The headline is true, except for the fact that if I was actually sitting in the Stanford CS 183 class, I would hear Peter Thiel’s voice, not Siri’s.

Yet, I can’t help but smile at the fact that I can highlight any amount of text, sit back, and have my phone read it to me.  It’s awesome!

I am aware this functionality can be found in other downloadable apps and is not the first time I could have text to speech.  But baked into iOS makes it that much easier and fluid.  Just take this as a brief step-back from technology and realize how cool our world of mobile technology has become.

It’s how I have been consuming most of the class notes Blake Masters has graciously been posting on his blog.  I am sure (although an afterthought to him) it’s been quite the traffic spike for his blog.   These class notes are indeed long reads and when I don’t feel like reading, I just highlight and listen.

How to get Siri to read to you:

1.  Have an iPhone 4S

2.  Hold finger and highlight any content

3. Select speak.

For those of you who do not know, Seconds is a fast and easy way to make payments with your mobile device.  We automate payments through words sent in simple text messages (cool Siri video below) and shorten a minutes worth of transaction time into just a few seconds.

Below are a few charts specific to our pilot test around mobile payments.  The first one is for total monthly transactions and as you can see, the growth from January through May is accelerating.  (Chart actually starts with early testing in December.)  In fact, the change from April to May is most impressive.   In April we had 384 transactions and in May we completed 615 transactions.  Blow-out month for sure!

Monthly Transactions

Going further in depth on the numbers, some very interesting consumer observations emerge.  We took the entire user population and parsed out categories based on the number of times an individual made a transaction.  Specifically, we evaluated May and compared it to the previous month of April to see if we could identity any trends in usage.  Here’s what we found:

Findings:

1. The number of people making 10 or more transactions in a month DOUBLED!  This means as months go by people become more comfortable with using the system and more apt to make a quick purchase in Seconds.

2.  The overall user base grew 48% from April to May.  We continue to gain more users who easily jump into the system and start making payments using their mobile device.  Uploading payment credentials securely in the cloud just once is all it takes for a new user to start using Seconds.

3.  Roughly 2 out of 3 Seconds users are multiple purchasers.   This means they returned within the month and transacted at least twice using Seconds.  This is a very good sign.

4.  An astounding 82% retention rate is HUGE!  More than 8 out of 10 users in the month of May were users in the month of April, proving that we are not seeing much drop off once an individual enters the system and starts using Seconds.   Although adding new users is a driving force, more important is the ability to retain the ones you have already attracted.

Our assumptions are continually proven true and the lessons here are manifold.  When offered a quick and easy way to complete a transaction using their mobile device, people do it!  And time goes on people are more comfortable with making more payments by simply sending a text message.

Now, what if you could pay your rent that way?  Or refill your transit card?  Or rent a movie?  Or all the other areas of your life you want to take care of in Seconds.  That is why mobile payments are set to be a $1 trillion industry by 2016 and automated application-to-person payments are an estimated $100 billion industry.  We are only getting started.

You start to see that the word “entrepreneur” is a personality.  It’s difficult to talk to your friends that are not risking the same things you are because they are content with not pushing themselves or putting it all out there in the public with the likelihood of failure staring at you everyday.  You start to turn a lot of your conversations with relatives into how they might exploit opportunities for profit.  Those close to you will view your focus as something completely different because they don’t understand.  You don’t blame them.  They can’t understand if they haven’t done it themselves.  It’s why you will gravitate towards other entrepreneurs.  You will find reward in helping other entrepreneurs.  ”This is my email:  Let me know if I can help you with anything.”

Your job is to create a vision, a culture, to get the right people on the bus and to inspire.  When you look around at a team that believes in the vision as much as you do and trusts you will do the right thing all the time, it’s a feeling that can’t be explained.  The exponential productivity from great people will always amaze you.  It’s why finding the right team is the most difficult thing you will do but the most important.  This learning will affect your life significantly.  You will not settle for things anymore because you will see what is possible when you hold out for the best and push to find people that are the best.  You don’t have a problem anymore being honest with people about not cutting it.

