Dragos Novac, at Sunday CET, wrote an interesting piece on the new wave of European VCs.

I’m raising money right now for a new project and I can see the difference in people I’m talking to comparing to 2012-2013, when I raised money for MavenHut. The people I talk to now in Europe are a lot more similar to the people I was used to meet in the US. Not bad at all!

Who are those new people trying out new things? I am seeing three types:

i) former entrepreneurs – more and more founders decided to start investing, either on the side or as their main job.

ii) young people in their late 20s-early 30s, who decided to take their destiny in their hands and run their own show rather than working for traditional investment shops run by old school people.

iii) veterans who also decided to raise their own fund and become startup VCs rather than retiring as employees for traditional shops.

All those guys have energy, are knowledgeable and risk takers. They understand the value creation process and are trying their best to be a positive part of it. Some of them are idealistic, which is a good ingredient in a business where the KPI is a number which is usually correlated with the ego size.

And those guys, combined with a lot of outside competition, are the future of this VC-backed ecosystem, which is still an insignificant bubble in the grand economic scheme of things from Europe.

Read the entire newsletter/post from Dragos here and subscribe to Sunday CET. It’s the best newsletter I’ve found on VC and startup investment in Europe.

Do you really need a product to show when you start a new business?

The truth is you can actually start a business without a product. You need to know if there is a market for your idea, though. How do you do this? Asking friends and family is a dumb idea, in my opinion, so you need to find another option.

Read below how we’ve done it at MavenHut, before writing even one line of code. This happened in 2012, but the tactics and strategies mentioned in the post below are still valid.

A lot of people talk about Dropbox’s launch: they had a video, put it on youtube, got 75,000 people signed-up on the waiting list and so on. Of course, by that time Dropbox was a Y Combinator company, a year old company, for that matter, so this might have helped a little bit (more).

How to Validate a Software/App Idea with Less than $200

Use a mock product site

Here’s how we did it at MavenHut: In February 2012 we’d just gotten accepted into Startup Bootcamp Dublin on the perceived strength of the team, mostly, and not because we had some amazing product (read about MavenHut’s 1st year here). We’ve have had some idea of what we wanted to do, but it was fuzzy, to say the least. So, the first thing to do: we needed to confirm that taking classic games and making them multiplayer was a good thing. Take into consideration that most classic games are single player (Solitaire, Tetris, Minesweeper, Asteroids, Space Invaders aso), so the question we asked ourselves was genuine and needed a real answer.

After some analysis, we decided on Solitaire to be the test game. But we wanted to know if people would actually want to play such a game. And I considered that we needed to have the potential users take some sort of action, not only tell us “Yes, I would play this kind of Solitaire!”. As Ford would put it: “If I had asked people what they wanted, they would have said faster horses.” (though the quote is not sure to be real).

I would rather have some action from potential users, rather than have them tell me what they think they want.

What we did, in short:

I bought a domain name (solitairewithyourfriends.com – not live anymore, but you can see some it on archive.org, here).

I installed WordPress on the domain, using some cheap hosting. I am graphically challenged so I just chose the simplest theme possible and I wrote one post. The text on it was, basically, telling people that we work on a great version of Solitaire, but it’s not available yet, though you can play the old version. Also, we had a Photoshopped screenshot of how it would look (which I didn’t do).

The most important thing in the entire page was the fact that we had a link to an “old version” of the same game. And you “could” play that if you really wanted a multiplayer solitaire. The thing is that game never existed. We lied a little bit, but this way we had people perform an action and that told us that they were interested (or, at least, curious).

On the second page, though, people couldn’t play the early version of the game, since we were “just doing some maintenance on it”, but we asked them to complete some form, to give us some information. We thought nobody would do it, but we were pleasantly surprised (numbers below). In the form, in just 4 questions, we asked some info on multiplayer and classic games.

Finally, after building the site, I’ve deployed some Facebook ads and 3 days and $160 later, we had some answers.

So, this is, in short, the story.

Now, some numbers.

1. You don’t need an expensive site

Building the site, from the moment I bought the domain name to the moment it was live, took me about 4 hours (I am in no way proficient with WordPress or graphics). It cost me $12 in the domain name from NameCheap (today, I recommend Hover.com), and I already had some hosting on BlueHost, but I assume you can use any host. I would suggest, though, one that has any type of quick WordPress installer, since it makes it really simple to install WordPress. You can find hosting packages for about $3/month for monthly payments (and, for a test, you don’t need more than that). As an idea, for The CEO Library I use WPX Hosting, which is the best managed WordPress hosting I’ve used, but it’s a lot more expensive (because of the support it offers, the options and so on). The thing is, for a fast test, you can really use almost any cheap hosting you have access to, like Bluehost.

