ATTENTION Federation Citizens: Applications Now Open For #500STRONG Starfleet Academy

Startups – the final frontier. These are the continuing voyages of the Starship 500. Our vision: to explore strange new ecosystems, to seek out new startups and new founders, to boldly go where no fund has gone before.

The 500 Mission: Find and fund entrepreneurs all over the world. Make them successful through access to capital, mentorship, and education. Create a guild of GEEKS with Silicon Valley as a spiritual hub, then infect startup ecosystems around the world with the Silicon Valley (and 500) culture. Also, make $hitload$ of money and have lots of FUN.

Your Objective: Take your startup to the farthest edges of the galaxy with funding from 500, an amazing community of fellow founders and mentors, an incredible workspace in the heart of Silicon Valley, and much much more. Your time in Starfleet will culminate in Demo Days, which are a chance for you to showcase your company to some of the biggest, most influential aliens and investors in the galaxy.

Think you have what it takes to join other 500 companies that have taken their team into orbit with us? Beginning today, Thursday, January 31, you can apply to be considered for the Spring 2013 Accelerator program. All you need is your AngelList profile, and some awesome sauce.

How do I apply? Starting now, you’ll be able to submit your application through angel.co/500startups.

When is the deadline? We’ll accept applications through March 1st, 11:59PM Pacific. Get started sooner rather than later, as 29 Earth days go by faster than you think!

When will I hear back from 500? Throughout the application process, the Starship 500 crew will reach out to companies to conduct interviews. We will likely make final decisions by March 25, but that date is subject to change. Things move quickly when you’re operating at the speed of light!

Timeline:

– Applications open TODAY and remain open until Fri 3/1.

– We’ll be reviewing applications and reaching out to promising companies throughout the application process, including interviews. We’ll likely be doing interviews 3/11 – 3/22. Decisions will likely be made by latest the week of 3/25.

– The first day of the Spring 2013 batch will be likely be Monday 4/15.

P.S. Notice we used “likely” a lot? These dates are all subject to change, but those are what we’re shooting for.

What kinds of companies are you looking for? Starship 500 includes founders of all backgrounds, from all stretches of the galaxy. We want to keep that up. We seek out companies with strong teams, clear revenue models, and a focus on building businesses in any of these areas:

– Consumer & Commerce
– SMB / SaaS
– Family Tech
– Education
– Marketing / Distribution services
– Video Content & Infrastructure
– Language / International
– Mobile / Tablet
– Financial Services / Payments
– Food Tech

To learn more about what 500 looks for, check out our full FAQ at http://500.co/faqs

Check out the companies in our current Fall 2012 batch to get an idea of what we look for: https://angel.co/500-startups-fall-2012

So, brave cadet – are you ready to embark on your interstellar journey of awesomeness? Follow us on AngelList and apply today!

Best of luck, and godspeed!

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One Year as Startup Entrepreneurs: 10 Big Lessons

Elena Favilli (left) and Francesca Cavallo (right) are the co-founders of Timbuktu Labs, an award-winning company that focuses on mobile applications for children. They’re part of the 500 Startups family and are based in San Francisco. By working at the intersection of design, education and technology, they help parents discover the world with their kids.

A year ago, we got an email announcing we were among the winners of Mind The Bridge, the most important startup competition in Italy. The award consisted of one month in a startup program in San Francisco and a chance to take part in the final round of Italian Innovation Day at UC Berkeley.

We remember that morning well. We had been talking a lot about going to California, and all of a sudden we were about to make our journey there.
Since then, we’ve been through a lot. We moved to San Francisco, we were part of 500 Startups’ accelerator program, raised our seed round, won Best Design Award at LAUNCH Education and Kids, built a team and launched a brand new version of Timbuktu. If you don’t have it on your iPad, you should get it now!

We made many mistakes and, thankfully, learned from them. Here’s a shortlist of the 10 biggest lessons we learned.

1 – Just Do It.

Building a startup is hard, especially when you’re a perfectionist. There’s always a slide that could look better, some data to add, or a feature that’s still missing. But if you wait for everything to be as clear as water, you’ll never have a product.

Instead of thinking about what you want to do, just start. Meeting customers and investors will help you better understand your product and market. If you wait too long, you won’t get precious feedback that will help you improve, and you’ll fail before starting.

2 – You Have a Dream. Tell People about It.

Don’t ever be afraid of speaking your heart out about your startup. By repeating your story, you’ll get better at telling it, which will help you attract investors. Fundraising isn’t just about business plans – it’s also about telling a story that people want to believe in. How did you and your co-founder meet? How did you come up with the idea? Why is your product going to change the world?

