This link has been bookmarked by 462 people . It was first bookmarked on 09 Mar 2006, by Paul Terry Walhus.
-
15 Jun 17
-
04 Oct 16
-
12 Aug 16
-
29 Mar 16
-
07 Feb 16
-
04 Jan 16
fraser smithThe following is a guest post by Jonah Lopin (@jonahlopin), founder at Crayon. Jonah is a HubSpot alumnus, and I'm an angel investor in the company. Here at Crayon, we love humans. Advice and Insights for Entrepreneurs | OnStartups
-
23 Dec 15
-
17 Dec 15
-
02 Dec 15
-
02 Jul 15
-
20 Jun 15
-
02 Jun 15
-
22 Feb 15
mshitaGreat web site for startup advice. I read this quite often.
-
18 Feb 15
valeolivaFecha: Enero 2015
Autoría: Dharmesh Shah
Geografía: USA
Contenidos: Articulos para emprendedores -
06 Jan 15
-
05 Nov 14
-
02 Nov 14
-
18 Sep 14
-
14 Aug 14
-
22 Jun 14
-
26 Mar 14
-
19 Feb 14
-
10 Feb 14
-
29 Nov 13
emporio_armanezComo empezar una empresa sin contratar muchos informáticos.
-
24 Nov 13
-
04 Nov 13
-
12 Oct 13
-
08 May 13
-
13 Apr 13
-
29 Mar 13
-
22 Feb 13
-
20 Jan 13
-
11 Dec 12
-
19 Nov 12
-
14 Nov 12
-
20 Oct 12
-
02 Oct 12
-
21 Sep 12
-
06 Sep 12
-
28 Aug 12
-
09 Aug 12
-
03 Aug 12
-
17 Jul 12
-
01 Jun 12
-
30 May 12
-
02 May 12
-
06 Apr 12
-
23 Mar 12
-
10 Feb 12
-
03 Feb 12
Stefanos KarakasisAn online community and blog for startup entrepreneurs.
-
02 Feb 12
-
16 Dec 11
ashesnlp"
We trained our consulting, support, and sales teams on the tool so they can start using it with customers and prospects. We also came up with a sales contest to encourage the sales team to share the tool with as many of their leads in their funnel as possible. The day of the launch, we sent an email to the entire company reminding them of the launch and giving them some lazy tweets to share with their networks. For the twitter rookies out there, a "lazy tweet" is when you provide a sample tweet, fully written, so that someone who is inclined to help you, but a tad lazy/busy, doesn't have to think. They can just copy/paste the tweet or retweet an existing tweet. The easier you make it to help you, the more people do.
Launching a new tool like Marketing Grader takes blood, sweat, and tears, but the result is a tool that you’re so proud of, you want the whole world to see. That result makes the process of properly launching your new tool all the more important. we wanted to give Marketing Grader every opportunity to get out there to the public and be a rocking success. Staying focused, using all your tools and resources, and leveraging the skills of everyone in your company are great ways to get your new tool the publicity it deserves.
Here are answers to some questions we think you might have.
Why the big hoopla over the launch this time? Usually, HubSpot trickles out grader tools with an inocculous tweet from Dharmesh.
You're right. In the past, we've been much more subtle and measured when we launch a new grader product. This is largely because our new grader tools are often a crazy experiment -- we're not sure whether the market actually wants it or not. By avoiding a big launch, we avoid a big "unlaunch". In the case of Marketing Grader, we've had lots of evidence from our customers and friends (who have tried the tool) that it is super useful. We've made a big investment in this app, and we wanted to match it with some marketing. And, like all things at HubSpot, this is an experiment too. We wanted to see if we could reach people beyond our co-founder Dharmesh's twitter followers (which admittedly, is over 100,000 now).
How did you build your media contact list? What tool did you use to manage it? We try to keep things simple at HubSpot. Our media contact list is a simple Google Spreadsheet. The people on the list are a combination of folks that we know individually and someone on the team has some relationship with. Now that we've got another twitter celebrity (Laura Fitton, aka @pistachio) who happens to know just about everyone, our VIP list was bigger and better than ever.
