Launch is Dead (For Lean Startups)

Are you launched? Have you launch yet? When are you launching?

These are questions you hear quite a lot in an early stage startup. To be honest, the thought about doing a big launch like Steve Jobs, dramitcally unvailing our great product to the public and listen to the crowd cheering.

Ok, back to reality. The fact is that I'm always struggling with these questions. SOOMLA, my current company is doing a platform for mobile game developers - allowing them to add In-App Purchase Stores to their games. We are big advocates of 'Lean Startup' and so we had quite a few launch related events in chronological order:

• Sep 2012 - Released our first 'thing' - an open source project for IAP in Android
• Oct 2012 - A similar open source project for iOS
• Oct 2012 - We participated in a Startup competition that is often considered a launch pad. We also received some coverage in TechCrunch
• Nov 2012 - Our Cocos2d-x Plugin was completed and we received coverage in the official Cocos2d-x website 
• Dec 2012 - Released an early version of our premium product (on top of the open source framework)
• Jan 2013 - Launched a plugin for the leading 3d engine, Unity
• Mar 2013 - Our premium product reached a level where the value outweighs the problems. Also started, charging money for it
• May 2013 - Releasing a new version of our Dashboard - giving mobile game developers the ability to edit the stores on all devices in real time without a need for an update.

As you can see, the right answer for "when are you launching" would be "all the time". In a world where everyone is talking about lean startup, continuos deployment and failing fast, you can safely say that Launch is Dead. It might be still alive for hardware startups that have huge upfront investments and need to create a big hype to push inventory out. 'Launch' might also still be a valid event for big companies who can summon a press conference and get a lot of buzz going with little effort. For statup, however, the concept of launch is a pointless pursuit. Here are a few reasons for this.

First, as a startup, you want to launch as early as possible with a half baked product to guage the demand and test many other assumptions. Like in the case of SOOMLA, this means that there is no spceific launch date but rather a series of small iterations. 

Second, most startups get very little impact from the press they receive while launching. For B2B companies, there is an obvious mismatch in the target audiences but even for B2C companies, the small audience that will be willing to test the product is the early adapters that happen to belong in the niche target market that you are targeting (yes, you have a bigger vision but you are starting by targeting a niche) when you are crossing that with the audience of the publications the number you get is not very high. When we got covered by the press, the result was always a spike of traffic resulting in low conversion rates and after a few days we were back with our average number of visits. 

Third, the effort or cost for getting the press to notice you is quite big due to the amount of companies starting up every month. Reporters are constantly flooded with new companies and getting noticed requires a great deal of effort that you can't afford more than once or twice so it's hardly a strategy. 

So how are we getting noticed? For us, the answer is content marketing. Being able to produce valuable content in topics that interest your target audience is a great way to get your brand out there. Hubspot Walkme and Flurry are great examples of doing it right. There are so many ways you can leverage good content to get traction. I'll cover that in a different post.

Can iPad Replace My Laptop

That's it. My laptop is about 4 years old. It is a Lenovo U350 with an Intel Centrino. Used to be a decent machine when it was bought but feels really outdated now. About a year ago I gave it some new life by installing a brand new 8 cell battery, deleting and formatting the hard drive. It did wonders and lasted about 8 months before becoming too slow again.

So now it's time to get a new laptop and I'm playing around with an idea to use an iPad as my only carried computing device. My day to day tasks include:
- Blogging: Researching topics online, Writing, Editing and Moderating
- Product: Web applications, Illustrations
- Fundraising Materials: Making Slides, Image Editing, Illustrations
- SEO and Website: HTML editing, file uploading, Analytics
- Business Communications: emails, Notes, Calendar, Contacts

There are a few obvious advantages. The iPad is lighter, it makes better impression in presentations and meetings, it's has better battery life and it's quicker to wake up. Adding to that two important components: a Logitech keyboard and 4G connectivity results in an ability to work from almost anywhere without having to worry about carrying a big laptop and searching for WiFi.

I started on the blogging side. So far, it is a lot nicer with this setup. I didn't have to change much of the services I'm using with the exception of Typepad but It was time to move away to a newer blogging platform anyway (currently using Blogger and Tumblr).

I'm expecting that the other tasks will require a bit more flexibility and maybe a few paid apps. However, taking into account that a laptop would have cost a lot more, it's would still be a good investment.

Goodbye Typepad - My Blog is Moving On

Goodbye Typepad

Well, it has been about 4 years. You have served me well for a while and we had good times together. 

My blog needs to move to a new home now. There are a few reasons for this decision: the monthly fee, the lack of widget support but more then anything is the poor support for mobile. Ironically enough, I'm writing this post the second time since the first version was mysteriously deleted by the web interface that doesn't support mobile well enough.

