10 STRATEGIES FOR
10 ways to get
funding, build a
product, and thrive,
from a CEO who’s
Hello, I’m Jason Nazar, the co-founder and CEO of Docstoc. The reality is, once you start your own company, the
We help entrepreneurs start and grow their business by providing uncertainties only grow. How do you ﬁnd the right co-founder?
useful documents, articles, videos and other resources. Get funding to build your product? Hire the best employees? Get
Docstoc is one of the 500 most visited websites on the your ﬁrst set of customers?
internet, and over half a billion people landed on our website at The two things I want to avoid here are boring you, and
some point in the last four years. I raised $4 million to grow sugarcoating entrepreneurship. I will do my best to capture both
Docstoc into a proﬁtable business, and have spent a lot of time the challenges and the rewards of starting your own company.
helping others do the same. Many people are attracted to the idea of building something
I’ve done hundreds of lectures on how to raise money, pitch they love, gaining recognition and earning money. But there is
a business plan, grow and track revenue. My goal today is to always trade-off. For me, it’s worth it to wake up and go to an
combine all of my presentations and ideas into one ofﬁce of 50 amazing employees who care about Docstoc as
comprehensive guide on how to be successful in the startup much as I do. There’s a sense of purpose that comes from that
world. feeling, one you can’t ﬁnd anywhere else in life. If you’re ready to
Wherever you are in the process of starting your own ﬁnd that serenity, this is a good place to begin.
business, I’ve been there. Many of you want to start your own These are 10 important strategies I developed over the last 6
company, but you’re not sure how to do it. You may be scared to years of building a proﬁtable business. Hopefully they can help
leave your job, or fear all of the struggles that lie ahead. you build a company you’re equally as passionate about.
Edited/designed by Rochelle Bailis
Ideation: The Entrepreneur’s Dilemma
The ﬁrst step towards success is meaningful
ideation, or the creation of ideas. When it comes
to an idea, most entrepreneurs face a perpetual
battle between dedication and ﬂexibility.
Let me explain. There is a mythology around
entrepreneurs that brands them as persistent
visionaries. They are pegged as individuals who
see things nobody else can, and stick to their
ideas even under harsh scrutiny. Some famous
examples include Steve Jobs and Walt Disney.
Back in the 1940’s Walt Disney had a vision for
an amusement park called Disneyland, a magical
land of puppet animals named after him. People
initially thought he was crazy, but he was
persistent in his dream and it became one of the
most iconic theme parks and brands of our time. Vision or
On the other side of the coin, it’s well-known Versatility?
within the startup community that most
businesses will fail unless they are willing to pivot.
For example, both Groupon and Twitter, some of
the most prominent websites today, didn’t start
out as the same service they currently are. They
were struggling, and had the foresight to switch
How do you balance these two conﬂicting drives,
to be loyal to your idea but able to change
direction before going under?
My suggestion is to stay attached to the problem you are trying to solve but be very ﬂexible about the
solutions to solve it.
If there is a problem that has yet to be ﬁxed, there is an opportunity for business. Stay loyal to the issue, without
letting your ego get too caught up in your solutions.
I’ve come up with plenty of terrible solutions for very important
problems, and only through trial and error did I ﬁnd out which ones
“Stay attached to the worked.
problem you are trying You will come up with plenty of terrible solutions. I know that I did,
and it took me years of constant trial and error to see how bad they
to solve but be very were. At that point I could ﬁnally cool down my ego enough to take
ﬂexible about the feedback from people who want to alter or criticize my solutions.
solutions to solve it.” If you are ﬁxated on an important problem and willing to be ﬂexible on
how to solve them, you will allow room for improvement without
losing sight of your purpose.
The 4 P’s: People, Product, Process and Passion
Unless you already exited a company for a lot of
People with a
money, I don’t know any sophisticated investor
that will invest in your company without a
product already built. Some investors don’t want
to hear a pitch at all, they just want you to hand
them a computer and let them play around on your
Brian Lee, the
website. They want your product to speak for
You will need to raise enough money to build a
product and show people, whether it’s through seed
raised 27 million
capital, loans or scrounging your savings. If you’re
dollars for The
incredibly strapped, at the very least get a designer,
Honest Company in
build out slides and mock up something investors can
click through to get a feel for what the product will be like.