Why use Marketing.Grader.com on its own domain? Wouldn't the SEO have been better to put it on HubSpot.com? We basically had three choices when picking domain names for our free tools. We could use HubSpot.com -- which has advantages, including brand-building and SEO. By launching on HubSpot.com, the Marketing Grader page would get some SEO authority relatively quickly because of the power of the main domain. Another option would be to put it on a completely separate domain, like MarketingGrader.com. But the option we picked is to use Marketing.Grader.com (so, make it a subdomain of grader.com). This approach has a couple of advantages. Getting a sub-domain of an established main domain to start ranking is much, much easier than a completely new domain. And, since we use this model for our other free tools, our users are already used to it. (But, of course, either domain will work -- one simply redirects to the other).
What's the difference between getting all of these efforts to happen on the same day? Couldn't you have easily just "spread them out" over time and gotten he same level of overall usage? This is a tricky one. For the most part, you are right. Rather than have 20 things happen all on the same day (which is a challenge to orchestrate) we could have spread the news out over days and weeks. The advantage to trying to "compress" some of the news into a smaller window is that there's the potential for the news to hit a "tipping point". If news of the launch hits several different channels, all around the same time, it gets "noticed" by other channels that we didn't have direct access to. Those people then might write about it, causing more people to see it. We get a snowball effect. Doesn't always happen, but it's much more likely that it will happen if we can get some strong media pickup all on the same day.
It's not fair! You folks have a reach of millions. How can my tiny little startup match that? It's a good point. We do have exceptional reach, across many different channels. That makes our jobs much, much easier. It's fun to be able to put something new out there and know that it's going to get some attention. Our advice to you would be two-fold: You don't have to have a massive reach to get attention. (We had some great successes even when we were a struggling young startup). The key is to be remarkable and even more importantly, create useful content. For example, if this article were written like a standard marketing schpiel, it would never have gotten posted to OnStartups (despite the fact that Dharmesh is one of our founders). By wrapping the "nugget of news" in a nice, useful layer of tips, tricks and lessons learned, the article becomes something people (hopefully) want to read. Maybe even share.
Does Karen Rubin actually exist or did Dharmesh just conjure up an attractive, charismatic persona as part of some weird A/B test he's running? Attractive and charming? Oh, Internet reader, you flatter me so (batting eyes in best impersonation of Scarlett O'Hara). But rest-assured, I do actually exist. What you don't know for sure is what parts of this article were part of my original submission, and what parts are late-night edits from our crazy co-founder. I'll leave that as an exercise for the reader.
So, what questions do you have? What can we tell you about the HubSpot marketing machine and how we do things? What lessons have you learned launching your own apps?
Love startups? Join the OnStartups community on Facebook.
Article has 17 comments. Click To Read/Write Comments
Cult of Product: Marketing Isn't Just For Losers Who Pay For Sex
Posted by Dharmesh Shah on Wed, Nov 30, 2011
25
inShare
Tags: marketing, guestpost, product
The following is a guest post by Mike Troiano. Mike is a former New York ad man turned venture-funded entrepreneur, now a Principal at Boston-based Holland-Mark. You can follow him on Twitter at @miketrap, and connect with him elsewhere through About Me.
Product, product, product. More focus on product was at the center of Brad Feld's comments at last week's Silicon Valley Bank CEO event, in response to a question about what he'd do differently if he had it to do over. More focus on product is at the core of the Lean Startup Revolution we're all getting behind, and in the spine of the Steve Jobs bio we're all reading, and in the frequent posts of the startup bloggers we all pay attention to.
And it's all true. Product is the key, at the very center of building a viable business from nothing. And by implication, marketing is so 15 minutes ago. Marketing is for products unworthy of passionate advocacy, a crutch for nice-to-have startups who invest in sprawling web sites and launch parties like losers with no choice but to pay for sex.loser
I spend a lot of time fighting this perception, talking about the difference between the kind of strategic marketing that can corrupt your vision with the external reality, marketing communications, which consists largely of the promotional sham-ware of the mid-twentieth century.
