Good investors are good at asking questions. This is their craft – pushing, listening, pushing, listening until they arrive at the nugget of truth in an opportunity. Watching Paul Graham hold office hours at Techcrunch Disrupt reminded me of how beautiful the mind can be. While many of the questions Graham asks are obvious, you can see how skilled he is at leaving everything in without leaving anything out. Paul Graham and Y Combinator have become famous for their mentorship of start-ups and this office hour session puts this gentle nudging on display. The following will hopefully provide a useful blueprint for my tinkerings and your entrepreneurial ambitions. The full video is available at the end of the post.
I’d summarize his line of questioning with each entrepreneur as follows:
1) What is this?
2) What does it do and who uses it?
3) What does it do and who uses it really?
4) Let me repeat back to you what this is and what it does to make sure I clearly understand it, is that correct?
5) What is the hardest part of getting this off the ground?
6) Is there nothing else that is hard(er) about getting this off the ground?
7) What is the easiest way to do the hardest part?
8) How do you get users to discover and engage with the site over and over again.
In my view, more than half the magic comes from questions #1-#4, which most of us are too bashful to ask because we don’t want to seem ignorant. Instead we jump in around #5 and try to show how great we are at problem solving.
A summary of each question and answer session is below-
Dydra – social graph database company:
What kind of graph database?
Who uses it?
So this is for searching gigantic graphs?
Can you give me an example, of all the people in the world who needs you the most?
So collaborative filtering is the low-hanging fruit? What is the low-hanging fruit?
Who has trouble with this now? Who wants to do these computations faster?
Your advantage is that you can do the calculations faster then?
So people are going to run your app on their servers, is that how it works?
Is latency going to be a problem since it is cloud-based?
Is there anyone who wants to use this software now? And they aren’t your friends?
How did those users know about you? They must have read about you?
Who are your beta users? And why? And what is going on?
So is this like LinkedIn? Why would your customers need you – why wouldn’t they use LinkedIn?
Are any of these people ready to pay you?
If they want to pay you, are they paying you?
It seems like it would be good to try to get their money, you never know how serious they are until you try to get their money?
Money would be helpful because investors may worry that you are a great solution in search of a problem.
Who is going to use your software in production first? This is a combination of how desperately they need you and how quickly they make decisions?
Do start-ups need you quickly? They can’t do what they need to do fast enough well enough? Find this out.
Final advice: Describe yourself to investors as solving whatever your customers’ problems are rather than describing yourself as a graph database.
Vidappy – low-wage job hiring site:
So the idea is for low-wage jobs, you don’t need a resume, you’d rather just see a video?
How do low-wage jobs get hired now?
How do you know what questions hiring managers are going to ask them? What would you ask them?
How do you get to creating a marketplace for this? How do you get the retailers and job applicants?
Which is the party that is harder to get on your side? Retailers or job hunters? Are you sure it is job hunters?
Is this site launched yet? Do you have any users?
Maybe you could go to a big retailer and tell job applicants to apply through your website and get their applicants as your users?
What you could do is let stores pay other stores for their unused leads?
Final advice: Launch now and get your retailers to draw in applicants. Keep the applicants as your customers for the future, which will draw in more retailers.
DataCurious.org – Data visualization for investors:
What kind of visualization?
Day traders? Individual investors?
So what you are building is a data visualization site that investors can use to follow trends?
Are you going to have research reports on each company?
So individual investors are not going to compare companies on the fly? Can they do queries on the fly?
So there will be pages on a company and then you can do queries on the fly?
What kind of queries will be more most common?
Will this have a big enough gravity well to stay at the top of people’s heads?
Will this be something people do once and never come back for?
If someone were to come back over and over, what kind of queries would they be doing over and over?
Right, like what chart would it be exactly?
How many investors are there that are that into digging into statistics to come back over and over again?
Final advice: People seek out start-ups only if they are offering something that they desperately need. Unless they desperately need it, they won’t hear about it. Daytraders need to run lots of queries, but long-term investors don’t, so why focus on long-term investors?
TvTak – makes every television interactive:
It does what?
How does it make it interactive?
What is going to be the biggest single case for people using it a year from now?
How is this better and different than IMDB or Google Search?
Why do I want to use your product if you decide what I can see with pre-determined queries? What if I want to search some peripheral thing – like the location?
I would test this with actual people, can you get them to the point where they won’t watch television without it? Try it with your family first, they will be charitable with you first – they should want to use it if this is mass market, right?
Could you try to get advertisers drive adoption? Could you have viewers call in the way they do on radio shows? You could check-in to TV shows – prove that your there?
Final Advice: Can you make it so that it doesn’t have to be useful to consumers? Can you make it so that it is useful to advertisers? I would work on that in parallel. Then get a big show to refer people to your app to verify that viewers are watching and then you would have a big user base for the other side of your company!
Flytivity – introduces people at airports:
The idea is that I am in an airport and you tell me who should I want to talk to who is around me?
Doesn’t this generalize to situations where you don’t usually go?
How do you know who I will want to talk to? Is it people who I have been meaning to talk to? Friends of friends? With profiles?
How do you solve the chicken and the egg problem?
How can you find the small niche that is more driven to use this?
Could this niche be frequent fliers? Is it really enough that people fly on planes a lot?
Is your name to airport specific?
This is sort of a pushed LinkedIn?
Are airports the right place for this? Because airports collect people randomly, wouldn’t a more directed audience be better?
Final Advice: You need to find the people who want to have this problem solved. Don’t think of anything except who this tiny market of people is who want to be introduced to other people in the same area. And they have to want it enough to seek you out. If I were you, I would start over. The very best start-ups solve a problem that the founders have. Is this the worst problem in your life?
LuckyChic – Social shopping network for women:
I’ve heard of you, you make a lot of money?
Where did your 100,000 members come from? How did they find you?
Ah, scrappy, not hapless.
What do you do for them when they get to your site?
You build gaming apps on your website? What people do on your website is play games?
So what do they see on your site when they get to your site?
What is the most common thing your users do on the site?
So you are an auction site? Is this a penny auction?
What is the biggest driver of traffic?
So a big driver of traffic to your site is penny auctions then?
So you are a penny auction site that pretends to be a platform? You want to grow into other areas then?
Can you grow users and breakeven or does this cost money?
What do you count as 100,000 users?
On a given day, how many people use your site?
Do the users return to the site?
What is the growth rate like?
So you are looking for what is going to make your site go exponential?
Final Advice: Like Groupon, you have a base of users that – when you find the right thing – you can launch your product on. So what you should try to do, is figure out what you can do for those users that no one else is doing for them yet.
The full video of the live Office Hours can be found here.
(Photo credit: snowizard.com)