The series "Silicon Valley" (Silicon Valley) is not only an exciting comedy about startups and programmers. It contains a lot of information useful in the development of a startup, presented in a simple and accessible language. I always recommend watching this series to all aspiring startups. For those who do not consider it necessary to spend time watching TV shows, I have prepared a small selection of the most useful episodes that you should definitely watch. Perhaps after reading this article, you will want to watch this show.
The series tells about the fate of Richard Hendricks, an American programmer who invented a new, revolutionary data compression algorithm and, together with his friends, decided to start a startup based on his invention. Friends did not have any business experience before and therefore they collect all possible bumps and rakes.
Episode 1 - 17:40 - 18:40
Richard does not understand the potential of his invention, but more experienced businessmen Gavin Belson (head of Hooli Corporation) and Peter Gregory (investor) understood everything perfectly and offer Richard two options for the development of events. Gavin offers to buy Richard's web service along with the rights to the code and algorithm, and Peter offers to invest in Richard's future company.
The episode shows one of the ways to determine the terms of investment. One of the hardest things about investing in the early stages is valuing a startup. Gavin's offer to buy gives Peter the easiest way to evaluate. If there is a buyer for the entire startup, then it is clear how much the share will cost for the investor. The dialogue is also interesting in that with the increase in Gavin's offer, Peter reduces the amount of investments and his share, remaining in a corridor that is comfortable for the investor in terms of the amount of investments.
Episode 2 - 5:30 - 9:50
Richard comes to a meeting with Peter Gregory to discuss the project and the investment. The first question that interests Peter is the composition of the project team and who has what shares have already been allocated. Next, Peter is interested in the business plan, go-to-market strategy, budget and other documents that reflect the vision for the future of the business. He explains that he, as an investor, is interested in the company, not its product. An investor buys a stake in a company. For an investor, a commodity is a company, not its products. The investor earns the bulk of the profit when he sells his stake in the company after its value rises. This principle works in venture investments as well as in the usual purchase of shares in a public company or a stake in an LLC. Peter Gregory also voices this thought - "I pay $ 200 for 000%, and you gave someone 5%, for what?". That is, a person who receives 10% is expected to bring benefits of at least $10.
Episode 2 - 12:30 - 16:40
Richard and Jared interview Richard's friends to find out their skills and role in the future company, as well as the benefits they can bring. It sounds like it's just that friends and cool dudes are not given a share in the company. Friendship is friendship, but shares in the company should reflect the usefulness of the founders for business development and their contribution to the common cause.
Episode 3 - 0:10 - 1:10
As it turned out at the end of the 2nd series, Gavin Belson (the head of the Hooli corporation), who was denied a deal by Richard, assembled a team for reverse engineering - restoring Richard's algorithm using the existing website and fragments of the front-end code. In parallel, Gavin launched videos announcing his Nucleus software platform for data compression. Richard's friends discuss why he is doing this, because he has nothing yet. Dinesh, a programmer from Richard's team, says: "The one who gets out first, albeit with worse quality, wins." He is both right and wrong at the same time.
It seems that whoever first enters the market with a fundamentally new product has the opportunity to capture it without competition. Moreover, the product can even become a household name - like a copier and a polaroid.
However, usually there is no clear, formed need for a fundamentally new product, and people have to explain how good and convenient the new product is, how it improves the lives of consumers. It was in this direction that Gavin Belson moved with his commercial. In addition, the absence of direct competitors does not mean that it will be easy. Those consumers who still have a need already somehow satisfy it and are used to the existing order of things. You still have to explain to them why your product is better. When the tractor was invented, people had been plowing with bulls and horses for thousands of years. Therefore, the transition to the mechanization of agriculture took decades - there was a familiar alternative with its own merits.
Entering a market where there are already pioneers, a startup gets a huge plus - you can study the shortcomings of existing competitors, the needs of existing users and offer them the best solution tailored to the specific tasks of a particular customer segment. A startup can't afford to spray on products for everyone. Startups need to focus on a small target audience with a clearly defined need to launch.
Episode 3 - 1:35 - 3:00
Peter Gregory (investor) wrote a check to Pied Piper Inc, not to Richard personally, and the company must be registered in order to deposit the funds. This was revealed at the end of episode 2. Now Richard is faced with a problem - there is already a company in California with that name and you need to either agree to buy out the name, or change the name and ask Peter to rewrite the check (in real life there are more options, but this is a work of art). Richard decides to meet with the owner of Pied Piper Inc and negotiate a buyout of the name if possible. What follows are some comical situations.
This episode gives us such a lesson - before getting attached to the name of a future company or product, you need to check this name for its legality (I will tell one funny and sad story from Russian practice in the comments) and conflicts with existing brands and trademarks.
Episode 4 - 1:20 - 2:30
Richard comes to the lawyer (Ron) to sign the statutory documents as the head of the new company Pied Piper Inc
Talking to Richard, Ron let slip that Pied Piper is another data compression project (and there are either 6 or 8 in total) in the portfolio of investor Peter Gregory.