But you know what? I'm giving all that up. I'm going to take another approach, one I think will resonate more clearly with the Cult of Product sub-culture which seems to be sucking all of the oxygen out of the shill-o-sphere.
Ready? Here it is: You should focus on the desired response to your product, not just on the product itself.
Why must you focus so intently on your product? Isn't it because you want people to respond to your product in ways that propel your businesses to greatness? Isn't your product, then, a means to an end? Isn't it a stimulus hoping to evoke the right response on the part of the customers who buy it?
In a very real way, I'd argue yes. More than that, I'd argue that the primary dimension of product response that propels businesses to greatness is emotional response.
What do great un-advertised, Billion-dollar brands like Dropbox, Facebook, and even (until recently) Google have in common? We love them. They make us feel respectively Liberated, Connected, and Empowered in ways that enrich our lives. They make us grateful, make us want to share with others. A brand is nothing more than an emotional response out there in the world, but building brands with products instead of print advertising doesn't make them any less important, or any less worthy of early focus, thoughtful strategy, and effective execution.
It's becoming a cliche to say your product is your marketing, in an era where customers trust each other more than they do media. Well if that's true it might be time to bring a little more marketing into your product, in the form of treating the softer science of brand development with the same respect you give the harder sciences of product management and engineering.
What do you think? Where do you stand on the Cult of Product? Would love to read your comments.
Love startups? Join the OnStartups community on Facebook.
Article has 16 comments. Click To Read/Write Comments
12 Things Entrepreneurs Should Be Thankful For
Posted by Dharmesh Shah on Wed, Nov 23, 2011
358
inShare
A simple thanks to all the people that have made it possible for me to be an entrepreneur. There are few more fulfilling things in life than finding one's calling. And, for millions of entrepreneurs around the world, that's precisely what it is.
onstartups thank you
A special thanks to all the people that have joined existing startups and small businesses. Joining an existing effort requires risk and a degree of selfnessness. You are all entrepreneurs in my book for one simple reason: You're crazy enough to join a merry band of misfits even though it makes absolutely no sense. You're my kind of crazy. Cheers.
12 Things Entrepreneurs Should Be Thankful For
1. Customers.
2. Getting to pick the exceptional people we work with.
3. An opportunity to add value, big or small, to people's lives.
4. Not having to ask permission to try something crazy.
5. The patience and understanding of our family and friends — especially when we likely don't deserve it.
6. Receiving payment for value delivered. There's no feeling like it.
7. The joy of seeing a sliver of light after some dark, dark, days.
8. The freedom to change what's not working. It's sometimes painful, but at least it's possible.
9. Not having to rationalize to your family and friends why you took that Wall Street investment banking job.
10. Day 2,743, when the world celebrates your “overnight success”
11. The pleasure of helping team members create memories and experiences that will last a lifetime. Most of them good.
12. The chance to try. To fail. To try again and flail around. Then, with some luck, to flourish.
Your turn. What do you think entrepreneurs should be thankful for?
Love startups? Join the OnStartups community on Facebook.
Article has 98 comments. Click To Read/Write Comments
DON'T start a company...yet
Posted by Dharmesh Shah on Mon, Nov 21, 2011
74
inShare
Tags: strategy, guest
The following is a guest post by Andrew Payne. Andy is a Boston-based entrepreneur and angel investor, and a HubSpot director. You can read his blog at blog.payne.org or follow him on Twtter at @payne92.
I was visiting Harvard a few weeks ago and the professor said, "yea, every undergraduate here is working on a startup!" Nearby, MIT is practically putting "startup" in the school water supply, and incubator programs for new graduates abound (e.g. TechStars, Y Combinator, etc.)time to learn
For those new graduates itching to start a company, I'm giving some very contrarian (and possibly unpopular) advice:
Don't do it. At least not yet.
Instead, go join someone else's early stage company as employee #3-50 (or so). The experience you'll get over the next few years will be invaluable, and you'll be in a far better position for success when you decide to leave and start your own company. You'll see many processes (e.g. fundraising, product management, leadership, etc.), you'll learn from mistakes (yours AND other's), and you'll build a great network of contacts.
