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
 

Yes, Youth Can Be Entrepreneurs Too

Adam Lieb, founder and CEO of Duxter, started his entrepreneurial journey at a very early age.  He founded and sold his first company at the age of 11! Not too shabby, eh.

I sat down and talked with Adam during one of my recent Founders RAW conversations where we covered what it’s like to start a company so early in life, the value of Law School and how easy (or hard) it is to raise money for a growing startup.

What a great conversation!

Fear – It’s Just Part Of The Process

If you are a founder – or thinking about starting your own company – a really important lesson is to realize fear will always be present with you.  There’s no way around it.

You will question your ability.

You will wonder what is going to happen to your company tomorrow.

You will be scared to talk to investors, customers and potential new hires.

You will be worried as to what the media will write about you and your idea.

All this will be there, don’t fool yourself otherwise.  The best thing for an entrepreneur to do is come to grips with the fact that your fears will persist.  The next best thing to do is to find ways to deal with those fears, and to grow through them.  Finding advisors, talk with other CEO’s or founders, reading others thoughts about starting companies.  All these things help us get through the challenging times of starting our companies.

Or go to Founders RAW and watch what others are saying!

The 3 Most Important Skills An Entrepreneur Needs To Sharpen

I was asked a question recently send from a reader which centered around what I thought “was most important skills/qualities  beneficial when going out on your own?”  You can read my answer below.

In terms of skills for being an entrepreneur I think the 3 below are the most needed:

1) Courage/strength
You must have courage to make the decision to jump out on your own. Courage means acknowledging there is risk involved and you do have some trepidation, yet you still take action and make the move. It also means you are in it for the long haul. This takes strength and trust in yourself.  But you JUST DO IT.

2) Market Identification
This is the ability to look at certain markets and market segments to identify holes, or needs that are not met yet. This is where you get strategic and determine what you are going to build and why. It’s pretty hard to be a successful entrepreneur if you can’t find a market for your product or service.

This is a skill that develops over time but I would suggest starting by reading as much about business, technology and the changing dynamics of our world today as possible – and then make that a daily habit.  Also, once you figure out the general market you want to serve, you polish your market identification by talking to your (potential) customers to find out all you can about their problems.

3) Flexibility
Great entrepreneurs are very flexible and change direction similar to how a sail boat tacks back and forth. Nothing stays the same for very long and the ability to shift with the wind is a huge advantage over people who aren’t willing to change. Entrepreneurship is a tough road, but the ability to handle the hard knocks and go with the flow will allow you to remain relatively stress free, also it will help you to quickly pounce on unexpected but awesome new opportunities.

Although you can’t take classes for these, I think if you concentrate on the general ideas long enough you can really polish the skills.

Trust Yourself And Your Ability To Adapt

A few recent conversations with founders have brought a thought to my attention – Trust Yourself And Your Ability To Adapt.

I am noticing one of the most common issues with early stage founders, or people who are making the leap from employee to owner, is their lack of confidence in themselves.

Who am I to be CEO?

What if I fail?

I am not sure what I am really doing?

What if others find out I don’t know what I am doing?

News flash, we already know, because we also have no idea what we are doing.  The little secret no one wants to talk about is that we all are winging it, trying our hardest to fool others into thinking we know what we are doing all the while running around asking ourself “what the hell am I doing?”

Ok, so it’s a fools game.

If so, how do you win?

You need to actually fool yourself into thinking you know what you are doing.   You need to trust yourself, trusting your ability to adapt and make adjustments in real-time.  This requires confidence.  Maybe even a little stubbornness as well since you will often be finding yourself up against some hard places.

Confidence is achieved by quieting the inner voice you hear telling you things like “you can’t do that” and “who am I to think I can….” and replacing it with a calmness that accepts whatever result that inevitably comes your way.  Confidence is not caring what actually happens because you are at least doing something.

But if you lack confidence in yourself and doubt you are the right person to start your company, all is for not,  Nothing and no one will make up the difference if you lack faith in yourself and what is possible.

Get out of your own way by trusting you can make things happen, and by knowing deep down you ARE ABLE to do it, and then take those first few steps.

Trust me, no one has the answer to your problems and challenges.  Only you do.

The Value Of Social Events And The Greater Startup Community

“I was defintely in a dark place.  It was the meetups and startup events that brought me back.” – Michael Grabham, founder of Startup Grind Seattle

Who knew something as a simple as a meetup could help someone get back to feeling normal again?  But that is exactly what happened with Michael Grabham, one of my recent guests on Founders RAW.

He details how he was in a “dark place” after experiencing a big failure in one of his businesses a number of years back.  He didn’t go into much detail during our conversation but he alluded to being very down and out, probably in some sort of depressive state.

Why am I guessing depression was upon him?   Well, I dealt with those feelings as well.  Even the best of us can have our worst times, and those times can seem to drag on for so long you feel like it won’t ever get better.  That is what I think Michael was referring to when he mentions his dark place.

So how do you get out?

Like he mentions, you lean on your community and get around excited people doing cool things.  He decided he had enough and started going to meetups and other startup events here in Seattle, meeting founders and other people working on new projects.  He knew he would be lifted up simply by osmosis.

In fact, that is how I originally met Michael, at an event called Tech Cocktail held in Seattle in fall 2011.  After that, we kept meeting every month or two where he would advise me on what to do next and who I should talk to.

This face to face time was incredibly valuable to me as a rookie founder.  But amazingly, I had no idea how important it was to him and where he had been (psychologically) so recently in his past.

