Chop Wood; Carry Water

I recently sat down for a great lunch conversation with Nick Soman, a founder friend of mine here in Seattle.  Nick is the founder and CEO of LikeBright and a TechStars graduate.

As we were reminiscing about the founder life he said something quite profound.

Chop Wood; Carry Water.

It’s obviously a nod to early times in society where life depended on staying warm and keeping hydrated.  People couldn’t just hide in their cave if something went wrong, they would eventually die.  Or if successful, they couldn’t just rest on their laurels when something went right.  Simply put, life goes on. They needed to keep chopping wood and carrying water no matter what.

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I believe that thinking applies today.  Actually, the principle applies even more today than ever since we have so many distractions in the palm of our hands and right in front of our faces.

If you have experienced something exhilarating, exciting and greatly advantageous for you or your business, the question is what do you do next?

You need to chop wood; carry water.

If you are down and out, struggling with life and fighting the feelings of disappointment the question is what are you going to do tomorrow?

You need to chop wood; carry water.

The point is you need to stay alive.  You need to keep working.  You need to keep doing what got you that advantageous opportunity in the first place.  And if you have hit a negative streak you need to just keep going, things will come back if you get back into the game and work on the basics.

Successful people make it a habit to be steadfast in their ways – they don’t get too high when things go well and they don’t get too low when things get challenging.  They stay even keel.

They keep chopping their wood and carrying their water no matter what happens to them.

I like that.  And it’s what I have been telling myself lately as I have been enduring some exciting times.

I hope you do as well.

I told You So

RG3I hate to say it but I will.

I told you so.

You may remember almost a year ago I wrote about The Washington Redskins and the failure of their team leadership when dealing with Robert Griffin III and his knee injuries.  During that post, I detailed their game against the Seattle Seahawks in which the Redskins – wanting to win and advance in the NFL playoffs – kept playing their highly talented rookie quarterback even though his was visibly hurt, risking his future at the same time.  One specific part of the article I will share again:

RG3 went down, and the future of the franchise lay on the ground to the disappointment of the silent stadium full of Redskins fans. Although the injury is not career threatening at this point, it’s arguable if RG3 will actually be able to play at the level he was before the injury.

So whose fault is it?

Not RG3′s. The problem is the person involved is not thinking clearly or wisely at the moment. They are focused on themselves, considering only the moment and the short term, not the long term. They do not understand the long-term ramifications of their actions. Even though RG3 said he could still play the responsibility to make the right decision ultimately falls on the coach, the leader of the team. He should be realistic enough to make the right decision.

Well, I told you so.

This year, The Washington Redskins – once favorites to win their division and challenge for the Super Bowl – are 3-10.  They will not even be making the playoffs and their coach is under intense scrutiny. Their quarterback RG3 has looked awful this year and it seems he still isn’t fully health, hasn’t regained his speed and quickness from before the ACL injury.

CBS reports Coach Shanahan is contemplating shutting RG3 down for the rest of the year so he can get healthy and concentrate on next year.

Though Griffin hasn’t been nearly as good in his second season as he was when he was a rookie, Shanahan said this isn’t an instance where he’s benching his quarterback because of performance issues. Instead, he’d do it to keep Griffin healthy going into the offseason.

Hmm, maybe something he should thought of last year before he chose to risk his future investment.

The point here is to not make fun of a struggling team (ha, the Seahawks are league leading 11-2) nor pick on an injured player.  It’s to review a huge leadership lesson from a year ago and look at it from the framework of what has transpired.

As I predicted last year, keeping Griffin in the game risked not only that season but they ended up losing the next one (that being this season).  It was a risk and they took it.

The thing is, as a leader our decisions have major consequences.  Sometimes the most drastic affect the immediate, such as the choice of throwing the ball to the wrong team as to cause an interception.  But sometimes – and often most times – our decisions have consequences we cannot see or aren’t even aware of yet.  They are long term consequences.

That last statement is the hardest part of Leadership.  Being a Leader is all about taking risks – albeit calculated and well thought out risks.  During a time of decision, you must be able to inuit enough about the future to understand the long term consequences of the choices right in front of you.  And unfortunately, maximizing for the immediate usually comes with a huge price tag in the future.

In this case, it might even be a shortened career of one of the most gifted quarterbacks to come out of college.

It’s tough to watch a highly talented athlete struggle like how RG3 is currently.  But it’s even harder to be in the leadership role and faced with difficult decisions.  Next time you find yourself in a challenging conundrum ask yourself what would you think about each choice a year from now.  Almost always, the one you will think higher of a year down the road is the choice you need to make today.

Better take time to think about the future now rather than mentally replaying the past and wishing you made a different decision.

What’s Your Story?

Have you ever thought about this question?

“What’s my story?”

I attended an event last night where the speaker talked about startups and creating a story around them as you build.  He then had a slide that simply said “what’s your story?” meaning what’s the company’s story you will be telling others, such as future employees, investors, and customers.   His whole point was a major differentiator between your company and all the others is the story behind it.  I liked where he was going with it but I think it can be taken to a much deeper level.

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What’s your story?

Do you know the meaning of the life you are living right now?

Why are you doing what you are doing?

Does company you are starting or the job your are current in have a strong story and purpose behind it?

Why does the company exist?

Does it connect with people on an emotional level and add value to their life?

