http://www.youtube.com/watch?v=FqrRSsvZNNU
I highly recommend watching this video about Adam Smith’s startup experience at Xobni but here are a list of highlights for those in a hurry.

OVERVIEW SUMMARY:

• Networking: Adam emphasizes networking in order to build your team, attain funding, and expand business opportunities.
• Financing: He promotes using ones money wisely but has probably received more financial backing then the average entrepreneur.
• Product development: The product doesn’t have to be perfect, you just have to be conscious of where it stands in the eyes of the consumer and be nimble and smart enough to learn from your mistakes in order to move on to your next attempt.

(Notes are written in the order they appear in the video)
NETWORKING: To get funding.
At first Adam networked with everyone. He connected with a professor at MIT who happened to be a partner at Y Combinator (ycombinator.com).  Adam was given $12k in funding for equity in his new company.

NETWORKING: To build a team.
In order to find people to work with, Adam’s approach was to “shake the friend tree”.  He spoke with the smartest people he knew and managed to convince one friend to cancel his plans and start the company with him.

SMART MONEY (FRUGLE): Setting up office space.
The office was set up near Harvard Square in an apartment. The third bedroom was sublet and Adam was resourceful with his spending on furniture.  He  bought $35 desks from Goodwill and folding chairs from Costco.

FUNDING:  Building a team.
After managing to raise $80K from various angles the team decided to move to out west. Once there, after setting up in a nice apartment, Xobni managed to raise $4M in round A fundraising which they used to build a team hiring a new employee every month.

PRODUCT DEVELOPMENT & QUALITY: Receiving feedback and executing.
Product debuted in 2007 and although it wasn’t perfect (issues and bugs) it received market feedback and coverage. Adam states that the goal is to reach the Product Market Fit where they created a product people wanted for a market that existed. Before product market fit the team remained smaller. After reaching that point they choose to scale up. Once product market fit was reached it was a case of “brutal, raw, execution”.

COMPANY POLITICS: Working with a small team.
Since the company was so small everyone knew what everyone else was doing in “painstaking detail”. This environment makes the company more nimble, creative, and energetic.

(Google was used as an example in that it took them from 1998-2004 to go from Product Market Fit to IPO)

WORK ETHIC: Working at a startup.
At first they worked all available hours 7 days a week however Adam believes that this was too much.

DECISION MAKING: Product and company direction.
Their first product was an analytical tool that wasn’t used frequently and therefore did not create as much value to corporate and private users as he would have liked. A segment, management consulting, loved the product. Xobni was faced with the choice of whether to go towards enterprise email analytics or to do something completely different. They chose to do something different. Companies have to be nimble and learn from their mistakes in order to move to the next phase in their evolution.

PRODUCT RE-DESIGN AND DEVELOPMENT: Created new product for Outlook (sidebar)
Xobni decided to create a sidebar for Outlook. It was received with open arms and good coverage. However, at the time they didn’t know if they were going in the right direction. Adam Re-emphasized that the most important thing is to be nimble.

Q&A:

Question:  How to execute well?
Answer:

• Hire good people who are smart and can get things done. “Fire and forget” because they can be their own project manager.
• External deadlines are very useful. Work fills the time it is allotted. If you want to get something done quickly, create a deadline that you can’t control, like signing up for a conference.
• Always do something. Be active and just do it. Otherwise, you’re not experimenting enough. Big companies have to be more careful here.
• Expect one quarter of projects to fail. If everything works, means you’re not taking enough risks or being ambitious enough.
• Focus only on what the user needs now.
• Have lots of experiments but strategically focused. Yahoo is spread too thin. Apple is a great example of focus.
• Learn how to use outside resources. If you’re not good at something find someone who is (contractors for specific projects).
• Build DNA as a company. Hire diverse personnel that can offset your strengths and weaknesses. Don’t get people like yourself.
• Hit the high notes:  focus on what you do really well.
• 90% of execution is persevering when everyone else gives up. Don’t give up.

Question: Audience member has a “hot product” and wants to know (a) the angel investing environment now and (b) how Silicon Valley compares with Boston.
Answer:
The economy has forced many into entrepreneurship (“vibrant”) and as a result investors are actively looking for good deals. Adam believes the West Coast is geared towards startups especially with the networking opportunities. There are advantages to being there.

Question: What do you have for startup reading?
Answer:

1. Founders at Work by Jessica Livingston
2. High Stakes No Prisoners by Charles Ferguson
3. Paul Graham’s essays

Contact info:
adam@adamsmith.cc
blog.adamsmith.cc
@asmith (twitter)