Working with Pollenizer will give you access to the Finance and Ops Team who get stuck in, set up your company, open a Saasu account and an online filing system full of processes, procedures, budgets and financial reports that will be a very valuable asset when your business is ready for investment at Series A level.

At the closing stages of completing an investment round for serious money from the big guys you will embark on the Due Diligence (DD) journey. Generally, there will be tight deadlines to make in order to make this happen and get the cash in the bank or potentially watch everything you have sweated tears over in getting your business to that stage fall over because you have run out of money to get to the next level.

At Pollenizer our Finance and Ops Team use:

• Saasu
• Google Docs
• Dropbox
• Harvest
• Evernote
• Yammer
• Right Signature
• 1Password

DIRTY HACKS FOR STARTUP FOUNDERS

The aim of the dirty hacks series is to help you launch your startup faster, cheaper & dirtier. Everything is rough, crude, and fast. Just what you need for your startup.

Part 1: How to use Facebook to size a market

Ok. So you’re assessing a new startup idea for potential, or you’re putting together your first pitch for an investor. You need to know the market size, right? Not only should it be at least 1 gazillion people so the VCs think you’re hot, but you need to quantify it in terms of TAM, SAM, and SOM. So how do you do it? Some people trawl through market reports or pay for specific market segment data. But this doesn’t actually give you what you need. You don’t get anything that means much in the real world. Instead, here’s a hack to get a rough feel for the market that you want to enter. It’s free, and it is easy. All you need to do is dig into the Facebook Ads platform. You’ll be done before you can type N-i-e-l-s-e-n on your iPhone.

Background

Facebook ads can be great for highly targeted advertising, but they also give us a quick way to quantify specific market segments by using a combination of the location, demography, and likes information of Facebook users. We can use this information to build useful market segment profiles and calculate the size of a potential market. What you get is an actual number of real people who have specifically stated that they like your kewords. You won’t get these data from a market report.

How to do it

• Login to Facebook
• Click on the “Advertising” link in the footer of your profile
• Click the “Create an Ad” button
• Complete the Design your Ad form (use any website, it doesn’t matter)
• Start changing the settings on the “Targeting” screen, and you’ll see your Estimated Reach update dynamically
• Choose Locations
• Choose Demographics
• Choose Likes & Interests (previously known as Keywords)
• Choose Connections
• Choose Advanced Demographics.
• Now you have your final Estimated Reach.
• NB: Don’t delete your settings once you’ve got your Reach. Save it as an ad campaign so you can run it when you start testing your MVP. (Use that $50 free ad credit voucher that Facebook sent you).
• Now get out of the building and go do some customer development

Caveats

Using Facebook for sizing markets is rude and crude. There are all kinds of inherent data biases, so be mindful when drawing conclusions from the data. For example:

* Facebook users are not a random, representative sample of the general population. This is a key point if you want to make some kind of inference about the greater population. While Facebook does have a very large sample size (500+million users) it does not accurately represent the world’s population, nor does it necessarily represent your market at all. You must ask yourself if the Facebook user base accurately reflects your market. That said, sub-sampling for results within the Facebook demographic is valid, where you believe that your market has strong crossover with the Facebook population. For tech startups, it is probably correct to say that some segments within the Facebook market are an excellent representation of your market. In terms of sizing your overall market, let’s be clear that you can’t extrapolate from Facebook to another market. It is entirely flawed to say that 65 536 out of 500 million Facebook users like a product, therefore 65 536 *12 = 786 432 out of 6 billion humans will like that product.

* Facebook “likes” are also not random or representative. “Likes” data are based on what people say they like, yet many users don’t use the likes field, or they use inconsistent keywords, or their likes are biased selections. (Conversely, data such as location, gender, and age typically have a much better signal to noise ratio).

* We can only pull broad data sets using the current implementation of the Facebook Ads platform. This is because the Likes & Interests field uses the Boolean OR operator, instead of AND. For example, entering “iphone, mp3” will return the Estimated Reach for “iphone or mp3″, not “iphone and mp3″. Just get smart with your likes terms and you can get great data. NB: When Facebook roll out the AND operator, this hack will improve 10x.

* I’m not even going to start talking about null hypotheses, Type I and Type II errors, and all the other statistical funkiness. This is a dirty hack. Your stats professor will not give you an A+.

* Lastly, once you’ve pulled your data from Facebook, you should also read this: http://cdixon.org/2010/04/03/size-markets-using-narratives-not-numbers/

Conclusion

A final note: market numbers don’t actually mean anything. Instead you need to go and talk to real customers. Use the data from Facebook as a proxy for your market, and then go and test your assumptions with real customers. If you haven’t got them already, go and buy the insanely good Customer Development book by Brant Cooper and Patrick Vlaskovits, the brain tweaking Four Steps to the Epiphany book by Steve Blank, and the piping hot Lean Startup Book by Eric Ries. And if you aren’t following @hnshah and @kissmetrics you should be.

