Conference Presentation, Keynote
Dan Siroker at Startup School 2013
- The speaker's entrepreneurial journey began with "Sentiment Solutions," a 2005 Stanford startup using machine learning for stock market prediction based on news sentiment, which failed to achieve profitability or secure paying customers due to a lack of market feedback and sales efforts.
- The speaker joined Google as an early Product Manager for Chrome, learning the critical value of the "feedback loop" by leveraging Google's brand name to acquire 100,000 initial users and gather rapid, incremental product feedback.
- Inspired by a November 2007 speech by then-Senator Barack Obama regarding evidence-based governance, the speaker joined the Obama campaign as a volunteer on the New Media Analytics team.
- During the 2008 campaign, the speaker ran successful A-B tests using tools like Google Website Optimizer and Omniture, identifying a market bottleneck where acquiring developers was difficult for non-technical teams.
- Post-campaign, the speaker and co-founder Pete Kuman launched "Carrot Stix," an educational math game for children, which struggled due to selling to third parties (parents/teachers) rather than the founders themselves and facing significant distribution hurdles.
- A second venture, "Carrot6," reduced the time to first paying customer from "infinity" to six months, but growth remained insufficient to justify a large-scale company, prompting a pivot to building products founders wished they had.
- The startup "Spreadly" launched in Winter 2010 via Y Combinator, offering merchant discounts for social referrals; however, the team quickly identified that the social capital cost of spaming friends exceeded any discount incentive, leading to the product's failure within a month.
- "Optimizely" was founded based on the insight that non-technical teams needed a visual A-B testing tool; the company secured its first paying customer for approximately $1,000/month before writing a single line of code.
- Under Paul Graham's Y Combinator guidance, Optimizely pivoted fully to the A-B testing model, growing from a team of four and $100,000 annual revenue in the first year to 42 employees and $7.6 million in revenue by the third year.
- Optimizely's press strategy leveraged the "David vs. Goliath" narrative against Adobe Omniture and the unique selling point of having both the Obama and Romney campaigns as customers.
- In 2012–2013, Optimizely adopted a unique Series A fundraising process involving mock board meetings to evaluate potential investors' ability to ask the right questions, resulting in Peter Fenton of Benchmark joining the board.
- By the time of the presentation, Optimizely had grown to 130 employees, launched the product in 10 languages, and established a sales strategy heavily reliant on word-of-mouth referrals from 5,000 satisfied customers.
- The speaker defines a "universal startup algorithm" centered on continuous improvement: executing a cycle where every action generates feedback used to refine decisions and operations.
- The speaker warns against the "activity trap," where entrepreneurs focus on executing existing processes rather than inventing unique strategies, citing Tesla's direct-to-consumer distribution model as a prime example of defining one's own algorithm.