Jessica Alba, is
because he is one of
the most successful Progress Passion
town. Getting somebody to give you Passion by itself will not raise you money.
People with a track money is about overcoming inertia—by But it can be the x-factor that pushes
record of success, which I mean, the investor’s inertia to you over the bar when the investors are
whether starting or write you a check. You must create on the fence. Imagine how passionate
working within a good the momentum by showing them you are about the most important thing in
company, have a meaningful progress. your life—now be twice as passionate
higher likelihood of I’ve always had a fool-proof formula about your business when you are
getting angel to raise money for your companies, pitching it to investors.
investment from the and it’s all about setting and
get-go. exceeding expectations.
Even if you’ve When you have the product, but
never started your don’t need further investment just yet,
own company, go to an investor and tell him, “I don’t When we started Docstoc, I’d
remember that want anything, I just wanted to show never raised money before,
investors are you what I’m working on. I’m but was able to pull half a
investing in you, ﬁrst developing this product, what do you
think? I am going to complete a million dollars in 45 days. I
and foremost. Before
diving into a prototype in the next 3 months.” could only do that that
description of your And whatever you do, make sure because I spent years building
product, take a that you complete it in less time. Go up relationships with
minute to explain back in 2 months and say, “Remember investors, knowing that one
your background; how I told you I’d ﬁnish this in 3
months? Well, I did it in 2 months, and I day I would ask these people
who you’re working
with, and things also accomplished this extra thing.” for money. If you have not
you’ve done that are You repeat this, returning to them for done that, start now. Tell
directly applicable to feedback and updates a couple of people what you are going to
what you plan to do. times, and they will see a person who accomplish, and let them see
If you can’t sell they can trust to get things done. That
is the process you go through to build you do it, multiple times over.
yourself, you won’t
be able to sell your trust that you would otherwise have to
product. build over several years.
Building a Team: Three Golden Rules
I require my I make sure to let new employees know that at
employees be the Docstoc we work harder than everybody else. If the
best at what they company next to us is working 10 hours a day, we
do. I want new are going to work 12. If they are working 12, we are
employees to going to work 15. If we want to beat the
know that that’s competition, we need to put in the effort to do so.
why I chose them, Trust Your Instincts
and that they will
be working with
others who also Of course, you may develop
Don’t hire assholes. There should be no bad your own standards. What’s
maintain a high
seeds in your company; employees need to trust important is that you stick
each other in order to succeed.
excellence. to them, without making
exceptions. Sometimes in an
interview, especially when
you’re desperate to ﬁll a
Inspiring Excellence: Classroom to the Ofﬁce position, you’ll start making
There’s a great story about the New York school system that
exempliﬁes the power of a driven culture. A school principal But whenever you hear a
gathered a group of teachers and told them, “You are my best voice in the back of your
teachers, and I have a project for you. I’m going to give each of head telling you “This is not
you a group of C students, but we’re going to tell them that they’re going to work out,” don’t
A students throughout the year. You’re all such good teachers, I
believe that simply by telling they’re A students and pushing them, dismiss it. You might need
you will make them exceptional students.” this person in the short
term, but this decision will
The teachers were hesitant about this method, but agreed to give it always come back to you.
a shot. Throughout the year they told the C students that they were
the brightest students in the class. Every single time I was
As the principle predicted, those students outperformed all the desperate to ﬁll a position
other students in the class, even though they were actually in the and hired somebody in spite
middle of the bottom pack. of suspecting they might not
meet our standards, they
At the end of the year, the principal had a party for the teachers to
celebrate their success. The teachers praised the principal for his didn’t last. In the long run,
idea of pairing the average students with the best teachers. The not trusting my instincts
principle then pulled them aside and said, “I’m very proud of what was a negative opportunity
you’ve done, but just so you know, you were actually the middle of cost to my company.
the lower pack of the teachers. I just told you that you were the
best.” I don’t want to compromise
with my team, but instead
Something very special happens when you set an expectation of
greatness: people will subconsciously live up to it, and will push set a collective
themselves beyond what they thought was possible. When hiring, if consciousness of quality
you set an expectation of excellence with people who are already that will be contagious
high achievers, you create an incredible company where the sum amongst my employees.
of the parts is much greater than the whole.