There's just nothing like learning on the job, in context, from those with more experience than you. There's a reason why the apprenticeship system has been the dominant method, for over a half-millennium, to pass the experience of a trade or craft to the next generation.
I sometimes encounter startup teams that are thrashing on basic things, and it's almost always because they're lacking experience. Skill is a combination of (a) knowing what to do, and (b) knowing when/where/how to do it. The Internet is a seductive source of "what", but isn't a substitute for judgement. Reading someone's blog post on their Agile development principles is helpful, to a point. But remember: these anecdotes are necessarily simplified and abstracted, and are missing important bits of context. Someone else's experience may not translate to your situation.
I am not an astronomer, but I long ago remember reading the fastest way to grind a good 12-inch telescope mirror was to first grind a 6-inch mirror. Few builders are successful grinding the larger mirror as their first project, and that's sound advice for startup entrepreneurs as well.
What do you think? Is better for would-be entrepreneurs to just "jump in" or is there value to spending some time learning the ropes at another startup first?
Love startups? Join the OnStartups community on Facebook.
Article has 32 comments. Click To Read/Write Comments
The CEO Should Be The Chief Experience Officer
Posted by Dharmesh Shah on Tue, Nov 15, 2011
368
inShare
Tags: strategy, management
Earlier this week, I was chatting with my friend, co-founder and CEO of HubSpot, Brian Halligan. We were doing one of our ad-hod strategy sessions about the business, and working through some things.
After that conversation, as I was driving to a dinner meeting, an idea occurred to me. The phrase “Chief Executive Officer” doesn't convey much, if anything. There's a better way to describe the role.ceo wrench
I will posit that in a technology company, the CEO should be the Chief Experience Officer.
If the CEO can make the following set of experiences amazing, by definition, she will make an amazing company.
1. Product Experience: What is the experience like using the product and getting value from it? Does it solve the problem simply? Does it make users happy, productive and hopeful when they're using it, or does it make them frustrated, angry, agitated and depressed?
2. Purchasing Experience: What is it like to go through the sales process and buy the product? Was it easy to figure out whether the product was the right fit? Was the pricing straight-forward? Was the buying process smooth without unnecessary steps and complexity?
3. Brand Experience: What is it like to interact with the company's brand? Does talking about the company with others ignite passion? What kind of emotions does it evoke? When people see the logo online or offline, what's the visceral reaction?
4. Support Experience: What is it like to receive support from the company? Do people dread having to call in and get help? When they do make contactl, do they feel like the company cares not just about appeasing and pleasing — but that the actual problem is addressed?
5. Exit Experience: What is it like to leave the company, cancel the subscription and no longer be a customer? Sometimes you can tell more about a company by how it treats customers on their way out, than on their way in.
6. Employee Experience: What's it like being recruited by the company? Working for the company? Being let go from the company? If you have a terrible employee experience, you will not attract the kinds of people that will make the customer experience amazing. It just doesn't work.
Notice that most of the above experiences are all about the customer. How does the customer experience the company? I think that's the primary set of experiences the CEO should worry about. The reason is simple, by improving the overall customer experience, everyone wins. Including the investors/shareholders (and yes, the CEO also needs to manage the shareholder experience too).
So, Don't just improve the product, improve the experience. This is one of the points I made in my Business of Software (2010) presentation (I think it was one of my better ones, full video and transcript available).
What do you think? Am I over-thinking the importance of the overall experience? Any lessons learned or tips on how to measure and improve the end-to-end experience?
Love startups? Join the OnStartups community on Facebook.
Article has 86 comments. Click To Read/Write Comments
The Backuisition and 9 Other Types of Acquisitions [humor]
Posted by Dharmesh Shah on Fri, Nov 11, 2011
36
inShare
Tags: humor
It's time for some Friday fun. The following list was sparked in part by my hatred of the term "acquihire" (which no matter how many times I try to train myself, I can never say it correctly in my head when I read it).
