Startup

Dreams come true

Go confidently in the direction of your dreams! Live the life you’ve imagined. - Henry David Thoreau

I can distinctly remember that for the month of December in 2010, and for much of January 2011, I did a lot of dreaming.

Back then, as I do now, I had a daily ritual of going for an evening walk before sleeping so that I could disengage from the day. I had discovered this helped me sleep better. By leaving my phone at home and setting off for my twenty minute walk, I had only my mind to keep myself entertained during the walk.

When I go on my walk, for the first five or ten minutes, my mind is usually occupied by thoughts about my current issues, challenges and tasks, or the highlights or low points of the day. After ten minutes, interesting things happen.

I would guess that for many of us, we rarely go for ten minutes without a task to do, a friend to talk to or a social network to check. I can tell you that in my experience, ten minutes of solitude leads to some powerful thoughts. It is fascinating to observe where your own mind wanders.

In December 2010, I had just launched Buffer and my mind often wandered to the thoughts about where this new side project might lead. Two weeks into the month, I had got two paying customers for Buffer, paying me $5 a month. This was a huge milestone for me, and the thought that kept occupying my mind was: could this ever make enough money that I could quit my day job? Another two weeks passed, and another two people started paying $5 per month. Now I was up to $20 of monthly revenue.

On my walks I day dreamed about the day when Buffer would make enough for me to quit my day job. Since these walks were just before bed, I also often had real dreams about this too. The number I had in my mind for this milestone was around $1,000 per month. On my walks, I remember calculating in my mind how long it might take at the current pace of paying customers joining Buffer. With 4 new customers per month, it was going to take a long time.

Then January rolled around, and things started to pick up. I became more focused and the product was improving fast. Leo had joined me and we were getting customers faster. I kept going on my walks and I kept having the same dream. In the first two weeks of January, we got another 4 customers: as many as the whole of December! We were now making $40 per month. But it was still going to take a long time to make $1,000 a month.

In February, things really started to change. The dreams I was having were starting to feel real, to feel possible. I kept going on the walks, and letting my mind wander back to the dream. By the end of March, I had dropped two of my five days of freelance work, I was just working three days a week and could spend the rest of my time on Buffer.

I felt like I was now working on making my dream a reality. By the end of May 2011 I had dropped my freelance work completely, and in June we hit our $1,000 per month milestone. We were growing rather fast.

I remember that I continued to go on my walks, and at times I would be amazed that this dream had now come true. I could remember exactly the feeling of going on a walk just a few months prior and imagining how amazing it would be to be able to work only on Buffer. On my own project, my own startup. Nothing else. And it was amazing. It felt fantastic.

What struck me, is that it might have been the fact that I let my mind wander, the fact I had these dreams, that made me push ahead during the early mornings and evenings and actually achieve those things. The dreams made me want it, even if I didn’t fully realize. The dreams meant that I had allowed my mind to be taken over by this objective.

These days, things are even crazier. When I stop to take a moment and truly appreciate where I am, I realize that I now have more than I could have ever dreamed of. That $1,000 a month goal is easy to forget. We now make $1,000 in less than half a day and if we don’t then something is wrong. And in a month, we now make a hundred times that original dream.

Now I have new dreams, and they can come true too.

Photo credit: Michael

The undervalued advantages of being a small startup

I remember when I was 12, I was desperate to grow up. I think most of us are when we’re young. Similarly, when you’re getting your startup off the ground, it can be easy to wish ourselves ahead to having a big team, a fully-fledged product and millions of users.

The thing is, there are a lot of cool things to experience, enjoy and be happy about when you are 12, before you become 13, 14, 15. The same applies when you’re a 2 person or 3 person startup. There are plenty of reasons to be happy.

You can move fast when you are small

I think one of the interesting things I’ve learned while growing Buffer to 11 people is that you can move fast when you’re 11 people, however you can also move rather fast when you’re just 2 people.

This is not to say that we moved faster overall when we were 2 people. We now have a larger footprint: we have a super useful web product, mobile apps for iPhone, Android and Blackberry, browser extensions for Chrome, Safari and Firefox as well as countless integrations with awesome partner apps and startups. There is no way we could move fast in all of these various areas if we were just 2 people.

However, the key thing is that you can move just as fast in terms of percentage growth when you are 2 people as when you are 11. In fact, in our early days we sustained 40% MoM growth for almost the whole of the first year.

