The Ultralight Startup: Launching a Business Without Clout or Capital [Review]

Sep 26, 2012

Table of contents:

1. Minimum Viable Product (MVP)
2. Getting organised
3. Working with others
4. Early traction
5. Working with others
6. Business models and making money
7. Getting media attention
8. Raising money
9. Conclusion

“The Ultralight Startup: Launching a Business without clout or capital” is the first book from serial technology Entrepreneur, Jason L. Baptiste. Jason is the co-founder and CEO of OnSwipe a service that allows content creators to make their work look beautiful on touch screen devices. Jason is an alumni of TechStars, an accelerator / incubator programme for startup companies, and he appeared in the first series of Bloomberg’s reality show that charted the TechStars inaugural class of New York City (Episode 1, 2, 3, 4, 5 and 6).

The Ultralight Startup is a book of practical knowledge and advice for launching a company without money or a network of contacts. Jason launched his first company at 19 out of college and subsequently launched two further companies without a lot of capital or an existing network.

The cost of starting a company has dramatically fallen in the last few years. It is now possible to quickly test an idea before investing in expensive marketing or customer acquisition. The Internet in particular is one such opportunity that allows any company to attract a global market of millions.

Minimum Viable Product (MVP)

Minimum Viable Product is a popular term in the world of Lean and Agile startups that references the minimum feature spec product that a customer will be willing to use or pay for.

MVP comes from the work of Eric Ries (The Lean Startup) and Steve Blank (The Four Steps to the Epiphany and The Startup Owner’s Manual).

The goal of a Minimum Viable Product is to test an idea or a hypotheses with real users or customers. The MVP allows you to quickly create a product with the least amount of investment possible to prove or disprove an assumption.

Creating an MVP is critical to creating a successful product without investing a great deal. Very quickly and very cheaply, you can test ideas and assumptions to find an opportunity worth pursuing. Minimum Viable Products are extremely important to saving time and money because they force you to focus on the real pass or fail aspects of the idea, without getting carried away with design, features or development.

A good part of Jason’s methodology is testing and proving the viability of an idea before proceeding. Again much of the theory is nothing new, but Jason is able to break down each task, and then give you an overview of exactly how his company OnSwipe acted upon it.

Getting organised

When starting a company either alone or with a couple of co-founders, it is unlikely that you will have all the skills, knowledge and prior experience that is needed to cover each job. Administrative tasks can be seen as not important in the early days, but getting organised will prevent unnecessary hassle going forward.

Jason gives an overview of what you need to get organised in terms of your legal documents, incorporation documents and founder-related documents.

But it is not just the boring administrative tasks where you need to be organised. Starting a company can be exciting if you want to work on many different aspects of a business, or perhaps you only want to work on one aspect such as Product.

If you do not get yourself and your colleagues organised over who does what, things will quickly start to fall apart.

Jason breaks down the tasks and roles of a startup into his “Five Divisions Rule”. The five divisions are:

1. Product
2. Business Development and Sales
3. Public Relations and Marketing
4. Finance and Funding
5. Hiring and HR

Whilst it’s easy to let yourself believe that focusing on Product will ensure your business succeeds, each of the divisions are just as important to the final outcome as each other.

Jason breaks down each of the Five Divisions into the key tasks that you must focus on in each area. This section of the book was really well written and organised as it allows you to quickly pull a coherent task list together so you are covered in each area. You can then assign these tasks to yourself or your co-founders safe in the knowledge that you are working on each important aspect of your business.

Working with others

One of the most important aspects of a successful startup is the team that is created to go after the vision. The team is not just the Founders, it is also the Employees, Investors and Advisors.

Jason advocates for two founders, one technical co-founder and one business co-founder. If you are one or the other, Jason gives a good guide for how best to find a partner and how you should evaluate and pick the right person to work with.

When money is tight in the early days, Freelancers can be used to help you refine your product or to quickly expand your team without the investment or commitment of hiring someone full time.

However, you will get to a point where you need to hire full time Employees. Working with Freelancers can be a good way of finding people who you want to work with and who will fit in with the culture of your company.

Advisors are industry veterans who have been there and done it. An advisor should be an experienced Entrepreneur who has seen the front line of battle. Jason of course mentions his time in TechStars and how it provides access to people with experience and skills in each of the critical areas of founding a successful startup.

Early traction

No matter how good your product is, if nobody uses it you won’t be successful. Jason outlines some cost effective tactics for growing your initial user base.

Whether you decide to bootstrap your company or seek outside investment, traction will be critical to your success. There are many ways to organically grow your product and company without spending huge amounts on Marketing or Public Relations.

