Instructive episodes from the series Silicon Valley (Season 1)
The series "Silicon Valley" (Silicon Valley) is not only a fascinating comedy about startups and programmers. It contains a lot of information useful in the development of a startup, presented in a simple and accessible language. I always recommend to watch this series for all beginner startups. For those who do not consider it necessary to spend time watching TV shows, I have prepared a small selection of the most useful episodes, which are definitely worth watching. You might want to watch this show after reading this article.
The series tells about the fate of Richard Hendrix - an American programmer who invented a new, revolutionary data compression algorithm and decided to make a startup with his friends based on his invention. Friends had no business experience before and therefore collect all possible bumps and rakes.
Episode 1 - 17:40 - 18:40
Richard does not understand the potential of his invention, but the more experienced businessmen Gavin Belson (head of Hooli Corporation) and Peter Gregory (investor) understood everything perfectly and offer Richard two options for the development of events. Gavin offers to buy Richard’s web service along with code and algorithm rights, and Peter offers investment in Richard’s future company.
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The episode shows one way to determine investment conditions. One of the difficult moments when investing in the early stages is the evaluation of a startup. Gavin’s purchase offer gives Peter the easiest way to evaluate. If there is a buyer for the whole startup, then it is clear how much the share will cost to the investor. The dialogue is also interesting because with an increase in Gavin's offer, Peter reduces the amount of investments and his share, while remaining in the corridor comfortable for the investor by the amount of investments.
Episode 2 - 5:30 - 9:50
Richard comes to a meeting with Peter Gregory to discuss the project and investment. The first question that interests Peter is the composition of the project team and who has already allocated what shares. Then Peter is interested in a business plan, market entry strategy, budget and other documents that reflect the vision of the future business. He explains that he, as an investor, is interested in the company, not its product. An investor buys a stake in a company. For an investor, a product is a company, not its products. The investor makes the main profit when he sells his share in the company after its value rises. This principle also works in venture capital investments and in the ordinary purchase of shares in a public company or share in an LLC. Peter Gregory also voiced the following thought: “I pay $ 200,000 for 5%, but to someone you donated 10%, for what?” That is, it is expected that the person who received 10% should bring benefits of at least $ 400,000.
2 series - 12:30 - 16:40
Richard and Jared will interview Richard's friends to find out their skills and role in a future company, as well as the benefits they can bring. The thought sounds that just friends and cool dudes are not given a share in the company. Friendship is friendship, but shares in the company should reflect the usefulness of the founders for business development and their contribution to the common cause.
Episode 3 - 0:10 - 1:10
As it turned out at the end of the 2nd series, Gavin Belson (head of the Hooli corporation), whom Richard refused the deal, assembled a team for reverse engineering - restoring Richard's algorithm from the existing site and fragments of the front-end code. In parallel, Gavin launched videos with the announcement of his Nucleus data compression software platform. Richard's friends are discussing why he does this, because he still has nothing. Dinesh - a programmer from the Richard team says: "The one who gets out earlier, albeit with the worst quality, wins." He is right and wrong at the same time.
It seems that whoever first enters the market with a fundamentally new product, he has the opportunity to capture it without competition. Moreover, the product can even become a household name - like Xerox and Polaroid.
However, usually for a fundamentally new product there is no clear, formed need and you have to explain to people how good and convenient the new product is, how it improves the lives of consumers. In this direction, Gavin Belson moved with his commercial. In addition, the lack of direct competitors does not mean at all that it will be easy. Those consumers who still have a need already somehow satisfy it and are used to the existing order of things. All the same, they will have to explain why your product is better. When the tractor was invented, people have plowed bulls and horses for millennia. Therefore, the transition to agricultural mechanization took decades - there was a familiar alternative with its own merits.
Entering a market in which there are already pioneers, a startup gets a huge plus - you can study the shortcomings of existing competitors, the needs of existing users and offer them the best solution tailored to the specific tasks of a specific segment of customers. A startup cannot afford to spray products for everyone. Startups need to focus on a small target audience with a clearly expressed need.
Episode 3 - 1:35 - 3:00
Peter Gregory (investor) wrote a check in the name of Pied Piper Inc, and not personally to Richard, and in order to transfer funds, you need to register the company. This was revealed at the end of the 2nd series. Now Richard is faced with a problem - in California there is already a company with that name and you need to either agree on the redemption of the name, or change the name and ask Peter to rewrite the check (in real life there are more options, but this is a work of art). Richard decides to meet with the owner of Pied Piper Inc and arrange for a ransom of the name, if possible. The following are some comic situations.
This episode gives us such a lesson - before becoming attached to the name of a future company or product, you need to check this name for its legality (I will tell you in the comments one funny and sad story from Russian practice) and conflicts with existing brands and trademarks.