Hope you enjoy reading them as much as I enjoyed coming up with them.
big fish10 Types of Acquisitions
1. Backuisition: A few rogue employees from BigCo went off and started their own company (NotAsBigCo) a couple of years ago. The CEO never got over it, so worked out a deal acquire their startup to get them back.
2. Crackuisition: BigCo is addicted to acquisitions. If more than a few weeks go by where some sort of deal isn't consummated, the twitching and shakes start. They need their “fix”. Like right now. Before somebody gets hurt.
3. Hackuisition:
BigCo: “How many hackers do you have?”
NotSoBigCo: “You mean programmers?”
BigCo: “No, we need more hackers. People that read The Hacker News blog. Do you have hackers?”
NotAsBigCo: “Um, sure, we have hackers…”
BigCo: “Great! We need to get ourselves some hackers.”
4. Sackuisition: This is a deal that's all about the customers or the IP or anything other than the people. Once the deal is done, most of the people get laid off. [Not to be confused with the deal where most of the people get laid. That's the mythical, inthesackuisition]
5. Shaquisition: BigCo has a company basketball team consisting mostly of white guys that can't jump. They're embarrassed and want to remedy that.
6. Packuisition: Executives in corporate development at BigCo are used to traveling a lot. For some reason, they looked at their calendar and saw that there were 3 straight weeks with no travel coming up. This would drive them and their family insane. So, they go off looking for an out-of-town acquisition to do. Choice of potential company to acquire depends primarily on two variables: weather and availability of golf courses.
7. Snackuisition: BigCo tends to do really, really big deals. The kind that get written up in all the newspapers and magazines (and also, in something called “blogs” that the executives have heard of). But these big deals sometimes take time, and in-between, their blood sugar can get low.
8. Knackuisition: When a deal is done because the company being acquired has a particularly valuable and rare knack for doing something. Like building operating systems. Or natural voice recognition algorithms. Or the ability to use MongoDB successfully while resisting the temptation to eventually simulate SQL-like features.
9. Attackuisition: A deal that's done specifically to attack another company in a particular industry, primarily out of spite and CEO arrogance.
10. Frackuisition: When the value trying to be extracted from the deal is so deep, it requires knowledge of hydraulics and a really good PR firm to convince the world that you're not going to destroy the company, the industry and the world in the process of getting to this value.
Do you have any of your own that you think I missed?
Love startups? Join the OnStartups community on Facebook.
Article has 20 comments. Click To Read/Write Comments
From Deadpool to Acquisition: Lessons From Sprouter's Almost Fail
Posted by Dharmesh Shah on Tue, Nov 08, 2011
56
inShare
Tags: guestpost
The following is a guest post by Erin Bury. Erin is the Director of Content and Communications at Sprouter.com, a site that connects startups with expert advice. She's also a startup columnist for the Financial Post. Find her on her blog at erinbury.com, or on Twitter at @erinbury.
A few months ago I had a brilliant flash of business inspiration, as so often happens when you're in the startup world. Why not start an online marketplace where new startups can buy furniture and office supplies from startups that enter the deadpool? A depressing Craigslist, well at least depressing for the companies liquidating their stuff.
The irony wasn't lost on me when, mere months later, we announced that our startup Sprouter was shutting down (for the record, we did get rid of our furniture, and I do think my business idea has legs). We launched in 2009, and I've been part of the four-person team since the beginning, building the brand from zero users to a vibrant community of entrepreneurs and startup experts.success failure
The reason for the shutdown was simple: we ran out of capital. We were supported by angel investment, and had big plans for how we'd become profitable. But the investment dried up before we could actually execute on those ideas.
The morning we announced we were closing our doors was hard, but it made it easier to see the outpouring of support from the community. Media outlets covered our shutdown, lamenting the fact that the resource for startups would be gone. Community members voiced their dismay on Twitter, our blog, and via email. By the end of the week we were out of our office and all unemployed.
What happened next could be straight out of a Disney movie: think The Mighty Ducks for startups (The Mighty Canucks?). One of Canada's largest media companies Postmedia Network Inc., owners of national newspaper the National Post and countless other newspapers across the country, expressed acquisition interest. They wanted the team back together, and were interested in integrating our content and digital presence with their properties.
