The startup equation : a visual guidebook for building your startup

508 Pages·2016·29.81 MB·English

by  Steve, Fisher, Duane, Ja-Nae

Copyright © 2016 by Steven Fisher and Ja-Naé Duane. All rights reserved.

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This book is dedicated to Ja-Naé.

She is on the cover with me but is really the reason this book is written
and in your hands. She is my wife, my life, my best friend. And from my

two page wedding vows, I reaffirm to always be your partner in fun

and adventure, your lover, your sounding board, your co-pilot, your sous

chef, your copyeditor, and your best friend. And to always flush the

toilet and remember to put the seat down when I am done.

Love you, babe.

Steve Love you too.

Ja-Naé In Memory of Karl Baehr

A Teacher, A Mentor, A Friend. And yes. Profit is good.

Contents

Acknowledgments
Foreword
Our Story

SECTION 1

DISCOVERING THE EQUATION

1. The Age of YOU: The Entrepreneur

The Next Billion Entrepreneurs
Create or Die
The New Industrial Revolution
Choose Your Own Startup Adventure

2. The Rise of the Startup Economy

The New Startup Economy
A Tale of Two Cities: Savannah and Boulder
What Makes a Great Startup Economy?
Where is the Best Startup Economy for Your Business?

3. The Six Forces of Change

Force #1: The Anywhere, Liquid Workforce
Force #2: The New Work Order—Connected, Collaborative, Creative
Force #3: The Connected and Engaged Customer
Force #4: The Era of the Maker
Force #5: The Sharing Economy
Force #6: The New Creative Economy
Applying the Six Forces to Your Startup

4. The Startup Equation

The Equation Structure
Building the Foundation
Crafting the Equation
Growing the Dream
The Periodic Table for Startups
This is a Living Diagram

SECTION 2

BUILDING THE FOUNDATION

5. The Entrepreneur’s Journey

Building a Great Entrepreneur
Finding the Leader Within
Entrepreneurs, Know Thyself
No MBA Required
Plan to Succeed, Not Win
Getting Ready …

6. The Big Idea

What’s The Big Idea?
Generate Ideas with Brainstorming
Communicate Ideas Through Sketching
Utilize Collaboration to Build
Focus on the Right Opportunity
Getting Ready …

7. Strength in Agility

Living the Lean Startup Life
Discovering Your BASE Business Model
Thoughts on Financial Models
Building Your Minimum Viable Product
Vision Without Execution is Just Bullshit
The Art of the Pivot
Getting Ready …

SECTION 3

CRAFTING THE EXPERIENCE

8. Culture of Wow

Culture Starts with the Person at the Top
Finding the Right Culture Mix
Creating the Right Cultural Balance
Supporting Balance, Preventing Burnout
Closing the Creativity Gap
Leveraging Coworking and Makerspaces
Getting Ready …

9. Rewards of Great Teams

The Single Founder vs Co-Founding Team
How to Find The Right Co-founder
Recruiting the A-Team
Leveraging Great Mentors and Advisors
Building and Leveraging Great Advisory Boards
Crafting a Stellar Board of Directors
Getting Ready …

10. Creating Great Customer Experiences

Everything Starts with the Customer
The Six Disciplines of Great Customer Experiences
Discovering the Customer Journey
Building a Minimum Delightful Product
Customers as Partners
Leveraging Benchmarks, Testing and Customer Insights
Getting Ready …

11. The New Brand Order

Great Brands = Great Experiences
Building a GREAT Brand Takes GUTS!
Creating a Brand Identity
Bringing Your Brand to Life
How to Think About Your Brand Affinity
Getting Ready …

SECTION 4

GROWING THE DREAM

12. No Money, No Excuses

Picking a Funding Strategy
Leveling Up With Angels and VCs
The Art of the Pitch
Beyond Investors: Loans, Grants and Cash Flow
Startup Rocket Fuel: Accelerators and Incubators
Getting Ready …

13. Startup Marketing Alchemy

Seeing the Big Picture
Knowing Your Customers
The World’s Shortest Marketing Plan
Startup Marketing Mixology
An Inbound Strategy to Unite Them All
Growth Hacking Your Startup
Getting Ready …

14. ROI of Happy Customers

Building a Sales Engine
Hacking Your Sales Process
Mavericks, Journeymen, Superstars and Trouble
Creating Loyalty with Brand Evangelists and Raving Fans
Getting Ready …

15. Scaling to New Heights

Scaling the Elements
The 3 Ms of Scaling
Jumping the Gun
Building an Engine of Growth
Running on All Cylinders
Getting Ready …

16. Always Be Innovating

Creating a Culture of Innovation
The Rules and Habits of Innovation
Everyone is a Design Thinker
The Art of SMART Innovation

