was that they used our site because of its easy and simple interface, and this was enough of an incentive not to use eBay
2) On coming to the US, we thought we should tackle this problem in eBay itself
3) After a bit of research, it quickly emerged that this opportunity was too good to ignore, and so we decided to launch Auctomatic.

Srini Panguluri of YouOS fame has been the ninja developer behind this, ably assisted by Harjeet and our new team member, Thomas Schmidt, who recently moved here from Paris, and looks after our interface design.

Our approach is to tackle the ‘low lying apples’ first, so we are building the core and simple tools first, in close communication with some big powersellers. Later, we’ll integrate the more exotic functionality.

Justin.tv has just launched.

It’s the first 24/7 reality internet tv show where the host is not tied to a fixed PC webcam. This is from the same guys who founded Kiko, the online Ajax calender (a previous Y Combinator company).

Briefly, what’s special is these guys have developed a cost-effective way to broadcast video 24/7 to the internet, which is a non-trivial problem to solve. The implications are huge - citizen journalism has potentially entered a new level.

Anyway, I’m bullish on this venture, because:

1. This team has the right experience. Kiko was great software, which managed to hold its own vs. the competiton (ignoring Google Calendar). I personally know the guys and think they have all the important skill sets covered in the founding team. They are a dedicated and very talented bunch.
2. I think this is interesting. Despite the sceptics saying it won’t be interesting to watch a “normal guy” 24/7, it becomes surprisingly addictive, exactly the same way that we watch normal people on Big Brother.
3. This technology is pretty special. Being able to broadcast around the clock, whilst moving around, opens up a whole lot of possibilities for journalism.
4. The ‘platform’ that Justin.tv is enabling is huge. We can all basically become our own tv channel.
5. It’s slightly crazy.

Anyhoo, we’re going to be on Justin.tv at 1.30pm Pacific Time, which is 8.30pm UK time. Message me if you’re watching! (email kul at auctomatic dot com, or via text at +1 415 612 0117).

Nice.