BerandaComputers and TechnologyWozniak, Kalanick, and Chesky on starting small

Wozniak, Kalanick, and Chesky on starting small

EDIT: I’m gonna open this essay up with the caveat that there’s a lot of non-Airbnb stuff in here. That’s because I wanted to draw parallels between Airbnb and other startups. I’m less interested in lazily inspiring you with examples like most sites do, and more in what you should take away to increase your probability of success.

I’ve also decided to split the original essay up into 4 parts (shipping 1 part each day). It was almost half an hour long and I feel like that just would’ve been too cumbersome to consume.

Hope you enjoy.

RJ

Links to the rest of the good stuff:

The Dumbest Startup That Ever Worked  — What You Can Learn From Airbnb  — PART 1

The Dumbest Startup That Ever Worked  — What You Can Learn From Airbnb  — PART 2

The Dumbest Startup That Ever Worked  — What You Can Learn From Airbnb  — PART 3

The Dumbest Startup That Ever Worked  — What You Can Learn From Airbnb  — PART 4

TLDR: Lesson 1: It’s possible for you to make things better. Lesson 2: Solve your own tiny problem. Lesson 3: Validate quickly and double down when it works. Lesson 4: It’s easy to connect the dots ex-post-facto. Lesson 5: Finding product/market fit from day one is fiction.

We’ll cover lessons 2 and 3 today. Let’s get this show on the road, yes?

When Brian moved to SF and decided to live with Joe to figure out what their billion-dollar startup was gonna be, he quickly learned that in order to make rent in SF, you have to sell a kidney. Probably both if you’re one of those fancy, pampered types that enjoys the finer things in life such as, you know, nutrition.

He didn’t have his part of the rent though ($1150).

But that weekend, there just so happened to be an international design conference at SXSW, and they noticed that all the hotels on the website were listed fully booked.

They figured: well, designers are gonna have to stay somewhere, we don’t have the money to make rent, so what if we made a makeshift Bed and Breakfast?

But Brian and Joe didn’t have any beds. However, Joe had some airbeds leftover from camping so they changed their idea to an Airbed and Breakfast (Airbnb).

They ended up hosting a 35yr old woman from Boston, a 45yr old father of 5 from Utah, and a 30yr old man from India. Oh… and they made rent.

If you just want to read about Airbnb, skip the following section and pick back up at: BUILD SOMETHING SMALL THAT YOU WANT AND THINK IS DOPE.

Notice that they weren’t trying to build a unicorn. They just needed to make rent and it seemed like a cool, fun thing to try.

This is a surprisingly common theme in startups. Travis made a similar remark about the origins of Uber: 

‘’When we first started it wasn’t about taking over the world. It wasn’t about taking on corruption in every city around the world. It was actually just about being baller in San Francisco.’’

Because literally every POS article on Business Insider type websites doesn’t have the accurate quote and more annoyingly can’t be bothered with a source either, here it is:

Travis Kalanick at Startup School 2012 (2 years after founding Uber).

Back when computers were expensive, Woz built his own because he wanted one for himself. That was the origin of Woz, Jobs, and for 12 days Wayne’s, Apple.

‘’I had no idea that I was taking exactly the right steps up this nice smooth ladder that leads up to the Apple II.’’

Notice the nice smooth ladder he’s talking about. You start small and incrementally work your way up. You don’t start with the vision of the trillion-dollar Apple we have today.

‘’I told my father: ‘Someday, I’m gonna own a 4K Nova Computer, so I can write programs.’ And he said: ‘That’ll cost as much as a house.’ And I said: ‘I’ll live in an appartment.’ I would rather have a computer in my life than a house.’’ 

‘’I was giving away the schematics, passing them out. No copyright notices, no nothing. Passing out the listings of the code I wrote to other people in my club [The Homebrew Computer Club]. I was saying: ‘Here, you can build your own.’ And nobody really had the time to build it. And, so Steve Jobs came by and said: ‘Why don’t we make a PC board to save them the time to build it.’

There’s this idea that in order to change the world you have to start with the vision to cure cancer or build a quantum computer or something.

I don’t really like that approach. Maaaybe it’s useful for a second-time founder but for a first-time founder, I think it’s way too overwhelming.

When you’re ambitions are so grandiose, it’ll scare you into inaction.

We know from BJ Fogg’s work (2009) on behavior science that if ability is low (something is extremely hard to do), then even with high levels of motivation, behavior won’t occur. And reminders (called prompts) will just make you frustrated. 

But there’s another problem too. Namely, there are just so many examples of solutions to tiny irritations that escalate into big companies.

There are a few reasons for that but one of them is that it brings clarity, simplicity, and focus. My favorite example of this is The Point vs. Groupon. [4]

So be open to solving small problems in your life. Yesterday I saw Mikael Cho, founder of Unsplash talk about this on Twitter. It’s a good reminder that small stuff really can become big.