Getting Customers: Put the Big Rocks First
Years ago a man named Stephen Covey, the He looked intently at the audience. “What was
author of The Seven Habits of Highly Effective this exercise all about?” he asked.
People, did a famous seminar in front of a
massive audience. He placed a big glass jar next Someone yelled out, “You can always get more
to a pile of large rocks for everyone to see. He out of your day, and squeeze a little more in.”
ﬁlled the glass jar with the rocks until it was full, “No,” Stephen responded. “The point was to
and turned to the audience. demonstrate why you should put your big rocks
“Can we ﬁt anymore rocks?” he asked. in ﬁrst. If you don’t, you’ll never be able to ﬁt
Everyone answered, “No!”
For entrepreneurs, the big rock is almost always
He pulled out a bag of gravel and poured the getting customers. Because it’s the hardest,
gravel so that it ﬁlled in the spaces around the largest, and most fundamental issue they face,
larger rocks. most founders avoid it. This is a fatal mistake.
Once you have those customers, you can ﬁll in
He held up the jar once again and asked, “What the gaps, and work with what you
about now? Can we ﬁll up the jar even more?” have. But that ﬁrst big
The audience answered more uncertainly this rock will be
time, “I guess so.” the
He produced a bag of sand, and ﬁlled the ﬁne load to
grains of sand around the gravel and rocks. lift.
“What about now?” He asked. “Do you think we
can ﬁll it up even more?”
The audience sounded doubtful. “Maybe…”
Stephen then lifted a large pitcher of water, and
poured it in the jar around the sand, gravel and
rocks, and lifted it up for the audience to see.
The Pareto Principle the big rocks
ﬁrst to reach
Another important tool for understanding customer acquisition is the Pareto
principle. It states that 20% of our efforts lead to 80% of our results. But the top
when you’re working in a startup, the effort-to-results ratio is even more extreme
than 20/80, it’s 1/99. One big thing you accomplish will lead to 99% of the success
your company needs to reach the next metric. I come into work every day and write down the one
most important thing that, if I accomplish this day, week, or month, will make the biggest
difference in my company.
Most of the time, people spend very little time working on the most important thing they need to
tackle. Why? Because it’s so damn hard. It’s the greatest challenge, and it takes the most energy.
So instead, people write a long list of small things to do that will ﬁll up our day and be easy to
check off. “Today I posted on Twitter, I organized my desk, I did laundry... I did all these small
things that make me feel accomplished but made no difference in my business whatsoever.”
Don’t make a long list. Just focus on that one goal, and put all your efforts into it. It will be difﬁcult
at ﬁrst, but this is the only way to make big changes that will elevate your business to the next
Online Trafﬁc: Paid Marketing and 7 Free Ways
A big issue most entrepreneurs overlook is how
they’re actually going to get users. Ask yourself
When you ﬁrst start out
from day one: are you actually going to get
and don’t have money for
people to show up on your page and use your
a PR ﬁrm, you need to get
application, your product, your service?
your own press. This
Many new websites create a product, decide to takes persistence, by
spend X amount driving trafﬁc to their website, which I mean spending
and then hope it goes viral from there. weeks or even months
You can only sustain the cost of AdWords,
afﬁliate marketing or other trafﬁc driving ads if Michael Arrington, the
you have a positive return on investment (ROI) founder of TechCrunch,
to sustainably draw from. Most new companies wrote about Docstoc four
can’t spend money driving trafﬁc forever. times before we even
launched our site. Why?
Over the years I’ve come across 7 free way to Because I built a personal
drive trafﬁc to your site. I’d suggest developing relationship with him.
as many of these approaches as you can, so
that you’re not depending on one source for When I was back in law
driving users. school, I skipped one of
my ﬁnals when I heard he
was going to a party. I
crashed the party, and
approached him. From his
1. Search Engines perspective, I probably
came off as a stalker. But
Improving SEO is the ﬁrst challenge you can take on with a high potential for I stuck around, bought
driving trafﬁc. drinks for his group of
friends, and didn’t leave
At Docstoc there are 20 million people a month that actually type in the url until I could have a nice
“docstoc.com”. The other 20 million people enter queries for documents or conversation with him and
resources on search engines like Google, Yahoo or Bing. build a rapport. I worked
on building a relationship
I didn’t realize when we ﬁrst launched Docstoc that we would be a search-
with him until he was
based company. But after seeing a strong correlation between the amount of
willing to look at what I
trafﬁc we pulled and how quickly our resources were increasing, I realized that
did, and eventually write
growth couple be exponential.
