FROM DEVELOPER TO FOUNDER The Web Startup Success Guide BOB WALSH FOREWORD BY JOEL SPOLSKY, CEO OF FOG CREEK SOFTWARE “This book is a fantastic resource for anyone doing a web startup or a software startup.” —JOEL SPOLSKY www.it-ebooks.info www.it-ebooks.info THE WEB STARTUP SUCCESS GUIDE Bob Walsh www.it-ebooks.info The Web Startup Success Guide Copyright © 2009 by Bob Walsh All rights reserved. No part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any informa- tion storage or retrieval system, without the prior written permission of the copyright owner and the publisher. ISBN-13 (pbk): 978-1-4302-1985-9 ISBN-13 (electronic): 978-1-4302-1986-6 Printed and bound in the United States of America 9 8 7 6 5 4 3 2 1 Trademarked names may appear in this book. 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Although every precaution has been taken in the preparation of this work, neither the author(s) nor Apress shall have any liability to any person or entity with respect to any loss or damage caused or alleged to be caused directly or indirectly by the information contained in this work. www.it-ebooks.info This one is for Sake, who for nearly 23 years was a very good boy. www.it-ebooks.info www.it-ebooks.info Contents at a Glance FOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi ABOUT THE AUTHOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii ABOUT THE TECHNICAL REVIEWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xv ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix CHAPTER 1 INTRODUCTION: WHAT WAS IS NOT WHAT IS . . . . . . . . 1 CHAPTER 2 VALUE IS THE CORE OF YOUR STARTUP . . . . . . . . . . . . . 25 CHAPTER 3 SO MANY PLATFORMS, SO MANY OPTIONS . . . . . . . . . . 49 CHAPTER 4 TOOLS AND GROUPS FOR STARTUPS . . . . . . . . . . . . . . . 99 CHAPTER 5 MONEY: RAISE, MANAGE, MAKE . . . . . . . . . . . . . . . . . . . 145 CHAPTER 6 SOCIAL MEDIA AND YOUR STARTUP . . . . . . . . . . . . . . . 209 CHAPTER 7 CLARITY MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 CHAPTER 8 GETTING IT DONE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 CHAPTER 9 SIX WISE PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341 CHAPTER 10 WHAT’S NEXT? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399 INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407 www.it-ebooks.info www.it-ebooks.info Contents FOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi ABOUT THE AUTHOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii ABOUT THE TECHNICAL REVIEWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xv ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix CHAPTER 1 INTRODUCTION: WHAT WAS IS NOT WHAT IS . . . . . . . . . 1 Please Insert Chip into Brain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 What’s Changed Since Micro-iSV: From Vision to Reality . . . . . . . 2 The New Online Economic Reality and Your Startup . . . . . . . . . . 3 A Ridiculously Short History of Software Startups . . . . . . . . . . . . . 3 So, What’s a Startup? And Why Would I Want to Be One? . . . . . . 8 Startup Flavors—Take Your Pick . . . . . . . . . . . . . . . . . . . . . . . . . 9 When Is the Right Time to Jump?. . . . . . . . . . . . . . . . . . . . . . . . 14 Neil Davidson, Business of Software Conference . . . . . . . . . . . . 15 Don Dodge, Director, Business Development at Microsoft . . . . 17 Recap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 CHAPTER 2 VALUE IS THE CORE OF YOUR STARTUP . . . . . . . . . . . . . 25 Value and Problems, Problems and Value. . . . . . . . . . . . . . . . . . 25 Beginning at the Beginning Is Just a Beginning . . . . . . . . . . . . . . . 25 Wally’s Startup Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Implications of Wally’s Startup Law . . . . . . . . . . . . . . . . . . . . . . . 33 Have a Great Startup Idea? Hmm. Maybe Not. . . . . . . . . . . . . . 36 Where Do You Find Problems? . . . . . . . . . . . . . . . . . . . . . . . . . 41 Ten Startups Not to Do, and Why. . . . . . . . . . . . . . . . . . . . . . . 43 Recap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 www.it-ebooks.info Contents viii CHAPTER 3 SO MANY PLATFORMS, SO MANY OPTIONS . . . . . . . . . . 49 Then and Now . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Everybody Wants to Be in the Platform Business . . . . . . . . . . . . 50 Evaluating Platforms: A Checklist. . . . . . . . . . . . . . . . . . . . . . . . . 51 Software As a Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Saas Enterprise Reality Check: Rick Chapman, Softletter . . . . . . . 56 Platform As a Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Loving Google App Engine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Microsoft’s Azure Services and Mesh Platforms. . . . . . . . . . . . . . 64 Social Networks As Platforms. . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Mobile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Andrey Butov, Antair Corporation . . . . . . . . . . . . . . . . . . . . . . . 76 Eric Chu, Google Mobile Platforms Program Manager . . . . . . . . 79 Hybrid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Jeff Haynie, CEO, Appcelerator . . . . . . . . . . . . . . . . . . . . . . . . . 83 Peldi Guilizzoni, Balsamiq Studios . . . . . . . . . . . . . . . . . . . . . . . . 85 Open Source/CMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Mac Desktop and Windows Desktop . . . . . . . . . . . . . . . . . . . . . 91 Scott Morrison, Founder, Indev . . . . . . . . . . . . . . . . . . . . . . . . . 92 Gwen Hilyard, Cofounder, Brisworks . . . . . . . . . . . . . . . . . . . . 96 Recap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 CHAPTER 4 TOOLS AND GROUPS FOR STARTUPS . . . . . . . . . . . . . . . 99 Back in the Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Tools for Startups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Subscription Startup Communities . . . . . . . . . . . . . . . . . . . . . . 