Every Entrepreneur Needs to Be a DEO
Getting Ready …

17. The Exponential Power of the X-Factor

Driven to Succeed
Bouncing Up, Not Bouncing Back
Curiosity Killed the Bad Idea
A Startup State of Mind
Serendipity Not Included
Getting Ready …

SECTION 5

CHARTING THE ADVENTURE

18. Choose Your Own Adventure

One Equation to Rule Them All
The Elements of Startup Success
Two Questions You Must Ask
The SEED Board—Where the Rubber Hits the Road
Build Your Own SEED Board
Your Journey is Just Beginning

Notes

Acknowledgments

We want to thank our parents (Steve—Terry, Carol, and Joanne, Ja-Naé—

Mike, Leslie, and Cindy) who really don’t read business books so they won’t
know they are in here unless someone tells them.

We want to thank Caleb Sexton who was the creative glue who put up with

Steve and interpreted his haiku and sketches to turn them into graphics that made
sense.

We want to thank Kate Rutter who really got the essence of the Startup

Equation and so clearly and quickly created sketchnotes that anchored each of
the element chapters.

We want to thank Britt Raybould who patiently proof-read, edited, and re-

edited our book to prevent this from becoming Ulysees 2, but without the
stream-of-consciousness style that made that book great. She is awesome.

We want to thank our agent Carole Jelen at Waterside who understood the

vision of this book and helped us find the perfect home for it.

We want to thank the team at McGraw-Hill, including Casie Vogel, Peter

McCurdy, and most importantly, Donya Dickerson, who has been patient,
creative, and just plain awesome.

We also want to thank caffeine and sugar, two elements that are not in the

Startup Equation, but both helped us write this book.

Finally, we want to thank all of the entrepreneurs out there for whom this

book is written. You are the pioneers, the explorers, and the rebels who create
things for the world we never could imagine. You make this world a better place.
This book is for you.

Foreword

“Why don’t you just fix that?”

It was a late summer night at the office. Many of my friends were on romantic

dinners or exploring Colorado on their bikes. I, however, was tucked away in an
office drinking warm beer with some other stressed out software developers. It
struck me that all these startup friends had never worked together. These three
developers are now lifelong friends, but before that night had not really had a
chance to work on something together. One of them had a problem with their
newly launched application, and I happened to know just the right person to fix
the problem who joined us at the office that night. “There should be a way we
can work together on projects.”

“Why don’t you just fix that?”
I could have left it there. I could have just passed on it. It could have joined

thousands of ideas in the trash can. For some reason that night, I jumped to
action and within an hour, I had a website, ticketing system, and blog post with
just a single line written, “Let’s do this.”

Looking back, the launch was both structurally embarrassing and completely

perfect. No logo. Under 200 words describing it. No venue. No partners. No
sponsors. No money. I wasn’t known nor very connected. I chose the name
“Startup Weekend,” which was so generic that people claimed to have heard of it
before we had even done anything. Even with all these obvious flaws, something
big started happening: people were actually signing up. We had five people.
Then ten people. Then thirty. Then, just three weeks later we had eighty-eight
people show up to a small office above a bike shop in Boulder, Colorado.

Startup Weekend was born.
We all gathered at 6 p.m. to discuss what we all wanted to build. Ideas went

around about event organizing, finding friends, parking, trail mapping, and
voting were presented. This group was having a hard time building consensus,

voting were presented. This group was having a hard time building consensus,
until we began discussing a product idea. That’s when we struck gold. That’s
when we had consensus.

We made a voting application for groups just like us. Or we tried to.

Throughout the weekend we picked a name (VoSnap), selected a programming
language (Ruby on Rails), created a marketing plan, and created a group cheer
(voooooooo-snap). We had all the functional things of a startup, in just one
weekend, which was against everything we were told was possible. But it
worked, because we had the basic elements of our own Startup Equation.

It was community building at its finest: A talented group who are individually

challenged to remain as flexible as possible to solve a problem. That is the
essence of what Ja-Naé and Steve talk about when they want you to assemble
your “A-team.” To get a group together who challenge themselves and
encourage the others as well. Because we had that core team element, what
really launched that weekend was a centralized movement of these Startup
Weekend events.

But it wasn’t easy. A bunch of blogs wrote about what we were trying to do

and pointed out how we were going to fail! That was actually fantastic for
getting attention and ironically they became our biggest word of mouth
evangelists without even knowing it. And that got lots of people talking about
whether we were on to something. Could a startup be built in a weekend? How
about a prototype? We knew, just as Ja-Naé and Steve know, that you just need
the right elements in place and a startup can be conceived in a day … or a
weekend.

