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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. Tuesday, June 4, 13

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Two startup models: Human Serves Machine vs. Machine Serves Human Tuesday, June 4, 13

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“Tech” startup • Human Serves Machine Model • Machine Serves Human Model Tuesday, June 4, 13

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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) Tuesday, June 4, 13

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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. Tuesday, June 4, 13

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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 Tuesday, June 4, 13

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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. Tuesday, June 4, 13

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Machine serves Human Model. A Computer Scientist Approach How to get there ? Tuesday, June 4, 13

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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. Tuesday, June 4, 13

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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. Tuesday, June 4, 13

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statement date = the date bank prints your statement and mail it to you. Tuesday, June 4, 13

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due date = the date you need to pay your bank Tuesday, June 4, 13

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statement date - due date = 20 days. Tuesday, June 4, 13

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last month statement date to next month statement date = 30 days. Tuesday, June 4, 13

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days between this month statement date and next month due date = 50 days. Tuesday, June 4, 13

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Big item purchase like Google Adwords is made one day after the bank printed my statement. Tuesday, June 4, 13

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therefore I have 50 days to make sales and profit before I incur my costs. Tuesday, June 4, 13

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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. Tuesday, June 4, 13

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Rule Of Thumb: To get 50 days credit, spend one day after statement date and make sales! Tuesday, June 4, 13

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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. Tuesday, June 4, 13

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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. Tuesday, June 4, 13

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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? Tuesday, June 4, 13

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Bootstrapping forces you to invent ways to solve your problems rather than spend your way out of your problems. Tuesday, June 4, 13

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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. Tuesday, June 4, 13

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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. Tuesday, June 4, 13

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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/ Tuesday, June 4, 13

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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) Tuesday, June 4, 13

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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 Tuesday, June 4, 13

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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...... Tuesday, June 4, 13

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Thank you! Tuesday, June 4, 13