Are you doing something just to make money or are you also creating value in the world?

Yes, these are deeper and more serious thoughts than revenue models and exit strategies but they need to considered or one day you’ll wake up wondering what the hell you have been doing for the last decade or two.

I don’t know about you but I don’t ever want to have that feeling.  I’m not perfect and nowhere near where I want to be in this department but I am glad I am reflecting on thoughts like these.  They are definitely influencing my next moves.  I hope they help you as well.

If you need some help in this area, listen to Scott Harrison tell his story about Charity: Water.

When Losing is Winning

I recently sat down with serial entrepreneur Jordan Weisman for a Founders RAW conversation and walked away a changed founder.  As we cracked our beers and adjusted our mics – we hadn’t even yet turned on the cameras – I asked him to give me a brief overview of his entrepreneurial journey.  Here’s a rough summary of what followed:

So I started out trying solve problem X…. that didn’t work.  So we tried something else…

Next, we founded a game company.  That was bought by company Y.   Boy was that crazy..

After that, I started a few more, one was sold to Disney.  Another I sold to….and  so on and  so on.

In total, Jordan has founded 14 companies over the course of his entrepreneurial life.  Many failed.  Some very much succeeded and you could sense he was very content with his journey.

I really wish we had captured those few precious minutes on camera!  I wish you could have heard it – and seen my face – during the conversation because my jaw was dropping lower and lower each time he said the words “…and then I started” and followed them up with “and that was sold to...”

It was during that specific moment I was struck by something very powerful, I realized I was grasping a strong lesson right then and there.  Of course you are going to feel like a failure if you start one company and it doesn’t work out.  But the truth of entrepreneurship is it’s a numbers game.  Or said differently, if you take just one crack at it most likely you are going to fall flat on your face.  But by simply getting back up and trying again you greatly increase your odds of succeeding.

At risk of sounding naive, pollyanna and cheerleaderish, I want to bring up a really important point.  The irony is the most successful people in our world have failed more than many of us, sometimes more than many of us – combined.  We all have seen the old Nike commercial where Jordan describes how many times he failed, yet he still is arguably the most successful athlete we’ve ever seen.  He says: “I have failed over and over and over in my life, and that is why I succeed.”  

Look at any billionaire founder (outside of Mark Zuckerberg) and you will see someone who did not make it on their first try at business.  Or second try.  It might have even taken them 3, 4, or 5 starts before the big one hit.

This is not a “let’s all grab hands, sing kumbaya and make each other feel better for failing” type of post.  This is about absolute truths of the world, and ones which are hard to truly understand when you find yourself in challenging moments.

The lesson here is all of us founders must understand the first few times are the most challenging.  If you didn’t achieve what you set out to achieve in your current startup, statistics tell you to try again.

Does a gambler in Vegas take just one shot at the craps table?

Was your your first job the best and highest paying you have ever had?

I am guessing no.  So don’t think your first startup is going to be your best.

During another recent FR conversation, Matt Schobe told me it took starting 2 other companies before starting Feedburner, which in the end sold to Google for $100 million.   Would you grind away at two tough startups before a third one gets acquired for nine figures?

I sure hope so.

And a subtle but important footnote in that story is Dick Costolo.  He was part of all of those attempts – there during the tough times and challenging days – which in the end led him to Google, and then on to Twitter where he is now CEO.

Oh and he recently took Twitter public, minting him many more millions in the process.  I am wondering if he would be there today if he quit after the 2nd failed startup?

Here’s Jordan’s advice to first time founders.

A Great Conversation With Matt Shobe of FeedBurner And Google

I recently sat down with Matt Shobe for a Founders RAW conversation over some tasty beer at Easy Joe’s in Seattle.

Matt is a local entrepreneur and seasoned technology vet, he co-founded Feedburner in 2004 and sold it to Google in 2007 for $100 million.  Not bad.  You should hear what he’s considering starting next.

His story is amazing, entertaining and educational.  You will enjoy!

See more Founders RAW conversations here.

Founders RAW: Here’s What A Good Founder Looks Like To An Investor

In one of my latest Founders RAW conversations I sat down with Seattle VC and managing partner of Seapoint Ventures Tom Huseby to talk about entrepreneurship, investing, patents, and what he looks for in founders he might potentially invest in.

This clip encompasses what he considers a “good” founder – most important is the fact that it’s all about the relationship and the connection/alignment between entrepreneur and investor.

Watch more Founders RAW clips here >

 

 

Manipulating The Big Mo’

A recent conversation with my good friend Kyle Kersterson of Freak’n Genius brought forth – amongst many other things – one interesting observation.

Startups are all about momentum” Kyle said during our meeting.

And he’s right, momentum is key to getting over the hump and experiencing startup success. But it ain’t just startups where momentum applies, I think it applies to life in general.

We went back and forth on the subject for a good 10-15 minutes. One of my key takeaways was that momentum is a 2-way street and you have to spend energy to “manipulate” the big mo’ in your life, knowing how to create it and how to direct it appropriately to maximize the upsides.

This requires need a keen observation of what’s happening in your life, the strange but interesting conversations you find yourself in, people you seem to spending more time with and the inevitable opportunities that can result from those conversations.

And then sharpening the ability to identify when momentum is on your side so you can then use it to parlay into circumstances and opportunities otherwise not available to you.