Just focus on the right things and crank away at code and marketing and you can make a lot happen as just a couple of founders. That brings me to my next point:

You don’t need structure when you’re small

A couple of months ago I had a very interesting week where I spoke separately with both Jonathan Abrams and our advisor Maneesh Arora and found that they both had similar advice, and shared that they were staying small for as long as they could with their startups. These are two very experienced founders, and they were sharing that they had no hurry to grow big. I even remember Maneesh advising us to pay ourselves more instead of spending the cash on new hires. It now makes a lot of sense to me.

I’ve found that there is are a series of tipping points in a startup where prior to that point, structure would slow you down, and after the fact structure will speed you up.

For example:

  1. When you’re just 2 founders you can make all the decisions collaboratively, with no real structure.
  2. When you become 3 people, it probably still works.
  3. When you’re 5, 6 or 7 then it starts to break down and slow you down.

Put differently:

"Adding just two more people to a team of 3 means that there will be 10 possible combinations of 1:1 conversations. Make it 10 people and you have a whopping 45 possible sets of conversation partners." - Duane Jackson

That’s when you need to introduce structure and select one person to make the final call and lead the process. We’ve found this repeatedly, with product and with our customer support team and our engineering team too. We recently added more structure by promoting Sunil to CTO, leading engineering, and Carolyn to CHO, leading customer support.

My lesson learned here is that it is important to get the timing right with staying unstructured, or introducing structure. If you have departments and titles when you’re just a couple of people, that will probably slow you down. If you have a team of 30 people and no one in charge, that’s probably going to be slow too.

You can learn more easily from your users when you are small

When you are just getting started, it is vital to be in touch with the user and to do good customer development in order to understand whether your assumptions are correct.

The beauty is that when you are small it is actually very easy to have a conversation with your users, because there aren’t many of them! The harder part is actually taking the plunge and asking for that Skype call or coffee meeting with someone who signed up for your product.

I think Eric Ries put it very well in one of his presentations:

Most of the techniques that big companies use to do customer research (surveys, in depth analysis, data mining) they do because they have too many users to keep track of, and therefore they have to do that stuff to try to make sense of all the information they have. When you’re small you have the advantage that you only have a small group of people to get to know.

Indeed, we found that when we tried to do A/B testing and build out detailed metrics in our first few months, we were much better off to simply reach out and talk with the people who were signing up to Buffer.

Now that we have over 600,000 users posting more than a million times a week, what Eric Ries said resonates even more. We now have a small team working just on metrics and understanding what our users are doing. You can avoid this when you’re small, it is a lot of fun to be able to glean so much from just a few conversations.

Are you in the early stages of your startup? Are you embracing the benefits of how small you are? Or, maybe you’re at a later stage and remember how different it was when you were small. I’d love to hear your thoughts on this topic.

Photo credit: Christian

Want to help your hometown? Pack up and leave

image

I’ve done a lot of traveling throughout my journey with Buffer. I started in the UK, and since then I’ve lived in Hong Kong and Tel Aviv as well as San Francisco where I’ve now settled for the longer term.

When I was in my hometown of Sheffield in the UK, I became quite involved in the (then tiny) startup scene, and even ran a meetup for startups. The choice to move to a different city was quite a big one, and later the choice to leave the UK completely was a step even further.

I often hear the argument that people should stay in their hometown to help the startup ecosystem. I believe that paradoxically, the best way to grow the ecosystem in your hometown might be to leave it.

I think there’s this myth that the best way to help your hometown is to stick around. I also think there is a misconception that the way to help is to focus on the community, more than on yourself.

Focusing inwards, in order to be able to help others

One of the key things I’ve learned is that you can help a community far more by focusing inwards, on yourself, than you can by spending a lot of time working on the community itself.

"The greatest gift you can give to somebody is your own personal development. I used to say ‘If you take care of me, I will take care of you.’ Now I say, ‘I will take care of me for you if you will take care of you for me.’" - Jim Rohn

Indeed, in a recent post on the gender bias in the tech and startup world, Melissa Miranda concluded:

"The best way to have more women at the top is to climb up there myself."

Kate Kendall, a great friend and a founder I am inspired by and respect a lot similarly mentioned in a recent post:

"I cannot continue to provide for others if I don’t get my own company’s foundation firmly planted. I look forward to giving more again soon. Once I first learn how to ask."