Usually, angel investors don’t base their decision purely on results and data. Since data is often partial or incomplete at an early stage, they’ll look at your team and story. Ultimately, people invest in your story, your passion, and the fire they see in your eyes.

3 – Build Relationships.

Do this with customers, but also with other startups. Promptly reply to people who email you. Be open to their advice and requests, even when they’re demanding. If you make your customers feel like they’re part of what you’re building, they’ll become your advocates.

It’s the same with investors, present or potential. Respond quickly and be open to feedback, and keep them up to date with your results. Once again, practice storytelling. Everyone loves to feel like they’re part of a great adventure.

4 – Break the Rules.

Don’t stay within the lines. Rules are made to be broken. Try to make those rules better, and don’t give up when you hear “no.” If you’re disrupting a market, you’ll get many “no’s.” Get used to it. Be prepared to fight for what you think is right.

5 – Don’t Ever Think You’ve Made It.

It’s cool to be happy for an article in a newspaper, for an award, or for closing an investment. Nevertheless, to build something that can change the world, you need to dream big. It’s great to close a seed round, but at that point you’ve only just started.

We spend 14/15 hours per day trying to understand how to change the face of digital publishing for kids. And we won’t be happy until we do it. There’s a lot of work to be done if you want to make your dream a reality, so don’t ever rest on your laurels.

6 – Question Yourself.

It’s easy to fall into the average company mindset. As soon as you get a bit of success, you’ll stop feeling the need to reply to emails from people you consider below your level. Or even worse, you start acting like you’re an expert. All of this stops your growth before it’s even started!

Always be open to exchanges. Keep questioning yourself, no matter how successful you are.

7 – Learn to Say No.

This one of the hardest things to do since a startup is hardly in a position of strength, and in most cases it faces 6 to 8 months where it has to prove itself. But the skill of saying no is fundamental. You need to learn to say no to the offers that could bring you money immediately, but will distract you from your core business.

Say no to investment offers that are too much in favor of the investors. Say no to those who believe they can always set the rules. It may seem incredible, but being able to say no not only helps you stay focused on the most important goals, but will also earn you the respect of the people you work with.

8 – Set Short-Term Goals.

Investors like long-term projections, but for a startup, the most important results are those that can be measured short-term. And you’re not a startup unless you grow week by week (Paul Graham wrote a beautiful post about this).

Things changed for us when we started setting goals that we could measure every week. Accomplishing short-term goals will buy you the time you need to demonstrate you can achieve things in the long term.

9 – Build a Team.

Think like a team. Build great relationships with the people you work with. Never get tired of explaining your choices, and don’t be afraid to look vulnerable or to lead.

Surround yourself with talented, trustworthy people, and most importantly, don’t feel threatened by other people’s talent. If you instinctively put a capable colleague in a corner, ask yourself why. If the reason is fear, find a way to resolve it.

Talent is rare and must be cherished. It’s one of the most important ingredients to win the startup game.

10 – Have Fun.

The stakes are high, but don’t let you responsibilities crush you; being an entrepreneur is a lot of hard work, but don’t forget to have fun, too. Otherwise you’ll get stuck in a job you don’t like – and you won’t even have your boss to blame for it.

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Six Steps to Growth: What I Learned as 500 Startups’ Growth Hacker in Residence

Mike Greenfield

Mike Greenfield is an entrepreneur with a strong interest in data and analytics. He founded Team Rankings and Circle of Moms, honed his growth hacking chops at PayPal and advises early stage companies. He blogs at numeratechoir.com.

I just finished up a six month stint as Growth Hacker In Residence at 500 Startups. I want to share a few of my learnings.

But before I do that, a couple of things to get out of the way.

First of all, 500 Startups is a strong operation and an amazing story. If you’d just arrived in Silicon Valley yesterday, you’d probably have no idea that it’s only a couple of years old. In public, Dave McClure is a little zany/off the wall/all over the place, but that’s far from the entire story: he understands the venture world, he has good ideas on how to shake things up, and he’s built up a good team that complements his skills.

500 Startups has two major unfair advantages: a huge network of talented mentors helping portfolio companies (with many others clamoring to mentor) and impressive ties abroad — incredibly valuable for deal flow, fundraising, and partnerships. 500 acts like a growing startup rather than a greedy venture firm: with a small fund, Dave opts to hire more employees who will help startups, rather than keep extra money for him and the other partners. Venture capital is going to get shaken up over the next decade or two, and 500 Startups’ strong network and ungreedy, open-minded approach will put them in good position to thrive.