You start to see that you’re a leader and you have to lead or you can’t be involved with it at all.  You turn down acquisition offers because you need to run the show and you feel like your team is the best in the World and you can do anything with hard work.  Quitting is not an option. 

It’s not if (but when) the sliding occurs the true leader will emerge.  Let me just tell you what happens in a typical startup.

A. People sit around and think about cool new ideas

B. Those people start prototyping and building a product

C. Once they realize they want to jump into this more intently, they find a few more people and form a team

D. At some point the group formally incorporates and makes the company official

E.  The people associated are listed as founders and as such, receive incentive to stick around via stock

F.  (Most founders) think they are the next Facebook and think their product will magically spread virally to millions of people

G. Then it doesn’t

H.  Then shit hits the fan and everyone finds out it’s actually tough to grow a business

I.  Only then will you finally find out what people are made of.

J.  Only then, when it’s actually work and things don’t come as easy, the pretenders will leave

K.  And only at this time the leader will emerge and help the company find it’s true path

Look, life is tough.  Things don’t always work out as planned.  But does that mean you just up and quit, to simply move on to the next thing that you think might magically make your dreams come true?

I don’t believe so.  I believe it takes Blood, Sweat, and Tears for anything materially positive and truly great to be created.  This has always been true but it’s even more so today.  Why?  Because it’s too damn easy to build a product and start a company today.   There has to be a distinction between the minor leagues and the major leagues; jumping straight to the majors just doesn’t happen often enough to be a believable story for your life.

What’s the minor leagues?  Hacking, dinking around and building crazy products.

What’s the major leagues?  Building a business and an organization around the product which adds value to our world.

If you ever wonder who’s the leader in a group, just light a bomb (figuratively) and throw it directly into the center of the team. Watch someone run and they are the weak link.  They are not the leader.  Whoever stays has leadership qualities within them.  And whoever stands up, starts taking hold of the situation and determines the path forward – well they are the true leader.

It’s funny, when everything is great and everyone’s slapping backs and high-fiving there’s almost no need for leaders.  Everything seems to move forward with little direction or effort.  But just wait till something happens.  Leaders find their calling and establish their potential when things start going sideways.

I think it’s amazing that leaders emerge during crisis.  I also think it’s fitting and believe it’s how the world should work.

But please do yourselves and your co-founders a favor next time you want to start a company.  Look each other in the eye and ask yourselves what kind of player you are?  Minor or major?  Weak link or leader type?  It will save quite a bit of time and grief on the others.

@jnickhughes

Yeah, it’s not fun!  And that is why we are changing it.

Now you can refill your transit pass in Seconds.

Curiosity is actually what drove me to start a company. It all began by my observing how consumers interact with merchants; their tendency to repeat interactions particularly caught my attention. Isn’t it funny how we go to the same coffee shops, restaurants, retail stores, gas stations, websites, and other consumer activities each day? In fact, we do this so much that the person at the counter who “swipes” your card actually recognizes you and may even know your name.

Although loyalty started my entrepreneurial journey, it didn’t end there. I started to think a bit deeper about what people typically do each time they go to the coffee shops, restaurants, retail stores, or gas stations—yep, make a payment! Amazingly, payments are the one data point that can trace a consumer’s path through our economy and organize commercial actions, habits, relationships, and trends. Imagine being able to quickly aggregate and see all those data points in your own life—things like where you spend your money, how much, when, buying what, and how often. Now imagine seeing that on a merchantwide level. How about a worldwide level?

This thinking drove me not only to start a payments company, but also to figure out how to create the fastest way to transact and interact with merchants using a mobile device. Transactions and interactions driven through a simple text message take only a few seconds. I believe that if you speed up a traditionally laborious process, make it available to the widest range of people possible, and emancipate the data to be used in adding value to the system, great things will happen.

The article goes on to review the last 20 or 30 years of innovation in payments and then talks about a few of the current challenges in mobile payments, namely the fact that a full 75% of the world is being forgotten by most of the new payment platforms.  Go ahead, read the entire article.