WordPress is the blogging CMS that’s really easy to install, has lots of features, lots of themes to pick from aso. I used ThemeForest to buy premium themes, so I would suggest them. Still, even better, I would choose a free theme, and you can find plenty on the web, starting with the WordPress themes repository.

2. Make the content on the site interesting and engaging for you target audience

Since we targeted people that played games, I used a more tongue in cheek tone, having fun at our own expense, lowering the initial rejection reaction that people would have for being tricked into getting on a page that promised them an interesting game. Also, a screenshot of what you offer (or promise to offer) them goes a long way, showing that you are actually trying to provide what you said (see the screenshot above with our frontpage). You can make good looking images with Canva, it’s an amazing and fast tool (even I can create them).

On the second page we continued with the same attitude, but this time we had to push the “saying sorry” theme since it was a second time we actually tricked the players. So we used the “can’t resist” eyes of Puss in Boots from Shrek and asked to be forgiven. This allowed us to be more cheeky, actually, and also ask for their help with the form: “Pleeeaseeee?”.

3. Users should take some kind of action

The Click here on the first page was the action we were very interested in. And everything on the page drives people to click that. We thought that if they do click (they do some action), they are really interested or curious about what we want to offer (a multiplayer Solitaire). On the same page, you could also click on the Photoshopped image of how the game would look like.

Moreover, on the second page, since we knew we would lose those users anyway (nothing else to do on the site), we added a Google Form (free with Google Docs, puts results in a sheet, best choice in my opinion for something fast and short). In the form we chose to give them just 4 questions – initially 5, because I wanted the “submit form” button to be visible without scroll. The question can be anything you need, we needed some game ideas suggestions from the potential players.

To give you the context, the first iteration of MavenHut was a platform for real money betting on single player games (hence, the third question, about betting).

Finally, a lot of people asked why we didn’t ask for the email addresses. Well, we wanted as many answers as possible in the shortest amount of time and I’ve found out that people become more evasive once they give any type of identification, even email. Moreover, since it was a small test, the list would be really short. Building an email list is a good thing to do, but not in this particular case.

Actually, why don’t you subscribe The CEO Library’s email list. I’m sending a weekly email with tactics for startup growth, books to read, as well as a list of interesting startup and business articles from around the web.

4. Drive some targeted traffic to the page

This is what a lot of people find difficult.

First of all, you need to decide how much is enough: how many visitors, how many clicks, how many answers. We decided that about 200 visitors should be enough to give us an idea of the appeal of Solitaire multiplayer. More, we were really bootstrapped at that point so we wanted to spend the least amount of money possible.

There are two ways to send traffic: free and paid.

Free traffic means going to sites like HackerNews and use AskHN (I think reddit also has a similar section) if your audience is there, go to forums where your audience stays or, if you can, find a blogger to ask his/her audience. The downside of the free traffic is that it takes time to generate it.

Paid traffic means everything from Google Adwords to Facebook Ads. We chose Facebook Ads because we already knew we would launch the first game on Facebook (my co-founders had a lot of experience on the platform), so Facebook Ads was the choice. Moreover, you could target specific audiences, from location and age to, what mattered most for us, interests.

We’ve got some interesting results:

As audience, we chose Solitaire as interest and US as country.

Finally, we sent these users to our site, but we needed to follow them in the site and extract some info.

5. Metrics: the most important thing

First and foremost, you need to understand what indicators you want to follow. From the start, our KPIs were:

– how many people reach the site from Facebook Ads (is there any interest in this type of games?)
– how many people click on the first link on the site (Click Here and the image) – this would give us information on the level of interest for this kind of game
– how many people complete the form (self-explaining)
– how much time people spent on the site, especially on the second page (it means they were interested enough to read what we wrote)

All these numbers were available through Google Analytics, the free solution from Google, which we happily installed.

The results? Well, above expectations:
228 unique visitors, 517 page views, 386 unique page views, 145 pageviews on the second page (the one with the form), 2:09 minutes on the second page.

The percentage of people visiting the second page is 60% (145 unique pageviews compared to 240). This means 60% of the unique visitors (approximately, since we cannot compare unique visitors on the pages, but we expect people didn’t visit the second-page multiple times) clicked on “Click Here”. So 136 people visited our second page. Out of those, 66 people submitted the form to us. A staggering, for me, 48% of the people that got on the second page (and 29% of the total visitors).

