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Start Small, Stay Small by Rob Walling

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A software developer explains why doing marketing before writing your first line of code will improve your next startup chances of success.

Finished: Mar 2017
Rating: ⭐⭐⭐⭐
Get the book πŸ‘ˆ

πŸ’‘ Short review

This book is a little hands-on manual for people with technical backgrounds, such as developers, aspiring to make the move to entrepreneurs and work on their own product. Despite the book being very short, it is very detailed in critical aspects of this process.

Chapters that I found particularly relevant are those related to idea acquisition, marketing, and outsourcing. The author repeats throughout the book that putting aside the urge to build/do everything by yourself and wear your marketer hat first are the main challenges for transitioning developers.

[TK]

πŸ’Ž Gems

Developers making products tell themselves:

You code it once and sell it 1000 times β€”it's like printing your own money! I build apps all the time, how hard could it be to launch a product?

Who makes the switch from Developer to Entrepreneur:

The experience of many veteran developers show that after a certain level of experience you can't push past that financial barrier. And keeping up with the latest technology will begin to wear you down.

Avoid doing everything yourself:

Outsourcing is a learned skill, and you're likely to screw it up your first time around.

Entrepreneurship requires taking decisions without complete facts

...take your best guess, then measure and tweak. And do it 20 more times until you succeed.

For most scenarios follow this realization:

Your order of importance is market, marketing, aesthetic, function.


πŸ“” Notes

πŸ‘‰ The gap between a developer and an entrepreneur

entrepreneur is a visionary, sees potential in an idea and create a viable business from nothing

Entrepreneur types in this book:

  • Micropreneurs: a.k.a Solopreneneur, single or multiple products. Her goal is a specific lifestyle
  • Bootstrappers: Larger vision than a single person. work with a team to grow an idea to survive.

Knowledge is similar: Finding a niche, finding a product, building, launching, marketing

Two problems with fund seeking:

  • Massive time investment
  • Makes modest success impossible (forced to go big)

Small, let's you go niche, make product really good, with low overhead and moderate expected revenue

Self-funded startup entrepreneur

  1. equates to technical visionary creating sw for a niche market.

  2. Merges technical knowledge with online marketing knowledge.

  3. developer (ability to fix and support client) + webmaster (to create a compelling sales page and SEO) + marketer(Find your market, before building a good product).

Product Last, Marketing First

Venture-backed startups require arduous work with a low potential for massive payoff, in contrast, Bootstrapers reinvest income to grow organically (profit and headcount) -- a decent potential for a decent payoff. Financial payoff is inconsequential to Micropreneurs.

Reasons to startup

Wrong reasons

  1. Having an idea. Not knowing the difference between an idea (fun to work on) and a product (something people will buy)

  2. Get rich. Better to look for something with higher success rate and lower reward.

  3. Sounds fun. Building your product (the fun part) is about 30% of the work required.

Right reasons

Different for each person. What are your goals? freedom, flexibility, income antifragility, challenges, desire to build, ownership, control...

  • Pay the price: Large time investment at the beginning, giving up control (by hiring, automation)

  • What are your goals? It will help you make the right decisions. What do you want? Quit your job, extra financial source, start your own company? Define the kind of product you should launch. Write them, make them public, make yourself accountable.

Suggested short-term goal: Build a startup that generates $500/month in profit

Goals will keep you motivated during the hard times.

if you manage to build and launch a product know that:

  • Underestimating workload due to customer support, most issues are not product related!\
  • Ongoing development, harder than greenfield dev.
  • The hardest part of the equation is hitting critical mass, way after the big dip.
  • Most likely your first startup helps you understand the amount of work required, and make you a savvier software entrepreneur.

Elements of the transition: Learning (or relearning the same things over and over), ownership (make your next product, release or fix translate to equity for yourself)

Some common roadblocks:

  1. Your start building something people don't want. Verify market 1st.

  2. Fear of starting something new. Take fear as an indication of growth, will make it easier and easier each time Largest roadblock of all, keeps out most people.

  3. No clarity on what you are after, no roadmap. Write goals down.

  4. Not producing consistently, busyness without actual productive work. Reduce information consumption

  5. Trying to do all by yourself. Delegate or outsource tasks aggressively, but start small and increase gradually

Must accept that time is your most valuable asset. "Dollarize" your time by outsourcing work this is an essential step for entrepreneurship. Know your hourly rate and compare against the cost of hiring a VA. Increase the value of your hourly rate, as a goal in itself, but never below your current freelancer rate. You realize:

  1. Outsourcing is a smart and powerful move

  2. Work hard, play hard separately

  3. Avoid time wasters, and use wait times for thinking.

  4. Consume information only to produce. Similar to learn in order to create. Pro-tip: take action notes (links, techniques)

Realizations for developers becoming entrepreneurs:

  1. Need to be entrepreneur (strategic), manager (tactical), and technician (operational).

  2. Market, Marketing, Aesthetics, Functionality.

  3. Unlike coding, entrepreneurship will never be crystal clear (humans involved)

  4. Plan but leave room for uncertainty and rapid reactions.

  5. Be OK with failure, and keep improving

  6. Nothing is ever completely done.

  7. Takes time but gains will snowball over time.

  8. Put processes in place to avoid mistakes and
    create freedom.

  9. Your product status is on-going, in all aspects, always.

πŸ‘‰ Niches

Most important factor above founders, marketing, and product is people willing to pay! Find market first before having an idea of what you are building.

Sizable market + low competition despite poor looks and features will work well for a while...

