Update The Second: Tony has posted his slides on Slideshare, which I’ve embedded here for your viewing pleasure. Enjoy!

Update: Sunni Brown and Marilyn Martin did a fantastic visual note taking session of the talk, which was shared on the SXSW blog. Click through to the full-size image.

Sunni Brown and Marilyn Martin's Graphic Recording

• Started out selling pizza in his college dorm room
  • Alfred, current CFO, buying pizzas downstairs and selling them off by the slice upstairs
• Started LinkExchange and sold it to Microsoft
  • Sold it off because the corporate culture started to suck
  • They didn’t know to grow it for culture so they let it grow without supervision
• Started an investment fund with Alfred and invested in 20 companies including Zappos
  • Turned out to be the most interesting and the most fun
  • Joined within a year and became CEO
• Outsiders think of Zappos as an online shoe company
  • Really they sell clothing, shoes, cosmetics, etc.
  • They just want to be about the best customer experience online
  • Customers ask them to start airlines, run the IRS, etc.
  • Wouldn’t rule it out… this year.
  • Compare themselves to Virgin
    • They’re about being hip and cool, Zappos is about being the best customer service
• Recognized for company culture this year, which is a huge accomplishment given the reason they sold LinkExchange
• 75% of orders on any given day are from repeat customers
  • Take the money they would have spent on new customer acquisition and spend it on existing customers
• $0 in 2000, $1b in 2008.
• What is customer service?
  • Customers see the 1-800 number first
    • Actually want to talk to customers
    • At the top of every page
    • Most of the calls aren’t customers calling to make a sale
    • Unsexy and low tech, but the phone is one of the best branding devices
      • Undivided attention for 5-10 minutes
      • If you get the experience right, WoM takes over
  • Free shipping both ways
    • Customers order 10 pairs of shoes, try them on with different outfits, send back 9
  • 365 day return policy
    • For people who have trouble making up their minds or committing
  • Most repeat customers are “surprise” upgraded to free overnight shipping
    • Can order as late as midnight and have them on your doorstep 8 hours later
    • Very expensive, but viewed as a marketing expense
• Only show items on the website that are physically present on the website
  • Avoids getting an email later that says that the items is sold out
  • Zappos originally would list everything that was in the manufacturer’s websites and pass the order through
  • This was 25% of their revenue at one point
  • Sat down one day and decided that the brand wasn’t just about selling shoes and so this policy wasn’t right for being the best at customer service
• Call Center not run like most call centers
  • If someone calls the call center and they’re out of stock, CSRs are trained to look up the same shoe on 3 competitors’ websites and direct the customer there to buy it
    • Not trying to optimize every single transaction but to build a lifetime relationship
    • The absolute best way to build a company focused on best service is to focus on the longterm
  • Don’t measure Average Handle Time for calls or have sales-based goals
  • Run the warehouse 24/7
    • Not the most efficient way to do it — normally let orders pile up for a few days then pickers have higher order density
• The number one goal isn’t customer service, it’s company culture
  • If you focus on culture, everything else happens naturally
  • Two sets of interviews
    • Hiring Manager does the skills tests
    • HR does the culture tests
    • Have to pass both
  • Same for firing
    • Performance reviews are 50% based on culture, 50% on performance
    • Can be fired even though you’re doing a great job but you aren’t doing culture
  • New employees all get the same training no matter what level you’re at
    • 1 weeks of training and classes
    • 2 weeks on the phone taking orders
    • 2 weeks later at the warehouse in Kentucky
  • Offer everyone in training to pay them for their time so far and a $2000 bonus to leave right away
    • Standing offer during the training period
    • 3% took it in 2007, 1% in 2008
    • Started at $100 but not enough people taking it so they keep increasing it
    • Call center staff make $11/hr, so it’s quite a lot of money
    • Biggest benefit wasn’t getting rid of the people who would have left anyway but rather the people who thought about it and decided not to take it and stay
      • Much more engaged than they would have been
• Put out the Culture Book once a year
  • 500 pages
  • All employees write a few paragraphs about what culture means to them
  • Organized by department
  • Unedited except for typos
  • Give it to prospective employees to decide if they like the culture