The thing to know is momentum is 100% manufactured, and it starts in your head, your words and your actions. You have the Big Mo’ when you find yourself saying things like:

“Oh, you didn’t know (well known investor X) is participating in our round? We might have room for one more…”

“I’m booked up for the next month or so…. but let me see if I can squeeze you in”

Momentum is an entrepreneurs best friend.

But also know there’s a dark side of momentum, which is the another way of describing the downward spiral. Entrepreneurship, for all it’s glory and celebration, can negatively impact people if they don’t fully understand the dark side of momentum and how to curb it.

This is where emotional and phycological issues take their toll on someone to the point of full on depression.  No one is immune to these thoughts and feelings, but the best medicine I have found is to fully understand how to manipulate momentum in your life – taking the wheel and directing it so to minimizing negative emotions and maximizing positive outcomes.

What also sprung from the conversation is the concept of luck, or “lucky people.” I added that I think “the lucky ones” are simply people who are actually paying close attention, and keen of what is happening around them at any moment in time.  In another word, lucky people are the one’s who know momentum is on their side and are in control of where it’s going.

Think about how many people go through life unaware of what and who is around them. They hang their head and mope around all the while complaining “nothing ever happens to me” and “why can’t I just catch a break?”

What they don’t realize is luck is simply being prepared when opportunity strikes, such as when you find yourself in line next to a predominant investor, entrepreneur, or attractive person with nothing else to do but say hi and “waste a couple minutes” talking with you. Only then, if you have prepared for this chance meeting, will you actually be able to maximize the opportunity.

Ha, and some call that luck!

Founders RAW: The Definition Of A Fundable Founder

I recently sat down for a Founders RAW conversation with Marc Weiser, a VC who started the investment firm RPM Ventures after a successful run as an entrepreneur.  If anyone knows a thing or two about the desired qualities of a founder, it would be Marc.

During the conversation I asked him what he looks for in founders the consider investing in.  His answer is great, and if you are thinking about raising money from outside investors you need to listen to what Marc is saying.  He’s right on the money (no pun intended).

Go here to watch the entire Founders RAW conversation with Marc.

 

 

The Keys To (Revelevant) Local Commerce Are Now Within Reach

So since we all now know daily deals aren’t the holy grail of local commerce, it begs the question “WHAT IS the holy grail of local commerce?”

I’ll throw in my hat and suggest a real-time product and service discovery platform within your local community would be a strong contender.  Imagine if the right information hit your mobile device just at the right time, suggesting (or urging) you to make a purchase or buy a product from a favorite merchant of yours, who happens to be right in front of you at the moment.

keysIt’ll happen.  And OfferSavvy is already treading in these waters.

I spoke with Justin Boggs, one of the OfferSavvy founders about the future of commerce, where he sees it going and how they are looking to roll out their product discovery platform.

A few years ago Boggs started to think about how Groupon, LivingSoclal and other daily deal sites were taking huge cuts from each deal sold but not adding much value to local commerce.  He thought “how do we track offline transactions, and do it better and in a more healthy way for the local economy?”

After going through Bizdom, an accelerator in Cleveland where they got advice and connections, they are now headquartered in Long Beach, CA and rolling out their first version of the product as we speak – a personalized product discovery platform with CashBack incentives on any purchases through the system.

Ideally, they aim to build out this commerce platform and offer it to brick and mortar companies to establish a full blown local product recommendation system, akin to what Amazon does on their properties.

The goal is to create something meaningful for business owners and local consumers, with cash back incentives for both if they opt for social sharing.

I sure hope they succeed, I cannot wait to get relevant deals and offers from a system that actually knows who I am, knows my interests, knows my favorite local merchants and understands my purchase history.

You can read the entire back and forth conversation below.

What is OfferSavvy?

OfferSavvy is a social commerce marketplace where people come to discover, share, collect and buy their favorite products. We incentivize social activity and reward users with CashBack Offers on Products and Social Bonuses when their social activity leads to sales. Users can elect to have their earnings deposited into their bank account or they can donate those funds to charity AND OfferSavvy will match that donation.

We believe we have figured out how to truly create social engagement around the shopping experience in a meaningful way. Most importantly, our goals are to present each user with a personalized experience and a wall of relevant offers. So with our advanced recommender technology, artificial intelligence machine learning software, graph database, and natural language processing capabilities, we can acutely monitor a users interaction with our website and people on the site, and then begin to customize the experience for each user. Thus we help people shop for fun and with purpose.

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What’s the vision?  And what problem is OfferSavvy solving?

OfferSavvy is shopping evolved. People love to window shop, score great deals, and tell their friends all about it. OfferSavvy delivers that experience in one place, and we help people earn some extra cash based on their social connectivity. Moreover, the best form of advertising is word of mouth. Big brands and marketers know this. You probably realize this too, as your friend’s opinions are more important to you than some paid advertisement.

So, we encourage our users to be social and share offers that they discover through OfferSavvy. And each track every link that is shared. Therefore, when any social activity leads to new signups and sales through OfferSavvy, we give a little Social Bonus to the user for being the catalyst to that activity. Every user now has the power to earn dollars just for being social. Plus for the millions of American’s that need their dollars to stretch just a bit further, every product on our platform has a CashBack offer attached to it, so you can find the products that you really want- and earn CashBack in the process.

