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How to start the next Facebook, Airbnb, Ford, or Apple

make something people want

I’ve been noticing a trend in how some companies began, including Apple, Facebook, Airbnb, Ford, and others:

  1. Someone wanted something
  2. They made it
  3. They began to offer / sell it to other people

 

Facebook

Mark Zuckerberg talked about how and why he started Facebook in an interview with Paul Graham. Here’s some of what he said:

I launched it at Harvard first because I wanted it, right, I built it for myself. I really wanted to be able to use this service.

So then after Harvard, a lot of students from other schools started writing to us and asking for us to expand. And, we weren’t looking to start a company…

I didn’t start Facebook to start a company, I started it because I really wanted this thing personally and I believed that it should exist globally (although I wasn’t sure that we’d be able to play a role in doing that) and it was mostly just through wanting to build it, and having it be this hobby, and getting people around me excited that it eventually evolved into and got the momentum to become a company.

I was working on this Facebook thing for Harvard, and I really was excited about it because I wanted to use it, but at the same time how I thought that, over time, someone would definitely go build a version of this for the world. But it wasn’t going to be us, it was going to be Microsoft, or someone who built software for hundreds of millions of people. Who were we, we were college students, we’re not qualified in any way to build this.

(later)

It was fundamental for me. I felt this need really acutely, I really wanted this. (22:50)

 

 

Airbnb

Brian Chesky, Founder and CEO of Airbnb, talks about how he and his founders started Airbnb, which today is valued at $10 Billion:

I had just moved to San Francisco and Joe tells me the rent is $1,150… and I have $1,000 in the bank. So, we’re in this apartment, and we don’t have enough money for rent.

It turns out that the weekend I was in San Francisco, this international design conference was coming to San Francisco. And all the hotels they were recommending were sold out.

So Joe and I say, ‘why don’t we create a bed and breakfast for this conference?’ So we inflated three airbeds and called it the Airbed and Breakfast. So we built a website in like three days. I called my mom and told her about it and she said, ‘ok, so you built a website so that strangers could sleep in your home because you don’t have enough money for rent.’

The first website was just a few simple pages and we knew basic HTML, but if you look at the site today it’s pretty ghetto, it was very very simple.

I didn’t think it was necessarily a good idea.

To my surprise, three people wanted to stay with us.

We only did this, originally, because we wanted a creative way to make rent.

So, as we’re waving them goodbye, we realize ‘maybe there’s a bigger idea here.’ I didn’t know how big the idea was.

The story from Joe’s perspective: https://www.youtube.com/watch?v=NKxNhkzfTWg

Had first website up in 24 hours and coverage in major design blogs the next day.

 

 

Ford Motor Company

Henry Ford built the first engines himself in a shed in his back yard. He made the engine components. He tested designs. He, personally, spent hours and hours in his garage making, testing, and adjusting to create an engine he liked. Recorded in his autobiography, Henry recounts his early inspiration:

It was life of the farm that drove me into devising ways and means to better transportation. I was born on July 30, 1868, on a farm at Dearborn, Michigan, and my earliest recollection is that, considering the results, there was too much work on the place.

There was too much hard hand labour on our own and all other farms of the time. Even when very young I suspected that much might somehow be done in a better way. That is what took me into mechanics.

Being a full-fledged machinist and with a very fair workshop on the farm it was not difficult for me to build a steam wagon or tractor. In the building of it came the idea that perhaps it might be made for road use. I felt perfectly certain that horses, considering all the bother of attending them and the expense of feeding, did not earn their keep. The obvious thing to do was to design and build a steam engine that would be light enough to run an ordinary wagon or to pull a plough. I thought it more important first to develop the tractor. To lift farm drudgery off flesh and blood and lay it on steel and motors has been my most constant ambition.

 

 

Apple Computers

In an interview, Steve Wozniak, co-founder of Apple and creator of their first products, talks about why and how he made the first Apple computer:

I wanted my own computer. I told my dad at one point, ‘some day, I’m going to have this particular computer of my own.’ And he said, ‘how are you going to do that, it costs as much as a house.’ And I was sort of stunned because I was young. And I said, ‘well, I’ll live in an apartment.’

I would rather have a computer of my own that I can write programs on.

Eventually I was working for Hewlett Packard designing the hottest gadget product in the world – the HP scientific calculators. And while I was doing that I was designing all sorts of little projects.

And finally I realized the formula – the day had come when you could buy low enough cost memory chips, low enough microprocessors that did enough, I figured out in my head the formula to building an affordable computer. And I said, ‘wow, this is what I’ve wanted for ten years, I’ve got it!’