The answers? Well, those are for us to have, aren’t they? :) There are two of them in the screenshot below (the same as the one above).

The results of this experiment gave us the push to start building Solitaire Arena. And it gave us first proof of concept.

I am amazed at how many startup founders don’t do this kind of testing (especially seeing how cheap it can be – it cost us less than $200), but I think most of them don’t do it just because they are afraid of the answers. We were quite ready to change course (which we did, we never built a gambling platform, as we initially intended).

Finally, where does the story end?

Well, we presented some great numbers at the Demo Day of the accelerator: see our Demo Day presentation here.

Solitaire Arena had, a year after launch, 1,500,000 monthly active users, MavenHut has been the recipient of $700,000 in investment and it has outgrown the 3 initial co-founders several times.

In 2015 we sold most of the games to RockYou, an US company. MavenHut’s games were downloaded more than 40,000,000 times across all platforms available. And in 2016 I left the company :)

P.S.: I wrote the first version of the article in 2016. This is an updated version I wrote in 2020.

“I just started a gaming company and we make Solitaire games!”
“Well, that’s stupid!”

That was me in 2012, telling a friend about the new project I just started. He still is my friend (I know!) and he is a smart guy. And he genuinely thought it was a stupid idea. And I still remind him of that discussion.

Of course, that’s what started MavenHut. We built that initial Solitaire game (Solitaire Arena) to a company with 35 people and more than 40 millions players.

Do you know there’s a guy that wanted to start a marketplace for people to rent inflatable beds in their apartments? Or a guy that thought internet was good for selling books? Or some guys that thought they could build a site helping you leave it the moment you visited it? Yeap, they’re Airbnb, Amazon, Google. They all seemed really stupid at the moment.

I love stupid ideas. I like talking about them. I know most of them will never become a business, a company or even a side project. But come on, don’t you want to let your mind wander and wonder?

I prefer, as Tynan says here, to see the good in the ideas. That’s why I almost never say “don’t do this“. I just say “what stops you from trying?”

That being said, no matter how much I love talking about stupid ideas, I would not invest in them. I mean, I can’t afford a 1 in 1,000 chance of something working.

I will never put down a stupid sounding idea, though. After all, I’ve founded a company making Solitaire games. “How stupid is that, when you can play it for free on Windows?”

The image above is of the MavenHut offices in 2014. I took it from Radu.

Asking questions is probably one of the most underrated skills in the world. I mean, everybody can ask questions, right? A toddler asks questions. And, oh, my God, they do ask a lot.

As you know, though, it’s not that simple.

I grew up in communist Romania. School was a serious matter and you didn’t ask stupid questions. Or, even better, don’t ask anything. Take everything the teachers give you, learn it by heart and become the perfect little communist. Of course, I’m generalizing, because I was fortunate to have some great teachers, but they weren’t the rule. This continued through college, even if it wasn’t as obvious as it was in the first years of school.

I was also lucky to have parents that encouraged my curiosity, but that almost bit them in the a$$ when I told people at school that my parents were listening to Voice of America radio, which was banned in Romania. My family was lucky that my third grade teacher heard me and sent me home to talk to my parents. Otherwise, the results could’ve been dire.

Anyway, as I got older, asking questions seemed a sign of weakness. I mean, my first “real” job was in a Government institution, that had its ways. And I was working with a lot older people, that had THEIR ways. And it was “obvious” how I should do things. What, I was hard in the head, couldn’t I see on my own? Where the hell did I grow up?

After about 1 year of working there I continued on my entrepreneurial track. And finally, asking questions seemed a lot easier and more accepted. Especially since I was so interested in new technology. This meant that all the people I knew had bits of information they could share so I started asking LOTS of questions. And, for the first time in my life, they didn’t seem like an annoyance to anyone. OK, OK, I had a good friend that ALWAYS made fun of me for asking “stupid and obvious questions”, but I learned a lot from him during those early years.

Now, I ask questions all the time (really, I do). Even if I seem slow or stupid. I want to know things, so I’m ok with that.

Here are the tips to ask good questions:

1. Don’t worry about being annoying

It’s worse being annoying because you don’t know something and execute badly, rather than being annoying by getting right what you need to do.

2. Ask specific questions

Don’t ask general questions: how can I make money is a general question. It’s better if you ask “How can I monetize my mobile app?”. But the even better question is the one that asks “What is the biggest issue you had with monetizing your app with subscriptions?”. Of course, based on your relation to the person you ask, you can start with the general ones and get to the more specific questions as time goes by.