These are some very wise words. The message is clear. Many who have taken considerable steps along their journey are realizing that their best way to help is to focus inwards on themselves, in order to become more and have more to offer. This is certainly the approach I am aiming for, too.

Refreshing your environment and your circle

One of the toughest things to accept as an ambitious entrepreneur is that you are affected by your environment and the circle of friends you have. We have far less willpower and self-control than we like to admit to ourselves.

Seneca wrote in a letter somewhere between 63 and 65 AD that even the most accomplished men are affected by the “crowd” they choose to be amongst:

"Even Socrates, Cato, and Laelius might have been shaken in their moral strength by a crowd that was unlike them; so true it is that none of us, no matter how much he cultivates his abilities, can withstand the shock of faults that approach, as it were, with so great a retinue."

If Socrates himself would be affected by a crowd who did not push him and encourage him, how can we hope to even achieve a sliver of the success he had unless we decide carefully who and what we choose as our environment? Seneca advised in this same letter:

"Ponder for a long time whether you shall admit a given person to your friendship"

I got lucky myself. Something drew me to Birmingham in the UK, from my hometown of Sheffield. Then, after Buffer reached ramen profitability Leo and I had a craving, a calling to visit San Francisco. After arriving and spending 6 months in Silicon Valley, lack of visas forced us to travel the world and live in places such as Hong Kong and Tel Aviv.

It was through this journey I learned the power of a fresh environment and starting new friendships. With each new place, I had a more specific criteria for who I would let into my true circle of friends. Today, I have much freedom and I am surrounded by people who never judge and always encourage. The difference this makes is something I can’t put into words. Leaving your hometown is the best way to deliberately sever those ties and step into the unknown and the chance of great possibilities.

Finding somewhere to thrive

With an inward focus and a desire to shape your environment in a very deliberate way, I think that if you choose to try and do these things in your hometown, you are very much at a disadvantage.

There is no way I would have been able to develop as much as a person if I had not jumped on a plane to a place where I knew nobody. I love my friends and I love my family, but the truth is that stepping away has helped me tremendously to become a better version of myself, and paradoxically to allow me to help them even more, too.

There’s probably a place in the world that is better for your business than where you are right now. For AirBnB, it was New York:

While at incubator Y Combinator, Paul Graham looked at their plans for Airbnb and asked them the simple question, “Where is your market?”
The founders said that New York seemed promising. To which Paul, gesturing wildly with his hands, said, “Your users are in New York and you’re here in Mountain View.”
The founders were dumbfounded, saying they were in Mountain View for Y Combinator.
Paul repeated himself. “Your users are in New York and you’re here in Mountain View.” After a pause, he added, “What are you still doing here?”

For us, it is San Francisco. We’re a distributed team, but many of the conversations we need to have with startups we partner with and the social networks we are providing a service on top of, happen much more easily when we’re in the same location as the majority of them and can grab coffee face-to-face. I’ve come to agree with what Brad Lindenberg said in a blog post recently:

"I am convinced now that in order to be a player, you need to have a presence where your target market is because if you do, things can happen really quickly."

A lot has happened in my hometown of Sheffield since I left. There is even a startup accelerator there now. If I hadn’t left, I’d not be on a level where I would comfortably and excitedly be a mentor for the accelerator. Would you be able to help more if you let go of your roots and focused on yourself?

Photo credit: Christine Vaufrey

How to gain traction in two sided markets

Startup ideas that involve two sided markets are notoriously difficult to get off the ground. It’s the age-old chicken and egg problem. You need lots of buyers for the sellers to be interested, and you need lots of sellers for the buyers to be interested. The same goes for the recruitment space, and many other verticals too.

I myself have failed in a two sided market, where I once tried to build a product which would kill the business card. It would only work if everyone used the product and exchanged their business cards using my platform. Or so I thought.

While I don’t have any direct personal experience of solving the two sided market problem, I have now been involved in startups for quite some time and have helped over 100 people through 1:1 Skype calls and coffee meetings, and gaining traction in a network effects startup is a challenge that comes frequently. Here are the two ways I would go about building traction for a product in a two sided market:

Go super niche

The first thing I would advise is to think about just how narrow you could go with the first iteration of your product. The more niche you go, the smaller the market becomes. The smaller the market, the easier it is to gain a critical mass within that market and become the defacto product for the audience.