It’s funny, you never know what, to what degree and to what depth someone is dealing with, since we all put on these masks as we go about our day.  It’s quite possible one of the people you will talk to at your next social or networking event is deeply struggling with something, and you may never no it from the outside.

Yet they are silent screaming “please help me!”

Do them a favor and ask “what can I do to help you?”  You will be amazed at how surprised they will look when you say that.  Also, ask to get in contact with them and book a coffee/beer meeting with them so you can talk deeper privately.  I guarantee you will change their life – or they might even change yours.

I think we underestimate how important our greater community is.  It very well can save the person standing right next to you.

Attracting Technical Talent When You Are Not Technical

I seem to be fielding a specific question more often lately.

“How did you find your technical co-founder – your lead developer – when you yourself are not technical?”

Finding technical talent when you are not technical yourself is indeed a challenge.  Developers are notoriously hard to find, difficult to communicate with and almost impossible to convince to join you to build a random and weird idea.

So, how do you find them?

You actually don’t find them.  They should find you.

You see, developers are approached all the time by “biz dev” guys pitching them yet another idea.  An idea in which it’s blatantly obvious the person pitching cannot build, hence the earth- scorching search for a workhorse they can ride.  This almost never works, since just like the pretty girl at the bar, developers have their pick of the litter when it comes to accepting job/founding opportunities.

So rather than finding developers, you must attract technical talent.  Here are just a few ways to put yourself out there so technical talent will 1) discover who you are and 2) actually want to work with you.

Write stuff

First thing you need to do is get in front of people, and the easiest way to do that is to create a blog, pick relevant topics and start writing.   “Ok Nick, what am I supposed to write about?”  ANYTHING.  Simply putting your thoughts and opinions out into the public is the first step to helping people understand who you are and what you are thinking about.

Then, once you have a few solid posts under your belt, quickly reach out to growing media resources and offer to write a guest post for them.  Guest posts give you instant credibility (given it’s the right channel and one developers are reading) to the technical crowd.

Go to technically focused events

I have written about the value of events before, but I will touch on it again.  Attending events focused on the technical crowd is a great way to meet new developers.  What better way to connect with technical person than to go to a meet up centered on an interesting technical/programming topic which will attract technical people.  That’s just common sense 101 right there.   And if you have been following #1 above, you will start to get approached by these people since they are reading your stuff.  See how it all works…

Offer compensation in ownership and equity

There’s nothing worse than pitching a developer on your idea, making it very obvious they are the one’s who will make this thing come to life, and then stiff them with no equity in the product/company.  The best approach is once you feel you have a solid candidate, you need to have a very uncomfortable conversation about the equity and compensation structure going forward.

If you are just starting out, I would say you should consider looking for an equal partner and splitting the ownership around half/half.  If it’s farther down the road of the product/company, you can offer a smaller chunk or negotiate a different agreement.  Bottom line = give them the respect they deserve for bringing your vision into reality.

Stay True To Your Roots Regardless of The Competition

I love the way John Cook describes how he maintains the GeekWire focus and brand among stifling competition.  Basically, he says

If you want to differentiate yourself you need to stay focused on your unique DNA – your roots if you will – and why you started in the first place rather than just copying whatever the other competitors are doing.”

That’s an awesome statement and one I try to live by as a founder as well.

But how?

I think there are a few fundamental methods of staying true to your roots.

1)Deeply Know Thyself

It’s important to know why you started your company or built your product in the first place.  Was it something that occurred to you through a life experience?  Or did you see numerous other startups doing the same thing and raising money from investors so you thought you might as well jump in and do it as well?  Really evaluating and understanding the why of your pursuit will bring you closer to your roots, which will inevitably lead to differentiation from the rest of the pack.

2) Talk To Your Users and Customers

Rather than looking at the competition, you need to look at your users.  Very early on you need to talk to your customers or users to determine why they are using the product and what value they are deriving from it.  The insights from your users will open your eyes to aspects of your product you may have not seen before.  This Customer-centric practice will keep you internally focused on your product/vision/future rather than what all the other competitors are doing in the space.

3) Be A Leader, Not A Follower

One of the best ways to stay true to your roots is to be a market leader, one who blazes the trail vs finding someone else’s trail.   Leaders usually have unique insights on an existing model and are doing something new and different than the competition.  They don’t care what others think or what the competition is doing.   They are independent thinkers and use their own models as testing for what works and what doesn’t.  In this manner, Leaders typically are the unique and original brands the other competitors are trying to copy – to little avail.

Listen to John touch on his perspective of staying true to GeekWire’s roots.   Go to Founders RAW >>

How To Best Handle ‘Battles’ Within Your Team

Is it a good sign if team members are frequently challenging and arguing with each other ?

I say yes.

And so does Patrick Henley.

During a recent Founds RAW conversation we touched on the subject of leadership and team dynamics.

“If they aren’t arguing with one another or passionately responding to others ideas, it tells me they don’t really care.” – Patrick Henley, co-founder of Amp Tab

I like that statement.  I believe it to be true as well.

A healthy dose of argument and discussion is essential for a team to balance themselves out.  There should never be the same winner each and every time, that would eventually discourage others from speaking up.  “what’s the point?” they will start up wonder.  Probably the best way to shut someone down is to never value their opinion, or put to use their ideas.

But if the team agrees upon a method of “battling” where each person’s perspective is heard, understood, evaluated and then placed in juxtaposition to the vision of the product/company and then eventually one direction is decided on, that – to me – is a healthy team.