So on October 3rd, two months after we announced our shutdown, we announced our acquisition. Being part of the Postmedia family means we have a bigger platform for our startup content, and can continue to expand our offerings. We have a new office in downtown Toronto (yes, with new furniture), and we're almost doubling our team in the next month.
While not the ideal route any startup would take to acquisition, it really is a case of all's well that ends well. But there are some key lessons to take away from the whole ordeal, and not just that making millions of dollars is more advantageous than running out of capital and shutting down. We got that message loud and clear.
Here's what our team has taken away from going from deadpool to acquisition
Lessons Learned
Don't underestimate the power of your community. We figured our shutdown announcement would cause a stir, but we could never have predicted the outpouring of support that resulted. Our community of supporters rallied together, suggesting ways we could stay afloat and even offering to pay for our service to keep it active. Your community is a powerful resource in itself, and don't underestimate how they can support you in times of trouble.
Crisis communications are imperative. The first inclination when you're shutting down is to hide under your desk and not show your face again until SXSW 2012. But we decided that we would respond to user emails, Tweets and media requests the week of the announcement. Being transparent and responsive when you have a crisis seems like a no-brainer, but it can be difficult for founders to face the public during hard times.
Embrace the failure. The startup post-mortem seems to be the latest trend for deadpooled companies. Startups who've failed offer their take on where they went wrong, hopefully steering new entrepreneurs in the right direction. In another ironic twist of fate, our founder Sarah Prevette had agreed to speak at FailCon Paris before we announced we were shutting down. Her presentation there, How I've Failed So You Don't Have To, outlined the major lessons from our growth and failure. Namely, you need focus at a startup. Oh, and sales are important.
Users aren't customers, and brand doesn't equal sales. We built up a big community of startups, and were featured in media outlets around the world. But at the end of the day, our great brand equity and user base wasn't paying our bills. While it's important to focus on marketing and user acquisition, those things don't matter if you're not bringing in revenue.
Strive for success but prepare for failure. This encapsulates how founders should approach their companies. Everyone wants to be the next Dropbox, Zynga or Airbnb, but the stats tell us only a few will actually get there. Be optimistic, but realistic. Prepare for the worst, and always have a contingency plan for times when you aren't hitting your sales goals.
While I hope your team never has to experience what we did, it was truly a learning experience. The path to startup success never does run smooth. Oh, and one last lesson: don't get rid of your furniture until you know you're 100% gone. If you need us, we'll be putting together Ikea desks.
Love startups? Join the OnStartups community on Facebook.
Article has 11 comments. Click To Read/Write Comments
Forget The MBA: How About a Masters In Startup Awesomeness?
Posted by Dharmesh Shah on Mon, Nov 07, 2011
187
inShare
Tags: strategy, sales, marketing
This weekend marks the 6 year anniversary of OnStartups.com (it was launched on November 5, 2005). The OnStartups community has grown -- a lot. There are now over 30,000 RSS subscribers, and 218,000 members in the OnStartups LinkedIn Group -- making it the largest entrepreneurial community on LinkedIn. There's also OnStartups on Facebook, with over 27,000 people there. And, of course, the Q&A OnStartups powered by StackExchange.
Thanks very much for all of the support and encouragement over the years. The blog started as a birthday present to myself, but it also had an academic purpose. I was working on my master's degree at MIT at the time, and as part of my degree requirements, I had to write a graduate thesis. The title of my thesis was “On Startups: The Patterns and Practices of Contemporary Software Entrepreneurs”. I needed some “real world” feedback from actual software entrepreneurs to include in the thesis. I figured out quickly that this would involve talking to humans (something I found reasonably unpleasant). And, I had heard about this “blogging thing” so decided to give it a shot. I took the first two words of my thesis title, tacked it together, and came up with OnStartups.com.graduate onstartups
I had a really good time in business school at MIT. Learned a lot, met some exceptional people. But, I think the whole MBA thing is a little old-fashioned. How many people do you know that want to get really good at business administation? What would be cool instead is a Masters in Business Awesomeness. The coolest would be a Masters in Startup Awesomeness. Of course, there is no such thing, and no university you can go to get that degree yet (but there should be). The good news is MIT -- and other great universities are starting to introduce much more entrepreneurial content in their programs. [Shout out to my friend Bill Aulet, chair of the MIT Entrepreneurship Center]
So, below, are some of my favorite (and I think most useful) articles from 6 years of OnStartups.com. If I were to design a curriculum for the Masters In Startup Awesomeness, some of this material would likely be included. I recognize that this a lot of stuff, so feel free to just bookmark this article and read later.