Asked by Richard why fund so many projects, Ron replies: “Turtles give birth to a fucking cloud of cubs, because most of them die before they reach the water. Peter wants his money to get…” And then Ron adds, “You need both halves of your brain to run a successful business.” During the conversation, it becomes clear to Richard that he does not have any vision for the concept of the future product. He came up with an algorithm that gives advantages that can be used as the basis of technology, but what will be the company's product? It is clear that no one even started to think about monetization. This situation is quite typical, because startups often have a well-developed technical part of a solution, but there is no clear idea of who needs it, how and for how much to sell it.
Episode 5 - 18:30 - 21:00
Jared (who is actually Donald) suggests that they start working on SCRUM to improve the team's efficiency. A personal pet project can and can be done without any methodology and task tracking, but when a team starts working on a project, success cannot be achieved without effective teamwork tools. The work on SCRUM is briefly shown and the competition that has begun between team members for who works faster, completes more tasks, and in general who is cooler. The formalization of tasks has provided a tool to measure the effectiveness of team members.
Episode 6 - 17:30 - 21:00
The Pied Piper team is declared as a participant in the battle of startups and does not have time to complete its cloud storage platform. Separate modules for processing files of different formats are ready, but there is no cloud architecture itself, since none of the team has the necessary competencies. Investor Peter Gregory suggested using an external expert to develop the code for the missing elements of the system. The expert, nicknamed "Cutter", turned out to be a very young man and demonstrated great skill in the area of \u2b\uXNUMXbwork assigned to him. The carver works for a fixed fee for XNUMX days. Since he managed to complete his work before the agreed time, Richard agreed to give him more tasks from another area, because this would not increase the amount of payment for services. Since the Carver worked almost around the clock and on "substances", as a result, a malfunction occurred in his brain and he spoiled many of the already completed modules. The situation is comical and, perhaps, not very real, but the following conclusions can be drawn from it:
- do not be greedy and trust temporary employees more than what was agreed and what they really understand.
- do not give employees more access rights and powers than required to perform their tasks, especially temporary employees.
Also, the episode, it seems to me, shows the fragility of software systems and warns against risky changes on the eve of important events. It is better to show less functionality, but proven and tested, than to aim for more with a high risk of getting into a puddle and embarrassing yourself.
Episode 7 - 23:30 - 24:10
The Pied Piper team travels to the TechCrunch Disrupt startup battle, where they have some comical personal situations. This episode shows the pitch of another project - Human Heater. The judges ask questions and give a comment - "it's not safe, no one will buy it." The speaker begins to argue with the judges and, in support of his innocence, gives an argument - "I've been working on this for 15 years."
At least 2 recommendations can be drawn from this episode:
- when preparing for public speaking, it is worth doing practice runs in front of people unfamiliar with the project and listening to questions and objections in order to prepare for them;
- the answer to objections must be convincing, the arguments must be factual, the manner of the answer must be polite and respectful.
Episode 8 - 4:20 - 7:00
Jared tells the Pied Piper team about a pivot, a change in a business model or product. His further behavior is comical and shows what not to do. In fact, he is trying to do problematic interviews, but not at all correctly. This is the first episode in the series where someone from the Pied Piper team tries to communicate with potential users.
From the following seasons, there are several more interesting episodes on the topic of communication with clients, and the most important of them, it seems to me, is in season 3, episode 9. I planned to cover only episodes of season 1 in this article, but I will talk about this episode from season 3, because in my opinion this is the most instructive episode of the entire series.
Season 3 - Episode 9 - 5:30 - 14:00
The Pied Piper cloud platform has been launched, there are mobile applications, there are more than 500 registered users, but the number of users who constantly use the platform does not exceed 000 thousand. Richard confesses this to Monica, an assistant to the head of an investment fund. Monica decides to figure out what the problem is and organizes focus groups to study the reaction of users to the product. Since the product seems to be for all people and allegedly does not require special knowledge, people of various professions (not from IT) get into the focus groups. Richard is invited to watch a focus group of potential users discuss his company's product.
As it turned out, users are “completely confused” and “goofy”, “feel dumb”. In fact, they simply do not understand what is happening. Richard states that the group must have been chosen poorly, but he is told that this is already the 5th group and they have the least hostile reaction.
As it turned out, earlier the platform was shown and given to IT specialists for testing, and “ordinary people” were chosen as the target audience of the product, who had not previously been shown the platform and were not asked for their opinion.
This episode shows a very typical startup mistake when feedback about an idea, and then a product, is collected from the wrong target audience for which the product is intended. The end result is a good product and good reviews, but not from the people who should be buying it. As a result, the product exists and it is good, it was made taking into account user feedback, but there will be no planned sales, real metrics will be completely different, and the economy will most likely not converge.
Source: habr.com