The key is to actually agree upon your “rules of Battle” early on in the companies lifecycle.  How are new ideas submitted?  How will we decide which is the best option?  How do we  pitch these ideas, and hear each person out so everyone is on equal footing?  Who’s the ultimate decision maker?  Where does the buck stop?  Deciding on these upfront will save a lot of frustration later.

Watch and see what Patrick has to say.  It’s great.   Go to Founders RAW >>>

Hang In There

I tend to get a bit emotional when I find myself looking back over my almost 2 years of full time, full contact entrepreneurship.

Why?

Well, it’s been such a crazy ride.  It’s been up.  It’s been down.  I’ve been in.  I’ve been out.  I quit my last full-time job over 2 years ago with basically nothing to jump to but my own gut instinct, which told me – akin to Field of Dreams – “if you jump, they will find you.”

I jumped.  And they found me.

It was incredible to jump into my company full-time, but in reality it hasn’t been all roses.   Mostly I’ve hung in there and “weathered the storm”  as they say, until brighter days came.

It was then I realized what this entrepreneurial journey is all about – hanging in there.  I was reminded of this recently as I was chatting with GeekWire founder John Cook.  He mentioned it as I asked him about some of the lessons he has learned over the last few years building GeekWire.

He said something to the extent of “if you just hang around long enough you will make it.”

What I think John is saying is you need to be patient enough to give yourself the opportunity to encounter success.  It doesn’t happen overnight.  It sometimes doesn’t happen over a year.  Fortunately (or unfortunately) some people must wait many, many years before the seeds they have planted actually grow into something they can reap benefits from.

But you just have to hang in there.

John is a perfect example of this in action.  He spent about 10 years working for an old traditional newspaper, the Seattle PI.  At the time, he was covering tech and could see what was about to happen (or happening) to the newspaper industry due to the growth of the web.

In fact, he and his friend Todd actually came up with an entire plan, shared it with the PI and suggested they go another direction, embracing the web as opposed to fighting it.  John and Todd told the PI they would run it.  Those executives didn’t listen the John and Todd, which at the time I am sure was frustrating to the both of them.

Yet, today…. GeekWire is an up and coming digital media resource, has a great presence in Seattle and beyond, and is growing strong.   The Seattle PI?  They shut their doors on their physical paper a few years ago and are struggling to stay relevant in this new digital world.

Lesson: It will come soon enough if you just hang in there.

Startup 101 – Make Something Worth Investing In And Be Honest About It

honest

One of the most common mistakes founders make when starting a new project is creating the wrong product.  Or said a different way, they spend all their time creating something they think is valuable only to get to the end of the road and find out no one else thinks it’s valuable.

This is your classic Founderitis:  you are the only one who thinks your idea is good or valuable enough to purchase/buy/invest in.

Of course, this is where customer discovery and development come into play.  As a founder, before your team lays down one line of code you need to research the market, observe what they are doing, learn their problems and determine what you can build to solve those problems.  Then you need to test the hell out of the idea and the prototype.  Doing this will save you and your team a lot of frustration and grief down the line.

But what about convincing investors to actually give you money in support of your venture?  Is it as easy as walking in and sharing your world changing vision?  How about explaining in excruciating detail how your unique  technology is the latest, greatest and smartest in the market?

Not exactly.  The single best way to raise money is to tell the truth.

Paul Graham just wrote a great essay on this subject.  In it he states investors really only care about a few things:

Formidable Founders.  “The most important ingredient is formidable founders. Most investors decide in the first few minutes whether you seem like a winner or a loser, and once their opinion is set it’s hard to change.”

Tell the Truth “The way to seem most formidable as an inexperienced founder is to stick to the truth.  Investors will know if you are lying or pulling something over on them.  That’s the quickest way to turn them off.”

A Big Market “To prove you’re worth investing in, you don’t have to prove you’re going to succeed, just that you’re a sufficiently good bet. What makes a startup a sufficiently good bet? In addition to formidable founders, you need a plausible path to owning a big piece of a big market.”

So here’s the recipe for impressing investors when you’re not already good at seeming formidable:

  1. Make something worth investing in.
  2. Understand why it’s worth investing in.
  3. Explain that clearly to investors.

If you’re saying something you know is true, you’ll seem confident when you’re saying it. Conversely, never let pitching draw you into bullshitting. As long as you stay on the territory of truth, you’re strong. Make the truth good, then just tell it.

There you go.  It’s not easy to raise money but you should be simple, straightforward and honest.

Who Makes Seattle? We Make Seattle.

A cool new project about the Seattle creative community hit Kickstarter recently.  It’s called We Make Seattle.

Given the fact I am an entrepreneur, founder of a Seattle startup and now founder of a site that helps other founders tell their  startup stories, I am very excited to see something like this come out of our community.  Seattle needs more exposure to put to rest the “Seattle vs Silicon Valley” arguments.  We are not SV and never will be; we are Seattle.   We are unique, different, but also a land of huge opportunity.  Films like this allow us to tell our stories to the world and show them we know a thing or two about creating great products and companies.

They are more than half way to their goal of raising $28,500 to get this thing in production, so go on and help them achieve their goal!  Below is more about the short film.

Screen Shot 2013-08-07 at 12.12.17 PM

This short film is a celebration of what makes Seattle the best place in the world for entrepreneurs and creatives to live. It tells the story of the vibrant and supportive community we have for starting companies, betting on dreams, and chasing big ideas.