The Best Articles From 6 Years of OnStartups.com
Sales and Marketing
Startup Websites That Work
Startup Marketing: Tactical Tips From The Trenches
17 Mutable Suggestions for Naming A Startup
The 5 Minute Guide to Cheap Startup Advertising
Building Startup Sales Teams: Tips for Founders
How to Pick a Company Name: Tips From The Trenches
A Geek's Guide to Hiring Marketing People
5 Startup Sales Tips From Turkish Rug Dealers
The 900 Pound Gorrilla: Why Strategic Partnerships Aren't
People
Choosing A Minimum Viable Co-Founder
14 Ways To Be A Great Startup CEO
The 11 Harsh Realities of Being An Entrepreneur
SaaS 101: 7 Simple Insights From Inside HubSpot
Startup Founder Compensation: The Good, The Bad and the Irrelevant
17 Pithy Insights for Startup Employees
Startup Hiring: Why You Should Date Before Getting Married
Pricing
Important Questions Startup Co-Founders Should Ask Each Other
How to Price Software Without Just Rolling The Dice
Startups and the Challenges Of The Freemium Pricing Model
Strategy
4 Quick Tips on Raising Funding Without a Plan or a PowerPoint
14 Reasons Why You Need To Start A Startup
The @dharmesh Test: 16 Questions for Better SaaS Companies
Startups: 10 Things MBA Schools Won't Teach You
Startups: Your Customers Are Not Ignorant, Selfish, Control Freaks
Development Shortcuts Are Not Free: Understanding Technology Debt
17 Pithy Insights for Startup Founders
—-
Thanks again for all of your support. If you want to find me online, I'm @dharmesh on twitter and +Dharmesh Shah
Love startups? Join the OnStartups community on Facebook.
Article has 32 comments. Click To Read/Write Comments
Startups: You're Not Really Ramen Profitable, You're Ramen Sustainable
Posted by Dharmesh Shah on Fri, Oct 21, 2011
46
inShare
A new phrase entered the startup vocabulary a little while ago: “Ramen Profitable”. The phrase is used to reference startups that are making enough money for the founders to live on the startup staple of Ramen noodles. [For our friends in India, Ramen noodles are similar to what you would know locally as “Maggie”, which is what I grew up on. I like the Masala flavored one].ramen
So, here's my issue with the term “Ramen Profitable” — in most cases where it's being applied, the company's not really profitable. Reason? Because the entrepreneurs/founders are paying themselves negligible (if any) salary. This distorts the actual value being created. Some of you might argue that founder's are simply making an investment of their time/energy, in lieu of salary. That's a wonderful thing, but from an accounting perspective, just because you're not properly calculating expenses, doesn't mean it's profit. To be fair and more accurate, founders should look at their fair market value to determine actual profitability.
For example: Lets say you happened to inherit some prime real-estate in downtown San Francisco. You got it for free. Now, you open a really swank gelato bar for Python developers. If you weren't charging yourself any rent for that space, nor paying yourself anything, and the business made $100/day, would you really consider that profitable? You could have rented the space out at fair market value for much more money than that. I'd argue you're losing money -- and I'd be right.
