Experiment: Positive Thoughts on Posterous

I've started an Experiment: I now have a Posterous blog at gaborcselle.posterous.com where I'm going to try to post one inspiring / uplifting quote a day (Plus random photos from my iPhone).

Being an entrepreneur is hard because it's a rollercoaster ride of ups and downs. Without any substantial or factual change at all, you'll feel awesome one hour, and awful the next. Sometimes it's enough to just load one positive thought into your brain's state and it'll all work out fine.

Many of the quotes I'll post might be lifted straight from Barack Obama, Paul Graham, VentureHacks, Jessica Livingston's Founders at Work, or something that a speaker at YCombinator might have said.

Mail me any good quotes you might find - my email is on my homepage.

Why did I choose Posterous? Because Garry Tan is a cool guy and because Posterous lets you blog via email. And everyone knows how much I like email.

Stay subscribed to this blog, though - this is where I'll be posting original thoughts and content.

So - here it is: gaborcselle.posterous.com

"It's the Small Steps"

Here's one of my favorite blog posts. I have no idea how I found it in the first place, but I've kept it bookmarked in my browser for those moments when I'm feeling overwhelmed: Patricia Handschiegel - It's the Small Steps:

"After an hour of talking, the reporter said, 'Wow, I’m really surprised at how long and hard you worked, Patricia. You always assume when somebody has success, it was easy.' There is absolutely nothing easy. Any success, however you define success, is going to make you work harder than you could have ever imagined. Add in a start-up, and the to-do list can be enormous. This is why I constantly tell those I advise or mentor to create a list of their goals, a timeline for those goals and then, from there, the individual, small steps to get to each of them. Doing this makes the work easier, more digestable and less overwhelming. [..]

If I were to try to do everything I want to do at once, nothing would get done. I focus on the small things and so far, pretty much everything I’ve set my mind to has happened."

Xobni's Journey to the Right Product

This is the second of a three-part series on the Xobni launch. Come back on next Monday to check out Part III of the story. Co-written with Marie Baca. An abridged version of this article was featured yesterday on GigaOm.

I often speak with entrepreneurs applying for funding from YCombinator, and when I do I give them this advice: the most important decisions you make are the ones in the beginning of the process. Choices like what product to build and what market to serve determine whether you’re headed for failure or a multi-million dollar exit. Marc Andreessen, founder of Netscape, calls this "product/market fit" and says that it’s the only thing that really matters when it comes to building a company.

It's fair to say that at Xobni, is that we stumbled into product/market fit. We initially built the wrong product, but then we quickly corrected our course.

Building the Wrong Product

When Adam first wrote up our YCombinator application, Xobni was called "EmailDM"—the DM stood for "Data Mining." Adam included demos of how EmailDM would summarize emails, highlight important passages, and so on. Eventually this vision morphed into Xobni Analytics, which lets you analyze email usage by creating a diagram of your message traffic.



The initial plan was to offer this program to companies as a productivity tool. Workers would install the software into Outlook and use the data to find ways to become more productive. We would then offer this product to corporations so managers could remotely monitor employee email productivity.

This Boston Globe article, the first major coverage of Xobni, illustrates why this model was a bad idea: employees would feel like they were being spied upon. But even beyond the spying problem, Xobni Analytics was the wrong product to build for a more important reason: users would install the software, browse it for a bit, and then close it and quickly forget about it. Analytics was not a sticky application that tempted users to come back again and again.

The Xobni sidebar is completely different. There are many features beyond the analytics that add value for the user. Plus, the sidebar sits right next to the inbox, so users are exposed to it for the 2 hours they spend checking their email every day.

Our mistake became even clearer when we shopped early versions of Xobni around to venture capitalists. We first tried to remedy this problem by designing something called Xobni Feeds, which allowed users to create different types of XML queries that we would show up in the sidebar. Only later did we realize that this way too much flexibility for the average user, and we decided that it was a much better idea to show relevant, people-based default information.