Despite being named the #1 tech city in America by The Atlantic, and consistent top rankings on the list of the world’s most livable city, we’re frequently overlooked as the place to go for people with big talents and ideas. This film will change that.

The film has three goals:

1. Celebrate the creative community.  We have all personally benefited from the Seattle community, and the film will be a reflection back to the community itself on how many amazing companies, events, and projects are based here. In our daily lives we rarely step back to see the entire city, and We Make Seattle will inspire by telling the story of how many great things happen around us.

2. Help recruiters and entrepreneurs attract talent. NYC, LA and even Portland have produced short videos to help local companies tell the story of their city. Seattle has no such film, until now. The film will be the perfect one link to send to convince ambitious creatives, potential business partners, or top candidates from around the world to bring their passions to the northwest.

3. Have the community tell its own story. Everything about this project is built by the Seattle community itself, and led by well known leaders who have benefited from our creative city and want to give something back. We’ll be inviting people to contribute in various ways throughout the production of the film.

All funds beyond our budget will be used to promote the video, as PR and reaching a wide audience is as important as the video itself.

What I Have Learned In the First Few Founders RAW Conversations

I love entrepreneurship because it comes in all shapes, sizes, flavors and personalities.

As I am sure you know, we have started a new project recently, called Founders RAW.   It’s a video site where we showcase recorded conversations I have with other founders over a beer to get a better idea of their story as well as (hopefully) pull out lessons that other viewer will be able to apply to their life.

One of the perks of founding Founders RAW is the unique opportunity to be the one sitting down with these individuals and drive the conversation.  It’s an honor, and it’s quite fun.

It’s also very educational.  Here are just a few things I picked up after the first 6 Founders RAW conversations.

Entrepreneurial from an early age

Everyone I have sat down with has expressed how they were exposed to entrepreneurial ventures from a very early age.  This may have been through observing their parents operating their businesses, working paper routes during middle-school, creating their first “business” in their youth or somewhere in between.  The common thread I am already seeing is entrepreneurship is taught (or experiecned) very early.  So early, in fact, these people thought it was normal and was what they wanted to do when they “grew up”.

This is precisely what I was talking about when I wrote about Making Entrepreneurship An Infectious Cultural Disease.  If we’re taught from a young age to take responsibly for our business life and chart our own course, well that’s exactly what we end up doing.

Clueless at first

Like clockwork, when I talk to founders it’s bound to come out at some point.  “I was clueless at first.  We had no idea what we were doing and we just tried things to see what happened.”  It’s amazing how high of a pedestal we place founders of companies, thinking they know it all and are destined to succeed from day one.  Unfortunately it can’t be farther from the truth.  Founders are forced to quickly learn on the job.

If anything, we are VERY good actors.  We fool others into believing we know what we are doing.  And we continue to do that until we stumble into actually knowing what we are doing.  I believe this skill is a pre-requisite for a founder: the ability to convince yourself and others you know the next few steps to take towards success.  And then exercise that ability to go find and do what ends up being the next step before it’s too late.

It’s Hard Work!

Founding a company is hard work.  I hear it again and again each time I sit down with a new founder during Founders RAW conversations.  “It was tough man!”  “We worked really, really hard sometimes for many, many years.”  Anything extraordinary will require extra effort on the part of the founder, no exceptions, they tell me.

What’s really interesting is to ask them the next question “So given it was hard work, what makes you different than the other founders who are working just as hard?”   I don’t have a specific answer I can write about right now but I think that answer would be very interesting, specially coming from the horses mouth.

My guess: “I figured out a smarter way to work hard.”  Although everyone can work hard, the most successful people find ingenious ways to get things done quicker, faster, more efficient and with higher quality.  A railroad worker most definitely worked harder than a business man, but it was the business man who walked away from the day with more money, providing him more security.

Hear many, listen to few

An interesting nugget of wisdom has already been touched on in these early conversations.  It revolves around the idea that everyone wants to tell you what to do next and how to best build your company.  “Everyone has an opinion, just like everyone has an _________.”

The key is to hear and understand as many viewpoints as you can, but then parse out what applies to your situation and follow a few solid pieces of advice.  Be very picky on who you give your ear to, who listen to and what you read.

Hear a lot, listen to few.

This is huge!  If you don’t follow this advice you end up like a dog running around looking up every time it hears something and sniffing everything it sees.  This is a quick way to go nowhere, fast.

Man, it’s been quite an awesome few months and I look forward to many, many more beers with other great founders who are willing to open up to me and tell us their stories.

If you haven’t yet watched these first conversations, go check them out now > Founders RAW

Determining Which Problems to Solve Requires Wisdom

An important first step when building a product/business is determining what problem you are actually solving.  Pick the wrong problem and you will waste precious time, resources and energy running in the wrong direction.  Pick the right one and you just might have a billion dollar business on your hands.

The key is to be wise in how you pick the problems you will ultimately solve.

thinkingSean Ellis said it best.

Surprisingly, founders’ instincts to solve problems can also cause us to fail. Many startups miss success signals because they are too busy solving problems. Our instincts tell us to be responsive to customer feedback – especially negative feedback. These problems are so actionable that we feel good solving them. But over time a startup that chases problem after problem creates a bloated, fragmented solution that isn’t really needed by anyone.

 Think about that statement for a minute.  Basically, what Sean is saying is you cannot run around and fix everything that people complain about in your product.  It takes wisdom to decipher which feedback from customers – positive or negative – you should listen to and act upon.