The world has moved on and I'm with it. Most of my blogging is mobile now and so there is no other choice but to go through the painful process of moving the blog to a new home. I found this post about moving from Typepad to Blogger and Tumblr - http://justin-singer.com/post/1014549984/how-to-move-a-blog-from-typepad-to-tumblr-spoiler. It doesn't sound like a fun task but it has to be done.

I'm sure there will be glitches, broken links and other problems during the process but in a month or two the blog will be hosted on a more suited platform.

Ok, back to the porting work.

Good luck to all of us.

The Sound Bite Glossary of Our Seed Round

About 6 weeks ago we started a round to raise a bit more funding. We were lucky enough to close a round in 3 weeks and in very favorable terms. I'm not going to share too much information about that but we doubled the company's value in 6 months and maintained the flexibility and control.

Fund raising requires to condense complex ideas and strategies to short statements and terms that are often known as Sound Bites. I thought that an interesting way to share some of the intereststing aspects of the round would ge as a glossary of Sound Bites that defined the round:

Breakeven with a Squeeze (Kvetch in the Hebrew version) - Basically it's a situation where the company generates enough revenue to support the founders on a low budget - eating mostly Falafel or Ramen soup in Paul Graham's version - "Ramen Profitable". This is a desirable milestone since it frees the founders mind from the idea that VCs are the only source of money and at the same time allows the company to focus on activities that has a business impact.

Instant Gratification - In today's internet/mobile startup world, there is a lot of emphasis on design and UX and the company's ability to create highly usable and great looking products is considered a key element in attracting and engaging users. Instant gratification is a term that encapsulates a lot of this approach and communicates that both sides understands the importance of UX.

SDK Companies - The high number of companies who are trying to offer services to mobile app developers created a situation where mobile game developers are flooded with an endless stream of offers and emails from 'SDK Companies'. We made a strategic decision to differentiate SOOMLA from all the SDK companies by targeting pre-launched developers.

The January Share Holders - We made a decision that we will only bring investors as common stock holders that will have no special rights. This creates a very strong foundation for a scalable and agile company that focuses on product execution and market validation. At the same time, there is no easy way to refer to the share holders as a group in the legal documents. So "The January Share Holders" Became a substitute for the "Holders of Series A stock".

Share Holder with Fingers Crossed - As one of the founders of EyeView I still hold quite a few common shares in a company I have very little influence on. Although my situation is quite unique among founders it is very common among early stage investors who find themselves at a minority position in later stages of the company. The common fate allowed me to establish relationship and trust with Angels and create a funding strategy that is appealing to early stage investors.

Developer Product - Our product is made for developers by developers. Many investors are struggling with that concept. The VC playbook says that succcessful companies make products for "Rich Customers" (see Sequoia bplan tips - http://www.sequoiacap.com/ideas) and developers for the most part don't have big pockets as individuals nor they command big budgets in the companies they work for. The beauty of this model is that developers can become a very effective channel for getting rich customers. This is known as a B2B2C model. Two recent Israeli success stories - CrossRider and Wibya did us a huge service by demonstrating how a good developers product can reach hundreds of millions of users in less than 2 years and with zero marketing effort. 6 weeks ago a very smart guy helped us figure that out and I was lucky enough to find investors who understand it as well.

5 Ways to Save Money and Reduce Burn Rates in Startups

Some startups rise a few millions of dollars with a deck of slides. I bet you didn't. This post is for the yet to be recognized entreprenuers who are looking for their first pre-seed or seed investment. Many of you are experiencing a catch-22 situation where most investors will want to see traction before they help with funding but at the same time getting traction without expenses seems impossible.

My current Startup - The SOOMLA Project reached over 1 million end users with around $10,000 of expenses. Here is one tip for getting traction on a dime (tip zero) and five tips to make the dime last long enough to see the traction.

ZERO - Solve a specific problem for many people who will actually do something about their pain. This is probably the most important one and is the main reason why early stage investors insist on having traction as an investmet criteria. If you are a B2C business, it's a good idea to profile the users who will be interested in your service. Find the specific use case and make sure they are already doing it in a way that has more friction then the one you are suggesting. If you are a B2B business, make sure that there is a specific person who really has this pain and that the specific person has the budget and authority to act on his pain. Too many startups are doing the product-market fit validation in a way that is not accurate enough. Be accurate and change your product or market until they fit.