• Twitter has really helped the company culture
  • Learned about it at SXSW in 2006
  • Great for finding parties
  • Used it personally for about a year to meetup with friends
  • Great way to keep up with friends in San Francisco since they’re located in Las Vegas
  • Rolled it out to the entire company
  • Twitter class as part of new employee training
  • 1400 employees, 700 in Las Vegas, a little over 400 on twitter
  • Employees meet up outside of work which really helps culture and trust
  • Social proprioception about your team mates and what they do outside of work
    • One employee just getting started tweeted “I could really use a cheeseburger” and one appeared 10 minutes later
  • twitter.zappos.com
    • See all the 400 people
    • Aggregate all of the tweets
• A company’s culture and a company’s brand are two sides of the same coin
  • Companies are becoming more and more transparent whether they like it or not
  • A single disgruntled customer or employee can write something that gets read by 1m people
  • Think of the airline industry as a whole
    • Most people will say things like “bad customer service”
    • That’s the aggregated brand of the industry
    • No one airline sets out to have that culture
• A woman bought a wallet, tried it out, and sent it back
  • Was missing $150
  • Chased her kids around trying to get them to admit to having taken it
  • Got a letter from the warehouse staff who had processed it saying “Thanks for the return! We found $150 in your wallet and thought you might want it back. Thanks for the order!”
  • Could easily have kept it, but they hire for culture in the warehouse too
    • As a result of the focus on company culture, this situation took care of itself
  • Could have put in cameras and strip searches and supervisors
    • Would have been very expensive
    • Take the money and put it into the hiring and training process instead and let these situations take care of themselves
• Focus for 2009: Owning the three Cs
  • Clothing
    • Get the word out about clothing
  • Customer Service
    • Have them experience the great service experience
  • Culture
    • Make sure they understand that the culture drives everything
• Customers say “Zappos is happiness in a box”
  • Whether it comes from what’s in the actual box or through customer service or for employees as part of their job
  • Zappos is about delivering happiness to everyone
• Zappos Culture is ten committable core values (committable means you’re willing to hire or fire based on them). More at Zappos Core Values.
  1. Deliver WOW through service
  2. Embrace and drive change
  3. Create fun and a little weirdness
     • On a scale of 1 to 10, how weird are you?
  4. Be adventurous, creative, and open-minded
     • On a scale of 1 to 10, how lucky are you in life?
     • Based on a research study
       • How lucky are you?
       • Count photos in a newspaper and report the number
       • Hidden headlines throughout saying “Stop now, the answer is 37, tell the researcher you found this and get an extra $100″
       • People who considered themselves lucky found the headline more
  5. Pursue growth and learning
  6. Build Open and Honest Relationships With Communication
  7. Build a Positive Team and Family Spirit
  8. Do More With Less
  9. Be Passionate and Determined
  10. Be humble
• Can’t make compromises on hiring any one person or it creates a trend toward the bottom
• Some people say “Great for Zappos! Would never work for my company”
  • Good to Great book: getting everything thinking the same way and feeling the same things gets everyone moving in the same direction and is a multiplicative effect
• 7 Steps to Brand Building
  1. Decide
     • There are a lot of tradeoffs you have to make to get to a $1b
     • Make this decision early so you’re focused on the long term vision
  2. Figure Out Values and Culture
     • Used to think that “core values” were a big company thing
     • Found that rolling it out made them wish they had done it from day one
     • Do it from day one when you’re only a small number of people
       • What are your personal core values
       • What are the company’s
       • Most important thing is alignment, not what they actually are
     • A year long process at Zappos
       • Asked employees and got 37 in the end
       • Narrowed it down to the core list of 10
     • Don’t have a brand positioning document or set of policies
       • Reporters or job candidates can talk to anyone they’d like
       • Wander around, have something in the kitchen, find me when you’re done
       • Not afraid of what employees would say
       • If they talk to three employees, they’ll get three versions of the story
  3. Commit to Transparency
     • twitter.zappos.com
     • Culture book
     • letting employees walk around
     • Extranet for vendors
       • Work with 1500 different brands