Our longterm vision for OfferSavvy is to build out the commerce rails to allow any business to actively engage with us and make Offers through our platform. This will give our users a unified experience, and allow them to stay on our website rather than be redirected third party websites to buy products. In addition, we have already written card linked offer software, as a means to close the loop for offline redemption in store. So, when I am able to build out this vision, OfferSavvy will be a grand catalog of CashBack Offers, both online and offline, to your favorite brands and merchants. We will be able to serve up real time, geo-located, personalized, mobile and cardlinked offers for our users. This way we can help people earn rewards off of every transaction they make each month. If you think about all the money you spend each month, how meaningful would it be in your life to get 5-15% of that back… we can truly impact lives here, while building cool technology.

How do users discover and use OfferSavvy?

We just went live last week, so we have started contact all of our friends, family, and connections directly. So people are coming to the site mostly through a direct link to the site. In addition, the website is built on the premise of social shopping, which means that each of us spends time using the product, creating collections, and sharing products with friends through social media. This has lead to promising traffic from Pinterest and Facebook, and a couple of visits from Tumblr and Stumbleupon.  As time goes on, traffic in large part will be through natural search for products, and given are large catalog, we can compete for page rank.

What’s the story behind OfferSavvy?  Any lessons to share?

The initial thoughts and ideas were came to me a few years ago, since that time I have continue to iterate and cultivate what is now OfferSavvy. Officially, the company was started June 2012, when we got some initial seed funding.

Some things I’ve learned from building startups is that nothing happens unless you do it, and you can truly never expect anybody else to be invested in your ideas the way you are. So you really need to be passionate about what you are doing, and love working, because for the first several years, work life balances shouldn’t exist- if you want to build something truly impactful.

Another interesting thought is just how startups are a lot about “hurry up and wait”. You have this grand vision for what this thing could be, and you want it tomorrow, but come to find out that it is going to take quite some time to build such a thing.

Also, as the founder, remember that you don’t have to be the best at everything, instead try to be the maestro, and get the right and best people for each role of the orchestra.. the genius is witnessing the music as your group plays in concert, in harmony.

What is the company’s current status? (funding, beta, users)

We have raised a little over $300k in seed funding thus far. We now have a live product open for consumption, and watching intently as users begin to interact with our platform. Ideally we want to use data and user feedback to shape this into the product that people truly want to use. And we can take the evolution in development and modifications in stride as we have structured release cycles in agile development. This allows us to be nimble, and redirect development efforts quickly as users begin to tell us, and show us the right way to go. We are also looking to raise additional funding that would give us a 9-12 month run rate, so we can focus on user acquisition and engagement on the website.

What’s next?

We have some fun hacks under way as we speak that is truly ground breaking. In the next few weeks you can expect to see the release of some social products that are completely unique to OfferSavvy. One such hack will allow users to not only make comments on products or collections, but respond with hashtags.  You might say, “Hashtags” aren’t new? To which I reply, ‘what if’ every hashtag pulled the top user generated tweets & Instagram Pics in real time into the thread?  People would not only be discovering new and interesting products, but they would find additional rich social content surrounding that product.

So with a hashtag system in place you could not only read what people think or how they feel about the products, you can see the latest tweets about the product from all over the web attached to that hashtag, and you could see the most recent Instagram Pictures that people snapped with that product or brand with that hashtag. Check out our “Featured” section today to see this in action in a slightly different way, but it will give you a good idea of the direction we want to go socially.

Founders RAW: Startups Are A Lot Like Surfing

This post was originally posted on GeekWire.

Seaton Gras started a tech incubator because he wanted to help entrepreneurs more easily create companies.  He named it SURF Incubator — an acronym for Start Up Really Fast.

But If you prod a bit more and ask him about the name, he might just dive into an analogy of how startups and surfing are quite similar. SURF is a great name since founders are constantly working against resistance to get a business up and running, he says.

Bromium founder Simon Crosby brought up that same analogy during one of my recent Founders RAW conversations.

He says:

“So you’re in the waves… and you got a board.  And your board is your ‘idea’.  And one thing you quickly realize is you cannot control when the waves come.. you have no ability.  When the wave comes, you gotta get on the board and you gotta surf… and there’s reefs and other dangerous things under you.  So you cannot control time, you’re in a very precarious situation at all times… and it goes up and down a lot, sometimes several times a day.”

New startups are being created at a fever pitch — and we’re coming off Seattle Startup Week where we crawled, sang, danced, learned, lived and breathed startups. But it’s important to remember: Not everyone surfs.

And they don’t for very good reasons.

It’s dangerous.  It takes time.  It takes patience.  It takes learning the ins and outs of the environment  so you can start predicting what’s going to happen next.  It’s not as glamorous as most make it out to be, sometimes it’s cold, it’s always wet and a mouthful of salt water doesn’t usually sit too well.

See the similarities?

Let’s not forget it takes lots of hard work and dedication to build great and lasting companies.  Here’s to hoping you paid attention this last week, made some great contacts and discovered your next steps to take. I know I did.

Now, it is time to act on those next steps.  Make a promise that your excitement and energy of wanting to be a part of the startup movement doesn’t get washed away just like the “NICK WAS HERE” signature I place in the sand of every beach I visit.