Second, any thoughtful person who understands how to grow an Internet business cringes at least a little bit at the term “growth hacker.” The hype-to-substance ratio has become high: I suspect that a high percentage of the 338 people who show up in a LinkedIn search for “growth hacker” don’t have any idea what they’re doing. So it was with a tiny bit of reluctance that I accepted the “Growth Hacker In Residence” title. For better or worse, 500 is the ultimate
anti-corporate firm, so I don’t have any business cards to implicate me. But it all worked out well.

WHY GROWTH IS IMPORTANT

I didn’t push back on the title because there is in fact a lot of substance behind the term growth hacking, and hype isn’t always a bad thing. The underlying skill it describes — increasing a product’s usage and distribution — is incredibly valuable in consumer technology companies. And contrary to the complaints of some, growth is not just product marketing by another name: skills in product design,
engineering, and data analysis are just as relevant.

To see why growth is so important, one need only look at the big successes of my former colleagues at PayPal (aka the “PayPal Mafia”): YouTube, Yelp, Yammer, and LinkedIn. All succeeded in large part because they were designed for growth. The ability to embed videos on MySpace separated YouTube from the pack; Yelp mastered SEO for traffic and retained a small core of “elite” reviewers to build content; Yammer made it exceptionally easy to invite colleagues; LinkedIn made connecting with professional contacts seem like an obvious and important need.

I don’t think this is a coincidence. PayPal had to scrap and claw to grow and survive; its alumni figured out how to grow their next companies the same way. By contrast, early Google was a company with more impressive technology that didn’t have to scramble to grow. Its employees likely learned less about growth while at Google, and those alumni have since had far less success with distribution.

In that respect, most entrepreneurs are more like the Google non-mafia than the PayPal Mafia: they don’t bring to their startup a strong understanding of how to grow and maintain a large base of users. That lack of understanding is true of most 500 Startups companies — as it is for the companies of every investor. Fortunately, that skill is — to an extent, at least — teachable.

HELPING COMPANIES

So how could I help the teams of 500 Startups?

For one, I could help by setting the right context: growth is at least as much discipline and execution as creativity. It turns out that there aren’t usually easy solutions to growth challenges. This is where the hype around the term “growth hacker” can be dangerous. Hacking implies something weird and unpredictable. It evokes a sense that the perpetrators are more crazy artists than precise scientists, that their methods are unusual and tough to replicate. And it implies that there’s some sort of obscure code that can be cracked to yield the magic growth solution.

If that were true, there might be a simple but hard-to-find switch to flip. This is almost never true. “Change the button color to green, and you’ll immediately go from 100 users to a million!” is probably not advice to bet your business on.

THE STEPS

A consumer startup with good product can become proficient at growth via a fairly straightforward series of steps. As a founder, I informally understood that series; working with the companies of 500 Startups allowed me to formalize it as a six step process:

1. Track: Figure out what needs to be tracked. Track it.

2. Understand: Delve into the data to understand how people are using the product.

3. Prioritize: Evaluate and prioritize the areas most likely to yield growth. Sometimes they’ll be tweaks, sometimes they’ll be rearchitected features, sometimes they’ll be completely new features.

4. Design/Write:In the top area or two, design a few features that are likely to yield growth. I emphasize writing because the words describing a product often matter at least as much as any other characteristics.

5. Build: Code it up, push it out.

6. Measure: Gauge success of new features. GOTO 1, 2, or 3, adjusting strategy based on the results.

THE PROCESS

Much like a signup flow that sees significant dropoff upon asking for the first piece of information, companies often get sidetracked before finishing the first step. Tracking and storing data — so you can actually go back later and see what went on — requires discipline and is low on glamour and creativity. You know that tracking won’t help you tomorrow: isn’t it more important to build out
that cool feature that might actually help right away, or fix a bug that a user is complaining about?

Usually, no. Those who try to grow by relying only on designing and building often wind up spinning their wheels: they work on the wrong area of their product, again and again; they never completely understand what worked and what didn’t.

In my stint at 500, there were a few times when a company I worked with didn’t get past step one. Needless to say, that was frustrating for me, and it forced me to come up with a rule: if you want me to spend my time helping you grow, you need to set up the basics of tracking before we start working together. That rule worked well.

The technical details of what needs to be tracked vary; a more mature company will usually need to store most user actions in their own database. Pretty much anything the company cares about improving — the number of users coming in via certain channels, views of certain pages, clicks via email, invitation responses — needs to be stored.

Once the data are in place, understanding the big picture comes to the fore. How are people finding out about the product? 