       • All of them can log in and see the same info the buyers can see
         • Inventory, profitability, turn rate
       • Info might get into the hands of competitors, but more importantly they get an extra 1500 sets of eyes who aren’t on payroll who are looking for brands that are trending, etc.
     • Tours and reporter visits
       • Takes about an hour
       • Companies like Southwest Airlines have come for a few days
     • ZapposInsights.com
       • Any entrepreneur can sign up and ask questions about any aspect of the business
       • Question forwarded to the right department who will answer by video
     • Ask Anything newsletter
       • Employees email to an address and ask anything
       • Question forwarded to the right person who answers it
       • Answers published in monthly newsletter
  4. Vision
     • Whatever you’re thinking, think bigger
     • Chase the vision, not the money
       • Notorious B.I.G: don’t chase the paper, chase the dream
     • When employees saw that they were working for something bigger than profits or being the biggest in a category they became much more engaged
     • Vendors and customers on the phone felt that passion
     • When entrepreneurs ask which category they should go for, Tony says to chase your vision
       • What would you do for 10 years if you never made a dime
       • What’s the larger vision and greater purpose in your work beyond money or profit?
     • Big difference between motivation and inspiration
  5. Build Relationships
     • Not networking
     • Be interested rather than being interesting
     • Most of the big things that have gotten Zappos to wear it is are random, lucky things that happened by building relationships and benefiting from them 2 – 3 years later
  6. Build Your Team
     • “If you want to go quickly, go alone. If you want to go far, go together” African proverb
  7. Think Long Term
     • Overnight successes are years in the making
     • It’s been 10 years to grow Zappos to where they are now, though it feels like it’s an overnight success
• Take a step back: what is your goal in life?
  • Goals: Grow a company, get a great job, relationship, be healthy
  • Why? retire early, make money, find soul mate, run faster
  • Why?! spent time w/family, buy a home, start a family, etc.
  • All boils down to one ultimate goal: HAPPINESS
  • What is the science of happiness?
    • There’s a science here the same way as there is around the best way to run a marathon
    • Lottery winners a year later are at the same or lower happiness levels
    • Science in business behind things like conversion, psych of buying, direct marketing, etc.
    • What if you spent 10% of your time learning about and researching happiness?
  • Some Frameworks:
    • Perceived control
    • Perceived progress
      • Moving up to becoming a buyer over a three year process but in six month chunks so they measure it
    • Maslow’s Hierarchy
      • “Peak” by Chip Conley
      • How do you get employees to get from job to career to calling
    • 3 Types of Happiness
      • Pleasure
        • “Rock Star” Model
        • Very hard to maintain and sustain
        • As soon as source of stimuli goes away, you return to not happy much faster
      • Engagement
        • “Flow” Model
        • Put yourself in situations where you’re in the zone
      • Meaning
        • “Higher Purpose” Model
        • Being part of something bigger than yourself
        • This is the longest lasting type
• Books:
  • Peak by Chip Conley
  • Tribal Leadership by Logan, King, Fischer-Wright
  • Four Hour Work Week by Tim Ferriss
  • Happiness Hypothesis by Jonathan Haidt
  • http://bit.ly/twitterbetter
• Was at a Sketchers conference a few years ago
  • Similar to SXSW: stuff during the day, drinking and partying at night
  • Went out with a bunch of people from Sketchers
  • Shut down one of the bars and wound up at someone’s hotel room at 3am
  • Someone from Sketchers really wanted a pepperoni pizza and had been talking about it all night
  • Room service wouldn’t deliver after 11pm
  • Tony offered up that he ran a pizza shop in college and knew how to make one
  • She didn’t find that helpful
  • They all said “Call Zappos! Call Zappos!”
  • She called and said “I’m in Santa Monica and I’m really craving a pepperoni pizza and I know you’re all about customer service”
  • Awkward silence and then the rep said “You know you called Zappos and we sell shoes and not pizza yet?”
  • Put her on hold for five minutes and then came back with a list of all of the places that sold pizza that were still serving at that time
• Email tony@zappos.com for a copy of the presentation and a physical mailing address for the happiness book
• Email tours@zappos.com for a tour with pickup/dropoff
• zappos.com/zappos5
  • Collect five of a kind by getting a differently stamped card each day