Every time I designed something really cute, Steve would come by and say, I know how we can sell it.

I designed all the early Apple computers – from scratch. Normally, you go to college, and you learn hardware or you learn software. You’re one or the other. I did it all, I did the whole hardware, I wrote the computer programming languages, I did every single bit of the whole computer.

But I did it not for a company. I did it because I wanted it for myself. (8:58)

 

 

Observations

(I’m especially interested in the moment of creation, because that’s both the most crucial and the hardest part – coming up with something people want. After that moment, the activity becomes much easier so I don’t care about it :) Traditional management books can handle that stuff.)

  • Founders built the first products for themselves – they were the user
  • Founders built the first products themselves
  • First products were very simple (deep in the Airbnb and Facebook interviews, Ford and Apple easy to see in their products)
  • First products built using skills founders already had
  • No business school-style market research done
  • No customer development done
  • No money raised
  • First products were built quickly (Airbnb in 24 hours, Facebook in two weeks during Harvard’s study break before finals in January)

Please leave any observations you have in the comments below!

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  • Ari

    Jeff, if you don’t mind, why not:

    1.Someone wanted something
    2.Someone else saw the need and made it
    3.They made it available to other people
    ?

    • Jeff Schwarting

      Ari, GREAT question. I’m sure that model works as well. It may even work more often, I don’t know, but here’s why I think it didn’t work in the stories above: when the person making the product IS the user, it’s easier for them to make a really good product, because they know exactly what should be included, what can be left out, etc.

      They begin using the product as they develop it, before it’s even done, so the feedback loop is REALLY fast. They can produce a good product faster than someone who has to build an iteration, then show it to users to get their feedback, then build again, then find more users to get feedback, repeat repeat repeat.

      • Ari

        Jeff,
        I hope I understand your point correctly.
        Is your argument against this “customer interviews” back&forth (or other startup obsessions and narcissisms) that can be dangerous, misleading and time consuming? (in which case yes I agree with you)
        Or is it “user/maker” against other forms/models of business creation?
        My point is that the most important thing for creative business ideas is having an eye on the market (which is pretty much what the Paul Graham article is saying),
        seeing what is missing and what problems exist or are likely to come up. I don’t care whether or not the builder is the user himself…neither do I argue against his feedback loop as you put it. It isn’t an “either or” thing the way I see
        it.As long as someone is market oriented that’s good enough for me.
        A need either exists or is being created by change.
        What is important for good business is an eye for change and opportunity in the market.
        And it is much more important than formal business education or funding or research or customer development. These are just tools that might help you serve the need you ALREADY identified.

        I hope it makes sense

        • Jeff Schwarting

          Makes sense, thanks for expounding.

          I think customer interviews are very useful once customers have a product to give feedback about, but if no product has been built yet, then yes, I think they’re dangerous, misleading, and time-consuming with very little return.

          In regards to user/maker, I don’t think this is an either-or scenario at all – I’d imagine there are more successful businesses started by people who aren’t the user/maker than those who are. I was really surprised to see the pattern in these companies, however.

          Also, most of the entrepreneurs I talk to are dreaming about ideas that either they can’t make, or that have no demonstrable demand, or both, and the user/maker model seems like it could eliminate both of those issues for them if they’d adopt it.

          • Ari

            I see what you mean Jeff.
            Thanks for clarifying.

  • Hank Taylor

    Wow, that seems easy. I guess I’ll go ahead and start a billion dollar company today now that I know the steps. One question though: why haven’t you done this yet? I mean, you so easily synthesized the steps to creating a massive business from four data points…

    • Jeff Schwarting

      Ha ha ha great question, Hanky. Who knows.

      By the way, I’m not proposing that this is the way every business starts, I’m just shocked to see such a clear pattern in these few. Other companies I didn’t include, but that share the same story are GoPro, Qualtrics, Freshly Picked, and a few of my own attempts.

      Paul Graham wrote an essay on this subject with roughly the same conclusion here: http://www.paulgraham.com/startupideas.html

    • Daniel Falabella

      Good to hear from you Henry, it’s been a while since we met at the Ballard Center.

      If you are looking for a detail synthesized description on how to build a scalable business, you are welcome to read The Startup Owner’s Manual (from Steve Blank): http://books.google.com/books/about/The_Startup_Owner_s_Manual.html?id=MT-TtgAACAAJ

      Oh wait, it’s 571 pages of condensed academic garbage… and it’s only Volume 1.
      Let me know how it goes.