Book Review #3: The $100 Startup

Why I chose this book: Singapore is known as one of the most expensive cities in the world.  $100 may not even cover the cost of four taxi rides. I was curious how entrepreneurs were making it work. 

My three biggest takeaways 

• The One Page Business Plan: On Page 102, Guillebeau presents a simplified version anyone starting their business can use. All businesses are an intersection of four elements: passion, skills, problems and opportunities. Guillebeau’s business plan helps people figure out what they can sell, how much they can charge for their products and what metrics to measure based on those four elements.  I really liked how the business plan also came with a deadline. So far, I’ve come to appreciate why startups set deadlines for themselves and the benefits of launching a product – even one that is imperfect –  for market validation. 

• The Art of the Launch: Guillebeau describes how product launches aren’t just about creating a webstore and announcing it to the world. As a journalist, I’m familiar with the more traditional aspects of such events, having covered many by ministries and businesses. Inviting key stakeholders, crafting a press release and posting on social media is the easy part. 

Guillebeau shares about how small businesses can make their launches fun, by building anticipation and urgency into the offer. Drawing from his own experience as an entrepreneur, Guillebeau describes how he launched an online business course that was time-limited while on a train from Chicago to Washington. Unlike your typical while-stocks last sale, this was different. The sale would last as long as he was on the train, which also gave his community an interesting journey to follow. 

I also found it very instructive, how Guillebeau mentioned ways small businesses can thank their customers. As a journalist, I have received many press gifts at event launches, but never quite understood why organisers provide them. Guillebeau illustrates how personalized thank-you notes and unexpected freebies can go a long way in building customer loyalty.

• Product to Service: Just like how individuals have multiple streams of income, so can businesses. Guillebeau gives examples of how businesses can diversify and build upon existing products or services to win over new customers. For instance, a restaurant can offer cooking classes, while consultants can sell guidebooks offering a lite version of their services. 

Real-life applications 

• At my job: Occasionally, I have the privilege of interviewing small business owners. Usually this happens when I am writing about a trend, such as this story where my colleagues and I interviewed 110 hawkers about how the Covid-19 pandemic has impacted them and why they struggle to join food delivery applications. Every business is unique and being more aware of how business owners think will help me ask more targeted questions. 

• Startups I know: Perhaps the best launch in recent memory is crypto influencer Irene Zhao’s SO-COL, which went viral on Twitter and Reddit before it was picked up by mainstream news outlets. I do not cover the finance beat, but as an observer, there were many things to love. 

It had 

A clear value proposition: Buying one of her NFTs entitled the buyer to a tribe pass, or membership in her decentralised autonomous organisation (DAO), an internet community that shares an Ethereum wallet.

A fun element: The Telegram sticker packs were adapted from Zhao’s personal photos, with tongue-in-cheek slogans that spoke to the Crypto Twitter community. 

Timeliness: On its website, the DAO notes how once all 1,107 passes are claimed, no more will be minted. This naturally increases the urgency of customers to grab them while they last. 

Post-launch: While some may brush this off as a publicity stunt, Zhao took to Twitter to explain how the launch was really a proof of concept for SO-COL, a social network for influencers she was building. If she, as an influencer, was able to net $7.5 million in NFT earnings, so could other influencers on traditional platforms like Instagram. 

The $100 Startup was a fun read, since it is considerably less technical than the other books on my list. I would recommend it to anyone, whether they want to explore a side hustle, start a small business, or revitalise their start-up. 

If you enjoyed this review, feel free to leave me a message here or share this post. I will be reviewing Sprint: How to Solve Big Problems and Test New Ideas In Just Five Days soon. 

Book Review #2: The Lean Startup

A how-to guide if there was one, The Lean Startup by Eric Ries details how entrepreneurs can develop a vision for their company, steer it through challenges and accelerate its growth. 

Why I chose this book:  Many companies claim to be agile, or lean, but I had no idea what this meant. It turns out that the “lean” refers to lean manufacturing. Ries was inspired by how companies like Toyota treated every product, process and campaign as an experiment designed to achieve validated learning. This attitude would determine how startups create value and grow.

My three biggest takeaways 

• If you cannot fail, you cannot learn: Growing up, I was taught to avoid failure at all cost. In Singapore,  academic success is still highly valued. If you own a house, get promoted and are married before the age of 30, you are seen as having made it. But Ries argues that in order for a startup to succeed in the long-term, it has to fail over and over again. The caveat, however, is that start-ups deliberately fail, by identifying certain assumptions they want to test. 

• Value and Growth: On Page 61, Ries defines two hypotheses start-ups need to rigorously and thoroughly examine. 

The value hypothesis looks at whether a product or service delivers value to customers. 

The growth hypothesis tests how new customers will discover a product or service.

Using the example of Facebook, Ries explained how Facebook validated its value hypothesis by measuring the amount of time Facebook’s active users spent on the site. For social networks, time spent is valuable, because of the advertising revenue it can attract. 

Facebook also passed the test for growth. In 2004, it was only widely adopted by college students. But those college students were able to rapidly invite their friends onboard. 

Reading this was like a lightbulb moment for me. Although I was previously familiar with metrics such as the cost of acquisition and viral coefficient, I never really understood why that mattered. Having a theoretical framework has really helped me see the importance of big data for startups. 

