How to Take Your Startup to the Next Level - Aaron Patzer at FOWA

Aaron Patzer, the CEO of Mint.com, was the next speaker at FOWA Miami 2010. He shared his experiences building Mint from the ground up as a company ("How to take your startup to the next level"). He described the session as how he turned an idea into $170 million dollars in 3 years (referring to the recent acquisition by Intuit). This was, in my opinion, one of the best talks of the day.

There are three phases of startup life: 1) garage; 2) seed; 3) funded. The garage phase is about creating a prototype and validating the idea. Seed is about launching an alpha product and getting trial users.

In the garage phase you need to rapidly validate an idea. He suggest talking to as many people as you can rather than worry about a fear of stealing the idea. A good idea is a "dime a dozen" - its differentiated by the execution. You will be able to refine your idea by getting feedback from people. Also, you need to be sure your business solves a real problem that will still exist in five years (not a "transitional problem") and it should be in a large market. To value your garage company, his rule as an angel investor is +$500k for every engineer and -$250k for each business guy because the engineers are doing the work.

In the seed stage, you need to prove you have a revenue model before you have actual revenue. Revenue projections will be "bullshit" but per transaction and per user revenue is more important. Show that you have a big market and big opportunity - he showed some original Mint.com slides he used to demonstrate this to investors - including what revenue he thought he could make in each vertical on a per user basis.

In the funded stage, its all about scaling people. Most companies hire haphazardly. If you are a developer, you probably can hire developers pretty well but you will have difficulty hiring marketing and business development people. Aaron suggests training yourself to hire and hire better than you and let them work. Its important not to ask the "what" but the "why" - why did you choose that job and why did you leave?

The next part of the funded stage is to take the beta to the big launch. For Mint, he started a blog ecosystem, inviting guest bloggers to come and write for them. A private beta can build demand - Mint asked early adopters to put a banner ad on their site in exchange for access. Mint.com launched at TechCrunch 40 and Aaron says that it was very important that he hired a PR firm and, wherever you launch, make sure you have a presence. This helped them win the audience award at TechCrunch 40.

Someone asked how they were able to come up with their much touted UI design. He stressed that when testing your UI, use realistic situations and realistic customers. The UI designers were not just graphic designers, but knew how to assemble the actual HTML to take their idea to reality.