He goes further.

Ultimately the goal of any startup should be to create a “must have” product experience. The signal that tells you that you have created a “must have” product is your true north to build a successful business. You should understand everything you can about the “must have” experience so you can cultivate and protect it. Who considers it a must have, how are they using it, why do they love it, why did they need it, where do they come from…?

A “must have” user experience.  Perfect.  That’s exactly what you need to be striving for and what customer discovery is all about.  He lists of a few questions that need to be asked about the target user.  I can think of hundreds more which need to be written down and answered through interviews, user testing and the customer validation process.

The goal = listen to the positive reinforcements from customers, follow where they are leading and create the best product possible.  All the while not listening to all the negative feedback and not building X, Y and Z feature just because one random customer emailed you and suggested you need to include it.

Be wise my friends.

The Value of Youth Sports In Startup Founder Success

A few recent conversations have turned towards youth sports participation and the valuable life lessons they provide.  One in particular stood out to me – youth sports participation is one of the best training grounds for a startup founder.

How would I know?  I was a competitive athlete pretty much since the time I could run, competed up until college and still remain athletic and competitive today.

soccer1Although I didn’t necessarily know it at the time, as I was playing youth soccer, basketball and baseball I was adequately preparing myself for a life long battle in the business world.  Learning to cope with immense challenge and competition is paramount to a person’s ability to achieve success.

I am so grateful for the experience and for my parents not forcing me into any specific activity, but rather allowing me to participate in a number of sports so that I could further develop my athletic ability, maximize my leadership skills and mature enough to determine which sport I more fully wanted to pursue.

It turned out it was Soccer, and it’s crazy to think back and imagine me as an 8 year old running around in a grassy field on an early Saturday morning thinking I’m just having fun when in actuality I was taking in and absorbing lessons which would help me in my life 20, 30 and 40 years down the line.

Below are just a few ways youth sports help develop a young energetic child into a strong willed startup founder.  I thank John Cook of GeekWire for the conversation that sparked these thoughts.

Teamwork

One of the first things you learn as a young athlete is how to play as a team and how to become the best teammate possible.  No soccer team can win with one person trying to play alone – teams must be able to depend on their offensive players, their defensive players and ultimately their goalie to perform to their best ability.  Players must be willing to step up and take the shot, yet at the same time be able to support and assist their other teammates if the organization is going to function properly.  This requires youth to understand which is which, and the appropriate timing of each decision.

Companies are the same way, they aren’t built by one person. Startup teams must be well rounded, supportive and willing to do whatever it takes to achieve success – for all members of the team.  That, or the team won’t exist.

Leadership

Even at the earliest of ages sports teams will vote on a player to become captain, basically naming the leader of the team.  I believe this is the single best thing we (should continue to) do for our youth.  Captains are usually the more talented of players, have wide ranging experience and are outgoing and not shy in their ways with others.  But most importantly they are willing to take on responsibility.  They must lead the team, delegate when appropriate and stand up for a teammate if something goes wrong.

I believe giving responsibility as early as possible is one of the best ways to develop great leaders.

Imagine the lessons a 10 year old is learning as they lead their team during youth competition.  He/she is learning the basic tenants of team leadership, things they can apply to almost any endeavor.  In short, they are the on-field CEO and the success or failure of the team will rest (at least somewhat) on their young shoulders.

I cover startup leadership quite a bit so if you are a regular reader you will know my basic thoughts on the subject.  Simply put, startup CEO’s need to take full responsibility for their organization from day one.  They must wear the captain’s band on their sleeve in plain view so everyone knows where the buck stops.  This is not for their ego; it’s for efficient and effective organizational structure.  Why should an employee ask 3 people a question when really they should go directly to the decision maker to get the best and quickest response?  If employees in a startup don’t know who the decision maker actually is, whatever startup they are a part of ain’t gonna be around very long.

Failing

I get it, losing is not why we play the game.   Go visit a sports park on a weekend and watch how kids react to losing nowadays.  Yet losing in sports – just as in life – happens.  It actually happens a lot.  Learning to fail gracefully is a huge lesson any person, especially for someone thinking about starting their own company.

Why am I telling you failing is good for children?  Failing, maybe even getting injured  in the process, and then getting back up and trying again shows young athletes that if you do not quit then each new day is a new opportunity to win.  Losing teaches children not everything in life is guaranteed.  In fact, it teaches us more often than not things will not go as originally planned.  Sometimes shit hits the fan and you need to retreat and regroup to determine your next move.  There’s your basic “strategic thinking” lesson in action, a skill founders must employ A LOT.  Losing teaches youth hard work is required to experience success against your competitors.

This is essentially the experience of any early stage founder.  Startups fail most of the time.  Using lessons from our youth we can realize we just need to get back up and try it again, and hopefully we learn something in the process.

Enduring Hard Work

Finally, part of learning from failing is gaining the endurance to last long enough so we can experience success.  I distinctly remember our training sessions during soccer season.  They sucked.  Even if we weren’t going to be the best in the state of Washington (which we were 3 out of 4 years) we were definitely going to be the most in shape.  Coach made it very clear we would be the team with the best endurance around.

So we ran.  A lot.  We ran until we dropped, and then we ran some more.  We learned to embrace hard work and earn our success.  We learned anything worth winning was worth enduring tough challenges and the hardest of practices.  It was our standard and we embraced it wholeheartedly.  We spoke it.  We lived it.  We practiced it and we played it.  No wonder we won the state championship 3 out of 4 years I was on the team.  It was in our our DNA and our blood.