3. Understand time limitations/specific situations

You are at a conference and you want to ask a speaker something. There’s no Q&A session at the end, so you wait for the presentation to finish and you go and talk to the speaker. And you ask one question, then another, then another. You can see the speaker looking around, trying to escape, but you don’t stop. There’s a queue of 10 people behind you waiting to speak to that person, but you ignore them. At this point, you are annoying. VERY annoying. Ask one question, get the answer and, if you have follow-up questions, ask for an email address to ask a little bit more.

4. Try to find the answers on your own first

You have a phone in your pocket that has most information than most people had access to during our history. Use it. Google things before asking, read Wikipedia articles. If you can’t find your answers, by all means, find someone to ask. The advantage, though: you will ask really specific questions.

There’s more to asking good questions than these 4 tips. Practice will make you better. Ask questions, challenge people. If someone doesn’t like you because of this, maybe you shouldn’t care.

What I’m reading now

I got really interested in American Football lately. I’m a fan of Carolina Panthers, just so you know.

I actually went to Atlanta for Superbowl 53, to see what I thought would be Tom Brady’s last champion ring. I’m fascinated by the business/sports machine that is New England Patriots.

Right now I’m reading two books about New England’s coach, Bill Belichick:

The Education of a Coach – David Halberstam
Belichick – Ian O’Connor

Both are about Bill Belichick’s life and career. The first one is gentler with the coach, because the author had access to him personally. It also has only the first two Superbowls, because it stops in 2003. This means the writer didn’t know about the 2 biggest scandals that involved Belichick: Spygate and Deflategate.

I’m still reading the second book. It’s more agressive and it doesn’t pamper Belichick’s image. It talks about his mistakes more and in a less understanding light. This makes the book a little bit more balanced, but with less insight from the man himself. The writer talks about the scandals involving Belichick at length, as well.

Additional Reading

Here are some things to read from around the web and The CEO Library:

1. Book talk with Brian Burkhart

Things to take from the interview:

• the books that dramatically changed his career path
• how he really improved his presentation skills
• how you should use “reverse engineering” and do what you love
• why is gratitude important
• find out about how to build a brand people authentically love

2. Why are rich people so mean?

Is meanness necessary to become rich or is it a learned trait, that you gain as you make more money?

3. Is Amazon unstoppable?

Great write-up on how powerful Amazon and its CEO, Jeff Bezos, are. Really eye opening.

4. List of Basic Advice

Following my email last week, somebody asked for more examples of Basic Advice. And I made a list.

5. The Best and Worst Thing About Financial Independence

I have a soft spot for the Financial Independence movement. Maybe because, without knowing it, I looked for this all my life. What I didn’t realize until several years ago when I finally achieved financial independence is that it can make you miserable. This article is better at explaining my feelings.

Last week I sent an email to the email list (you should subscribe, by the way). I was talking about Basic advice and how important it is that, from time to time, someone reminds you how important it is to focus on the basics. My definition of basic advice is this: advice that’s really easy to understand, without too much explanation.

Chris, one of the people on our list, asked for more examples of basic advice.

What a great idea, I thought. Why don’t I make a list, while I’m at it and update it whenever I have more advice?

By the way, you can help. If you have more suggestions, make a comment below and I’ll add it to the list, along with your name. I’ll also add your link, if it’s not what I consider to be a spammy site :D

So, without further ado and in no specific order, here is the

MEGA LIST OF BASIC ADVICE (BUSINESS AND PERSONAL)

Initially, I was gonna do just a business advice list, but I was thinking of more and more personal advice, so I added that to the list as well. This means that the list is split in two: Business and Personal. Scroll down for the “Personal” section.

Business Basic Advice

1. Watch your costs

Most of the business go down because they spend too much.

2. Don’t hire too fast

Hiring creates lots of complexity in the business and it tries to sort a problem by throwing more resources at it. Most of the times it doesn’t work

3. Fire fast

Once you decided to fire someone, do it fast. Don’t postpone it, because it impacts your entire company/team.

4. Get a lawyer as fast as possible

Someone needs to read all those contracts and make sure they’re ok.

5. Get an accountant as fast as possible

The easiest way to break the law is by not paying taxes. Don’t fall into that.

6. Don’t send an email when angry

Write the email as draft. Wait 24 hours. If you feel the same, send it. If not, rephrase it. Anger rarely solves anything.

7. Raise more money than you need

There are lots of potential pitfalls on the way. If you raise money, try to raise at least 20-30% more than you think you need.