In the startup ecosystem of 2007, it was assumed that you needed to invest or

raise a ton of money in the hopes of launching something within a few months to
a year (or more). We were trying to challenge that assumption. What happened
when a group of people were challenged outside of their usual work? Would we
work smarter and faster? Could the new tools and methodologies carry us to an
early launch? There were just too many questions that we were testing, and in
the end, the bloggers were right: we alone couldn’t launch a startup in a
weekend. However, we could, and did, build a small community! Community
was my calling and the discussion around launching in a weekend was the
marketing plan.

A side effect of the weekend was that everyone in the room later described it

as the primary spark of the an evolved startup community in Boulder. The
narrative of “our community is too siloed” and “there isn’t much going on here”
went away. The startup community grew tighter, and I was amazed by the way
members of it always lent a hand. We had a strengthening community with great
ethics and leadership.

ethics and leadership.

During our first weekend, we stayed up until 4 a.m. looking to launch this

project. We kept on thinking that we were an hour away. We just needed to
patch a bug. We just needed to write some copy. We just needed to finish the
code. Well, we just needed to do about three weeks of work to launch, and we
really never did. The weekend was a success, but it also failed many ways. But
as this book explains, that it the chance for every startup. The true test is how
you can learn from it and pivot as quickly as possible. That is what we did, and it
made all the difference.

No matter where you are on planet Earth, building, launching, and scaling a

company leverages many of the same elements in order to be successful. One
thing that did come from that weekend were emails to me from people all around
the world wanting to do a Startup Weekend in their community. I responded to
these inquiries with a simple, “Sure, pick a date and I’ll fly out!” Many people
took me up on this and pretty soon we had programs in 20 states and four
countries. I was working a fulltime job and flying places on Friday and
facilitating for weekend. It was amazing. It was exhausting. It was a classic “I
must work harder” mistake on my part. I didn’t have the tools (like this book)
and made a ton of mistakes on how to run a program. My X-Factor (which Steve
and Ja-Naé cover in Chapter 17) was that I had that drive to start something and
caught the energy needed to really run with it.

It is stated in this book and by other sources that by 2020, about 1 in 6 people

on the planet will be an entrepreneur of some shape or form. How they come to
being an entrepreneur could be one of 10,000 ways, but it excites me that so
many will take that risk. Books like The Startup Equation will drastically
increase the number of people that realize they can start something (and that is
just damn exciting). This book is a key part of showing you who you are as an
entrepreneur, helping you decide on the right approach, and then giving you the
elements to build something you’re proud of.

Looking back, I can identify a few things that were the reasons why Startup

Weekend worked:

1. We put our full trust in the community and valued everyone that attended.
2. We gave a challenge to talented people and the flexibility for them to solve it.

3. We were clear with what we were, what we were not, and what to expect.

The customer of Startup Weekend was part what Ja-Naé and Steve identify as

the creative economy. These are the makers, the doers, the tinkerers, and the
creators. By reading this book, I’m going to assume that you are the type of

person that is looking to fix a problem or identify an opportunity for something
new in the world. If I were to list out my heroes, they would all fit into this
group. The inventor, the singer, the artist, the builder, and the founder. I think
the world needs more people who take charge and put their stamp on it. There
are startup economies of all shapes and sizes around the world and Startup
Weekend is helping power that. This book, The Startup Equation, is a perfect
complement to every Startup Weekend team.

I don’t think we need more dreamers. I think we need more founders. Think

the world is a certain way? Test it. Think there is a market for something new?
Talk to customers. Think you can make a change for the better in your
community? Launch it, and take pride in the fact that you are the one to give it a
chance to be great.

This is a living book that I think is a breakthrough in entrepreneurship and for

entrepreneurs of all shapes and sizes, regardless of geography.

Leveraging many of elements discussed in this book, the team has grown UP

Global, the non-profit that runs Startup Weekend, Startup Week, Startup Digest,
and Education Entrepreneurs. I am excited to say that we are active in over 140
countries. Every weekend, hundreds of founders make their first step toward
applying the elements of The Startup Equation. The energy grassroots organizers
bring is something that still gets me excited about what entrepreneurship can do
for the world.

So … here is some wise advice given to me that I’ll pass along to you:

1. Be humble. Failure is a known and very common outcome. Failure itself is not

failure, but an unhumble project is just that.

2. Be bold. Don’t be afraid to lead or to set up an experiment and test some

assumptions out. Take your views and style and put them into action.

Think about what you want to create. Ask yourself, “What problem am I

looking to solve?” So I ask you, as someone asked me: why don’t you just fix
that? What is stopping you? Now that you have this book and the passion, my
wish to you is that you go for it. Build something great and take the time to
enjoy the process. This is what The Startup Equation is all about, and I’m
excited for you read and leverage this book as you begin your journey.

Andrew Hyde, Founder

Startup Week
@andrewhyde