Startup founders need to take ownership of their future.  They simply need to determine where they are going, commit to a standard and uphold it no matter the cost.  They need to bleed confidence to the point where their success is inevitable.  They need to work harder than their competition.  This doesn’t mean work the most hours as humanly possible, that would be as dumb as our soccer coach running us until we all pulled hamstrings, eliminating us from competition completely.  Startups must figure out how to work harder but also work smarter.   Determining and following quality performance standards will do wonders to founders and their startup teams.

Youth sports are fun but they are also incredibly valuable to our society.  If you are a parent I would encourage you to place your children in a positive environment where they can develop leadership and success skills as early as possible.

Just like you.

Although Tempting, Raising Too Much Money Is Not A Good Idea

A 21 year old Stanford grad recently raised $25 million before even launching his payments company.  It was said to be the largest seed round of funding in Silicon Valley history.

This, for him and his other founders, was a terrible mistake. Before I go into the reasons why let’s talk in broader strokes about what the first early years of growth of a company should be.

Initially, you have an idea (a hypothesis) and you sketch it out on a napkin.  You then determine who else you need on your team – go recruit them – and establish the founding group of 3 or 4 people.  After that, you build a prototype as quick as possible and you get it into customers or users hands.  Once released, you observe the usage, gauge what’s working and what’s not, keep what’s working and toss what’s not and iterate as quick as possible.

All the while, you keep your team small, lean and working efficiently running like hell and trying to keep the wheels on the car.

All this could take anywhere between 6 months and 2 years – maybe longer – but it’s the most important time in the company’s history because this is where you are testing things to find the “secret sauce” and how repeatable it can be.  Before leaving this phase you should experience a massive uptick in growth, proving you actually have something worth investing in.  That, or the reality is you just have an idea but you don’t have anything people will use/buy yet.

I explain this because it is not how Clinkle’s, the startup I mention above, story unfolds.  From my understanding – and I don’t have all the facts for sure – is they have been working on this concept for some capacity for almost 2 years, already have roughly 50 employees and just raised $25 million all the while with no product launched.

The crazy thing is the list of investors is star-studded; they are A list investors who have backed many other successful technology companies.  I don’t blame Clinkle for being naive and short sighted when you have these types of people begging you to take their money.

But the reality is they just signed their companies life over to the devil.

The devil?  Yes, they have entered startup hell.

At this point, some simple math and logic can explain. By taking $25 million this early, they just lost all leverage with investors.  They also just put the horse before the cart. When raising money at an early stage, a startup generally gives away anywhere between 20 – 40% of their company.  So, if they raised $25 million and gave away 25% of the company, it’s fair to say this unlaunched company is valued at $100 million post money.

You read that right – $100 million valuation for a startup that hasn’t even put out a product.  This is absurd and it’s a terrible situation for any founder to put themselves in.

You might say that’s too high.  Okay, so maybe it is but given this much invested this early, I have a hard time seeing investors with less than that amount so it’s fair to see the investors share 20% on the low end.

Also, it now raises the exit question.  Given such high investment it now means Clinkle will have to exit for north of $100 million to simply not lose any investor money.  More likely, a $200 or $300m exit would be needed for VC economics to work.  This is not an easy task at all.  A nice $50 million acquisition will now be seen as utter failure.  You don’t think investors wouldn’t block an acquisition offer to sell at a decent price, because it would be bad for their return?

Another thing to consider, down rounds.  Raising this much money and allowing for at least some sort of valuation on the company (even if it was completed using convertible notes there still is an implied valuation) now sets the bar for future fundraising.  Basically, Clinkle just did the equivalent of making their first skydive the Felix Baumgardner Skydive from space.  It’s a bit difficult to repeat this feat.

More to the point, if Clinkle stumbles at all with during their first $25 million and they don’t have out of this world user adoption, they will be facing a down round of funding – meaning they will need to raise another round of funding at a lower company valuation than the previous raise.  The result strips out founders ownership and gravely demotivates the entire team.

Look, I have no idea if Clinkle will be successful or not, they might end up the new Paypal or Square for all we know.  But make no mistake, these are very important founder lessons for a few reasons.

Founders’ best asset is time, in the sense that if they can buy themselves more time to figure stuff out they generally do figure it out.  They key is to figure it out while still retaining the highest percentage of your company possible.  But when you raise $25 million right out of the gate you are not afforded that luxury.  Investors will rake you over the coals if you slip up and not perform.  The problem is Clinkle has no idea how the market will adapt and adopt their product.  That’s what raising a smaller seed round over the first few years and growing naturally affords.

Secondly, the press will kill you if you come out of the gate doing something like this.  Do you want to be known as the next Color (who basically did the same thing) for the entire history of the company?  People love to find the next thing or person to pick on, and as a founder it’s not smart to bring this unwanted attention to your already stressful life.

The lesson here is – mo money, mo problems.  If you raise money at all you should raise enough for money for what you need for the next 12-18 months and be strong enough to say no to investors who don’t have your best interests in mind.

That, or sign your company over to the devil.

Why We Play This Crazy Game Of Poker

poker chips2

Startups are all about risk.