How frequently are old users coming back in to the product? What, if any, are the social dynamics: are people coming back because someone commented on something or because someone followed them? When that’s in place, it becomes relatively easy to come up with some estimates of the metrics impact of potential product improvements. To be sure, those estimates are more likely to be accurate when done by someone who’s done them before, but anyone can and should make them.

Those estimates facilitate an ordered list of possible product changes. These changes might be minor — changing “Next” to “Continue” or “Submit” — or major, like building out a completely new signup process. And again, designing or writing by someone who’s skilled and knows what’s likely to be effective, is valuable. Building out those designs is the obvious next step; I generally didn’t get directly involved with that at 500.

Measuring the effects of those changes — for companies with data scale, via A/B testing — is the vital last step. It’s amazing to me how many companies will spend weeks working on a new feature or design, and then never really know if it was effective. If you’re tiny and just trying to get some kind of win, that’s okay. If you have an audience of hundreds of thousands of people or more, it’s negligent.

SUCCEEDING AS AN ADVISER

I effectively served as an adviser to the 500 Startups companies I worked with (though not financially), and I’ve come to realize that it’s not easy to add value as an adviser. Many advisers get a bunch of equity in a company, but don’t add a lot of value. If I agree to advise a company, I know there’s some chance that my advice won’t end up being relevant, but I want to maximize the odds that the time I spend with founders and employees has a measurable impact. As a founder, I intuited those six steps, and then spent hundreds or thousands of hours building everything out with a team of people I saw every day. As an adviser, I’m spending hours or tens of hours, so my thought process has had to be tighter and more formal.

The six steps outlined above can work pretty well regardless of the scale of involvement. There are a few companies with whom I spent a few hours a week over several months. With those companies, we spent a bunch of time upfront to make sure everything was being tracked. Then every week or two, we’d run through steps 2-6: finding a problem area, brainstorming and designing possible
improvements, building, and measuring the results.

With most 500 companies, my interaction was lighter: a 30-minute conversation every month or two. That may seem like too little time to go through six steps, but an abbreviated version can still work well. The conversation would usually look like this:

1 and 2. Tell me about your business. How do people find out about your product, how do they get back in to the product, etc. This works better if the founders get answers in advance.

3. Let’s figure out (in part by looking at the existing product) which areas to prioritize.

4. Let’s look at the product and try to narrow down (almost) exactly how the changes will look.

Then the startup does the details of step 4, and all of step 5 on their own — actually building it out — and does the measurement step (6) with a little bit of guidance.

That process isn’t always going to be effective, in large part because most product changes don’t work as hoped. But by understanding the problem and betting on the changes with the highest expected returns, I’ve seen many wins. Here are a few:

One company I worked with, TradeBriefs, gets most of their return traffic from email newsletters. That became obvious when we walked through the basic metrics of the business to understand how everything fits together. The content of those newsletters had always been hand-curated, which means it consistently looked professional but wasn’t optimized. In previous lives, I’d seen how similar types of email content can have vastly different clickthrough rates. To better discover which content will yield maximum click rates, the team created a system that allows them to test different versions of similar emails each day. Their volume was large enough to allow them to randomize content for a small batch of users early in the day, wait, pick a winner, then send the winning (best) content to the majority of their users later in the day. They implemented that and saw
a 30% improvement in their email click rates.

Another company I worked with is a community where users are creating all of the content and interacting with one another. They were seeing lower usage among people who had been on the site for more than a few months, and they wanted to address that. We spent a lot of time upfront on metrics, tracking activity levels and looking at how users transition across differing levels of
activity.

That digging led us to realize that people who became moderately active by day five were far more likely to stay active than those who had not. So we focused our efforts there, testing lots of little tweaks in the new user experience to get people to activate in their first few days. Cumulatively, those tests led to a 30% increase in initial activation; we expect that to pay similar dividends long-term.

A third company is largely a commerce company that makes money when people buy physical goods. Most of their traffic — and purchases — were coming from advertising on Facebook and Google. The founder discovered that she could get more traffic from those same channels much more cheaply if she sent users to a more fun — but less commerce-focused — area of the site. However, only 4% of that cheaper traffic converted into leads likely to monetize, making it not worthwhile.

Digging into the flow, we found a number of places to optimize the user interface — largely by making it intuitive to click through to the next step — and increased that 4% conversion rate to 16%. That difference was a huge one, immediately making the new stream of traffic immensely profitable.

Those three examples are in the minority: for most of the companies I spent time with, the immediate value I created for them was little or nil.