What are your experiences with using Facebook as a dirty hack to size a market?

It can be difficult to remain focused when you’re constantly online running a web business. The lure of the internet is very tempting and just a minute checking an auction on eBay can turn into an hour of researching Wedgewood tableware you saw in an auction earlier and thought your Mum might like for her birthday…. to be fair it is fast approaching….I wonder what payment methods rosesonly.com take…I should go to their website…

See how easy it can be to get distracted?

Darren’s top tips are:

1. Know and identify your goals, and know them on a big picture scale. Periodically write down your new goals and assess the previous goals.

2. Boundaries and boundaries around the core talks that are going to take you closer to your goals. You need to put boundaries around core tasks and set aside time to achieve these.

3. The other type of boundary and this is involves creating boundaries around the distractions. If it’s not a core task, create a small space in your day to do those things which are good but which also can be distractions.

But he warns of the dangers of stretching yourself too far. The above chart shows a tipping point where busyness can lead to less productivity. Be careful not to burn yourself out!

Ok, now back to the task at hand!

One of the challenges that we see regularly is people working on startups for far too long. If you’re working on it on the side (which means 9 to 5 – but 9pm to 5am) and you don’t have any partners or external people putting pressure on you, then you can take just as long as you want – which means forever. But you’re just guessing until you get it into the hands of a real customer.

One way we’ve found successful in pushing people to get a minimal viable product out is to pick a deadline for demoing. It’s an artificial date, but by announcing it to the world and inviting people, then all of a sudden there is an external reason to get it done.

To help people do this, Pollenizer is offering it’s office to you to run your demo. You give us the date, and we’ll invite some of our team, our partners and maybe even some of our investors, to hear your pitch and see the product.

Here is what you need to do;

• You must be a web (online, internet, mobile, ipad) business.
• Pick a date within 6 weeks from today – earlier the better.
• Write a copy of your web startup executive summary one pager.
• Email the date, the 1 pager, and a 1 minute video if you can to mick pollenizer com
• We’ll confirm the date, add it to our events section, and invite some people that we think will like to see the product.
• You chuck out as many features and bits you don’t need to demo. It’s OK and even preferred if it’s pretty ugly. We want to see wow value.
• Come and demo. 10 minute demo, 20 minutes of questions. Show your product quickly, then talk to us about your plans.

Looking forward to seeing your demo!

A message to our Sydney-based startup friends. Pollenizer is sponsoring Coming to America event, now on Thursday, October 15, 2009 from 10:30 AM – 12:30 PM.

Rich venture environments exist where there is a pool of successful entrepreneurs re-investing back into the kind of businesses that they understand. The guys at Mitchellake are a unique bridge between Australia and the US and they have pulled together a terrific panel of US-based Aussies who have ‘made it’ and now want to share the love back to the Australian community.

If you are ready, this is a great opportunity to pitch your business to a switched-on panel of investors and connectors and learn how to tune your story to the people that live and work on the other side of the ocean.

If you are a startup, ML are offering student pricing for you.

See you there!

The idea came to Posse CEO, Rebekah Campbell, when she was struggling to sell Evermore tickets in Perth. Recruiting the fans to work for the band quickly fixed that problem and planted the seed for a new web business.

Here is the first lesson for new web businesses: this idea was tested before the technology was envisioned, before the architecture was laid down, before the team was hired. There was simply a question: “If we gave fans the tools to sell tickets for the band, can they do so?”

If you can find a way to test your hypothesis simply and manually before you start, like Posse did, you can soon discover if there is a business behind it.

Now Evermore are touring again and we chose to gently launch Posse around the band that started it all. Now you can buy tickets for Evermore from me! I am going to the Sydney gig with some mates so let me know if you are coming and buy your ticket from me. :-)

Now begins the hard part – building a web business.

Our approach to this is highly iterative. We have defined a series of tests, each of which must be passed before we move on to the next. For example, 80% of users that start to register to be an agent must be successful. Or, average agent sales must be 5 or more tickets. With these objectives, we watch the stats closely, hypothesise about certain behavior and make changes to the site quickly before starting the cycle again. This is the core mechanical heart of the business and if it works poorly, the business will work poorly, no matter how large it grows.

As Rob Antulov (3eep’s CEO) says, “We want to make great burgers before we try to open McDonalds”

It is common for start-ups to have a feature based approach in which the blind hypothesis is that the next feature will bring the users. Rarely it does and usually the same teams are not noticing that registration is not working well, or invite emails fail to reach their destination.

We hope you will give Posse a try. Become an agent and try to flog some tickets to your mates. Help us learn how to make it a better service that is truly useful.