Siri, Apple’s magnificent personal assistant found on the iPhone 4S can do many things.  She can book a meeting or remind you to take out the garbage directly from your calendar.  She can search for a specific location or help you find something on the web.  She can also play your favorite song found in an iTunes playlist.  Siri does all this with simple instructions spoken from you.

But can she buy things for you?  Nope.

Until now.

Seconds powers simple mobile payments through text messages.  And since Siri sends text messages, she can now use Seconds to complete transactions for you in a just a few words. Check it out!

What is Seconds?

There is vast inefficiency in how consumers, merchants and brands exchange money for products, services and content. Issues stem from legacy payment methods (checks, cash, wire transfers) and from the fractured landscape of personal identity (SSNs, driver’s licenses, login credentials). Seconds’ communication and commerce platform solves these problems by converting the mobile device into both a fast and simple method of payment and a secure way to guarantee consumer identity.

We believe there is an unprecedented opportunity to bring mobile payments technology to the 6 billion mobile devices around the world.  We do this in three distinct ways:

PLATFORM AND DEVICE AGNOSTIC. Leveraging SMS technology for payments allows Seconds to be platform agnostic, meaning any mobile device holder can transact with any merchant or brand connected to the platform. This instantly opens up a market of over 240 million mobile consumers in the U.S. and almost 6 billion more individuals worldwide–giving Seconds the potential to be the most democratic mobile payment platform on the planet. Most other competitors opt for a native app experience, which immediately limits their reach. We believe that mobile payments should be open to all–not just to owners of smart phones.

PROXIMITY AGNOSTIC. Seconds dissociates proximity from transaction. Unlike NFC or Square, consumers can pay for products or services from anywhere with Seconds. This frees up the mobile device to become the new payment terminal, a terminal that resides in the consumer’s hand rather than sitting on the merchant’s counter. As a result, entirely new categories of transaction–from rent payment to concert ticket purchases–are available anywhere, anytime for anyone.

CONNECTION AND COMMUNICATION. Seconds sits at the convergence of communication and transaction. Our platform treats all parties–be they merchants, brands or consumers–as humans. Not only does Seconds offer quick and easy payments, but it also provides the opportunity for brands to have a conversation and relationship with their customers via the SMS channel. This high-tech, high-touch connection separates Seconds from all the other mobile commerce platforms on the market.

How big is this opportunity?

Previous Experience:

• Has spent time in a startup environment
• Has managed/led a team of engineers
• Front and backend coding experience
• Has experience with scaling technical infrastructure

Expertise/Familiarity:

• Cloud based infrastructures such as Heroku or AWS
• Ruby on Rails
• MongoDB
• Node.js and coffeeScript
• Cloud communication platforms such as Twilio
• Natural language processing
• Electronic payments, web processors and web merchant accounts

Personal situation:

• Can go 3-6 months without/low pay
• Ready to take on a very big challenge
• Looking for a full time company, not a side project
• Is entrepreneurial in nature

Compensation

• Equity stake
• Competitive salary

I read this the other day and it made me pause and reflect on how to better create culture within my team.  From Blake Master’s notes on Peter Thiel’s CS 183 class:

Good company culture is more nuanced than simple homogeneity or heterogeneity. On the homogeneity side, everyone being alike isn’t enough. A robust company culture is one in which people have something in common thatdistinguishes them quite sharply from rest of the world. If everybody likes ice cream, that probably doesn’t matter. If the core people share a relevant and unique philosophy about something important, you’re onto something.

Similarly, differences qua differences don’t matter much. In strong company cultures, people are different in a way that goes to the core mission. Suppose one key person is on an ice cream only diet. That’s quirky. But it’s also irrelevant. You want your people to be different in a way that gives the company a strong sense of identity and yet still dovetails with the overall mission. Having different kinds of problem-solvers on a team, for example, can make for a stronger culture.

