November 2, 2010

bump it

just returned from the stanford GSB after a great talk by david lieb, co-founder of bump, the iconic iphone app.  he shared the fascinating story of bump's founding -- as a student at chicago's business school (before it was booth, it was "the other GSB") he noticed that students were still trading contact information in low-tech verbal ways.  he and his buddies created the app and grew it through word of mouth, aggressive cold-emailing of tech journalists, and a lucky break as the billionth iphone app downloaded.  with over 20 million downloads, he had some interesting thoughts on marketing considering they've spent a grand total of $45.00 on marketing efforts.

since i've seen several different options at conference i've attended, i asked him about high-density information-sharing events and whether they're interested in private label bump platforms.  he said it was actually paypal early on that encouraged them to spin out their API and allow others to build proprietary platforms.

he candidly shared his experiences raising series A funding with venture capital firms in silicon valley.  "we don't plan to achieve profitability any time soon," he said as he explained that most of their business models are "at scale," so they plan to build it big and then roll out some of the money-making game changers.  it sounds like their partnership with paypal is just the beginning of opportunities for the bump platform.  money quote:  when asked how bump makes money he laughed and replied, "we sell preferred shares in our company to venture capitalists."

key takeaways:

  • "if you don't look back and think your first product sucked, you launched too late."
  • start your company is an Inc. (rather than an LLC) if you ever plan do any fundraising
  • valuation during series A funding is more art than science -- VCs are checking if you pass the bullsh*t test
  • y combinator changed the game for him, but it's very engineer-friendly and MBA-hostile
  • on a mobile platform, share of mind is really small, so everything has be super simple. "no disrespect," he said, "but users have the attention span of drunk idiots."
  • focus on what's going to kill you today, not the stuff that's a pain in your butt
  • android will be the ubiquitous lower-end platform within a few years

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