Taking risk is healthy, if not required, for any successful outcome – be it business or in life. Yet not understanding the risks you are taking (or choosing not to take) is the easiest way to find yourself out of money, out of business and out of a life.
PandoDaily ran a few great pieces recently regarding risk. A few things jumped out at me as I read them (and if you have time please read them yourself, super valuable stuff here).

 

The first one talked about the Three Main Risks you encounter as you start a company. Those included:

1) Category risk: Is your market large, valuable, and growing?

2) Competitive risk: Are you about to be disrupted?

3) Execution risk: Can you produce legendary results every quarter?

Although all are valuable, I believe the 3rd one is the most important since ideas are a dime a dozen and quality execution means everything. Of course you must start by picking a large, valuable and growing market. You can even take the most competitive angle on the market, and choose to be the innovator/disruptor rather than the traditional business that gets disrupted.

But if you cannot deliver legendary results each and every quarter, you risk losing the war. My thoughts on execution will be left to another post but suffice it to say executing on your idea makes all the difference.

These three thoughts are very important perspectives to take as you set out on your next adventure, and should’t be taken lightly. I would encourage any founder who finds themselves at the starting line of their entrepreneurial journey to take those three points and write at least one page on each point, detailing how you are exceeding what is required to become a great company in today’s markets.

But I want to bring to light another risk you might not even be aware of – The risk not taken. Or better said, how you view your decision to be an entrepreneur in the first place is worth a deeper look.

Andy Dunn, co-founder of mens online clothing retailer Bonobos, penned an incredible post on taking risk, and the possibility of the risk not taken. I cannot do justice here so just go ahead and click the link and take it all in. Good read…

But it gave me pause. It made me thank God I have chosen this life, for better or for worse. I feel at the end of my life I will be incredibly thankful of the lessons, people, relationships, experiences, money and memories this journey will have provided me.

Each and everyday we are presented with decisions, some small and some large. The crazy thing is at the time we probably don’t realize how imminent these decisions will be on our lives, we are usually so distracted and stressed we pretty much look at the immediate consequences of the choice at hand – make it – and go forward with our life.

Yet, as we all know, consequences can have long lasting effects on our life. Simply by punting – not taking the riskier decision – we are holding ourselves back from fully experiencing the world.

Andy talks openly about his struggles during his entrepreneurial journey. I love it because I’ve been there too! He mentions a time where he realized in the middle of a first date the restaurant where they were dining only took cash. Being a founder living pretty much on credit he basically didn’t have ANY cash – he even went to the cash machine during the dinner only to have the machine deny him any money – so he couldn’t pay for the meal. Talk about the worst feeling in the world, especially for a man.

Outside of those crazy broke stories, Andy dives into why we choose to put ourselves through such difficult circumstances, choosing to take risks, ones that probably seem somewhat unnecessary at the time.

The risk is not in doing something that feels risky. The risk is in not doing something that feels risky.

Very little is obvious in the research on human decision-making and happiness. Very few things are proven. One thing that is proven is this: the only regrets octogenarians have are for the risks not taken.

Here’s why: If the risk taken does pan out, it is good. But if it doesn’t — and here’s the key thing — we find a way to justify the failed risk taken as learning.

So true.

So here we have probably the best breakdown of why entrepreneurs CANNOT NOT take risks. I always found it funny people loosely refer to entrepreneurship as a disease. I think this gets to the bone of why people have been saying such a thing. We are addicted to 1) winning and 2) learning. And either way, being an entrepreneur we will succeed in our journey. We will either win big – financial, social, societal – or we’ll learn a hell of a lot in the process.

That is why we play this game. That is why we bet our stack of chips on our future, because we simply cannot NOT see what happens and learn from the experience.

You can learn more about business, people and life in general in 4 years of a startup than from any university in the world.

That is why it’s so addicting. That’s why we pull up our chair and are willing to place our next bet, because you never know what card will be flipped next.

I would rather ante up to see, wouldn’t you?

Bringing Health And Wellness Back Into Daily Focus For The Startup Founder

It ain’t no secret, startups will consume ALL of you.

As any founder can attest, you have no time to spare when you are starting a company.  You have no time for hobbies.  No time for friends.  Little to no time for family.

And definitely no time for your health.

Things start spinning so fast it’s very easy to add the “Founder 40” as former Groupon CEO Andrew Mason put it, simply by not paying attention to what you are or aren’t doing and what you are or aren’t eating.

That’s why I recently stepped back to evaluate my life and get my health and fitness back on track.  I realized I was starting to get soft in areas I have never been soft and lazy in ways I never have been lazy.

Given, I have paid at least small attention to my wellness since founding Seconds and in fact didn’t put on the Founder 40, so I am glad to say I am not overweight or out of shape.  I have been lucky to have kept up with a minimal exercise routine and stayed fairly consistent.

But what I did do was probably what most of you have let happen – I started to pay less attention to what I ate, how I ate it, what I drank and how often I drank it.  I started to notice how often we would include beers in our company meetings (all 4 of us) and how waiting 8 hours before I ate again would make me so hungry I would then stuff my face with a huge meal only to feel really full immediately afterwards.

(pro tip, feeling really full is not a good sign of healthy eating.)

I write this because I know most of you deep down are thinking the same thing, maybe even more desperately than I am.  All of us want to improve our health and wellbeing, and knowingly we would make the right choices if we knew how simple they really are.

Here’s a short list of things that I realized I needed to get back into my life.  The key to all of them is how I committed to them just as I would commit to showing up for a new job at 9am everyday if that is what they expected.