Knotis, which helps you discover great deals from businesses you’ll love, is one of the initial launch tenants.  CEO McLean Reiter says he chose SURF because “their mission is to help startups launch as quickly as possible so they can get out on their own, which is pretty much every statups’ goal.”

For background, knotis is reviving the concept of the digital coupon by taking the marketing strategy originated by Asa Candler with Coca-Cola and infusing it with 21st century tools. They are calling this new take on coupons an Online Social Incentive and merchants can now easily create as many as they wish at the low monthly cost (as opposed to the Groupon style of massive revenue share which can be detrimental to businesses). Merchants can share these self-generated OSI’s in online banner ads or through their social media channels like Facebook and twitter.

Knotis is doing business differently and intelligently by charging its merchants a low, flat-rate of $14 per month, and if the merchant doesn’t make a sale during the month, they are not even charged! “That’s just company culture,” says 28 year old founder, McLean Reiter. “We want to help local businesses thrive!”

Asked about why he favors SURF, McLean adds “My favorite thing so far is that everyone is there for the same reason – to succeed – and other entrepreneurs and developers, although busy, are still willing to help other teams achieve success.”

Another early startup is Shopobot, a better search engine for shopping. For example, stores are constantly changing their prices (even day to day), and they make it clear when it’s the right time to buy – which can save people a lot of money. At their heart they’re an analytics company, and  using their data and UI to give people an edge when shopping online.

According to one of the founders Dave Matthews, they went through more of an accelerator in San Francisco before coming back up to Seattle.  “When we started Shopobot we went through an incubator in San Francisco called AngelPad, which was super helpful for doing the demoday / launch / fundraising push. It was really hands-on with all the companies in the program moving on the same schedule towards launch. Now that we’re past that phase, SURF is a great spot for us to focus on our product and growth – while getting the benefits that come from a shared space.”

He notes they wanted to work in a shared space for the unexpected conversations, and meeting other people working on startups. “SURF has the right balance for us of lots of meetups and events and other teams working here, but we still get our private area to focus as a team.”

Lastly is Pandamonium Games, who just announced a Kickstarter project called The End Saga: Revival.   In short, it’s a 90′s style mobile role-playing game, bottling the best of that era and sticking it into a beautiful mobile gaming experience. Using the art of nexxing to build new items, while you amass a team of fighters, magicians or rogues to take out the evil Ismata.    (You should go check it out on Kickstarter!)

Jimmy Gambier from Pandamonium Games says “We chose SURF because we’re not big enough to have a dedicated office space and yet meeting in coffee shops was getting old. I’d also visited places in the Valley like Dogpatch Labs were you can feel the sense of community in the air. We wanted a place where we could bond with like minded people and companies.”

Digging a little deeper on why they chose the Kickstarter/crowd-funding route , Gambier said they went with Kickstarter because they wanted to go directly to the community versus spending their precious time pitching to investors. “We would rather spend the next 6 months heads down on our product instead of raising money.”  I can attest to that!

Gambier believes Kickstarter is the next evolution in investment, as you can receive instant market validation which helps you determine if you are heading in the right direction.  Interestingly, he sees a side benefit from crowd funding platforms.  ”Building a fanbase is also crucial for the kind of game we’re working on. We’re catering to a hardcore gamer audience and we thought building that user base early would be wise.”

Through his words it’s obvious Jimmy couldn’t resist the entrepreneurial pull and is the exact person SURF and other incubators need to help cultivate a great community of founders.  “I had been involved in startups in the past and had an unshakeable desire to start a gaming company. It almost seems like there wasn’t anything else worth doing. The art of building a fun game has fascinated me for years and continues to as I learn more about the craft.”

If you are like me, you’re probably not familiar with Pandamonium Games, a scrappy Seattle based games startup who loves RPGs. They’ve made a couple of social games before, but this is their most ambitious game to date. The team has worked at places such as Nintendo, Wizards of the Coast, Amazon and a large MMO company.