Likely-related posts:

• Social Media Strategies for Organizations My presentation from Web Strategy Summit, delivered May 4th 2009....

Related posts brought to you by Yet Another Related Posts Plugin.

I will pay unlimited $ to the person who figures out how to round my day up to 30 hours. Seriously. Unlimited $.

Posted to Twitter on January 19th 2009 at 12:18am

The replies started rolling in right away and they were so great that I decided I had to document them here. Keep ‘em coming! Some of the best:

Moving to Another Planet

OK, but I’m afraid you’re going to have to move to another planet. Now pay up!
ebacon

Simplest way to to get 30 hours in a day is to move to another planet with a different rotational length.
hexsprite

Borrowed Time

I’ll give you 6 of my hours in exchange for unlimited $. Seems like a fair hourly rate you’re offering.
alexknowshtml

you can have all of mine and i’ll just chill.
drew

Changing Schedules

28 hours is the best i could do: XKCD 28 Hour Day
Affan

I’m your man! (The method involves an over-clocked wristwatch and Dexedrine.)
sabbatical

Facebookers Speak!

Since my Twitter status also updates my Facebook status, a few people jumped in from over there:

Simple. Use the metric day system I invented. 50 hours = one demidecaday 10 of these your get a full decaweek.
Pete Mosley

You would have to travel close to the speed of light for the time dilation to kick in.
Jawad Shuaib

Likely-related posts:

• Twitter to the Max: Hotel Max Comes Through The Hotel Max in Seattle way overdelivers...

Related posts brought to you by Yet Another Related Posts Plugin.

• I met John Salama, Chief Software Architect at Kneebone, at a University of Toronto Research in Action showcase a few years ago. I really liked their elevator pitch and we chatted for a while about ways Radiant Core could work with them but nothing ever came of it.
• Nulogy was a Radiant Core client so we know Jason, Kevin and the gang pretty well. Martin spent a good deal of time working through PackManager’s user experience and providing fairly detailed wireframes and visual design at a key time in the product’s early days. They recently won a Red Herring Top 50 in Canada award, so they must be doing something right
• Regen Energy is fairly closely associated with Zerofootprint, and so I had the opportunity to sit down and chat with Mark Kerbel (CEO) on a few occasions. Their technology is really, really interesting for larger buildings with substantial HVAC installations, allowing them to effectively cycle their power use as an intelligent network of devices. Their How it Works animation tells the story much better than I can.
• I met Bern Grush, Chief Scientist at SkyMeter, at one of the Metronauts events and brought them in to form a partnership with Zerofootprint. Bern is more passionate about road congestion then any one man has any right to be, but he’s used that passion in the pursuit of good (rather than evil) and has co-developed a pretty amazing in-car tracking system. SkyMeter is well ahead of its time and it looked like the road wasn’t going to be long enough to let them rest of us catch up, so I’m glad to see that it’s been extended.

Congrats to all of the recipients! As David said: it’s fantastic to start 2009 off with a big funding announcement in the midst of all this negative economy chatter.

Related posts brought to you by Yet Another Related Posts Plugin.