• Minimum Viable Products: Prior to reading this book, I thought a MVP was a beta version of an application. But Reis deftly shows how even a landing page or a video works. 

Take Dropbox. The technical wizardry needed to drag and drop files would take years to develop. But Dropbox made a three-minute video demonstration, showing how files could be imported from one’s computer onto the Internet, with changes synchronized in real-time. 

That video was good enough for 75,000 people to sign up as early adopters and was part of Dropbox’s application to Y Combinator. 

As a non-techie, I’ve always been intimidated by how startups are built. Reading about  different kinds of MVPs made me realize how many options exist to prove a business concept. 

Real-life applications 

• At my job: As part of the Lean Startup methodology, Ries writes how every entrepreneur faces a turning point where they will have to decide whether to pivot or persevere. A pivot is a specific kind of change that tests a new hypothesis about the product, strategy and engine of growth. 

As a journalist, readers are our customers and articles are our products. Although I had been writing about Covid-19 testing extensively since mid-2021, I realised that Singapore was moving towards living with Covid-19. Meanwhile, scams were on the rise since Dec 2021. The decision to pivot came naturally. 

• Startups I know: While I am not aware of the founding story behind Love, Bonito, I’ve heard many accounts of how it began as a blogshop run by three friends in 2005. A blogshop seems like the perfect Minimum Viable Product for a retail brand. In the early 2000s when online retail was first taking off in Asia, the value hypothesis would have been whether customers would want to buy clothes they aren’t able to try on.. And the growth hypothesis would have been whether they would share this website with their friends and family. Today, Love Bonito is one of Singapore’s leading retailers. 

The Lean Startup was a thoroughly enjoyable read. Concise, well-organised and with real-life anecdotes, it deserves all the accolades. 

If you enjoyed this review, feel free to leave me a message here or share this post. I will be reviewing The $100 Startup in my next post in a few weeks’ time. 

Book Review #1: Zero to One

Written by Peter Thiel of PayPal fame, Zero to One is a high-level look at entrepreneurship rather than a how-to guide. It examines how startups can strive to stand out from competitors, build a founding team and the conditions under which a startup will succeed. 

Why I chose this book: I chose this book to start with, because I thought it was fitting for my first blog post. After seeing far too many people use the catchphrase “zero to one”, I wanted to find out what the hype was about. It turns out, “zero to one” is what startups need to do, to question existing ideas and find new ways of doing things. This involves rethinking businesses from scratch. This is different from going from “1 to N”, or copying things that work. 

My three biggest takeaways 

• Monopoly is the condition of every successful business: Thiel argues that in order for a business to have long-lasting success, it has to be so good at what it does that no other firm can offer a close substitute. But I found it fascinating how whether a company is a monopoly also depends on the market in which it claims it belongs to. Google is undoubtedly a search engine monopoly, but if we see it as an advertising company or a technology company, it would resemble a small player. Strategic positioning makes a big difference, which is why smaller companies have an incentive to cultivate an image of themselves as the intersection of a few markets. 

• Last mover advantage: Thiel challenges the concept of the “first mover advantage” – how those who are first to enter a market will capture the lion’s share of it. While first-movers may get a head-start, startups can’t just grow, they have to endure. Instead, Thiel argues how it’s better to be the last mover, to make the last great development in a specific market. When I read this, I couldn’t help but think of Apple. Apple didn’t invent any of the technologies it is celebrated for – the first tablet, portable music player or touch screen. But customers, including myself, remain loyal fans because of how well-designed and easy to use Apple’s products are. 

• Seven questions for success: Bookmark Page 153, if you ever need to know whether a company you run/fund/are looking to join will succeed. According to Thiel, a successful company must create breakthrough technology, have good timing and become a monopoly. It must have the right team, a way to deliver its products and be relevant 10 years from now. It must also have a secret – to see a unique opportunity that others don’t see. That definitely sounds like a high bar to me! Perhaps that’s why NFTs and crypto have heated up so much in 2021. I don’t really understand how Web3 operates, but there must be a reason why Facebook rebranded as meta and why crypto influencer Irene Zhao wants to build SO-COL  as a social network for influencers 

Real-life applications 

• At my job: Some of the most successful journalists I know have carved out their own unique niche. They might not have been the first to start a beat, but I’m definitely inspired by how they have found their own unique understanding of what readers want. I’m still finding my way 1 year 8 months into the job. But I’ve noticed how my better stories have been about issues that are timely and not too broad, like Covid-19 testing and charities. 

• Startups I know: I can’t think of a single company which lives up to Thiel’s standards for long-term success. But as a consumer, I have a better understanding of why Secret Lab chairs are so popular. Although I do not use one, I can see why Secret Lab has succeeded during the Covid-19 pandemic. It started with a small market (gamers) and dominated it. The pandemic made work-from-home the default, providing it with the perfect opportunity to scale. I can’t imagine a chair will ever be outdated either. 

That’s a wrap for my first book review 🙂 If you enjoyed this review, feel free to leave me a message here or share this post. I will be reviewing The Lean StartUp in my next post in a few weeks’ time.