The more content we had, the more trafﬁc we brought in. So the only metric that was
The single best way to
important to us that ﬁrst year was growing the number of documents in our library.
get journalists to pay
In the beginning our content was provided by our users, so we would run attention to you is to
contests for users to upload more documents. We built in features and follow them. Go to their
incentivized uploading, and leveraged our community. We looked for content in publicly blog, post comments,
available sources. We made deals. We did whatever we could to grow our library. re-tweet their log, reach
out to them and start a
You can also leverage the power of search engines outside of Google. We conversation. Don’t ask
applied the advantage of search to the app store, by creating thirty free apps for anything, just
with valuable titles that people are searching for. Now when someone searches interact with them and
in the app store for “how to get a job” or “employee management” we rank the help them out. After 6
highest in those search results. months, you’ll have built
up enough equity.
3. Social Media 4. Partnerships & Deals
Simply creating a Facebook and You can always ﬁnd a way to make
Twitter account before you someone drive trafﬁc to your site. Find a
have any followers probably Viral Video value proposition you provide that
won’t generate you new The Dollar Shave Club was a they don’t have, that’s worth them
trafﬁc. small startup with the great idea of sending trafﬁc your way.
shipping razors directly to men’s
Try using social media You don’t need a huge, successful
homes for a dollar. All they needed
outlets that start was to be discovered. So they created company to get the big guys to pay
conversations and have and shared a short, hilarious video all attention to you. In the startup
viral potential. At across the internet, and it went viral. world, more than any other industry,
Docstoc, we got trafﬁc This genius piece of marketing pulled people will work with you just
through posting on link over 4 million hits on YouTube, and because they like you.
was just what they needed to
aggregate sites like Digg, I’m willing to make a bet on
generate an explosive
Reddit and Stumbleupon. I partnerships with smaller startups if I
number of regular
also know of major publishers customers. like their founder and I see them working
that are driving a million unique hard. There’s no other industry like the
visitors from LinkedIn referrals. web, where you can leverage your own
personality to get people to build things with you.
5. Refreshing Content
6. Solve a Compelling
If your product or application doesn’t have refreshing content, it doesn’t Need
give people a reason to come back.
Docstoc used to be a very transactional based experience; people visited This one is pretty straightforward,
our site when they needed a document, then they left. In order to retain and possibly the hardest one to
users, we started creating original expert videos and articles, so that once accomplish. If you manage to ﬁnd
they arrived for a product, they’d stay for original content. an undiscovered solution to a
compelling need, this will often
sell itself through word of mouth.
7. Viral Loop
A viral loop draws in customers, retains them and
motivates them to return to the website frequently.
A great way to galvanize a viral loop is not only
bringing customers back, but turning them into
The most classic example of this was LinkedIn in 2003,
when it was still fairly unknown. Back then I was in business school, and I created an account on LinkedIn. While
searching the site, I saw another user who had over 500 connections on LinkedIn, and had a little badge next to
his name designating him as a special user.
I wanted a badge too, so I exported my 800 contacts stored on Outlook and sent them all a message to join my
LinkedIn network. A meaningful percentage of my contacts that day that signed up for LinkedIn. And many of them
probably sent invites to their contacts, sparking a chain of outreach that drove tens of thousands of users from my
LinkedIn had turned me into a user marketer, who brought them an exponential boost in trafﬁc for free.
Monetization: Grow and Track Online Revenue
Making money on the web is simply At Docstoc, people pay us $20 a month for unlimited
access to our documents. This wouldn’t work if we
a matter of ﬁguring out how to get a had a thousand customers. Instead, we have millions
of customers who spend a little amount of money.
lot of people to give you a little bit Once a product is created, it doesn’t cost anything to
of money for a product or service maintain, and since our subscriptions are virtual
there’s no distribution cost.
that has no incremental cost of That’s the magic of the internet. You can create a
goods and no distribution cost. business that will reach a lot of people with very little
cost of goods and distribution.