Panel Members (L to R): Mathew, Thomas, Darryl, Mike

• Panel:
  • Mathew Ingram (Globe&Mail)
  • Darryl Ballantyne (Lyricfind)
  • Thomas Whitaker
  • Mike Kirkup (RIM)
• Rick Segal:
  • You can get funded
  • Good news:
    • Canada is a big market (e.g. Toronto Tourist market is $4 billion/year)
    • Canada is a friendly and ’small’ market
  • Bad news:
    • Some business are outstanding but not VC investments
    • Some plans are amazing but not on target for particular VC firms
    • Process is fairly straightforward but not fun
    • There are lots of walking wounded from the last bubble
  • Good people with good ideas will get funded
  • Used to see a lot of biz plans with ‘customer logo salad’ but now we see ‘blog logo salad’
    • TechCrunch, etc.
• What’s the problem?
  • Lyricfind: name that tune
    • Everyone can remember the words but not the name
    • People are highly engaged with song lyrics
    • Everything in music industry moving to digital (whether labels like it or not)
    • Lyrics were a wild-west of user contributed and inaccurate content
    • Could be the hook that can pull in users
    • None of the music services wanted to go to 3k publishing contents and get licensing
  • Thomas:
    • A lot of companies don’t do IT internally or adopt new applications
• What’s the solution?
  • Lyricfind:
    • We go out, get the licensing, and resell as a clearinghouse
  • Thomas:
    • Come up with a drop-dead simple tool that enables people to adopt new tech
• What’s the bet?
  • Lyricfind:
    • We knew these sites were getting serious traffic
    • We knew consumers wanted to scroll through lyrics on their iPod
    • We knew publishers would see this as a ‘free money’ add-on to their existing business
    • A lot of the deals we’re doing are ad rev share but clients aren’t going to go away
    • Everyone is spending more time at home since they don’t have money to go out so they browse our content
    • We’re inherently a content company
• What do people have to believe to go to the next step?
  • Lyricfind:
    • There’s consumer demand for the content
    • The content adds value to music delivery
• Who’s going to buy your company:
  • Lyricfind:
    • There are companies that provide music meta data or licensing
    • Digital music companies who are our clients
    • Some partners
    • Anyone who provides digital music services
• Darryl Ballantyne
  • Tried in 2002 but couldn’t get licensing
    • Music industry was trying to shut down the Internet
  • Started again in 2005
  • Freeloaded off parents to save money
  • Recruited people to the board who had contacts in the record industry
  • Went to LA to work for a label and recruited his boss to the board
    • Gave credibility without having money
  • Worked from home, then got office space in exchange for being in-house IT, setup a fake PBX and redirected to cellphones
  • Did a big deal with Real Networks by setting up fake rooms in the office they borrowing from income trust
    • Brought in all of their friends to fill in the office
    • Switched his stuff to a private office and a partner into a cube
    • Had a sign printed and put above the income trust sign
    • Had a hot friend come and be the receptionist
    • Always listed their address with a suite number to look bigger
  • Got publishers to understand this was found money they were leaving on the table
  • We’re not targeting 10m consumers, we’re targeting 100 digital music companies
    • Coverage in mainstream blogs like TechCrunch is important but not key to their business
    • Don’t turn away publicity
• Thomas Whitaker
  • SMS marketing company
  • Consulting systems integration
  • ________(current company – missed the name)
    • A lot of companies don’t do IT
    • Solutions
  • Has pitched Rick 6 times and never got him
  • Chamber of commerce, local paper, Globe&Mail is the right coverage for my customers
    • We’re members at 10 Chambers and a dozen Trade Associations
    • Wrote an article series called Get Connected about how mobile is helping SMEs
    • That audience doesn’t know that you can do things like mobile CRM on a BlackBerry
  • Organic growth starts at a grassroots
  • Ideas come from reading a lot, observing a lot, writing ideas down
    • Ideas can pop into your head just from observing: people put their phones down on tables in restaurants and bars so why aren’t they showing ads?
  • Pitching makes you better at pitching. My first pitches were horrible but they’re getting better and better
• Mathew Ingram
  • Timing is everything
    • Hitting a journalist when they’re working on a story about your industry is key
  • Humanize yourself or your solution
    • Journalists are people — you need to resonate with them
  • If someone doesn’t write about you, don’t send them an email saying they’re a moron
  • Consumer facing web apps or services should care about TechCrunch, but they’re not always right
    • Twitter has had service outages, lost features, but still running strong
    • You can overcome negative coverage from the mainstream blogs, but it’s harder
  • Better to have lots of people talking about you negatively than no one talking at all
  • One good reason to read TechCrunch: finding out if other people are doing the same thing as you
  • Wish I could do mobile payments so I wouldn’t need a wallet
  • Bill Gates thought pen computing would be big a few years ago and lots of people agreed but it wasn’t — don’t be discouraged
  • One of the problems I have is looking at what my friends are doing and thinking it’s a great market
    • Markets are much bigger than a handful of people
• Mike Kirkup
  • Humanizing is key
  • Last thing I want to see is “this will put Microsoft out of business” or “sell 100x more BlackBerries”
  • If you come to us put together and have done your homework, that resonates
  • If you get blown off the first time, call us on it
    • Timing is everything — we might blow you off the first time because we’re busy
    • Best relationships have come from people who fought back
  • If you want 1000s of people to know about your BlackBerry product, don’t send an email. Put it on BlackBerry Cool or CrackBerry
    • We watch these blogs and get leads for partners from them
    • It’s easy to feed content to those guys — give them text and pictures
  • When you go talk to companies like RIM, MS, Apple, ask them how many companies are doing the same thing
    • We have at least 6 companies who think they’re the only ones building the next generation social network for mobile differentiated by location-based services
  • Mobile and micro payments are big feature requests for us
  • Balance between lifestyle and business on the same device is also key
  • A lot of people who come to pitch us haven’t thought through the actual sales channel and mechanics of their market
    • How am I going to get people to pay for this?
• Questions:
  • Are you going to VCs for validation or for money? For the ideas you don’t get funded on, do you let them go?
    • Thomas: For money. Rick turned me down on SMS marketing but I found some Angel financing. Still made a lot of mistakes and one fatal one.
    • Rick: a lot of times, people come in and say “You think it’s a good idea?” “No, it’s stupid.” but I’m a user group of 1 and the wrong guy to ask. Most VCs will give you their personal opinion that should go into your giant pile of opinions but not carry more weight
    • Darryl: Rick didn’t fund us multiple times but eventually said “I really should have bought you the first time you came in.” so don’t take one person’s opinion