Episode 4 - 1:20 - 2:30
Richard comes to a lawyer (Ron) to sign the statutory documents as the head of the new company Pied Piper Inc (literally "motley pipe maker", in the voice acting of the series "rat-rats" or "pie-pie pipe maker" is used).
Talking with Richard, Ron says that “Pied Piper” is another project to compress data (and there are only 6 or 8 of them) in the portfolio of investor Peter Gregory.
To Richard’s question - why so many projects should be financed, Ron replies: “Turtles give birth to a horseradish cloud of cubs, because the majority dies without reaching the water. Peter wants his money to get ... ". And then Ron adds: "A successful business requires both halves of the brain." During the conversation, it becomes clear to Richard that he has no vision for the concept of a future product. He came up with an algorithm that gives advantages that can be used as the basis for the technology, but what will be the company's product? It is clear that nobody even started thinking about monetization. This situation is quite typical, because startups often have a good technical part of a solution, but there is no clear idea to who needs it, how and how much to sell it for.
5 series - 18:30 - 21:00
Jared (who is actually Donald) suggests starting to work on SCRUM to increase team effectiveness. A personal pet project can and can be cut without any methodology and tracking task, however, when a team starts working on a project, success cannot be achieved without effective teamwork tools. Briefly shows the work on SCRUM and the competition that has begun between team members for who works faster, closes more tasks and generally who is cooler. Formalization of the tasks provided a tool for measuring the effectiveness of team members.
Episode 6 - 17:30 - 21:00
The "Pied Piper" team is declared as a participant in the start-up battle and does not have time to complete its cloud-based data storage platform. Separate file processing modules of different formats are ready, but there is no cloud architecture itself, since none of the team has the necessary competencies. Investor Peter Gregory suggested using an external expert to develop code for the missing elements of the system. An expert nicknamed "The Carver" turned out to be a very young man and showed high skill in the assigned area of ​​work. The carver works for a fixed fee in 2 days. Since he managed to do his work ahead of schedule, Richard agreed to give him more tasks from another field, because this will not increase the amount of payment for services. Since Rezchik worked almost around the clock and on “substances,” as a result, a crash occurred in his brain and he ruined many of the ready-made modules. The situation is comical and perhaps not very real, but from it we can draw the following conclusions:
Also, the episode, it seems to me, shows the fragility of software systems and warns against risky changes on the eve of important events. It’s better to show less functionality, but proven and tested, than to tackle more with a high risk of sitting in a puddle and becoming disgraced.
Episode 7 - 23:30 - 24:10
The "Pied Piper" team goes to the battle of TechCrunch Disrupt startups, where they have several comical situations of a personal nature. This episode shows the pitch of another project - Human Heater. The judges ask questions and comment - “this is not safe, nobody will buy it.” The speaker begins to argue with the judges and, in support of his innocence, argues, “I’ve been working on this for 15 years.”
At least 2 recommendations can be inferred from this episode:
Episode 8 - 4:20 - 7:00
Jared tells the Pied Piper team about pivot - changing a business model or product. His further behavior is comical and shows how not to do it. In fact, he is trying to do problem interviews, but not at all right. This is the first episode in the series where someone from the Pied Piper team is trying to chat with potential users.
Over the next seasons there are several more interesting episodes on the topic of communication with customers and the most important of them, as it seems to me in season 3 of episode 9. I planned to cover only episodes of season 1 in this article, but I will tell you about this episode from season 3, because in my opinion this is the most instructive episode of the entire series.
Season 3 - Episode 9 - 5:30 - 14:00
The Pied Piper cloud platform has been launched, there are mobile applications, there are more than 500,000 registered users, but the number of users constantly using the platform does not exceed 20 thousand. Richard admits to this Monica - an assistant to the head of an investment fund. Monica decides to figure out what the problem is and organizes focus groups to study user reactions to the product. Since the product, as it were, for all people and supposedly does not require special knowledge, people from various professions (not from IT) fall into focus groups. Richard is invited to observe the discussion of his company's product with a focus group of potential users.
As it turned out, the users are “completely confused” and “goof off,” “feel dumb.” But in fact, they simply do not understand what is happening. Richard claims that the group is probably poorly matched, but he is told that this is already the 5th group and has the least hostile reaction.
As it turned out, the platform was previously shown and given to IT specialists for testing, and “ordinary people” were chosen as the target audience of the product, to whom they had not previously shown the platform and did not ask their opinion.
This episode shows a very typical mistake made by startups when feedback about an idea and then a product is not collected from the target audience for which the product is intended. As a result, the product is not bad and reviews about it are good, but not from those people who should buy it. As a result, there is a product and it is good, it was made taking into account user feedback, but there will be no planned sales, real metrics will be completely different and the economy will most likely not converge.