119 Rob Walling, The Micropreneur Academy . . . . . . . . . . . . . . . . 120 Gene Landy, IT/Digital Legal Companion Author and Attorney. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Startup Organizations and Groups Online and Off . . . . . . . . . . 128 Shaherose Charania, Women 2.0 . . . . . . . . . . . . . . . . . . . . . . 132 Startup Groups Near You—Offline and On . . . . . . . . . . 133 Large Vendor Programs for Startups. . . . . . . . . . . . . . . . . . . . . 139 Recap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 CHAPTER 5 MONEY: RAISE, MANAGE, MAKE . . . . . . . . . . . . . . . . . . . 145 Follow the Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Raising the Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 Understanding the Funding Ladder . . . . . . . . . . . . . . . . . 147 You Are Not Alone . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 The Basics of the Funding Game. . . . . . . . . . . . . . . . . . . 151 The Art of Raising Angel Capital, by Guy Kawasaki . . . . . . . . . . 151 The Top Ten Lies of Entrepreneurs, by Guy Kawasaki . . . . . . . 161 www.it-ebooks.info [...]... taxes Where was the software to come from? Although the real story is a lot messier, our story comes to a fork in the road On the high road is Richard Stallman and others who believed that software should be free—free to modify, free to own, free to do what you want with Call this the road that led to Open Source Then there was the other road the people on the first road would call the low road It... desktop application Then along came the Internet, the World Wide Web, and Marc Andreessen Andreessen cowrote the first popular web browser, Mosaic, in 1993, while in college, and then hooked up with a Silicon Valley entrepreneur named Jim Clark to found the startup Netscape Communications to popularize the World Wide Web created by Tim Berners-Lee in 1989 Over the next six years the upstart Netscape... wrote this book The Web Startup Success Guide is kind of the Kill Bill Vol II of what it takes to create a successful startup I have written it for all those developers who are ready to step up and create more than just an alternative to programming for money for someone else There’s a whole other story now to be explored and told, one being written by tens of thousands of developers on the Web, on mobile... a web startup or a software startup Bob Walsh will teach you how to make your startup successful Buy it, read it, put it under your pillow Then buy copies for your cofounders And go out there and nail it with a killer startup that makes the world a better place Joel Spolsky CEO, Fog Creek Software www.it-ebooks.info About the Author My name is Bob Walsh (bob.walsh@47hats.com), and I believe that startups... around the global developer community while the venture capitalists were licking their dot-com-bust wounds on Sand Hill Road in Palo Alto If there was one single event that signaled the start of the current era of software startups, I’d point to the founding of seed-stage funding firm and startup factory Y Combinator in 2005 Paul Graham, one of those Internet millionaires, convinced that the cost of successfully... and a web designer who raise $200,000 to build a web app from family, friends, and an angel investor network? That’s definitely a startup So why leave the relatively safe harbors of corporate life or consulting to venture into the global market and launch a startup? Specific motivations are as varied as the people who have them—and people in the startup world tend to be anything but homogeneous A startup. .. e-books, and then created a new podcast (this time my own, The Startup Success Podcast, with the able help of my cohost, Pat Foley) I like startups Startup founders have a dream, a passion, a desire to make something happen, not just to do what others have done But by mid-2007 I had come to realize three things First, there had to be a better way to bootstrap a software business than either to hire... experienced programmers But for all their coding skills, they didn’t really know the first thing about making a business successful Which is OK They’ll learn It’s not that hard The hardest part is realizing that even though you’re making an Internet company, writing the code and getting it to work is only a small part of the effort, and not necessarily the most critical one The business side is just as crucial... software companies Y Combinator graduates were only a small sliver of the wave of startups that have shaken up the established order, but they are a representative sampling of what the current wave of startups are all about, as opposed to the software companies that came before them They are about doing things online: everything from sharing documents to making payments, to networking with online friends,... a kid in the front row who, I imagine, had just gotten his braces off the week before And for almost two hours straight, these poor kids asked me the most basic questions imaginable about the business of startups Pricing Features Marketing Invoicing They had so many questions I gave them as good a brain dump as I could on each topic They sat raptly and asked intelligent follow-up questions These were . —JOEL SPOLSKY www.it-ebooks.info www.it-ebooks.info THE WEB STARTUP SUCCESS GUIDE Bob Walsh www.it-ebooks.info The Web Startup Success Guide Copyright © 2009 by Bob Walsh All rights reserved FOUNDER The Web Startup Success Guide BOB WALSH FOREWORD BY JOEL SPOLSKY, CEO OF FOG CREEK SOFTWARE “This book is a fantastic resource for anyone doing a web startup or a software startup. ”. that page with the interview of me. This book is a fantastic resource for anyone doing a web startup or a software startup. Bob Walsh will teach you how to make your startup successful. Buy