Likely-related posts:

• AWAD: anomie Smart post-conflict governments invest heavily in rebuilding infrastructure. Thomas was...

Related posts brought to you by Yet Another Related Posts Plugin.

• From Boulder CO
• I get asked to speak at a lot of stuff
• I hear more and more about Toronto
• I came here to check out the community and to meet some of the people who have applied to TechStars
• Started as a software developer/hacker/geek
• Did three startups
• Went to the darkside of investing
• I’ve bootstrapped, raised, and self-funded
  • Zoll Data Systems
    • Public safety data systems
    • Paramedics with pen-based computers
    • Dispatched about 50m ambulance calls
  • earFeeder
    • Music and RSS
  • iContact
    • Only revenue was selling the domain name to a new company
  • TechStars
    • Fourth ’startup’
• Boulder is known for:
  • Mork and Mindy
  • Skiing
  • Pot smoking
  • 125,000 people including students
  • Denver is 1m
  • Nestled right up against the mountains
• VC in Boulder
  • $311m in Q1 2008
  • $2500 available per person
  • $130m in Ontario spread across 13m people, so $23 each
• VC is broken!
  • Really it’s a chickent and egg problem
  • Entrepreneurs are waiting around for more VC to start
  • VCs are waiting around for companies to invest into
• VC is hard to get everywhere, not just here
• VC follows innovation
• Boulder had a strong telecom and data storage basis
  • Created a lot of entrepeneurs with money who stayed there
  • Created the angel economy that is the engine behind the startup world
• Angels aren’t just in it for the money
• Startups
  • Photobucket
  • Newsgator
• Techstars
  • Partners
    • Brad Feld, askthevc.com, feld.com
      • Invested in Harmonics who made Rock Band
    • Jared Polis
      • Blue Mountain Arts ($780m), ProFlowers ($477m)
      • Elected to Congress
    • David
  • Mentorship driven seed stage investment fund
  • It’s not just about the money – it’s about the network you get surrounded with
  • Bring 10 teams of (young) entrepreneurs to Boulder for the summer (out of 400 applicants)
  • Incredible mentorship experience
  • Matt Mullenweg, Jeff Clavier, Stewart Alsop, etc. all come in and spend time
  • Companies hang out and live together
  • 10k sq. ft. ‘bunker’ that everyone can work from if they want to
  • 40 sessions in 90 days on topical subjects
  • Companies pitch over and over during the summer and get better every time
  • Investor and demo day in Boulder and Silicon Valley (200 – 250 investors)
  • Goal at the end is to get just enough funding to get to the next point
  • Success:
    • Socialthing
    • Brightkite
    • intensedebate
    • Filterbox
    • 13 of 20 companies now angel or venture backed
    • 1 defunct
    • 2 positive exists (Socialthing, Intense Debate)
    • Under $600k invested in two years of the program so positive ROI to date
    • About 40 new jobs in Colarado
    • AOL office opening in Builder
    • 9 of the 20 companies stayed in Boulder (4 from there originally)
    • Boulder becoming known as a startup town
• Lessons
  • Don’t focus too much on VC. Just start executing.
  • Community can be more powerful than you imagine if it works together
  • Promote your community (blogging, speaking, etc.) when you promote your company
  • Mentorship is the scarce resource that matters (not capital). Surround yourself with the best.
• Twitter: dgcohen23, techstars