Below is the short clip of the surfing analogy from my conversation with Simon.  You can catch more of Founders RAW here.

 

Who Inspires Me?

You might wonder who inspires me as an entrepreneur and a writer.

There are many, but one person is Mark Suster.  He is a previous two time entrepreneur – sold his last company to Salesforce – and is now an investor and has been with with Upfront Ventures for about 6 or 7 years.

He’s great because he views startups from both the investor AND the founder perspectives, hence he writes at Both Sides Of The Table.   His straightforward tone and no BS attitude is something I have taken to my own words.  Like him I feel truth, honesty and controversial topics should be embraced by an influencer.  Ya’ll deserve it.

To get an idea of who Mark is, here’s a recent interview with Sarah Lacy of PandoDaily.

If you are an entrepreneur I suggest sitting back and taking some notes.  It’s long, but chock full of gems.

5 Tough Questions To Ask When Starting Your Company

So, you want to start a company?

Awesome.  That’s a very exciting decision but first you must make sure it’s the right decision.

Startups are hard and have been referred to as “a full contact sport” by others so deciding to be a founder is only the right decision if you are ready and willing to except what comes with founding a startup.

Coincidently I am going through this same thinking process right now.  Even though I have started a few companies before, I find myself at the starting line once again evaluating a new “dent in the universe” idea with a fellow co-founder.  Here are five questions I am asking myself right now to help determine if it’s the right decision.  I believe they can that help you too along your path to starting your next company.

thinking-manAm I really an Entrepreneur?

Risk is the heart of entrepreneurship — which is defined as “the pursuit of opportunity without regard to resources currently controlled.” Your relationship with risk is the sole determinant whether you will succeed or fail as an entrepreneur.

Are you ready to take a risk?  I encourage you to think of yourself as an entrepreneur in the adjective form, not a verb.  What do I mean?  Well, during my first startup I struggled – a lot, and for a long time – and it really bothered me because I didn’t really know why I was struggling.

Then it finally hit me.

It all changed when I re-thought what the dream actually was.  I realized my dream wasn’t about what I was working on at the time, but more about the person I was becoming in the process.  The dream is about being an entrepreneur – the adjective – not the noun.

Entrepreneur – noun.  A proprietor who owns their own business.  A title.

Entrepreneur – adjective.  A person who embodies the qualities of being Courageous. Risk Taker.  Innovative.  Persistent.  Agile.  Intelligent.  Savvy. Strong.  Personable.  Creative.  Excellent. Fighter.  Winner. 

Once I realized all I needed to do is change me perspective of who I was, everything changed.  Also, I realize being an entrepreneur was all about how I viewed and embraced the world of risk.

Fellow entrepreneur and billionaire Sir Richard Branson follows a principle called “protecting the downside,” which means that by looking at any situation and determining all options before making a decision, one can identify the worst case scenario and work backwards from there to find the optimal route forward. Protecting the downside is really just identifying and understanding risk.

So your first step is all about asking if you can handle a world full of risk.

Am I ready?

Once you determine you are cut from the entrepreneurial cloth, you must ask yourself if you are actually ready.  Is it the right time to embrace a life of high risk and high reward?

Question yourself on things like: Do I have more important responsibilities, such as family obligations, debt to repay, volunteer work, coaching youth sports, or things that require your time and energy?

The reality is startups take pretty much all of your time and energy.  They are like rockets going to space – it takes A LOT of energy to take off but based on physics it takes less energy to keep going as it gets higher and farther away from earth.

Step 2:  sideline some of these major responsibilities if you are to start a high growth company, and  then pick them back up once things really get going.

Am I passionate about the idea?

Once the commitment has been made and you believe you are ready to take the plunge, you should ask if this is something you are really interested in, passionate about, and willing to give it 5-10 years of your life.

This is somewhat of a controversial topic.  Some say founders need not be passionate about a startup, simply because only possessing passion for a subject does not guarantee success.  And I agree.  Just being fanatic and uber-excited about something is not a shoe-in for startup success.  But consider the opposite: if a person is not particularly interested in a subject and not emotionally driven to solve a particular problem in the world, will they be able to make it through the trough of sorrow?

I think not.

Step 3 requires asking yourself if you posses energy, curiosity and passion about what you are doing so you can withstand the inevitable challenges and be able to push through the hardships you will face.

Is it a big and growing market?

Startup fact: Investors are looking for home runs, not singles.

One of the biggest mistakes first time founders make is not evaluating markets correctly and picking a market with low potential for growth.  Most investors and potential acquirers evaluate startups on the recipe of future potential.  A founder who desires a successful outcome for their company should look for solutions to problems in growing markets.

What is a growing market?

Growing markets are ones with an accelerating rate of competitors, users, revenue potential, and aligned with emerging technologies/platforms.   Founders should build their solution with forward thinking perspectives on technology and societal norms.  (ie: mobile usage vs desktop usage,  network platforms vs non viral sites, portable vs non portable tech, etc…)

Even if a founder is not planning to accept outside investment and wants grow from a bootstrapped position, it still makes sense to look for market that is big and growing.

Step 4 requires one to ask themselves, “no matter the size of my ambition, am I building for tomorrow, not just today?

What are my unique gifts?