Here’s Jimmy’s take on their quick history:

“For the past two years, we’ve been a small but committed team working in the social games space. When Glen Matsushita and I met at Tully’s in Bellevue, Washington, in 2009 to brainstorm our first title, we had never built a game before or worked together as a team. By the end of the first month, we had settled on using the Facebook platform to create Champions of Justice, a superheroes game. We brought on a couple of guys who had worked at Wizards of the Coast—a publisher of fantasy and science-fiction based role-playing games, board games, and collectible card games—to help with the art and writing, and went to work.

“The company was founded on the principle that there is a place for hardcore games in the next evolution of gaming.We made a couple of games along the way—neither a major hit—and are now working on our third title. Whether or not this will be our breakthrough in what has become a highly competitive market, we have the same passion and dedication that got us into the business in the first place. In fact, as we’ve gotten more experience, we’re getting better with each iteration and this title has been the most fun to work on since we’ve carved out more definitive roles and skill sets among the three founders.”

It’s early days for SURF Incubator and I look forward to meeting (and possibly writing about) many more startup founders.  If you are interested in SURF office space, feel free to visit their website and send them a note.

Teaching vertical progress or innovation is almost a contradiction in terms. Education is fundamentally about going from 1 to n. We observe, imitate, and repeat. Infants do not invent new languages; they learn existing ones. From early on, we learn by copying what has worked before.

That is insufficient for startups. Crossing T’s and dotting I’s will get you maybe 30% of the way there. (It’s certainly necessary to get incorporation right, for instance. And one can learn how to pitch VCs.) But at some point you have to go from 0 to 1—you have to do something important and do it right—and that can’t be taught. Channeling Tolstoy’s intro to Anna Karenina, all successful companies are different; they figured out the 0 to 1 problem in different ways. But all failed companies are the same; they botched the 0 to 1 problem.

What is he saying?

Peter is saying this doesn’t lead to innovation: “From early on, we learn by copying what has worked before.” Innovation cannot be taught and copying leads us nowhere.  Innovation is, by definition, creating the new…  Successful companies figure things out as they go, they learn from small insights early and often.  This is why no two successful companies are exactly the same, since they go from 0 to 1 in different ways.

Read more on Blake’s blog.

Seconds is mobile payments using the most intuitive experience we have on our mobile devices – text messaging.

Using the Seconds platform, brands have the ability to identify specific keywords that when sent to their Seconds number automatically trigger transactions for the accurate amount.  We see a whole new payments market opening up where no human being has to be on the other side receiving the payment.  We call these experience Single Party Transactions and they are estimated to grow to almost $10 billion by 2016.

How cool is Seconds?  Here are 2 slides that will knock your socks off.

view demo video

Mobile transactions will drastically change our society and the market for paying by mobile device is said to be well over $1 trillion by 2015.  Most significant will be the transformation in how we use our mobile devices in everyday commerce.

It’s time to chill.

Those who know me best have come to understand I will never let a good sunset pass me by.  I feel it is so important to take the time to stop, chill and observe the natural beauty around us.

Today, we spend to much damn time with our head down staring at a screen, searching for the next tweet of information to consume.  Don’t forget there is a beautiful world out there, waiting for you to appreciate.  Above is an image of the sunset from Monday, the end of a great day in Seattle.  When I noticed it was going to be a picture perfect evening I left the office a bit early, grabbed a few cold ones and went down to the beach to chill, think and take it all in.

Life comes at you pretty fast and beautiful scenery like this doesn’t happen very often so we must enjoy when we can.

1) Where did the idea of SURF originate?

The idea for creating the SURF Incubator came out of my personal frustration when I was trying to learn mobile app development from a textbook. No matter how hard I tried with great pains of details, none of the sample apps would function. The book, as it turns out, was full of bugs and there was no way that a novice, such as myself, could discern where the bugs were located or how they could be fixed because the error messages were even more baffling to me. I started looking for other programmers who wanted to learn a new language, which led to the formation of a Meetup group, which later pivoted into SURF Incubator.

2) Sounds like SURF is a startup itself? Can you describe the path that got it here?

