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Startup School 2009: 37 Signals has some lessons for European startups

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Portable HDTV and DVD player costs $300

jasonY combinator’s annual startup school event was held in Berkeley last Saturday and featured a stellar lineup of speakers including the founders of Twitter, Facebook and Zappos. The founders speaking were almost universally charming and funny, even Mark Zuckerberg who I was determined to dislike (he does look around 12 though). This reinforces my belief that charm goes a long way in business.

Jason Fried of 37signals gave one of the talks which seemed most relevant to European startups. His business partner is actually from Copenhagen and they worked together for 2 years before meeting in person. Here’s a summary of his presentation and a chat I had with him afterwards.

  • Bootstrap your startup because it teaches you how to make money. Funded companies are focused on spending it.
  • Charging for something forces you to be good. People care about something they have to pay for so you will get very good and honest feedback.
  • Useful is more important than innovative. “Cool” wears off, useful doesn’t.
  • Software has no edges. This makes it more difficult to stop it from expanding beyond where it should. Think of your product as a museum and the features as the pieces of art you select. Only the most important pieces should make it into the museum.
  • You can’t make just one thing. Every product has a byproduct. Again this is harder to see in software than with physical products. In the case of 37signals, books and conferences have been byproducts of the software products.
  • Say sorry in the right way. Don’t say “we apologise for any inconvenience which may have been caused” when you should just say “I’m really sorry”. Talk to your customers as you would to any other human being.
  • The best are everywhere, not just in the golden California Valley. So live somewhere you love. Don’t feel you have to move just to make your company work.
  • Failure is not a pre-requisite for success or a rite of passage. Unfavourable comparisons are often made between the tolerance of business failure in the US and in Europe. Maybe we should worry about that less. Jason advises replicating what succeeded as opposed to learning from your mistakes – the results are much more predictable.
  • Europe can be a less risky place than the US to start a company because of the social security system here. You are never going to starve or have to do without medical care even if it all goes pear-shaped.
  • In some European countries it may be more frowned upon to succeed spectacularly than to fail. In countries like Denmark or the Netherlands, standing out is often not considered to be a good thing.
  • http://www.touristway.com Stefano

    “In countries like Denmark or the Netherlands, standing out is often not considered to be a good thing”…. seriously? But the first 4 points are great milestones! Thank you 37Signals to keep startup’s feet on the ground.

  • http://www.hello24.com Paul

    A really great list! Thanks!

    Maybe one thing missing is: build with passion on your passion.

  • http://twitter.com/simonstarr Simon Starr

    As a freelance developer who’s using income from client work to support my own modest business ideas in my spare time, the points about bootstrapping and charging money sound like common sense to me.

    I don’t understand why the likes of Jason Calacanis are so convinced that the definition of success is to start a business by getting VC funding, hiring a load of people and working them like slaves and then selling the whole thing off a couple of years later. That’s never been the way the majority of independent businesses work in the real world so why should it be different on the internet?

  • http://crenk.com Steven Finch - Crenk

    This is some great advice. Im really looking forward to seeing more startups grow here in Europe!

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  • Kim Fransman

    @Stefano – I live in sweden and I have to agree with that doing great and making money is generally considered as something ugly. Even the tax-system is built to be harder on those who make it to be able to support those those that doesn’t.

    Sure there is less risk with the social security system, but it also cripples the companies in such a way that many companies chooses to move to countries with more “companyfriendly” tax-systems when they are starting to make money.

  • http://blog.johanrhodin.se johan Rhodin

    “In countries like Denmark or the Netherlands, standing out is often not considered to be a good thing.” This is (unfortunately) sooo true for Sweden as well :(

  • http://soci.ali.sm Jan Horna

    Europe is about making us (I am Czech) equal (Germans call it “gleichschaltung”). The Americans dream about becoming a shining star. A bit oversimplified but still true I believe.

  • http://twitter.com/essarbea Sameer Baroova

    This is a complete list key notes of all the speakers at startup school 09 http://journal.markbao.com/2009/10/startup-school-2009-summary/

  • http://timmolendijk.nl Tim Molendijk

    “In some European countries it may be more frowned upon to succeed spectaularly rather than fail. In countries like Denmark or the Netherlands, standing out is often not considered to be a good thing.”

    @Stefano: I’m Dutch and live in Amsterdam and yes, there is some truth to this statement. Yet, it does not mean you are not allowed to be successful. You can, and being successful is encouraged. It’s all about attitude though. As soon as you start behaving as ‘a class apart’, it will not be tolerated and society will decapitate you. :)

  • http://epigenesys.co.uk Jon Rowe

    Good article, but why can’t you hash our passwords!

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  • http://teabuzzed.com Fred Jabre

    Some great advise except for the following:

    “Jason advises replicating what succeeded as opposed to learning from your mistakes – the results are much more predictable.”

    Please tell me you’re paraphrasing incorrectly.. That just comes off the wrong way… Don’t learn from your mistakes..? Copy success..? Sounds like something I’d expect to read from Donald Trump, not someone I respect like JF..

    • http://www.ciara-byrne.typepad.com deciara

      Probably he was not saying “don’t learn from your mistakes” but more you can get further from replicating things that worked well. But fair point – I should check this with him.

      • http://teabuzzed.com Fred Jabre

        A little clarification would be nice.

        Didn’t mean to get snarky, it’s just that I think making mistakes and failure are a natural part of the process..

        Maybe I could learn a thing or two? =) Or maybe JF is one of the rare few who doesn’t make mistakes?

      • http://www.ciara-byrne.typepad.com deciara

        I mailed Jason about this to clarify. Here is his reply “You can definitely learn something from your
        mistakes, but I believe learning from your successes generally yields better lessons. When you learn from your mistakes you only learn what not to do again. When you learn from your successes you learn what
        worked so you can do it again.”

  • Cloudster

    “The best are everywhere, not just in the golden California Valley. So live somewhere you love. Don’t feel you have to move just to make your company work.”

    And yet YCombinator requires that you move to the valley to work on your startup.

    • http://www.ciara-byrne.typepad.com deciara

      I think this is because they believe that this kind of investment is a face to face business. Many VCs believe the same thing and won’t invest outside their geographical area.

    • http://www.adriatalk.com adriatalk

      I agree with this one. If “The best are everywhere” why YCombinator requires you move to the valley to work on your startup? It’s all about getting the best, and not the nearest. Isn’t it?

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