In addition, the smaller and more focused you make the market, the more you can do specific things which will make your product the better option than any others. I think there is a reason Facebook did so well in the early days when it only supported Harvard and other colleges. Zuckerberg mentioned in an early interview that by staying more focused they could provide more value:

There was a level of service that we could provide when we were just at Harvard that we can’t provide for all the colleges, and there’s a level of service that we can provide when we’re a college network which we couldnt provide if we went to other types of things.

I would encourage you to think “what can I do to provide value for a much smaller niche market that might not necessarily scale?”. This means to provide value very specific to that niche market, that might not apply to other markets you later want to support. That’s an interesting thing I’ve learned: methods you use early to gain traction don’t need to be able to scale as you grow.

Usually a great plan is to go truly niche by picking a specific location as well as specific use case, then expand outwards. Chris Dixon has a great article on using this method, he calls it the bowling pin strategy. For example, Facebook focused on Harvard, and students. Yelp on San Francisco and dining out. Think about what’s the best focus for your idea.

Have a single player mode

The other great way to gain traction when getting started with an idea in a two sided market, is to essentially avoid the “two sides” aspect all together. While it is very powerful to have network effects at a later stage and can help trigger fast growth, in the beginning attracting both sides is a tough problem to solve.

In my experience, I’ve seen that most ideas have one side which has many problems and could actually benefit from a “tool” of some sort in addition to the benefits that are provided with the other side of the market. The idea is that the features which involve both sides of the market (for example, repinning, commenting and browsing others’ pins on Pinterest) are the "multiplayer mode" of the product. If you can also provide a “single player mode” (for example, creating your own personal pinboard of great pictures you find and want to save) then this can be very powerful for gaining the initial traction when the userbase is small.

I’ve observed that often founders have not considered that they could provide a tool for one side of the market and this could give them a way to get the product off the ground, while still retaining the multiplayer aspect for later benefit.

Are you building a startup which inherently has network effects and the challenge of the chicken and egg problem to gain traction? Have you thought about these two techniques? I’d love your thoughts on the topic.

Photo credit: Simply Boaz

The highs and lows of startup life

I was recently back in the UK for two weeks and had the chance to speak at an event in London about the incredible journey with my startup in the last two years.

When I speak, I try my best to share useful information and this generally consists of mistakes I’ve made along the way and some of the greatest lessons I’ve come away with from the experience. At the same time, I also aim for my talks to be a little inspirational too, by sharing how I’ve been lucky enough to achieve some astonishing milestones despite the fact that I’m certainly no smarter than anyone else.

At the end of this particular talk, someone asked me a really fantastic question, which was “you’ve shared great lessons, tips and some amazing achievements, but what has been the lowest point in this journey so far?”. It is a great question and there’s certainly one moment that stands out amongst others as one of the hardest times I’ve had with Buffer.

A choice to raise funding

When Leo and I jumped on a plane to San Francisco around one and a half years ago, what we didn’t realise at the time is that in hindsight this was a clear turning point for us personally, and for Buffer as a startup.

When we first arrived, we quickly set up a number of different meetings. Notable people we met were Hiten Shah and Daniel Brusilovsky amongst a number of other founders at different stages of their startup career, including a few YCombinator founders.

What we quickly realised through conversations with people was that we could keep growing slowly and solidly without funding, but we were at a point with good traction and a clear bottleneck in terms of me being the only person working on the whole product and all technical aspects, where if we had some funding we could grow the team more quickly and get much faster growth.

Leo and I always have a very positive outlook which helps us a lot, so we quickly decided it made sense to raise investment and whilst we had no idea how to do that, we agreed that it was simply another thing we would figure out.

Switching our focus to fundraising

Of course, since we had literally no idea how raising funding worked, we asked many many people for advice, and we started to take action right away to attempt to make progress. One thing we were sure of was that we should try our best to reach out to investors and have meetings. We were scared to talk to investors since we didn’t know how to pitch or how the process works, but we knew that was exactly what we needed to do.

Due to our lack of experience and knowledge, we worked jointly on fundraising. We sat down together in various coffee shops and sent out dozens of emails to investors, to other founders and to people who had become casual advisors. We learned many things, including that you should always get an introduction to an investor, and that you should be very specific with a call to action in emails.

