Business of Software Conference 2008 (Part 2)

Excerpts from lecture by Dharmesh Shah, OnStartups.com

• At startup, your idea may "suck"... get started!
• Say "NO" to venture capital
• Target liquidity
• You don’t have to go out there and market (broadcast) to get people interested!
• Real EV of raising venture capital is high (add difficulty in getting one)
• Nobody reads Business plans... rather write a blog!
• All startups should be embarrassed about their product when it goes out into the market... If you are not embarrassed, you have waited too long!!
• Don't depend on advertising to sell your product
• You are not gonna be able to get the "pricing" right anyway... so just pick one
• Starting as early as possible and "charge" as often as possible
• SAAS - You are now the customer
• COCA - Cost of customer acquisition
• = Money spent to get a new customer onboard
• = (Total cost of sales + marketing/Number of new customers) - lifetime value of the customer (LTV)
• Therefore, one of the biggest success factors - lower attrition rate
• CHI - Customer Happiness Index - Probability of customer that he will stay next month
• Above can be correlated with (and hence should be monitored closely)
• Did the customer use the software, usage patterns (e.g. customers who use "a" feature are 4 times more likely to stay than who don’t
• Track usage data - by feature... who recommend it + which customers used it and how many left + who approved it
• Don’t do "partnerships"
• Go to the market even before you have written the first line of code
• Manage Risks - technology risks, market risks
• Try and reduce market risk as early as possible
• "Pay per click" is a morphine drip