When to Start Charging Try Charging
You might come up with a niche concept that’s difﬁcult to sell to investors. If you are for Everything
having a difﬁcult time raising money, or think you will, start charging right away.
The mistake a lot of entrepreneurs make is they planning scale and then monetize entrepreneurs are
without the funding to sustain this model. If at some point you’ll have to stop building scared to charge.
out your product because you’ll be out of money, you’d better start charging for your You'll be surprised
product from day one. what people are
willing to pay for.
If you do have the funding to scale, work on building a great product that you can
charge for once you have the trafﬁc. If executed properly, you may be able to make Test different prices.
more than if you start charging right away. You don’t know what
your product is worth
Facebook can make a lot of money off simple advertising today because they have
until you know what
almost 900 million users. This was the case at Docstoc as well; if we started charging for
someone’s willing to
documents from day one, we never would have scaled to the size we are now.
pay for it.
If it Works, Focus on it
If you ﬁnd something that works, don’t be
afraid to dig your heels in. A common mistake
entrepreneurs make is they ﬁnd something
that starts to work and instead of going as
deep as they can into that technique they
look for more. If you ﬁnd a way to bring in
revenue, put your energy into getting better
At Docstoc, the ﬁrst month we ever made
$500 off AdSense a light bulb went off in my
head. I saw a path of proﬁtability, and started
down that road. We placed AdSense
everywhere, and tested and optimized
constantly. This generated us enough revenue
to sustain ourselves, and after two years we
didn’t need funding. Once we accomplished
that goal, we were able to look at other
Business Development: 10 Tips for Better Biz Dev
1. Get Warm Introductions 2. Deal With the Decision Markers
If possible, meet someone through a mutual Your goal is to speak with the person who makes the
connection so you can establish legitimacy and decisions, whether you can do it immediately or are
familiarity. Be friendly; if the person likes you working your way to them. Figure out who that person
immediately this will take you a long way. is, and don’t be afraid to ask for them.
3. Only Pansies Aren’t Prepared 4. ASK, Don’t Talk
This seems like a no brainer, but prepare The single biggest mistake I see is that people don’t
thoroughly before speaking with someone about know when to be quiet. The best business growth
biz dev opportunities. Take time to do research on comes from people who know how to listen to
their company and their business, lay out ways people’s needs and cater to them.
that you can beneﬁt them speciﬁcally.
5. Provide as Little Information as Possible
The reason you provide the bare bones of information is it gives
you the chance to hook a person. You’ll often need to get past
a person who sifts through offers and decides whether to
pass them on to the decision maker. They’re used to blowing
people off. But a minimal description implies that you’re too
busy to push them desperately, and also might
pique their interest to know more.
6. A Picture is Worth... development is all
Don’t look like a slob. You don’t need to put about preparation
on a full suit or try to over-impress, but and persistence
looking like a casual business professional will
give the right ﬁrst impression.
7. Manage the Follow-Up Process 8. Please, Persistence and Pressure
In social situations, you stop reaching out to people if Always remain pleasantly persistent in moving the
they don’t respond to you. Business is not like this. deal forward. Oftentimes you need to not only be
You need to continue pursuing somebody until you relentless, but walk them through every single step.
get a hard “no” or they agree to meet you. They Don’t wait for someone else to move things along.
might express interest in the meeting, but particularly You can avoid sounding like a nagger by asking the
for the busier professionals you will need to be the person if it’s okay to send them a reminder in a couple
one to take the lead on following up. days if you don’t hear back.
9. Keep Up Excitement Until Closing 10. The Sale Begins After the Deal Ends
Your enthusiasm will be half the battle. Until an Remember, you can’t give up after you’ve closed a
agreement is made, maintain excitement about the deal. This is your chance to impress, and a stepping
mutual beneﬁts you will both receive. stone for garnering the interest of other potential
Strategy: Four Factors to Factor
The word “strategy” is tossed around a lot in the Every company has a start and end, a ﬁnite life.
business community, and has become somewhat of Each step you take has an opportunity cost.
a ﬂuff word in my opinion. Strategy is simply the
We don’t know what that timeline is right now, but
best way to achieve a set of results. Strategy in
it’s limited. Most entrepreneurs hope that, by the
itself holds no value, it’s a means to an end. A lot of
end of their company’s life, they’ve helped people,
board members or advisors will suggest different
made some money, and possibly have liquidity that
“strategies” for your company, but many of their
creates value for the Co-Founders, their
ideas will sound great without bringing about a
shareholders, and their employees.
