Sustainable and
Profitable Startup
- A Computer
Scientist
Approach.
[email protected]
Tuesday, June 4, 13
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Boo
WAS
HERE
Circa December, 2009
PUTRA HEIGHTS GARAGE
SUBANG JAYA | MALAYSIA
Tuesday, June 4, 13
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Little bit about me
• Fly below the radar type.
• Formerly with IBM, Vodafone, Shell.
• After 4 failed startups, founded
hometuitionjob.com and profitable by the
6th month.
• fanatical about ways to be more efficient
and make computer serves us faster and
better.
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Two startup models:
Human Serves Machine
vs.
Machine Serves Human
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“Tech” startup
• Human Serves Machine
Model
• Machine Serves Human
Model
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Human serves
Machine model.
• to scale, need to increase
number of humans to
serve more customers.
• Mechanical based way of
solving problems.
• growth gets expensive and
exhausting.
• examples - Yahoo(early
days) Groupon, Webvan and
Loyalty App(mobile)
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Human serves
Machine model.
• most e-commerce websites.
Not real “tech” startups, but
just a commerce entity with
website. Amazon.com is an
exception.
• revenue in short term.
• mostly staffed by non-tech.
MBAs, Marketing types.
• good to exit while at the peak.
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Machine serves
Human model.
• to scale, need to increase
number of machines to
serve more customers.
• Algorithm based way of
solving problems.
• growth ‘usually’ gets cheaper
and easier.
• examples - Google, Dropbox
and AWS
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Machine serves
Human model.
• 100% self-service model.No
phone number for
customers to call.
• most cases....revenue only
visible in long term.
• get to sleep and get paid.
• mostly staffed by
Programmers, Computer
Scientists & Engineer types.
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Machine serves
Human Model.
A Computer Scientist Approach
How to get there ?
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Computer Science
fund raising style.
• #FFFCC (not hex code for
color)
• F = Friends, F = Family, F =
Fools, C = Credit Cards, C =
Customers.
• 3 Fs = hard. CC = easier.
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Leverage on Credit
Cards.
• don’t have one? Too bad.
• two important dates to
remember for credit card.
Statement date and Due
date.
• Borrow from banks for 50
days. Interest free.
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statement date
=
the date bank prints
your statement and
mail it to you.
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due date
=
the date you need to
pay your bank
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statement date
-
due date
=
20 days.
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last month
statement date
to
next month
statement date
=
30 days.
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days between this
month statement
date and next
month due date
=
50 days.
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Big item purchase like
Google Adwords is
made one day after
the bank printed my
statement.
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therefore I have 50
days to make sales
and profit before I
incur my costs.
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confused?
it’s ok, not many
grasped this concept
initially, because school
never teach us how to
manage money and
cash flow.
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Rule Of Thumb:
To get 50 days credit,
spend one day after
statement date and
make sales!
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Customer is your
ultimate investor.
• Customers believe in your
service and want to see you
succeed. Focus on them!
• Angel investors, VCs want
to ride on your startup with
revenue generated or
traction from customers. Be
picky!
• think like stray dogs... go to
where the food(customer) is.
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Customer is your
ultimate investor.
• Go and bark at the
customers(find them online
via forums, flyers).
Subjective, sometimes a
customer don’t realize that
he/she needs the solution.
• Don’t waste time sucking up
to tech press/reporters
unless you want to build
hype around your startup to
lure investors.
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Getting customer,
things to watch
• Exchange services. i.e
Bloggers.
• Watch your COCA(Cost Of
Customers Acquisition). Aim
for lower COCA as much as
possible.
• Is your website SEO-able?
• Word of Mouth-able?
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Bootstrapping
forces you to invent
ways to solve your
problems rather than
spend your way out of
your problems.
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Example :
People’s Pact*(Bootstrap)
created content that went viral
online for free versus National
Garrison*(well-funded) that
spent heavily on
advertisements and spammed
your phone to death via SMS.
* - name changed to avoid political argument.
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Look for Win-Win
situation.
• enduring startups that have
become great today are
those companies in the win-
win situation.
• Groupon is not one of them.
Unless they pivot
successfully.
• Win-Win companies are
lasting.
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Make friends instead
of networking.
• networking is transactional
and short term.
• Usually starts with business
cards exchange.
• friendship is lasting.
• Usually starts with a smile
and handshake.
http://pandodaily.com/2012/11/27/networking-is-for-losers/
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Lasting Business =
Customers Acquisition + Retention +
Monetization Activities.
Growing Business =
Increase(Customers Acquisition +
Retention + Monetization Activities)
Dying Business =
Decrease(Customers Acquisition +
Retention + Monetization Activities)
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Peace, Love and Care
• No happiness without
peace. Fire fighting waste
time and resources - heard
it from ex-Living Social guy.
• Be willing to pass on your
knowledge.Be willing to train
junior programmers. Spread
Love!
• Care about your startup so
that it will endure the test of
time. i.e Lynda.com
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“Computers are incredibly fast,
accurate and stupid. Humans are
incredibly slow, inaccurate and
brilliant. Together they are
powerful beyond imagination”
Think about the endless possibility
of this combination......
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