My point: It's awesome for startups to get to a point that they're not reliant on external funding sources to survive. Paul Graham describes this well in "Ramen Profitable". Great article and I agree with his points -- particularly around the morale boost. But, I'd call this stage of a startup “Ramen Sustainable”. This stage gets a startup “infinite runway”. This can be a very good thing, because the entrepreneur can than tweak, iterate, pivot to her heart's content. But, that's also the problem with Ramen Sustainable startups. The entrepreneur may keep going longer than would have been warranted, instead of moving on to their next big idea.
Oh, and on a closing note (which came up in discussion as a result of an article by Scott Kirsner (of the Boston Globe), titled “Is Boston spawning too many startups, and starving growth companies for talent?” My thoughts on this:
You can never have too many startups, but you can have too few shutdowns.
Do you think I'm right about the Ramen Sustainable vs. Ramen Profitable characterization? Any thoughts on the pros and cons of reaching this stage in a startup? How do you know when your Ramen Sustainble startup is better off being shutdown so you can move on to bigger things?
Love startups? Join the OnStartups community on Facebook.
Article has 22 comments. Click To Read/Write Comments
Previous Page | All Posts | Next Page
" -
27 Nov 11
-
07 Nov 11
-
27 Oct 11
-
22 Oct 11
-
18 Oct 11
-
04 Oct 11
-
27 Sep 11
-
08 Sep 11
-
02 Sep 11
-
28 Jul 11
-
15 Jul 11
-
11 Jul 11
Chris HertachThis site is for entrepreneurs. A full RSS feed to the articles is available. Please subscribe so we know you're out there. If you need more convincing, learn more about the site.
-
03 Jul 11
-
30 Jun 11
-
28 Jun 11
-
27 Jun 11
-
26 Jun 11
-
16 Jun 11
-
03 Jun 11
-
francis_jaquiblog
-
01 Jun 11
-
31 May 11
-
12 May 11
-
02 May 11
-
18 Apr 11
-
Frankly, at the time, I could tell that Drew was really smart — but I didn't have enough data to know if he was going to be great (as in a great entrepreneur). I know many, many really smart people. Few of them have what it takes to be great entrepreneurs
-
-
15 Apr 11
-
14 Apr 11
-
05 Mar 11
-
11 Feb 11
-
09 Feb 11
-
03 Feb 11
-
16 Dec 10
-
23 Nov 10
-
15 Nov 10
-
10 Nov 10
-
05 Nov 10
-
01 Nov 10
-
21 Oct 10
-
18 Oct 10
-
17 Oct 10
-
14 Oct 10
Page Comments
Venham Conhecer a Nova Temporada da http://www.jogando.net/mu/ na versão Season6, com muitas Novidades, Eventos, Itens e Muito mais, para os jogadores do http://www.jogando.net/mu/
Super - 10.000x
Pvp 15.000x
Very Easy - 5.000x
Hard 100 x
Extreme 10x
War 1000x
Novo Sever: Phoenix Ep.3 3.000x (32k stats) Acumulativo
Algumas Novidades:
-> Castle Siege, agora o GM da guild vencedora ganha SET exclusivo.
-> Fique logado e ganhe golds, Free ganha 1 GOLD por minuto e VIP 2 GOLDs.
-> Novo mapa Karutan com novos MOBs, drops exclusivos e muita XP.
-> Ganhe Chaos Castle e receba itens ancients.
-> Novo char Range Fighter
-> Novos PVPs
-> Novo Vip Premium
-> Novos Mapas
-> Novos rankings será implantado
-> Nova skin no forum com novas opções.
-> Novas Asas, Ring e Pendats 5 Socket
-> Novos Kits Fusion V2, Shield Pv3, Kit Mysthical e ItensSupremo Diamond (raro) Apenas 100 será vendidos
-> Novos Sets especial de Time de Futebol com o melhor preço
-> Vem ai, 6° MegaUltraSuperHiper Evento de Castle Siege Premiado com mais de 21.000 Jcash + Troféus e Medalhas.
>> CADASTRE-SE E GANHE 5 DIAS DE VIP <<
ENTRE JÁ NO SITE : www.jogando.net/mu/index.php?s=cadastrar
By: xXxEmOxXx
Would you like to comment?
Join Diigo for a free account, or sign in if you are already a member.