Yet I come away feeling successful. In six months, I’ve been part of a few real wins and found a template for how I — and hopefully others at 500 Startups going forward — can help startups.

Thanks to Dave, Christine, the staff at 500, and the many, many founders and employees I’ve worked with over the past six months. I look forward to continuing to work with you all as a 500 Startups mentor and friend.

And now it’s time for me to go and build something…

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Startup UX and Design Demystified

Danny Boice - Speek Co-FounderDanny Boice is the Co-Founder & CTO of Speek where he runs product and technology.  Speek is a 500 Startups-funded startup that let’s users do conference calls with a simple link (speek.com/YourName) rather than using phone numbers and PINs.

A serial startup/technology entrepreneur and executive, Danny started his career as a software engineer working for startups like Network Solutions and MusicMaker.com in the 90s. Danny founded his first company, Jaxara, in the early 2000s (exited via acquisition), and co-founded Speek with John Bracken in 2012. Danny attended Harvard.

 


Figure 1: The mythical all-in-one UX +Visual Designer purple unicorn species
** Credit for image goes to Fanpop.com

I recently wrote an article called Startup Technology Demystified. In that piece I looked at the most common technologies used by startups and broke them down into words that could be understood by the business-afflicted among us.

Truth be told, however, there may be one single concept that is even more elusive than startup technology in the land of the entrepreneur: the difference between user experience and design.

Wouldn’t know gestalt taxonomy from a colonoscopy? Can’t tell Jakob Nielsen from Leslie Nielsen? (Hint: one is a really funny, white-haired guy. The other one was in Airplane.) Well then keep reading, my friend—I am about to fuck up your mind with some truth.

You know that Tom’s-shoe-wearing, DUMBO-romping, Warby-Parker-vintage-glasses-that-he/she-insists-on-referring-to-as-“spectacles” hipster with the tweedy impertinence and apathetic demeanor that magically make products easier to use?  That’s probably a UX badass, NOT a visual designer, and you better be able to tell the difference, home slice.

User Experience

User experience (UX) is the way a person feels about using a product, system, or service. User experience highlights the experiential, affective, meaningful, and valuable aspects of human-computer interaction and product ownership, but it also includes a person’s perceptions of the practical aspects such as utility, ease-of-use, and efficiency of the system. User experience is subjective in nature, because it is about an individual’s feelings and thoughts about the system. User experience is dynamic, because it changes over time as the circumstances change.

Translation: User experience people think about the holistic usability of your product. This includes things like the personas constituting your users, the flows users will follow, how to make flows and screens as user friendly as possible, and what goes on (or better – gets left off of) each screen.

Some of the things that User Experience peeps will consider and/or deliver:

* Personas
* Wireframes
* Interactive Prototypes
* Copy, labels, messaging

The type of problems a UX person may solve for you:

* The ideal user flow for a new user to my product
* The information that should be displayed on each screen (and why)
* Users can’t figure out how to use this widget or feature
* Users can’t figure out how to navigate this flow
* Users register but still don’t get what we do
* I can’t get users to register from my home page

Visual Designers

Visual design is the practice or profession of designing print or electronic forms of visual information, as for an advertisement, publication, or website.

Translation: Visual designers think about the quality of a user interface, the polished graphical elements that make up that user interface, and the interactions that occur when a human uses that user interface.

Some of the things that Visual Designers will deliver to you:

* Screen mocks
* Style guides
* Interaction guides
* PSD’s (aka Photoshop files)

The type of problems a Visual Designer will solve for you:

* The look and feel of my app sucks
* My UX freelancer just gave me a bunch of wireframes…now what happens?
* What colors, styles and other visual elements should I use in my app to do my brand justice?
* Users think my company sucks because of my shitty home page

Real World Example

To give you a practical example, I am going to take you through the UX and design steps we followed to bring our Speek iPhone app to life.

Below you will see what our UX lead delivered versus what our Visual Designer delivered.

UX – Storyboards, Structural Flow, Wireframes

This is something that our User Experience person designed.  The mission was to come up with the very best user experience for getting an iPhone user onto a conference call.

Storyboards

Structure / Flow

Wireframes

Visual Designer – Design Comps & PSD’s

Final Product

If you’d like to see the final working product you can see it here.

Conclusion

I hear people commingle and confuse UX professionals and Visual Design professionals all the time.  I also hear people assume they will be able to find one person who is great at being both.  Both of these misconceptions are huge mistakes.  As a startup founder, you must be intimately aware of the nuances between the design and user-experience professions; knowing who to ask for what and what to expect specifically from each employee and contractor is essential to help your product succeed.

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