One of the important things we discovered, was that there should always be a clear focus of any pitch. Most pitches have similar content sections such as the market, a problem, your solution, current traction and the team. However, each individual startup will have a single aspect which is the strongest part of the pitch. For us, this was definitely our traction; Buffer already had 25,000 users, monthly revenues around $1,500 and we were growing 10% week over week.

The great thing was: it is often said that when pitching, traction trumps everything. Certainly looking back, since we were first time founders with no track record, traction was even more important. The problem was, whilst traction was the key part of our pitch and the traction was good, as soon as we switched our focus to fundraising our traction slowed.

A difficult few weeks of learning

The traction which we were proud of was largely driven by a lot of hard work. For the six months previous, the only focus Leo and I had was to build a great product which solved a real need, and to market it so that people who would find it useful knew that it existed.

We learned that fundraising is a full-time task, so what happened next was that around three weeks into fundraising, around three weeks after we had almost stopped working on the product and marketing altogether, our traction started to slow dramatically. We had some long-tail traffic, but a large portion of the traction was driven by articles about Buffer which we were triggering on an almost daily basis.

We essentially started to lose our most valuable asset in pitching Buffer. To add to the struggles, we were almost one month into our allowed three months in San Francisco on the visa waiver program, and we were also quickly running out of money because we didn’t realise how expensive the Bay Area is. With only two months left before we would have to move on from San Francisco, we were eager to raise the funding we had decided would be so valuable for building the startup further.

However, one of the things we learned while figuring out how fundraising works is that two months is a very fast amount of time to close a seed round, even for the most experienced founders.

A tough Saturday morning conversation

One Saturday morning around three weeks after we started our attempt to raise a seed round for Buffer, at the apartment where we were sharing a single room (alternating between one sleeping on a bed and the other on the floor on an airbed), Leo and I talked about what we were going to do to try and turn things around.

We had been trying for three weeks, and we had learned a lot about how to raise funding, but we now knew that a joint effort from both of us in order to try to quickly close a seed round was not going to be successful. We needed our traction to continue, since the fundraising was going to be a longer task. We had very little cash left, in fact I was actually borrowing money from Leo, who was well into his savings.

So we needed a new strategy. Since I was the coder, we decided that I would be the one to work towards keeping our traction going, which I would do by building the product but also by doing all the marketing tasks which I was much less experienced with. Leo, on the other hand, would focus entirely on fundraising and learning more, and trying to figure it out. I would be pulled into meetings only when we reached a point where we were discussing terms.

We knew it was going to be extremely difficult, with many highs and lows for both of us, which we would need to shield each other from and remain positive and optimistic. I think we both believed we could pull it off, but we knew there was a good chance that we might end up back home on a plane to the UK without closing the funding we sought.

An amazing high: Being accepted into AngelPad

The next few hours taught us how crazy life as a startup founder can be. We were both truly at a very low point, and we often look back with fond memories of that moment since it was a great example of the struggles founders have to go through.

Around 2 weeks into our attempt to raise funding, we had noticed that AngelPad had a class coming up, and that even though the deadline had passed, they were accepting late applications. Since we were struggling, we applied. We didn’t take too long over it, though, and we quickly moved back to focusing on our fundraising efforts. We had a number of emails back and forth with Thomas, Gokul and others in the AngelPad team, and even had a Skype interview with Thomas. Still, we weren’t too confident we would get in.

After our memorable Saturday morning discussion, Leo got a call from Thomas. We had got into AngelPad and would receive $120,000 in funding for Buffer. We’d go through the 10 week program with 14 other startups and have a demo day at the end, and we would be taught about how to raise funding. It was simply one of the most incredible moments of my life and I remember a real feeling of elation, compounded by the fact we had just had to make a very difficult decision a few hours prior, which no longer mattered.

AngelPad proved to be a significant part of the Buffer journey, and enabled us to get some amazing advisors and investors on board when we did our fundraising after demo day. Although it was not easy, after the struggles and learning we had gone through we were fortunate to be able to raise a $400,000 seed round for Buffer.

I have realised that when I have low points, they are the times where the most growth and learning occurs. I would therefore not change a thing about those tough weeks.

Have you had some truly low points during your startup journey so far? Have you found that these moments have taught you some valuable lessons? I’d love to hear from you in the comments.

Photo credit: TexasEagle