From a bright spark, to setting the world alight: 10 lessons on how to create a successful startup by David Karp, Tony Hsieh, Peter Thiel and others
We often hear about startup success stories, from Mark Zuckerberg who launched Facebook from his Harvard dorm room to David Karp, who created Tumblr from his mother’s apartment.
Creating a startup can be overwhelming and difficult to grasp. What does it take? Here are 10 tips to create your successful startup.
- Have a vision for something and a want to create.
David Karp, CEO and founder of Tumblr
Having an innovative idea is only the first step for creating a startup. To be successful, you must be able to lay out a long term plan.
In 2006, David Karp wanted to start a blog to share his thoughts, but the “big empty text box” on services like WordPress was a source of anxiety because he didn’t see himself as a writer. His vision for Tumblr was to abandon the text box and have a button for each type of media. He wanted to democratize blogging. In 2013, Yahoo bought the blogging platform for $1.1 billion! Ten years after Karp’s vision, Tumblr hosts more than 292.7 million blogs and boasts 555 million users each month.
- Chase the vision not the money: The money will end up following you.
Tony Hsieh, CEO of Zappos
The main focus should be on the vision of the business you want to build. Picking a topic and defining a time frame allows for an effective organisation that is beneficial to the growth of your startup.
Zappos has been known for its company culture. The whole vision set by Tony Hsieh rests in “delivering happiness to customers, employees and vendors”. In 2009, after Amazon acquired Zappos for $1.2 billion, Hsieh wrote a letter to all Zappos employees to keep the open and honest relationship he built. His goal was to reassure the employees that the acquisition wouldn’t impact in any way Zappos’ initial vision and culture.
- Learn from others but maintain a strong independent vision.
Richard Price, founder of Academia.edu
Learning from others’ failures is clearly valuable. But don’t base every decision on people’s experiences, some risk-taking is necessary.
Richard Price had the idea for Academia.edu when one of his doctorate papers took three years to be published. His vision was to make the academic publishing process more efficient. He took a risk by going against the academics’ reluctance to share their work on a public and free platform. Traditionally, to access this type of papers, you must have a university ID or pay for access. Today, it is safe to say that Price won his challenge, Academia.edu is the most wideley used platform to read academic research for free with more than 30 million registered users and 8 million uploaded papers.
- Plan while you can, launch as soon as possible, and make changes as you go.
Levi Cooperman, co-founder of Freshbooks
Modelling your business is obviously important, but don’t get stuck at this stage. Try to push it out to your users as soon as you can.
Levi Cooperman founded Freshbooks based on the fact that of 60 million small business in the English speaking world, only 17% were using accounting software. The need being so big, it was unrealistic to try to serve it all. His vision was then to focus on a niche market to try and launch Freshbooks as soon as possible. Today, the company is the first invoicing software for small businesses in the UK.
- View your business plan as a game of chess and focus on the long-term vision.
Peter Thiel, co-founder of Paypal
There is no requirement that you need to be the first one entering the market, as long as you play your business strategy right. Peter Thiel explains his “Last mover advantage” theory in his book “Zero to One: Notes on Startups, or How To Build the Future”. The combination of fast data, ample venture capital money, low interest rates, easy outsourced labour, ever- cheaper hosting costs, and improvements in processing power make new companies easier to scale than ever. Companies such as Whatsapp rose to multi-billion valuations in fewer than five years.
- Find your niche
Christian Reber, founder and CEO of Wunderlist
Before trying to expand, focus on one specific target. Diversification will come with time.
“I’d say the best advice would be just to get started and once you find something, focus and execute. Don’t try to be everything to everyone right away. If you pick one vertical and do it well, other folks will find you. From a narrow niche of IT professionals who were our early target market, we now have a wide variety of customers.”
When created in 2011, Wunderlist was a Berlin-based startup consisting of a to-do app for PCs and platforms such as Windows, Linux and Mac OS X. In 2015, Microsoft acquired the company and the app has now more than 13 million users and is available from a smartphone, tablet, computer and smartwatch.
- Generate some buzz
Jonathan Long, CEO and founder of Market Domination Media
Try to get as much traditional and social media coverage as you can. Some concrete examples: live events, infographics, a Facebook page, an Instagram account, and creating a blog.
Uber understood the value of this tip. Since its creation in 2011, Uber has launched dozens of successful campaigns worldwide. In 2012, the company teamed with Spotify to enable customers to listen to their Spotify playlists while riding. Uber then announced that users in 10 global cities would get the chance to win a ride-along or live session with their favorite singers and celebrities.
- Don’t worry about your work/life balance.
Chris Myers, founder of BodeTree
The business you try to create is just part of that life. It doesn’t mean that the startup is the only focus, it just means that the lines get blurred.
Chris Myers explains that founding a startup is not like having a traditional job where you clock in and out. As the CEO of BodeTree, an online platform that helps small businesses automatically organise their finances, he learned that exceptional results require exceptional efforts. Sacrifice is essential to building a successful business. All his dedication allowed him to raise $3.4 million in funding.
- Do more with less.
Morgen Newman, founder of IdeaPaint
Limited funds do not have to be a barrier. Be creative in the way you can make things work. The key is to avoid unnecessary expenses by taking advantage of free advertising and marketing.
David Klein, founder and CEO of Commonbound, identified three idea to ponder so you can accomplish more with less.
- Capital scarcity is an enabler of resourcefulness and creativity.
Capital scarcity is negotiation’s best friend.
- Capital scarcity is a recruiting tool for top talent.
- Don’t go at it alone.
Gleb Budman, CEO of Blackblaze
You need to create a close relationship with your team and be clear about your common goals. Building a team is not only about leadership and skills, but also about resources. As your team grows, so will your business and hopefully your revenue.
In an interview, Gleb Budman listed three advantages to having a great team:
- A shoulder to lean on
- Easier to take a break when you know someone will be at the office who will care the way you do and share your goals.
- Variety of opinions, ideas and skills.