8. Raise money before you need to

Raising money takes a long time. Start raising money at least 9-12 months before you estimate you will run out of money. I would start 18 months before, frankly.

9. Read books about your industry

I’m biased here, since The CEO Library is about reading books. Still, I think that long form puts some things into perspective a lot better than articles online. No matter how many articles you read, nothing will make you feel the pain of firing people as much as The Hard Thing about Hard Things will make you feel. If you want to know how to read more, here’s a really good article on our site about it (Cristina, my cofounder at The CEO Library, wrote it).

10. Grind every day

Most businesses just need to survive to be successful. Do your work everyday, even if it’s boring during some days.

11. Don’t break the law

You really can’t run a legitimate business from jail.

12. Follow-up on email after every call or meeting

It took me a little bit of time to get into this habit, but following up on email after every call or meeting you have is the essential. This gives you a “paper trail” of the discussion and lets all people involved remember what you talked about. Also, if someone forgets something, there’s always someone to point that out.

If you have more suggestions for business basic advice, please add it in the comment section below.

 

Personal Basic Advice

13. Wash your hands

Really. You know how many people I see leaving toilets without washing their hands? Now, that I told you, you will never NOT see it.

14. Breathe

Sometimes, that’s all you need to go through the day. One breath at a time.

15. Don’t send a message when angry

Really, don’t. If you are angry with someone and want to clear the air, talk face to face. Or at least on the phone. It will give you some time and it’s a lot more difficult to say stupid things face to face or on the phone.

16. Clean your living place

Really, clean your place. I’m not saying you should be Monica from Friends, a cleaning freak, but don’t keep weeks old food on the sofa.

17. Read books

I feel that long form reading activates parts of your brain you don’t normally use. Especially fiction. I imagine so many things when I read Science Fiction, I dream entire worlds after that.

18. Exercise/Go out and walk

I’m not the best in keeping up with this, but I still walk as much as I can. The best life I’ve lived was when I was working out constantly.

19. Get some sunlight

Really. Go out and take a walk. Get some distance from your life for a bit.

20. Sleep

I’ve been sleeping 7-8 hours a night in the last few months and I’m seeing such a big change in energy and productivity. Cristina wrote a while back about sleep in our newsletter, so give it a read here.

21. Eat well

I need to remind myself this every day. I’ve been eating really bad food lately and I can feel it in the level of energy I have in the 1-2 hours after eating. Eating well improves your well being and productivity.

22. Don’t stop learning

Read new things, find interesting courses, watch videos, go to physical courses. Never stop learning.

23. Do things in moderation

Even the good things can be too much and they can lead to burnout if you overdo them.

If you have more suggestions for personal basic advice, please add it in the comment section below.

A lot of people pride themselves on being efficient. And this is not bad. Unless you’re efficient about the wrong things. Which means you’re not being effective.

Take this: you have a business selling a hat. And you devise the most efficient marketing plan for selling the hat. But truth is, the hat is bad. SO BAD! And you just spent 3 months creating the best and smoothest marketing plan. And you don’t sell anything. Because people can see that your hat is bad.

Effective = successful in producing a desired or intended result.

Obviously, what you need to do is make a better hat and THEN create the best marketing plan. And, I know, sometimes it’s not that clear.

Basically, what you need to do is to become effective instead of efficient. You’re being effective once you move things forward, once you put your energy in the RIGHT things. Like improving your product. Or creating a great marketing plan ONCE you have the right product.

To sum up, effectiveness is the combination of good efficiency and good prioritizing.
It’s being efficient about the right things.. Once you have these, all you need to do is put in the work.

Anytime you hear someone saying “I’m very efficient” ask “what about?”. Because you want effective people around you. Those that are efficient about the right things.

A recent example from my own history was when we tested if people wanted to play Solitaire Arena in a very efficient way – time and money wise.

The best answer you can get to any business request/proposal is, obviously, “yes!”. But what’s the second best?

For a long time, I thought that I wanted to hear at least a “maybe”. Or “let’s talk later”. Or “if you do this thing, I might be interested”. Oh, boy, how wrong I was.

If it’s not “yes”, the answer you want to hear is a fast “No!”. And don’t be afraid to ask for it, no matter who you’re talking to. Even if, in the short term, you might lose some deals, you’ll earn a lot of time in the long run.

By getting a fast no, you spend less energy on things that are unlikely to succeed. You will not fill your mind with hope even if it’s pretty clear you won’t get what you want.

If you’re raising money, look for a fast “no” if you can’t get to “yes”. If you’re looking for a deal, the same. You’ll be better for it.