I attended a Meetup group for iPhone developers and proposed that it would be easier to learn iPhone coding with peer support. I had one eager participant: Ken Decanio. So, we agreed to meet weekly, starting the very next day. The group grew organically as we expanded the hours and the frequency. It did not take too long before we outgrew our free location.

Then, the meetings were terminated until I made favorable arrangements with Regus. But, as it turns out, the economy caused Regus to reduce their own space and there was not enough room for SURF Incubator to continue. In November last year, I began to look for a permanent home for SURF Incubator. When I toured the Exchange building, it was so obvious that it was absolutely ideal for many reasons. For example, it was fully furnished and included Internet wiring to every desk. This provided a way for SURF Incubator to get up-and-running very quickly with minimal capital expenditures.

Surf Incubator: Seaton Gras (left) and Neil Bergquist

3) Why does Seattle (and possibly other parts of the world) need SURF?

Entrepreneurs around the world can be more productive when they collaborate and have access to a broad network of business and technical resources. Working at home or in a coffee shop makes it difficult to gain exposure to fellow subject matter experts. It’s also hard to maintain momentum or gain any serious traction. Trying to secure an office is a major step forward but few landlords are willing to lease office space on month-to-month terms to a tenant with little to no operating history. SURF can reduce the barriers of entry by providing flexible and affordable space with a robust community of resources. This reduces entrepreneurial risk and enables startups to operate incredibly lean.

4) What do you look for in founders and startups wanting to be part of SURF?

First and foremost, we are looking for passionate people who are committed to advancing their business. Second, we are looking for product and service ideas that have the ability to rapidly scale and disrupt large markets. The ideal businesses are the ones that challenge mainstream thinking and can make a significant contribution to the well-being of the world.

5) What do you think SURF will look and feel like in 3- 5 years out?

SURF will be an international community of entrepreneurs launching and advancing globally disruptive companies and technologies. It will be a community that enables startups to go further with less money. They’ll receive access to critical services at a fraction of the cost if they were to go at it alone and they’ll have exposure to a diverse set of global thought leaders. In the few weeks leading up to our launch I am already overwhelmed by the quality of connections made in the SURF community. “Game-changing” advancements are already occurring. I can only imagine what will happen in 3-5 years time. The success of the SURF residents is really what gets me fired up.

If you are interested in SURF, feel free to email Seaton directly –  Seaton@surfincubator.com.

At Seconds, we built a system to drive secure payments through text messages, allowing someone to quickly make a instant and automatic transaction by simply texting a keyword to a merchant.  Amazingly, it only take a second to send a text message.

Think about it, a merchant can now ping your mobile phone with a message informing you to complete the transaction by simply responding with a specific prompt. How would they know to do that? Your phone number can now become your payment credential, and since they can instantly reach you via short message from pretty much anywhere in the world, payments have no limitations.

Imagine how things will change when we all can interact and transact with any brand in the world in Seconds?

Some experiences of the past year:

• Quit my full-time job and gave up a steady paycheck
• Had no idea how I was going to pay my bills…
• Watched the gig I thought I was transitioning to disappear
• Launched this blog and started reaching people around the world
• Started contributing the BusinessInsider.com
• Was basically a free agent over the summer, just focusing on writing on here
• Had no idea how I was going to pay my bills…
• Was one-day away from taking a COO role at a startup in New York, when…
• My soon to be co-founder reached out to me through a random email in August
• I sat down and over coffee determined we should start a company
• We formed Seconds in early September
• We released our beta product late fall, early winter
• At first, we focused on text messaging between customers and local merchants
• At the beginning of January we started gaining attention and media
• Ran out of money
• Had no idea how I was going to pay my bills…
• Through February and March we kept expanding our vision and writing about it
• We made the change to focus on mobile payments driven through text messages
• We now field inquiries and interest from around the world and look to expand Seconds
• I now write guest posts on the most popular tech blogs around
• and people now look at me as a though leader and actually listen to what I have to say

So much more happened over the course of the last year but I will stop there.  I want to make something very clear: your life is what you make of it.  I have completely transformed my life in the last 365 days and I sit here today in awe of what I have been able to do.  We are (close) to being finalists in national recognition for being one of the top innovative companies of 2012.  I could’t have dreamed of this just one short year ago.  This transition has not been easy – actually the most difficult thing I have ever done in my life – but it’s not impossible.