Luck is a factor, but unlikely to happen to you.

Startups are mathematically poor decisions. Low wages, long hours, minimal chance of success.

Going for a general purpose software is often a bad idea because you are competing against large organizations with better marketing and development resources.

Niche allows you to become the best at something, cater a small group of people that is possibly easier to find (usually hang out on the same sites, etc)

Go niche because:

  1. Reduces the scope of your product (but make sure market size is significant)

  2. It's easier and cheaper to advertise to a smaller group of people

  3. There are fewer and smaller competitors

  4. Allows to charge more and make a higher profit

  5. Proper marketing is unusual thus could be more effective

  6. You may be able to build trust faster

Approach any hobby, occupation or interest of a person close to you when looking for niches!

When exploring a niche, marketing is the best ---but imperfect--- tool to evaluate the viability of an idea.

To find a niche you could go for something you are/were already involved (recommend Pamela Slim's 6-minute technique [1]), scan for occupations that you might be connected to or looked for pre-existing lists, such as this.

Or ... do something (anything, really!), it may uncover a hidden niche!

Evaluating niches

If self-funded most likely you don't have a chance to create demand. Avoid offline markets. Concentrate on consumers and small biz. Make sure market is:

  • Sizable: Price of ads for such market might be a good indicator. Any publications catering this market? Any stats available on the market, visitors, occupations? What is the traffic on relevant websites?

  • Reachable: sustainable with you resources. Not every visitor you get is part of your market. Major publications might not be a good fit for you. Cheap ways to market software are leveraging a pre-existing audience and using SEO.

Stay in vertical markets, as they have similar needs, conduct alike, are highly interconnected, and usually, recommend stuff to their peers.

Measure Market Demand

Using search engine keywords

Niche research is about narrowing ideas to those that can be implemented within you capacity (time, hands). The goals is to determine a way to estimate traffic and revenue.

  • Conversion rates: visitors vs buyers (or another task, like signing up for a mailing list) affected by:

  • sources of traffic

  • whether sales website is effective

  • price point

  • Traffic levels: Visitors needed to succeed in a niche

  • Estimation of how many visitors you need to reach a target (based on conversion rate).

  • Traffic breakdown: Distribution of traffic sources

  • Search engines (organic), Incoming links (blogs, directories), Direct traffic, Ads. (1/3 excl. Ads good rule of thumb)

  • It takes over a year to rank high for many terms (Google Sandbox)

Search engines don't make search data public, thus estimating search terms is not straightforward.

Determine demand for a product before you build it based on monthly google term search Surveys can also be a great tool to measure demand.

Sell online: Human behavior + Math

  1. What motivates people (why do they buy, speak to them)

  2. Internet marketing, click rates, profits, etc.

From your list of Niches (hobbies, occupations, interests) find out what kind of software they need. Add up the list of apps you've been wanting to build for years.

Outdated formula:

Keyword Effectiveness Index = 
No. searches by month / No. results

Tools by price: Free (Any good?), Pay, and SEOMoz. All work by saturation and limited by Google's API limitations. (Update resources not in the book [1:1][1:2][1:3][1:4][1:5]

SEOMoz is the best tool for the job but comes at a cost. It uses metrics such as no. of results/quotes, page rank of higher ranking pages, No. of backlinks, bid price, and adds displayed. [1:6][1:7]

Steps to measure demand for free (AdWords)

πŸ‘£ 1
Search your term (without quotes + synonyms) then search again using exact match. Values close to 10K are considerable (relative) and AdWords overestimate searches (half traffic is more realistic)

1/2 *search term * 4 = number of visitors (rank #1)

Half search term value * 4 (2 from long-tail keywords + 2 from other sources like organic traffic)

Assume conversion rate based on your price point to calculate an expected monthly revenue.

πŸ‘£ 2
Store separately keywords related to your chosen search term

πŸ‘£ 3
Use a keyword difficulty tool to grade these terms. Lower scores are best. Below 39 is easy (relative)

πŸ‘£ 4
[Sanity Check step] Google the chosen keyword, and look for the PageRank of the first result. Check the meta keywords and description they are using. Do a whois search to check how old the domain is (older that '99 is hard to beat). Find the domain backlinks [1:8] to determine popularity.

You may repeat with top 5 ranked sites. Use results from these steps to decide whether to move on to another niche, unless you're OK with investing 6-12 months to beat a well-ranked site.

Testing ideas under $100

Run an AdWords ad with the exact keyword (in quotes) to validate your idea even further. Benefits are: no minimun investment, inexpensive, and can be turned off anytime.

Using mini sales site to test buy intention. A simpler version of a sales site, with Home, Tour, Pricing and Signup. Home and Tour provides Description, screenshots, feature lists, and product info PLUS a call to action. This will give you insights into actual consumer intentions on the cheap.

Downloadable products:

  • price less than $40, try to get people to click "buy now" on Pricing & Signup.
  • price above $40, try to get them to click "download free trial" on the same page

SaaS or Mobile app

  • Try to get people to click "buy now" on Pricing & Signup

Direct traffic to your site using AdWords and track clicks on the call to action button. Assume conversion between 2-5% for click, and 40% of actual buyers. You need: Screenshots, sales copy, AdWords setup and tracking

πŸ‘‰ Product



  1. https://lxrmarketplace.com/seo-inbound-link-checker-tool.html β†©οΈŽ β†©οΈŽ β†©οΈŽ β†©οΈŽ β†©οΈŽ β†©οΈŽ β†©οΈŽ β†©οΈŽ β†©οΈŽ


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