The single biggest variable that increases the
At Docstoc we have a matrix for making decisions,
likelihood of having a positive outcome is the
to conﬁrm they are worth our time. Believe it or not,
number of iterations made along the way. Every
the most precious resource that you have is not
decision you make will affect your path, and these
money, or customers, or even your own
are the four factors that we use at Docstoc to judge
intellectual capital. It’s time.
whether they will be constructive for our company.
1. Potential Upside 2. Likelihood of Success
A lot of entrepreneurs spend too much time on To balance out “potential upside” there is the
tasks that, even when accomplished, won’t likelihood of success factor.
make a meaningful difference for their Sure, if you share your product on Oprah it will
business. take off. But what’s the likelihood of that
If there isn’t a signiﬁcant potential upside, you actually happening? In cases like these, it’s not
shouldn’t be wasting your time on it. You need worth the amount of time you’re going to invest
to be growing quickly, and tackle projects with unless you have a connection or jumping off
a large possible gain. point. Aim big, but use your judgment.
3. Effort Involved 4. Strategic Value
When the potential upside is big, many young Strategic value is simply bringing all three
startups will miscalculate the effort involved. previous factors together, and evaluating
Effort involved is something that you will gauge whether the decision is strategic.
better through practice, and is important to Is it worth your time in the short and long
assess every time. You must be able to weigh term? How will it help you build out your
whether the effort involved will be worth the core mission?
Managing a Board: Setting Expectations
The sales process does not end when you raise Let’s say I promise $100 million in revenue and
money. It begins. It’s after you get somebody’s deliver $80 million, versus promising $70 million and
money that you must demonstrate value and build delivering that same $80 million. The $80 million
trust. hasn’t changed, but I’m the hero if I bring in $10
million more than predicted.
Why? Because these people have preferred shares
in your company, and will therefore have the right to My board members always joke that I am the only
dictate some of your decisions. These are also the CEO they know who promises a certain amount of
people that will reinvest in the next round of your growth, and over-delivers every single time. I have
company when you need enough capital to solidiﬁed the conﬁdence of my board members by
continue growing. managing their expectations.
My approach to building trust with board
members is simply to over-deliver,
every time. Whatever annual revenue I
project Docstoc will achieve, I tell my
board we’ll accomplish 20% less. I
keep a separate team plan and board
plan, and push our team for higher
goals than I set in the board meeting.
The Unintended Consequences of Startups
The ﬁnal point I’m going to make is about the life of health, and strong friendships. You get a startup
a startup founder. Don’t doubt for a second that and one other thing – that’s the rule. You can’t
your business will take over your life. Docstoc has have a startup and be in a relationship, stay in
become completely intertwined with my identity, shape, see your children all the time and stay in
and that comes with its ups and downs. touch with extended family. Choose one.
The startup world has an understandable allure. Balance comes with time, after you make the big
You have the opportunity to create a company sacriﬁces. The decisions you make will have
born of your own passion, and make money doing consequences, so be sure you believe in them. It
it. That all sounds well and good, but what people bothers me that more people aren’t brutally honest
don’t tell you is that your friends will stop calling. about this fact, because every entrepreneur goes
Really, my friends gave up on me because they through it.
know I wouldn’t respond. I also gained 40 pounds,
In spite of it all, I knew it was what I had to do. I’ve
and neglected my family. I couldn’t sustain any
always felt like I was destined to be special, to live
relationships, and spent a lot of time by myself.
a different life from the daily grind. If you’re like me,
For the ﬁrst two years of Docstoc, I worked 16 you will ﬁnd a sense of congruence, passion and
hours a day, and spent all of Saturday just peace of mind from running your own business,
recovering. Honestly, if I’d known how hard it one that you will never be able to ﬁnd anywhere
would be, I might not have done it. So here’s one else.
last piece of information I leave you with. It’s not a
Obviously you’re reading this, so you’re interested.
tip, but more of a fact:
There is never a “right time” to start your own
You can’t a start a company and maintain a company. All that you need to do is take that ﬁrst
rewarding personal life, a good marriage, great step.