The series tells about the fate of Richard Hendrix - an American programmer who invented a new, revolutionary data compression algorithm and decided to make a startup with his friends based on his invention. Friends had no business experience before and therefore collect all possible bumps and rakes.
Episode 1 - 17:40 - 18:40
Richard does not understand the potential of his invention, but the more experienced businessmen Gavin Belson (head of Hooli Corporation) and Peter Gregory (investor) understood everything perfectly and offer Richard two options for the development of events. Gavin offers to buy Richard’s web service along with code and algorithm rights, and Peter offers investment in Richard’s future company.
')
The episode shows one way to determine investment conditions. One of the difficult moments when investing in the early stages is the evaluation of a startup. Gavin’s purchase offer gives Peter the easiest way to evaluate. If there is a buyer for the whole startup, then it is clear how much the share will cost to the investor. The dialogue is also interesting because with an increase in Gavin's offer, Peter reduces the amount of investments and his share, while remaining in the corridor comfortable for the investor by the amount of investments.
Episode 2 - 5:30 - 9:50
Richard comes to a meeting with Peter Gregory to discuss the project and investment. The first question that interests Peter is the composition of the project team and who has already allocated what shares. Then Peter is interested in a business plan, market entry strategy, budget and other documents that reflect the vision of the future business. He explains that he, as an investor, is interested in the company, not its product. An investor buys a stake in a company. For an investor, a product is a company, not its products. The investor makes the main profit when he sells his share in the company after its value rises. This principle also works in venture capital investments and in the ordinary purchase of shares in a public company or share in an LLC. Peter Gregory also voiced the following thought: “I pay $ 200,000 for 5%, but to someone you donated 10%, for what?” That is, it is expected that the person who received 10% should bring benefits of at least $ 400,000.
2 series - 12:30 - 16:40
Richard and Jared will interview Richard's friends to find out their skills and role in a future company, as well as the benefits they can bring. The thought sounds that just friends and cool dudes are not given a share in the company. Friendship is friendship, but shares in the company should reflect the usefulness of the founders for business development and their contribution to the common cause.
Episode 3 - 0:10 - 1:10
As it turned out at the end of the 2nd series, Gavin Belson (head of the Hooli corporation), whom Richard refused the deal, assembled a team for reverse engineering - restoring Richard's algorithm from the existing site and fragments of the front-end code. In parallel, Gavin launched videos with the announcement of his Nucleus data compression software platform. Richard's friends are discussing why he does this, because he still has nothing. Dinesh - a programmer from the Richard team says: "The one who gets out earlier, albeit with the worst quality, wins." He is right and wrong at the same time.
It seems that whoever first enters the market with a fundamentally new product, he has the opportunity to capture it without competition. Moreover, the product can even become a household name - like Xerox and Polaroid.
However, usually for a fundamentally new product there is no clear, formed need and you have to explain to people how good and convenient the new product is, how it improves the lives of consumers. In this direction, Gavin Belson moved with his commercial. In addition, the lack of direct competitors does not mean at all that it will be easy. Those consumers who still have a need already somehow satisfy it and are used to the existing order of things. All the same, they will have to explain why your product is better. When the tractor was invented, people have plowed bulls and horses for millennia. Therefore, the transition to agricultural mechanization took decades - there was a familiar alternative with its own merits.
Entering a market in which there are already pioneers, a startup gets a huge plus - you can study the shortcomings of existing competitors, the needs of existing users and offer them the best solution tailored to the specific tasks of a specific segment of customers. A startup cannot afford to spray products for everyone. Startups need to focus on a small target audience with a clearly expressed need.
Episode 3 - 1:35 - 3:00
Peter Gregory (investor) wrote a check in the name of Pied Piper Inc, and not personally to Richard, and in order to transfer funds, you need to register the company. This was revealed at the end of the 2nd series. Now Richard is faced with a problem - in California there is already a company with that name and you need to either agree on the redemption of the name, or change the name and ask Peter to rewrite the check (in real life there are more options, but this is a work of art). Richard decides to meet with the owner of Pied Piper Inc and arrange for a ransom of the name, if possible. The following are some comic situations.
This episode gives us such a lesson - before becoming attached to the name of a future company or product, you need to check this name for its legality (I will tell you in the comments one funny and sad story from Russian practice) and conflicts with existing brands and trademarks.
Episode 4 - 1:20 - 2:30
Richard comes to a lawyer (Ron) to sign the statutory documents as the head of the new company Pied Piper Inc (literally "motley pipe maker", in the voice acting of the series "rat-rats" or "pie-pie pipe maker" is used).
Talking with Richard, Ron says that “Pied Piper” is another project to compress data (and there are only 6 or 8 of them) in the portfolio of investor Peter Gregory.