And if after that you’re still inspired to tackle the hard and obvious problems, you’ll be in a much more favorable position. [5]

They went from idea to execution fast. There was no complex infrastructure. No complicated back-end designed to handle the influx of millions of people. No, it was all very ghetto. We need to pay the rent, so can we get 3 people to pay us $80 to stay with us and sleep on our Airbeds during the conference?

Most of the time when founders do that stuff, it’s just another way to hide.

One of the best models we have today is the Kagan Validation Model: Get 3 paying customers in 48 hours without spending any money. (Sumo Group founder and early Facebook/Mint employee Noah Kagan.)

Sure, that might eliminate ideas that would’ve worked had you spend more resources (false negatives). But it also prevents you from spending months or even years on ideas that are never gonna work (false positives). 

Since the latter is a far more common problem, it’s more important to prevent that from happening.

By making the system overly sensitive, you’ll prevent wasting resources on ideas that’ll never work and the stuff that does make it through your filter is much more likely to succeed.

Think about it. If you can presell something based on a phone call then that leaves all the tools in your toolbox available to grow it. Whereas if you launch with the perfect product and marketing after years of refining it behind closed doors, then where exactly are you gonna take it from there? What’s left to optimize?

This does beg the question: ‘‘Why make the system overly sensitive in the first place? Why not adjust it so it’s perfect?’’ Because that’s not possible. There’s no way to create a system that will sort good ideas from bad ideas perfectly. So you’ll always have to be biased toward identifying good ideas and throwing away good ones that seemed bad (false negative) or identifying bad ideas and continuing to work on bad ideas that seem good (false positives).

This essay Paradigm Shift: Drastically Increase The Odds of Success goes into depth on how to think about false positives and negatives.

[4] From The Right Way To Start A Startup:

Andrew at the NY Tech Meetup in 2008:

‘’The biggest mistake we made with The Point was being encumbered by this vision of what I wanted it to be. And taking 10 months to build the product and making all these assumptions of what people would want, that we then spend the next 10 months backtracking on. Instead of focussing on the one little piece of the product that people actually liked.

So, uhm, If there’s any advice that I have it’s you’re way too dumb to figure out if your idea is any good. It’s up to the masses. So build that very small thing and get it out there and keep on trying different things and eventually you’ll get it right.’’

[5] Elon Musk is a role model for many founders nowadays but what he’s doing now is much less accessible than what Jack Dorsey, Drew Houston, or Mark Zuckerberg have done. In fact, it was so inaccessible that he couldn’t raise enough from investors. Which is why half a billion dollars in loans from the government was required. As for the hundreds of millions to kickstart Tesla and SpaceX? His own money. Which he made from… yup… internet startups. His first project was a small video game called Blastar. After that, he created Zip2 (Internet version of the yellow pages telephone directory with maps included.), then PayPal.

Also, SpaceX grew in ambition. Originally the idea was just to use 100 of the 180 million dollar payout of the PayPal acquisition to eBay, to get people excited about space again. He wanted to land a miniature experimental greenhouse containing seeds with dehydrated gel on Mars to grow plants on Martian soil, “so this would be the furthest that life’s ever traveled” in an attempt to regain public interest in space exploration and increase the budget of NASA.

As for Tesla, that wasn’t even founded by Elon. Which most founders know but gen. pop. or the up and coming founder might not. The original idea came from AC Propulsion where Tom Gage and Alan Cocconi had built the t zero.

Point is, he didn’t start with his current vision and you shouldn’t either.

Berkeley Haas. (2008). Steve Wozniak on the Early Days of Apple [Video]. Retrieved 20 October 2020, from https://youtu.be/5WBX6SACViI.

Dang, L., & General, R. (2016). Meet the Man Who Became Airbnb’s Very First Guest. NextShark. Retrieved 20 October 2020, from https://nextshark.com/meet-man-became-airbnbs-first-guest/.

Fogg, BJ. (2009). A behavior model for persuasive design. Persuasive ’09: Proceedings Of The 4Th International Conference On Persuasive Technology, 40, 1–7. https://doi.org/10.1145/1541948.1541999

FORA.tv. (2014). Steve Wozniak Remembers Building the First Apple Computer. Retrieved 20 October 2020, from https://youtu.be/dz4aiU4FiIM.

Kagan, N. (2013). How to Validate Your Business | OkDork.com. OkDork.com. Retrieved 20 October 2020, from https://okdork.com/resources/validate-business/.

Y Combinator. (2013). Travis Kalanick at Startup School 2012 [Video]. Retrieved 20 October 2020, from https://www.youtube.com/watch?v=rQ6GoY2_Ujw.

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