ONE - Make an Intro Video with Pow Toons - Our intro video was less then $100 while others can cost $3,000 and even more. Pow Toons is a great tool for making a 'talking cartoon' type videos. It's not as good as doing one with After Effects and 3d illustrations but it's about 50 times more affordable and it gets the point across. We found a voice artist was on Fiverr so it was about 20 times cheaper than a professional one and it was just as good. You can check it out at https://vimeo.com/54377078

TWO - Office surfing - Apart from working a lot from our homes which takes a high degree of self discipline and a clear defintion of responsibilities, we did a lot of office surfing. We asked companies if we can use their offices as a second shift and some of them actually agreed. If you think about it, most offices are empty during the evening and night time so if they trust you they might go for it. This saved us about 4 months of rent. Typically $3,000 in Tel Aviv area.

THREE - Outsource repetative tasks on Guru.com - There are many other similar services but this is the one we used. The difference was huge. We created fully designed store fronts with 3-4 screens and 30 to 50 different images each one. We were able to get rates as low as $75 per store-front compared to over $250 when done locally. We did about 20 of these and saved $3,500.

FOUR - Our websites are built with Word Press and Git Pages and we saved about $5,000 on design by buying a premade theme on themeforest and using one of the themes from Github. You can see the result on www.soom.la and project.soom.la.

FIVE - Instead of paying for ads and hiring PR agent to promote us we focused our efforts on content. If your startup is B2C, funny pictures with exaghurated situations on facebook can do the trick. If it's a B2B startup, you might want to take a more serious angle and publish research, advice and how to guides that are relevant to your target audience.

All these tips can be summarized into one advice - be creative!

Are you Suffering from Open Source Phobia?

Since we started The SOOMLA Project as an open source company many friends are asking me about open source. There are a few urban legends, myths and misconnceptions that we should tackle while we are here:

• Open Source is impossible to monetize (or free) - well, there are plenty of models to make money with open source and some of them are very scalable as well. There are also numerous examples of sucessful companies built on open source. Most recently GitHub raised $100M from Andreesen Horowitz.


• Open Source is for Super Geeks Living on Their Own Planet - Not true either. In fact, open source contributors tend to be a lot like any other programmer you met - just a bit better.


• You can't have any IP or Patents - Using open source doesn't mean you have to open everything (unless you are on GPL) so it is just a myth.


• No one will acquire an open source company - Reality proves otherwise and in fact a Google representative once told me that they prefer buying open source companies.

OK, but what's the advantage of using Open Source? Why can't you just give it for free and get the same impact? There are a few answers to that as well - here are some:

• Open Source Reduces Costs - it's easy enough to give your software for free but even free comes with a price on your side (support, hosting, ...). With open source you can prove market adoption with 0 operational costs.


• Free Contribution - While you can't expect somebody else will write your product, it is likely that people will want to extend it to support more devices/platforms/OS and they will be happy to contribute their code back.


• Free Trafic - Since your code is open, it can easily be used as reference/sample for other people who are trying to write similar functionality as part of another project. You can easily refer people to your code from Q&A sites and get people to know your product without looking like spam.


• Better Code - You can't bluff with open source. If you don't document properly or write your unit tests it's going to be out there for the entire world to see. Open source gets better code from your developers and it also attracts better talent as developers have more opportunity to get exposure.

On a more personal note. Israeli developers have been much better users of open source than they have been contributors. I would want to see more open source companies and projects coming out of the startup nation.

Once we Close a Round We Will Buy a MacBook Pro

You must have had this thought or some variation of it many times if you are an entreprenuer. You get some funding and the temptation to reward yourself for hard work and spend the money is very strong. There are a few reason why this line of thinking is flowed and there might be a better way.

Now, it's not a secret that keeping burn rate low is crucial and that stretching your funding is important. How low does the burn rate need to be and how long exactly should you last? About 3-6 months after achieving a significant risk reducing milestone (RRM). RRM is the milestone upon which the next round becomes a question of when and how rather than a question of if. These milestones are the ones where your valuation drastically increases. Working with your team or with your advisory board to find the RRMs for your startup is critical and you should do that prior to every round. Look at the demonstration below where acheiving the RRM is a real step where real change in valuation is made by acheiving RRM and closing funding adds almost no value directly.







Going back to the question of low burn rate and the temptation to spend the money once its in your bank account. you need to ask yourself what expense is critical to reach your goals and what expense is more of a reward for your efforts. The mental exercise you need to ask yourself is whether or not you would still buy 'it' if you didn't have the additional funding. I'm not saying that rewards are not ok - startup is a marathon and we all need to celebrate - just make sure you are celebrating the right things and spending money when the risk is low. Here is my suggestion for buying the macbook pro:

• If you need 'it' in order to get the next risk reducing milestone (RRM)- buy 'it' now (before the funding and as a loan/credit if needed)


• If 'it' is more of a reward (getting out of the garage, increasing salaries, buying a MacBook Pro, ...) attach it to acheiving a real RRM quickly rather than to getting funded.