Take a look at the following previous Culttt posts for some ideas:

• Hacking Distribution
• Finding your Viral Coefficient
• Attract the right kind of traffic to your website

Working with others

Business Development is another critical aspect of growing your startup in the early days. Business Development is basically working with other companies to provide the whole product. Your startup is probably focusing on one very specific area of a problem. However, consumers or companies won’t usually be in a position to make a purchase or use a product that is that specific.

By working with other companies, you can create the whole product and share customers and audiences so each company grows.

Getting access to an existing or more established adjacent partner will also be critical for raising awareness of your product and the benefits you can provide to your target audience. Again, if nobody knows you exist, no one will buy from you.

Business Development is a critical aspect of getting early traction, do not be naive to think that you don’t need it.

Business models and making money

To become a sustainable company, you will need to find a business model that suits your product and the opportunity you are attacking. The Internet has opened the door for many new business models that take advantage of the economies of scale and the open and unlimited ability to supply customers around the world and in real time.

I talked about this opportunity in the post, Why you should start your online business today.

Jason gives a good overview of some of the business models that are being used in the latest wave of Internet technology companies. He also gives an example and explains why each business model has been successful for that particular company.

Jason also goes on to talk about the importance of pricing and how you should A / B test your pricing to ensure you are effectively pricing your product for optimum revenue and growth.

Finally, Jason also talks about the importance of differentiation and avoiding the “Race to the bottom”.

Getting media attention

Getting noticed by the press will be an important aspect of your early startup life and is particularly critical if you are consumer facing.

Jason gives a good overview of approaching the various media outlets and offers advice for handling what happens when your story gets picked up. Jason also includes the email he sent to TechCrunch Founder Mike Arrington to get his company OnSwipe (formally PadPressed) featured by the tech news giant (Turn Your Blog Into An iPad Web App With PadPressed).

Startup PR and media attention is important, but you have to remember it won’t make or break your success. Getting featured by TechCrunch will give you an initial early boost of interest, but it is up to you to create a product that is able to maintain and grow your relationship with the market.

You will also be covered when things go wrong, and so you must be able to handle the attention and bad news stories as well as you handle the good.

Raising money

Raising money can be a long and gruelling process for even the hottest new startup. It will consume a huge amount of your time, and so you need to be prepared to go all in on raising money to fuel your growth.

Whilst raising money might seem like the next logical step for early stage Entrepreneurs, you need to ensure you are in the right place or it could all be a big mistake. Jason has a set of 7 questions you must ask yourself to ensure you are ready to raise investment. These questions include, do you have a demo? Are you ready to bring people on board? And are you fully committed to this vision? If you answer no to any of these questions, you can save yourself a lot of time by delaying the investment process until you are ready.

Raising Venture Capital has a lot to do with momentum and warm introductions. Firing off a cold email to a Venture Capitalist or Angel Investor is a sure fire way of not getting a response. It doesn’t matter how big your idea is, or how much it will change the world if you do not put the ground work in before hand to get the introductions you need.

You should locate the specific Investors you want on your team and find ways to get introductions to them. Investors have a large network of colleagues and industry friends, and so you must find a way into that circle. Networking and reaching out to the rising stars of an industry will be a lot easier than going straight to the top. Getting an introduction from a mutual friend will be a much better way of getting a meeting with the investors you want.

Jason breaks down the investment process that lead OnSwipe to raise $1,000,000 in just 40 days. He talks about the initial meetings and what you should expect at each stage in the journey.

Conclusion

The Ultralight Startup is a great book for would-be Entrepreneurs and is very approachable for someone who is just getting to know the industry.

This book talks about many of the concepts founding a startup like Customer Development, Lean and Agile engineering. If you are already familiar with The Four Steps to the Epiphany, The Lean Startup and The Startup Owner’s Manual you aren’t going to learn anything new.

However, if have not already read these three books, the Ultralight Startup gives you an overview of what you need to know and would be a good primer to read before getting into the more in-depth material.

The Ultralight Startup is more akin The Founders Dilemmas in that it gives you the story and the steps to take when founding a startup. Jason has recently being on this path with his company OnSwipe, and so I think the real value of this book is being able to read the steps that Jason took, and to be able to learn from the mistakes he made.

Jason breaks down each of the steps it takes to turn an idea into a product and then into a company. He gives you a clear and uncomplicated explanation of all of the critical steps and all of the tasks you will need to take on.

Jason also give a lot of practical advice and things you can achieve with very little budget. Nearly everything Jason suggest can be achieved for less than $200 and the majority of things will cost you dramatically less than that.

I think Jason’s recent experience with OnSwipe is really interesting and he is clearly writing this book to scrappy Entrepreneurial types with no money and only an idea. If you are in the early stages of your startup path, The Ultralight Startup will be a fascinating book of practical help and ideas and a companion for when things get tough.

Buy the The Ultralight Startup: Launching a Business Without Clout or Capital on Amazon (Affiliate link)