You can do anything you set your mind to, never forget that.

Although starting a company today is quite a bit cheaper than it was 10 years ago, square foot for office space is not so much. It’s actually getting more expensive.  And it sucks, especially for a young startup that is likely pre-funding and cannot afford much more than cloud hosting.

So what to do?

Well, I’m going SURFing.  Since the beginning of the year, SURF Incubator has been quietly building a network of technology focused entrepreneurs, mentors, investors, and corporate partners. On April 30th, the SURF community will come to life when it officially launches with fifteen incubating startups.  I am proud to say Seconds is one of them, and very excited to be a part of this burgeoning startup community.  Located directly downtown Seattle, this is perfect location for startups, as it’s 5 minute walk from Pioneer square, Westlake mall and a short bus ride to South Lake Union.

SURF has also been collaborating with various corporate partners to develop a robust benefits program to aid in the growth of our young companies.  By leveraging the support of service providers and larger technology companies, SURF is able to provide opportunities that reduce the costs to start a technology company in Seattle. Bringing down the economic barriers associated with building a technology company has the potential to significantly advance the growth of Seattle’s startup community. SURF has already received applications from entrepreneurs located from Vancouver, BC to South America.

This is exactly what Seattle needed.  There are a number of places for co-working and startup office space, but none that were this neutral and spoke with the most potent vision.  Most other spaces are in connection to an accelerator, investment or other ties to companies and investors.  Not SURF.  Their vision is to provide cost effective space (over 15,000 square feet) for innovation and collaboration between tech startups and greatly impact the general startup scene.

It’s crazy because I had this idea last fall and wanted to organize a handful of startups to make it happen, which as I got further into the planning I realized it was a quite a bit larger undertaking than I had time for.

Thanks to the support of some of Seattle’s most respected technology companies and service providers, SURF Residents will not only benefit from subsidized office space, but they will also have access to a suite of free or significantly discounted services. One of the many benefits associated with building a startup at SURF are the free educational workshops provided by corporate partners – covering topics on company formation, intellectual property, fundraising, various programming languages and more.

The monthly SURF membership fee of $300/month per entrepreneur, which nicely suits early startups comprised of 2-4 founders.  They even offer evening hours (which would be 5pm on) at $200 per month.

SURF and its network partners are making it dramatically less expensive to start a technology company in Seattle.  I now know where I am spending most of my time!

Some of the other startups include:

Shopobot – tracks price changes at major online retailers. Using this data, Shopobot helps consumers get the best price on books, cameras, computers, and video games. Name your price, and we’ll alert you when it’s reached. Shop Shopping in the dark!

BBC Easy – dedicated to optimizing the commercial lending process between banks and their borrowers.

Translational Software  - simplifies the logistics of genetic testing and transforms test results into actionable guidance for doctors.  The cost of molecular diagnostics is falling precipitously but genetic tests are not useful without interpretive information.

Knotis – helps consumers discover great deals from local merchants. Customers can find personalized, location-based offers – happening in real time.

[So to all the investors out there, I guess we shouldn't be focused on business models and making money, should we?  I digress...]

Yet the more I thought about the acquisition and the entire startup experience in general, a few lessons came to me that in hindsight are blindly obvious but bear repeating.  As founders, we tend to get lost in our vision.  We tend to over-think and over do our product to the point where our initial value proposition loses it’s inherent value to the market.

What do I mean?  Well, most likely you bloat your product with way too many features.  You also convolute your value proposition based on the latest moves of your competition.  You think if they jab right, you should jab right as well.  You then confuse your users as to why they should be using your product.  This is probably the main reason why your 15 month old startup is not fielding attractive acquisition offers.  It’s because there is no clear place in the market for your company so you just get lost in all the noise.