Startups are difficult and require one to utilize their unique talents and gift in ways they may have never imagined before.  When a founder starts their company, it’s important they take some time and take into account their naturally gifts.  Are you uniquely technical and have the ability to quickly whip together a simple prototype?  Or are you more social, amazing with people, a natural salesman and can easily work a room full of investors?  Are you a visionary or an operations person?

This is probably the hardest question of the bunch, but the most important because the answer to these questions will point to your next phase of the company – recruiting others.  If you are non-technical and (most likely) better with leading people, you will need to find a technical person to balance your founding team out and help you build products.   If you are highly technical and can easily hack together websites and mobile apps, you will need to find someone who is less technical but more gifted in the business and people operations.

The last step pulls you inward to understand yourself, what your talents are, and who you should look to bring on and join you in your new venture.

Asking yourself these 5 tough questions should not only help determine if this decision is a good one, but if it is the right one for you at this time.

Here’s All You Need To Know About Conducting Customer Interviews

LIFFFT, an awesome startup here in Seattle, has put together a great presentation on everything you need to know about conducting customer interviews.

Discovering your customers and the exact problems they face is something you, as a founder, cannot predict.  So you must go and talk to them directly.  Here’s how you do it.

Founders RAW: Cameron Wheeler And The Crazy World Of China Manufacturing

In a recent Founders RAW conversation I spoke with a good friend and fellow founder Cameron Wheeler.

You may be familiar with Cameron and his company as I covered his startup ZappBug earlier this year.  Yes, they manufacture ovens to kill bedbugs:

The idea was to develop a bed bug oven that could use heat to kill bed bugs in luggage and other personal belongings, saving peoples belongings in the end. “We chose to begin with this product because we had the technical competency to do it. Heat treatment is a proven way to kill bed bugs. The product could be used for both prevention and extermination and would be a great revenue generator.”

 Although Cameron is a good friend of mine, I have to say I am very impressed with him and believe he’ll be extremely successful as an entrepreneur.  In my opinion he just “has it” and you definitely sense it when you sit and chat with him.

What’s “it” you say?

A deadly combination of: Smarts.  Intelligence.  Technical know how.  Social intelligence.  Persistence.  Understanding of markets.  Knowing where to innovate.  Youth.

Go ahead and watch the conversation.  From meeting Elon Musk to spending time in China, it’s a fascinating conversation.

What To Do When You Don’t Know What To Do

I remember it was a rainy, cold and downright depressing winter day in Seattle. The gray skies, piecing wind and nasty looks on people’s faces didn’t help what I was dealing with at all.

That was the day I realized I didn’t know what to do.

I had worked my ass off for almost 2 years on my mobile payment startup Seconds, but too no avail.   The writing was on the wall.  Yes, we had customers and yes we even had revenue.  But no, we weren’t growing and no we weren’t able to raise money to continue forward as a team.

The thing was I didn’t know what to do.

Do I simply shut it down completely?  Quit cold-Turkey?  What about our existing customers?  What about our reputations?  What would others think if we “failed” at our startup?

I was also broke.

I had gone 15 months without pay, barely living off credit cards and other things I scrambled together.  It was terrible.  Some days I didn’t have enough money to eat.  Some days I struggled to buy a ferry ticket home and so I slept on a floor in the office.  I was riding the ferry to and from the office each day because I had no way to pay rent,  so I chose to stay with my sister and her family – an hour and half away across the sound from Seattle.   Graciously, my family and friends helped out when they could which to this day I am ever grateful.

I was definitely worried for myself, not “OMG will I ever be successful” worry but more like “holy crap, I am really on a sinking ship here.”

I didn’t want to admit I needed to jump ship before it sank, I wanted to ignore the holes and guide it to smooth waters.  Why?  Because that’s what “winners” do, right?  But I knew the holes needed patching, and meant getting another job.   I just couldn’t admit to myself the dream was over.

But I just didn’t know what to do.   Then it finally hit me.

It all changed when I re-thought what the dream actually was.  I realized my dream wasn’t about what I was working on at the time, but more about the person I was becoming in the process.  The dream is about being an entrepreneur – the adjective – not the noun.

Entrepreneur – noun.  A proprietor who owns their own business.  A title.

Entrepreneur – adjective.  A person who embodies the qualities of being Courageous. Innovative.  Persistent.  Agile.  Intelligent.  Savvy. Strong.  Personable.  Creative.  Excellent. Fighter.  Winner. 

Once I realized all I needed to do is change the horizon I was gazing towards, everything changed.  I removed myself from the echo-chamber of my head and finally understood, “YIKES, YES THIS BOAT IS SINKING AND I NEED TO GET OFF!”

So I jumped out, found something part time that would plug the hole (support me finically) and was able to live another day.  I started to understand entrepreneurship is a life-long game and to win you need to embody the adjectives, not the nouns.  Once I took that heavy financial burden off my shoulders everything started to get better, my head got clearer and my smile got wider.

I got my mojo back.

Being an entrepreneur is not a title, it’s a person.  Or a persona.   Or a set of characteristics that allow you to dig out of any shitty situation you’ll inevitably find yourself in.

When I found myself in a situation where I didn’t know what to do I simply changed my mindset, which allowed me to see the world in new ways.   Sometimes simply looking at things from a different perspective is all it takes to change your own world.