To Richard’s question - why so many projects should be financed, Ron replies: “Turtles give birth to a horseradish cloud of cubs, because the majority dies without reaching the water. Peter wants his money to get ... ". And then Ron adds: "A successful business requires both halves of the brain." During the conversation, it becomes clear to Richard that he has no vision for the concept of a future product. He came up with an algorithm that gives advantages that can be used as the basis for the technology, but what will be the company's product? It is clear that nobody even started thinking about monetization. This situation is quite typical, because startups often have a good technical part of a solution, but there is no clear idea to who needs it, how and how much to sell it for.
5 series - 18:30 - 21:00
Jared (who is actually Donald) suggests starting to work on SCRUM to increase team effectiveness. A personal pet project can and can be cut without any methodology and tracking task, however, when a team starts working on a project, success cannot be achieved without effective teamwork tools. Briefly shows the work on SCRUM and the competition that has begun between team members for who works faster, closes more tasks and generally who is cooler. Formalization of the tasks provided a tool for measuring the effectiveness of team members.
Episode 6 - 17:30 - 21:00
The "Pied Piper" team is declared as a participant in the start-up battle and does not have time to complete its cloud-based data storage platform. Separate file processing modules of different formats are ready, but there is no cloud architecture itself, since none of the team has the necessary competencies. Investor Peter Gregory suggested using an external expert to develop code for the missing elements of the system. An expert nicknamed "The Carver" turned out to be a very young man and showed high skill in the assigned area of ​​work. The carver works for a fixed fee in 2 days. Since he managed to do his work ahead of schedule, Richard agreed to give him more tasks from another field, because this will not increase the amount of payment for services. Since Rezchik worked almost around the clock and on “substances,” as a result, a crash occurred in his brain and he ruined many of the ready-made modules. The situation is comical and perhaps not very real, but from it we can draw the following conclusions:
- do not be greedy and trust the temporary employees more than what has been agreed and what they really understand.
- you should not give employees more access rights and authority than is required to perform their tasks, especially temporary employees.
Also, the episode, it seems to me, shows the fragility of software systems and warns against risky changes on the eve of important events. It’s better to show less functionality, but proven and tested, than to tackle more with a high risk of sitting in a puddle and becoming disgraced.
Episode 7 - 23:30 - 24:10
The "Pied Piper" team goes to the battle of TechCrunch Disrupt startups, where they have several comical situations of a personal nature. This episode shows the pitch of another project - Human Heater. The judges ask questions and comment - “this is not safe, nobody will buy it.” The speaker begins to argue with the judges and, in support of his innocence, argues, “I’ve been working on this for 15 years.”
At least 2 recommendations can be inferred from this episode:
- in preparation for public speaking, it is worth making training runs in front of people unfamiliar with the project, and hearing questions and objections in order to prepare for them;
- the reply to the objections must be convincing, the arguments must be factual, the manner of the answer must be polite and respectful.
Episode 8 - 4:20 - 7:00
Jared tells the Pied Piper team about pivot - changing a business model or product. His further behavior is comical and shows how not to do it. In fact, he is trying to do problem interviews, but not at all right. This is the first episode in the series where someone from the Pied Piper team is trying to chat with potential users.
Over the next seasons there are several more interesting episodes on the topic of communication with customers and the most important of them, as it seems to me in season 3 of episode 9. I planned to cover only episodes of season 1 in this article, but I will tell you about this episode from season 3, because in my opinion this is the most instructive episode of the entire series.
Season 3 - Episode 9 - 5:30 - 14:00
The Pied Piper cloud platform has been launched, there are mobile applications, there are more than 500,000 registered users, but the number of users constantly using the platform does not exceed 20 thousand. Richard admits to this Monica - an assistant to the head of an investment fund. Monica decides to figure out what the problem is and organizes focus groups to study user reactions to the product. Since the product, as it were, for all people and supposedly does not require special knowledge, people from various professions (not from IT) fall into focus groups. Richard is invited to observe the discussion of his company's product with a focus group of potential users.
As it turned out, the users are “completely confused” and “goof off,” “feel dumb.” But in fact, they simply do not understand what is happening. Richard claims that the group is probably poorly matched, but he is told that this is already the 5th group and has the least hostile reaction.
As it turned out, the platform was previously shown and given to IT specialists for testing, and “ordinary people” were chosen as the target audience of the product, to whom they had not previously shown the platform and did not ask their opinion.
This episode shows a very typical mistake made by startups when feedback about an idea and then a product is not collected from the target audience for which the product is intended. As a result, the product is not bad and reviews about it are good, but not from those people who should buy it. As a result, there is a product and it is good, it was made taking into account user feedback, but there will be no planned sales, real metrics will be completely different and the economy will most likely not converge.
Source: https://habr.com/ru/post/461035/
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