Related posts brought to you by Yet Another Related Posts Plugin.

Don Dodge speaks about airplanes and spaceships at StartupEmpire

Don Dodge is a veteran of five start-ups including Forte Software, AltaVista, Napster, Bowstreet, and Groove Networks. Don is currently Director of Business Development for Microsoft’s Emerging Business Team. The goal is to help VC’s and start-ups be successful with Microsoft.

• Don Dodge
  • 25 years of experience
  • Alta Vista, Napster
• Why start a company now?
  • Great people
  • Customers want to save money
  • VCs have tons of cash
  • Can’t get worse!
• People are most important
  • Number one hurdle is great people
  • boom times everyone is busy
  • Bad times people get laid off
  • Companies retrench, focus on core, nothing new, people get bored
  • Startups are fun, challenging, and create value
• Customers want to save money
  • Try new things and take a chance on a startup
  • Must demonstrate how you save them money
  • Productivity improvements aren’t enough
  • Have to demonstrate very clear value
  • Is your product a vitamin or a pain killer?
    • Nice to have vs. essential
    • Productivity vs. saving money
• Investors will fund solid ideas
• Me too startups will not get funding
• Ad supported models will be questioned
• Experienced people with great ideas will get funded
• Investors fund people they know and ideas they understand
• Start with investors/angels who know you
• Angles know VCs who will invest
• Target investors who have experience in your business
• VC is a hits business: 1 big success pays for years of losers
• A small software startup can do $1m/month – the CPM to get that is huge
• Angels are easier to convince if:
  • They know you or know people who will vouch for you
  • They have been in the business before or have an affinity for it
  • If not one of the above, they are harder to get money from
• Infrastructure is cheap
  • Everythign is cheap and plentiful
  • Office space is cheap – sub lease
  • Office equipment – buy used
  • Software – BizSpark from MS
    • Less than 3 years old
    • Less than $1m in rev
    • Building SaaS
    • USD $100
    • Global community of support resources
    • Windows Server, SQL Server, Sharepoint
    • Microsoft startup zone
    • Contact David, Mark, Don
• Infrastructure – cloud computing
• Questions:
  • What’s the idea for Microsoft behind BizSpark? What are you hoping to achieve?
    • Group is put together to help startups succeed
    • Can’t succeed without lots and lots of companies building on MS
    • Competing with OSS
    • Tiny little startups don’t have cash and go the easy, free route
    • After three years or $1m they can afford for it
• Is BizSpark available through the cloud?
  • Yes, not just the dev tools
• Do I have to build something specific?
  • No, you can build anything on it
• MS acquired 22 last year, 21 year before, 16 this year to date
  • Generally filling in gaps or holes in the product line
  • Doing things better
  • Creating new markets
  • Usually start with a partnership and a biz dev deal
  • PowerSet semantic search, Fast enterprise search, Advertising aQuantive
• Do we sign NDAs before you develop the product?
  • We don’t get into that
  • Don’t tell me your secrets
  • VCs are the same
  • Never seen an NDA invoked or used

Likely-related posts:

• Tony Hsieh, Zappos CEO, at SXSW09 Tony Hsieh dispenses great wisdom about building your company's culture...

Related posts brought to you by Yet Another Related Posts Plugin.