In short, we discovered that our product was most successful when it provided focused information about people, not numbers. It is essential that entrepreneurs remember that they are serving an audience of individuals who need simple solutions to their everyday problems.

Why Outlook?

Unlike the initial problems with product development, Xobni made the right decision early on to target the Outlook market. There are an enormous number of Outlook users out there (around 350-400 million, depending on whose numbers you trust), and yet there is also major dissatisfaction with the program.



After Outlook, users most often requested that we build Xobni for Gmail and Apple’s Mail.app. However, both of those clients have much lower pain levels than Outlook. In addition, the addressable market is much more interesting: Outlook users are more likely to have business credit cards so if we ever switch to a freemium model, we can charge them. Also, there’s a strong demand for advertising partnership opportunities within Outlook, an application that users interact with for hours each day.

I like to think of it this way: there are a huge number of Outlook users out there who are so frustrated with the program that they feel like there hair is on fire. What Xobni offers is a cold bucket of water.

A Generalized Architecture

One of Xobni’s major differentiators is that we didn’t build a simple addin for Outlook, but an email application platform. Whenever we write software, we aim for a more general solution than what is required by our current needs. We can easily build new applications and build integrations into other email clients, as these leaked screenshots illustrate.



Building this platform took a significant amount of time and effort, but I’m happy that Adam made this decision early on: It allows us to quickly iterate on functionality, and build new, exciting products in the future!

Choosing a Look

Here are some mockups I created more than a year ago that illustrate the looks we had in mind for Xobni. The mockup on the right was our original choice: it blends nicely into Outlook, almost as if Xobni was built into it from the start. We created the third one almost as a joke, to show how the sidebar would look if we used a funky color palette.



We decided to go with the bright, saturated colors, because it would have what we call the “What the heck is that?” effect. Jane would walk by Jack’s desk, and see a bright blob on the right side of his Outlook screen, and she would blurt out: “What the heck is that?” Jack would have to explain Xobni and what it does, and Jane would probably download it once back at her desk.

Search as an Afterthought

Ironically, Xobni’s search function was initially an afterthought – Greg Duffy implemented it just a few days before we launched our private beta at TechCrunch 40. Even considering the rapid pace at which startups do product development, this was an immense accomplishment: Xobni’s search is twice as fast as Outlook’s, thanks to highly optimized and efficient search indexes. That combination of speed and usefulness make search our top-clicked feature.

Launch!

Let’s say you have a great product. How do you know when you’re ready to launch? That’s what I asked Gmail creator Paul Buchheit two months before our launch date. At the time, Paul was pretty skeptical, but he inspired us with an idea he repeated at Y Combinator's Startup School: Before launching Gmail, Eric Schmidt gave him the assignment to find 100 happy users. After talking to users, and eliminating their top feature requests and bugs, they met that number and thus, Gmail was ready to fly. We followed a similar spirit by adding the Are You Happy box to the product, and by listening closely to customers via our support team and users we knew personally.

We originally launched a private beta at TechCrunch 40, a conference where 40 startups launch their product within 2 days. The schedule was very tight, and the days leading up to it were a chaotic blur. In retrospect, we probably launched a little earlier than we should have. The product hadn’t been heavily tested at that point, yet we grew our user base by 50x that very day. With our open beta launch on Monday, we were finally ready in terms of speed and stability, and the feedback since has been extremely positive:

"Xobni is such a simple idea, but it is sure to radically change how you handle email." - Tom Spring, PC World

"For those who work in the corporate world - where Outlook is still heavily used - Xobni's public beta will be of great help, allowing them to quickly find and expose the data trapped in their inbox." - Sarah Perez, Read Write Web

"This plugin looks like it would be insanely helpful. Gmail, are you paying attention? :)" - Comment by Ross M, Lifehacker