Instagram didn’t do that.  They kept it simple.  They kept is so simple that I had to write about it since I think most of us don’t realize how powerful a needle point actually is.  Needles cure disease, hoses don’t.

Here’s my view of how Instagram positioned their product for a massive acquisition from Facebook.  All startups, no matter what industry need to keep these principles top of mind if they want a positive business outcome.

Do One Thing World Class

Intagram has been referred to lately as a mobile social network, but in reality they are a much less than that since social networks just collect around specific things.  Instagram chose to focus on photos – and determined to do it world class.  They identified weakness in the current user experience of taking a picture with an iPhone and trying to share that with your friends.  They found the process was way too slow and cumbersome.  They realized the most important thing to people was how quick they could complete the process.  Optimizing how photos were uploaded sped up the process and greatly enhanced the user experience.  Instagram quickly became known as the fastest and easiest way to take and share mobile photos with your friends.

Interestingly, the precursor to Instagram was Burbn, which was what the founders built before changing to “Instagram.” Co-founder Kevin Systrom explains how they launched the service primarily as a checkin, social geo-location app full of hoards of features, on which users could quickly upload photos and share them with friends. (Heres a great interview on the background of Systrom and Instagram)

Burbn had attracted a core following of users, but was not exactly taking off. Upon further evaluation the founders noticed that photo uploading was the strongest and most used feature. Instantly, they cut all other features, kept with uploading photos and moved forward with the newly minted Instagram.

Systrom resisted being all things to all people and in the end sold his 15 month old company for $1 billion.  Think about that  for a second.  By removing most of his product and getting down to the essential, he drastically enhanced its value.

Do you have the stomach to gut your product down to the bare essentials in order to make it more attractive?   You need to find the needle.

Networks of Distribution

The success of any product or service greatly depends on people actually discovering it.  Instagram beautifully leveraged the major distribution networks of today – Twitter, Facebook and Foursquare – to quickly gain user traction.  Take a picture, instantly shoot it out to your friends and followers… People click on it, see Instagram and think “that’s cool, I need to use Instagram.”

You may be thinking this is obvious and being a technology blog most people should understand the concept of leveraging social channels.  Well, this is not about leveraging “social” channels, but rather about finding the appropriate networks of distribution for your specific product or service.  Too many businesses think they need a “viral strategy” when their user experience is far from viral.  Lost in the noise about Twitter and Facebook are all the other options your company may be missing.

Neil Patel does a great job of explaining how to co-brand with a leading brand, illustrating how Spotify jumped onto Facebook and instantly saw millions of new users.  He also says, “besides reaching a wider audience, co-branding your work will also propel your brand faster, double your strength, give you someone to lean on and adds credibility.”  Well said Neil.

What adjacent platforms or companies are sitting there waiting for a strategic partnership with your company?   Are there existing distribution networks already perfectly placed where your user experience will greatly benefit all parties involved?

Aimed Directly at Competition

Systrom and company did something amazing which seems to be overlooked by most startups: find a gaping hole in a major player’s armor and expose it right on their front lawn.  Facebook, being the largest social network and the primary place people connect and share photos with friends, was embarrassing lacking an adequate mobile solution.  They were pretty late to the mobile game and when they showed up, their mobile experience was flat out clunky.

Instagram was built from the ground up as a mobile platform, specifically around photo sharing.  They not only identified there was a hole in the market, but they filled it and shoved it right in the Face of Facebook showing them how much better Instagram was than Facebook at the mobile game.  Zuckerberg knew it the whole time and from what we can read about the situation the latest $50 million raise was the last straw.  He pulled the trigger and bought the company knowing Instagram was a growing problem for them.

Here’s the point:  Don’t go build “another similar product” copying the competition simply because you are lazy and they showed you the market wants what they are offering. The outcome is typically not very good.   Why not study the market, find the hole and then go do that specific thing?  Own that thing.  Be known for that thing.  And do that one thing world class.

Using Instagram as a perfect example, that’s the billion dollar idea.

@jnickhughes