Pricing Is A Tricky Thing

6a00d8341c03bb53ef014e606f4675970c-800wiI was recently asked my thoughts on how to approach pricing digital products aimed at the local Small and Medium Business.

Actually, the exact question was:

Basically, I’m looking at how new startups decide on a pricing structure when they’re selling to SMBs. Essentially, you’ve got your product/platform/system, and you’ve pinpointed your target customers—now how do you determine how much to charge? Obviously market research is important, but what specific recommendations do you have in terms of how to pinpoint the right pricing for a new digital marketing/hyperlocal platform? 

My answer:

Pricing is a tricky thing.  Price too high and you put yourself out of business because no customers will pay that high of price for your product.  Price too low, and you run the risk of giving away too much for free and struggle to keep the doors open – again possibly going out of business. Digital or not, a startup needs to be able balance the need to generate revenue with the opportunity to attract as many customers as possible.

I think it comes down to doing a few key things really early on.  First, study the current market to determine who is offering what and at what price points.  You should be able to look at the market and see the high end/low end products and their associated prices.  You then look for the holes in the market – where’s the point where customers are paying too much for not enough value?  That’s where you can bring something highly valuable to the table at a more affordable price and undercut the market.

Second, it’s really important to determine what problems you are solving and what value you are actually providing.  If it’s just the same as others on the market then it will become a price war with competitors – which you probably don’t want since it usually is a race to zero.  Ask yourself how can you do something new and innovative that hasn’t been done before, and then you’ll have more freedom on the pricing structure.  McLean Reiter, CEO of hyperlocal startup Knotis, echo’s my thoughts.  He says “Most SMBs have less than $1,000 to spend on marketing, annually, so it needs to be affordable and if possible, monthly, to help them manage their cash flow better. So It all comes back to value – what do they get in exchange for what they are paying for. You need to price yourself according to the market and your overall objective, while also maintaining profitability.

Lastly, it’s truly impossible to determine your exact prices before you go to market and interact with customers.  Smart entrepreneurs engage with their customers early on, ask them about price points and adjust/iterate as they continue forward.  Founders should also use these customer interactions to uncover the hidden needs of customers, which becomes the real value of your product and thus helping to determine a pricing model.  People pay higher prices for things they really need and can’t get elsewhere.  And ultimately, companies should A/B test certain price points (offer variable pricing to random customers through marketing and study the results) to see which convert better and then optimize from there.  

 Pricing can be tricky.  So agree to understand you will not know what your pricing will be out of the gate, you will only learn what it should be over time.

Will AngelList Help Or Hurt Startup Fundraising?

Fall 2013 will be looked back on as the turning point in fundraising for early stage startups.   The JOBS Act, along with the acceptance of  “General Solicitation” has indeed changed the game for founders looking for startup capital.

Although changes in government regulation will have an impact on startup funding, I believe the biggest impact will come from innovations in the private sector – more specifically the Seed/Angel community.

AngelList has emerged as a black swan in the investment community and is opening up funding channels founders never dreamed of even just a few short years ago.   It allows well known entrepreneurs, advisors, and angel investors a digital network to follow startup activity and quickly jump into investment deals with new hot companies.  This makes it quite a bit easier for startups to close a round of seed funding.   The days of hitting Sand Hill road in hopes of simply getting your project off the ground are over.

And more recently, AngelList announced a new feature called Syndicates, where Angels can basically become “leads” and pool capital from other Angels (or Syndicates) to quickly create their own mini-fund.  They then use this to deploy into early stage companies on AngelList, with the transaction happening all through the AngelList platform.

I will not dive into details of Syndicates, please go here if you want a full description of how it works.  I simply want to touch on where this is going and why AngelList’s innovations are game changing to the larger startup community, for better or for worse.

The big question is how will this affect founders and the overall startup community?  Is it all good?  Or will there be unforeseen consequences which inevitably come with drastic changes?

Since I am not the expert I looked around to others and researched their take on the changes happening with Syndicates.

The innovations around AngelList are clearly going to benefit founders – namely to speed up the fundraising process.  Mark Suster believes it’s a net positive for the industry.  “The most obvious, syndicates can move faster in early-stage deals than rounding up 40 individual investors.”  Good, we don’t need to heard cattle as much anymore!

But what about for the angel investors?  Although it might be better deal flow, it seems market dynamics and economic factors are going to come into play on the investor side.  Hunter Walk sees interesting changes coming for angels, “My guess is there are also some angels who were popular when they represented a $25k check but won’t be as sought after if they try to push $300k into a round.”  The nuances here are not obvious and only time will tell if this is good for the angel community or not.

 Fred Wilson also believes this is good for founders.  “Angel List Syndicates are turning angels who have traditionally been followers into leads. That’s a good thing in many ways. The more folks who can lead a round, the better, at least for the entrepreneurs.”   But he goes even further to describe how it will force the investment community to grow and work harder.  “It also means that they will have to learn to lead and lead well. They will have to step up before anyone else does. They will have to negotiate price and terms. They will have to sit on boards. They will have to help get the next round done. Essentially they will have to work. That’s why they are getting carry from the syndicate, after all.”

So maybe it’s too early to tell how AngelList will affect the ecosystem but questions loom.