"Given that Outlook is pretty much de rigueur for most corporate e-mail systems, this should be a welcome addition for those of you trapped in Outlook at work." - Scott Gilbertson, Wired

"Oh Microsoft, you’ve missed the boat yet again it would seem." - Zach Epstein, The Boy Genius Report

"In just a short few days, I can already share my belief that Xobni is a must download for Outlook users." - Kevin Tofel, kjOnTheRun

"Designed to make it easier to handle the deluge of daily messages, Xobni integrates with Outlook and - to quote our original review - becomes an invaluable weapon in the daily war with email." - Tim Danton, PC Pro

Thanks to Evan Solomon and Sean Ellis for reviewing drafts of this article. Be sure to check out Part III of this series, where I’ll talk about how we built a great company, assembled a superstar team, and built a culture that encourages building solid products.

Further Reading

If you enjoyed this post, be sure to check out my earlier blog entry, The Days before the Xobni Launch which talks about the days before launching our private beta at TechCrunch 40.

If you haven’t done so yet, read the first part of the series "Hello World, Meet Xobni".

The Startup School Career

I’m at YCombinator’s Startup School at Stanford. There’s a great audience here with lots of hackers. Still, I think a lot of the guys here came with the belief that their first startup is going to be Facebook. That’s not going to be the case.



There’s a disconnect between the public image of doing startups and the realities of the game. The press wants you to believe that startup founders, through a fantastic idea, become billionaires, complete with Boeing jets and petting zoos.

Reality is different: Entrepreneurship is a career. You start your first startup, maybe with backing for YCombinator, and it will probably go well: Paul Graham said that 57 of the 80 startups they funded are still alive, for some value of alive. You’ll learn all these things that today’s speakers are talking about - angel and VC funding, building a product, finding a market, and making money. You might get sold, might go bankrupt, and maybe you’ll make some money. But with a large probability, you won’t own a Boeing jet when you’re done.

The great thing is that you can put another dime in the slot. The second time around, you’ll have more experience, more firepower, and a track record. This was best illustrated by today’s first speaker, who by the time he got around to doing Xfire, instantly got a term sheet, and 100 days later had a built product. Jeff is another great example of this model.

Startups: It’s not a shot for the moon, it’s most likely going to be your career.

PS: I remember the first time I went to Startup School back in 2005. Seems like a decade ago!

Career Advice for High Achievers

Just before graduating from school with your freshly minted Computer Science degree, you need to find an answer to an intimidating question: What should you do with your life?

Before graduating from grad school, I was thinking about starting a startup with two classmates – but that never materialized. Later, I joined Google, and after half a year, quit, relocated to San Francisco, and joined Xobni.

While I am not the ultimate expert on career advice, I have thought through the options many times. I have flip-flopped on my decisions enough to have achieved wisdom through pain. Here’s what I learned.

As a high achiever, there are four things you might want to optimize for:

• financial rewards
• public credit for your achievements
• work-life balance
• leaving a lasting positive influence on the world

(If you don’t agree with at least two of these goals, this article is not for you.)

This article tries to answer the question: Should I

1. join an established company,
2. start my own company, or
3. join an existing startup?

I deliberately excluded the option of joining a mediocre large company. At a landlocked company, you’ll learn about upholding the status quo. If you join a company that isn’t number 1 or 2 in its field, and you’re in a junior position, you’ll see mediocrity, not strength. Mediocrity won’t let you to achieve the goals I outlined above.

Let’s go through your options, in the order given above.

1. Joining an Established Company

[+] Getting your resume stamped
[+] Best work-life balance
[+] Higher initial compensation
[-] Harder to get public credit for your achievements
[-] Politics, established organizational structure
[-] Lower long-term financial upside

This is by far the safest choice. Joining BigCo is an society’s template. Your grandma will be proud of you. Your friends will congratulate you when hearing about the job offer. But is it a good deal?