Is this actually going to flatten the playing field for all of us founders looking for seed capital?  Or is it just going to make it even easier for “highly connected” founders to close a deal even quicker than before?  You only get discovered on AngelList if you can float to the top by “trending” on the network.   What does “trending” mean on AngelList?  And how do you achieve that if you are not in in the Bay Area, in 500 Startups or a part of YCombinator?  Is AngelList inevitably the web 2.0 version of the Old Boys Club?  Or is it the fundraising mecca all of us founders have dreamed of when we say to ourselves “if only we had access to more angel investors!”

We shall see!

In the end,  AngelList is a new beast and we don’t know what the effect will be on the industry as a whole but I am fascinated with the direction things are going.  My hope – easier access to angels and seed capital for all qualified startups no matter their location.

In a recent Founders RAW conversation I asked Duxter founder Adam Lieb his thoughts on AngelList.

Great Founders Learn To Toe The Edge Without Falling Off The Cliff

19_20120115feet-cliff032That statement emerged from a conversation I was having recently with a founder friend of mine.

This individual is struggling in their current situation – not far enough along to support themselves with their endeavor but not wanting to let go (if only slightly) to do other work which would pay the bills.   They said it feels like being between a rock and a hard place, and it’s painful.  I felt it was more like a cliff.

I simply said:  “Great Founders Learn To Toe The Edge Without Falling Off The Cliff “

I know this spot really well because I was there for quite a while and I remember almost falling off more than a few times.

What I learned through the process was how to toe the line – balance on the edge if you will – without falling off the cliff.  I realized entrepreneurship is balancing the risk of great rewards with the risk of detrimental actions.

How do you know which is which and what to do when you find yourself getting weak knees as you get pushed towards the cliff?

You have to look deep inside yourself and ask “what do I gain from staying here?  Do I really only have one option, which is to stay here and not evaluate my other options?”

Notice I said “gain” not “lose”?  There’s a big difference between those two perspectives.  When you are standing on the edge looking far down the cliff, you have much to lose.  So much in fact it’s hard to pinpoint exactly what you are doing and why.  Founders face so much challenge and adversity they can easily lose their perspectives and clarity of thought.

I told my friend he needs to look inside and ask what he gains from staying there.  He needs to look out for himself first and foremost.  He needs to take care of his basic needs – be it money, food, shelter, stress relief, relationships – and only them will the company stuff  work itself out.

I said, “trust me, it won’t get any better if you don’t step away from the ledge.”

Stepping away from the ledge is exactly what I did and I am so much better for it.  Yes, I had to swallow the pill and realize my “first” attempt at building my company wasn’t going to end like I dreamed it would just a few short years ago.  But as I backed away from the ledge and got my priorities/basic needs back in order, things started happening I never thought possible.

You would be amazed what happens to your business life when you remove self inflicted pain and stress from your personal life.

It’s That Time Again! The Seattle Startup Crawl 2013 Is Happening Oct 18th At 5pm

We are kicking off this year’s Seattle Startup Week festivities with a Startup Crawl on Friday October 18th in Pioneer Square. The Seattle Startup Crawl 2013 is part of Seattle Startup Week, Oct 18th-25th (www.seattlestartupweek.org).

Here’s your chance to mix some of the best things known to man – Beer, Technology, Entrepreneurship, and Seattle – all together in the same event.  The Seattle Startup Crawl 2013 will be a great opportunity to gather together the startup community in Seattle for an evening of socializing and learning a little more about each other as well as see inside the walls of a few staple companies in the tech community.

It will be in the form of a progressive party, with each host providing their choice of snack/beverages.  We will start at approximately 5pm.

RSVP Here!

Date: Friday October 18th

Time: 5pm and later

Cost: $5.00

5pm: EnergySavvy 

159 S Jackson St‎ #420
Seattle, WA 98104
 

6pm: BlueKai

720 3rd Ave suite 2300,
Seattle, WA ‎
 

7pm: SURF Incubator/Founders RAW

821 2nd ave,
Seattle WA 98104
 

Founders RAW: Find Problems. Create Solutions. Scale Quickly

As founders sometimes we dive so far into our own product we get lost, making everything more difficult than it needs to be.  It doesn’t have to be that way.

In a recent Founders RAW conversation I sat down with Adam Lieb, founder of gaming social network Duxter.  Early on in the conversation he brought up something I thought was interesting.

Wait…  Not interesting.  Actually, it was genius.

He basically said “find a problem, create a solution, and scale quickly.  It’s that simple.”

Wow, you would think we all figure that out.  But unfortunately we don’t.

What happens is we tend to 1) under-think the problem by not taking the time to talk to the target customer, thus missing the opportunity;  2) over-think the solution we provide and convolute our concept to the point of confusion; or 3) under-think the solution by simply copying another company.

Any way you slice it, the tendency for founders to veer off course is easy and happens often.  I call what Adam said genius because I am now convinced the real geniuses in our world are the ones that can take something complex and turn it into something simple for the masses to grasp.  People part with money only for things they understand.  Everything else, to the laymen, is gibberish.

From what I gathered during my conversation with Adam, he has seemingly nailed it with Duxter.  They do a ton of customer development.  They listen to what those customers are saying.  They then zeroed in on a problem, created a simple solution and then worked to scale it quickly.

Remember founders, it doesn’t have to be that complicated.

You can find more short clips of useful conversations at Founders RAW.