Working for BigCo has great advantages: The company is already set up for success. All the infrastructure is in place. You can start working quickly, training and documentation are available. If you’re working on BigCo’s distributed file system project, you will learn about building distributed file systems (valuable experience), instead of spending time installing Linux on your startup’s server (less valuable experience). If you get in trouble, there will be smart people working there to ask questions. At the startup, you’ll be on your own.

You will have time off, and will enough time and money to burn to go to Barcelona for the weekend. You’ll lead a more balanced life.

But there are downsides to BigCo. While you will receive some equity and bonus in your compensation package, you won’t be rewarded as much for exceptional achievements as if you owned the place yourself. You’ll deal with office politics: People might be incentivized to make themselves bottlenecks, not to help you achieve ambitious goals. The public face of the company will be the founders, the CEO, and exceptional people with good relationships to the PR department, not you.

Here are two tips for people who decide to go this route:

First, make it clear to your manager that you have high goals. Set specific, measurable, ambitious goals. This will drive you to work harder, set you apart from peers, while at the same time allowing for rapid advancement.

More importantly, find a good mentor. Find someone whose incentives are aligned with the company’s, not your manager’s. Don’t choose a fellow engineer who’s just been at the company longer. Find someone several levels up. Higher-ups have a broader view. They’ll be happy to mentor you if you appeal to their sense of ego. Don’t be shy about emailing that Engineering Director.

2. Starting a Startup

[+] Massive financial upside if it goes well
[+] Best if you’re an entrepreneurial type
[+] Best for getting public credit
[+] Best for positive world impact
[-] Hard to find co-founder
[-] Highest risk, potential public failure
[-] Need to build infrastructure that already exists elsewhere
[-] By far the most work

Paul Graham wrote the book on this topic. I’ll just give you my diffs.

If all goes well, starting your own thing will propel you into the stratosphere. You’ll be rich and famous. You might even have changed the world for the better.

There are risks and difficulties: If you fail (and you probably will), you risk public humiliation. This is especially true in European and Asian cultures, where you’ll have a lot of ‘splainin to do.

Out of all the options, this one takes the most work, and will lead to the most grey hair: Founders need to be emotionally stable.

At the onset, finding the right cofounder is success factor number one. You don’t want someone who’s a clone of yourself. If you’re an engineer, get an engineer with business talent. You’ll need technically proficient people, but also the guy who can negotiate good deals with investors and business partners.

Any place likes big companies. But for a high-tech startup, you need to be in a place that is accepting of you. A place where you can surround yourself with people of similar aspirations. Zurich is not that place, and Wichita, Kansas isn’t either. If you’re in Europe, move to London. If you’re in the US, move to the Valley.

3. Joining a Startup

[+] More financial upside than BigCo
[+] Lower financial risk than starting your own company
[+] Stable income, especially when venture backed
[-] Less public credit than if you are a founder
[-] Less financial upside than starting startup

Doing your own startup is the adventuresome path to follow, but there’s a less risky middle way: Joining an existing one.

This is a hybrid model of 1 and 2: If the company does well, money will rain, not pour (early employees receive significant amounts of equity). You’ll have credit for being one of the people who made a future BigCo a success, but the cover of BusinessWeek will show the CEO, not you. If you join after significant funding, you’ll have a stable income to live from.

Before you decide about joining, make sure the startup is set up for success. Meet with the key people, and ask them all the hard questions about what product they will build, how it will make money, what the equity structure is like, who controls the company, what the relationship between the founders is like, and what their plans are if things go awry. Do the due diligence. Join if you’re convinced.

After a startup, you can always go back to BigCo (but with more battlefield experience), or start your own. That’s what makes this option a good launching pad.

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Want to backtrack my agonizing about career options? Read these entries:

• Going to Google
• An Era Ends
• Joining Xobni

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Update: Another take on this topic, but from a macro perspective: Marc Andreesen’s Pmarca guide to Career Planning.