It really is that simple.

fruitCleansing

I just finished a 10 day herbal cleansing, the first one I have ever done.  To my surprise, it feels great and wasn’t bad at all.  The cleanse consisted of a fIber drink and multitudes of vitamins and minerals through the day and herbal cleanse pills at night.

In the end, it was a reset of my entire digestive and limbic system, and it’s amazing how I feel my body is a lot more efficient in how it’s processing the foods I eat.

I highly recommend doing a cleanse once every few months.

Eat more, smaller nutritious meals each day

I have re-committed to eating more nutritious and that means eating more meals throughout the day, with each meal being smaller in portions.  Eating better is simply a decision and then an act of commitment to keep that decision.  Once you have established the habit, it’s reinforcing each time you make the right decision to eat well, instead of grabbing a quick bite of crappy and unhealthy food.

I have learned to love fruits and veggies, I make sure I at least have a banana, orange, and apple each day, more if possible.  I drink meal replacement shakes and make sure I have a protein rich snack between meals.  During meals, I am aware of the nutritional value of the food I am eating, making sure I have a protein base (chicken, fish, beans, eggs, etc…) and then add a fruit and vegetable with it.  I also make sure I finish my meal feeling satisfied but not full.  This is key to not overeating and saving on caloric intake, which in the end will result in a trimmed body from weight loss.

Also, drink water.  A lot of it.  More than you think you need.  It’s the wonder drug of life, as hydration makes all other processes work more efficiently.

Simply put, I actually think about the food I put in my body and that makes all the difference.

Don’t drink as much

Drinking seems to be just part of the startup experience.  Every week there are a number of events going on in the startup community where free beer and wine are offered to meetup attendees.  Who can say no to that!

I realized I was drinking quite a bit of beer each week, and heavy beer at that.  I am not a “light” beer drinker either, I enjoy a strong well made Amber or darker beer with more hoppy taste.  And along with the hops come calories, which if you are not careful will start to add up week upon week.

Think about the affect this can have on weight gain – one beer roughly equals 100 calories.  A pound of body fat equals 3,500 calories.  Without even thinking about it, drinking 5 beers is another 500 calories in your system.  Conservatively,  if all you did was drink 5 extra beers each week you will put on almost 10 pounds each year.  Work on a startup for 4 years and you now see how easy it is to put on the Founder 40.

Keeping an eye on your alcohol consumption – amongst many other positive benefits – will help keep the LB’s off.

nike-shoesExercise every other day

Founders are notorious for having little time for anything else in their life besides working on their startup.  Yet counterintuitively, committing to an exercise routine of every other day actually makes you a A LOT more energetic and productive, giving you the feeling of creating more time in your day.

The cool thing is it doesn’t have to be a 2-hour workout every day.  As little as 20-30 minutes, every other day, will do tremendous improvements to your fitness.  I go on a 3 or 4 mile run and do about 15 minutes of strength training every other day and I feel great.

Honestly, I feel like 23 as I approach my 33rd birthday this summer.  Trust me, do whatever you can to get activity 3 or 4 days a week and you will be shocked at what happens to your life.

Walk whenever possible

In addition to working out every other day, I now pay very close attention to getting out and walking to meetings around downtown Seattle.  Yes, I need to leave a little bit earlier for the meeting but it pays off in the end.  It reinforces my active lifestyle, it gives me fresh air, it keeps the metabolism up and burns energy throughout the day.

Get up from my work station at least once per hour

Similar to walking to meetings, it has been proven sitting for long periods of time is very unhealthy.  It’s bad for our posture, bad for joints, bad for our circulatory system, bad for our digestive system and just downright not good for the body.

Making a habit to get up and do a lap, going to the bathroom, talking to another co-worker or whatever you want to do will keep you limber, awake and give you an edge health wise.

To me, it also allows to break up the monotony of the sitting workday.

To all those who say “I need to concentrate on coding or designs” I urge you to simply stand up at your desk, stretch and do some work on your feet for a while.  Also, you will find taking frequent breaks will keep you sharp, alert and might even help you with your work!

Pay attention to how I look and feel

Finally, all this has helped me pay a little more attention to how look and how I feel.  That’s not a bad thing!  We are told to not care about ourselves and not be so self centered about looks and things like that, which in some ways has its logic.

I agree, to an extent.  No need to overindulge in yourself.

But to barrow a dev term, we only build what we measure.  So if you are paying attention to your health and wellbeing, you will start to notice things about it you want to change.  Once you identify what needs to be changed, only then can you start down the process of changing it.  If you don’t pay attention, obviously nothing will happen.  So paying more attention to how you look, dress, how you feel climbing stairs and walking long distances will go a long way to help you become a healthier and more fit individual.

These simple things have really influenced me and my health recently, and I guarantee they will make positive changes in your life too.  All you need to do is make a few small but significant commitments in your daily life.

Seconds Highlighted on Started In Seattle, And Discuss How To Get Noticed

We were highlighted on Started in Seattle yesterday.  Started in Seattle is a a new site where Stephen Medawar and Chet Kittleson profile startup that were actually started in Seattle.  (Stephen made the distinction that it not just companies that reside in Seattle, but you actually have to have started in Seattle.)

Here’s our profile.

It’s a cool new idea and I was honored to do a short interview with Stephen, where he asked a few questions about how to get noticed in a very busy and competitive market.

How Do You Meet Other Cool and Smart People In The Startup Community?

coffeeI was at an event last night and started talking to a person who was younger and newer to the startup community.  During our conversation he asked something that slightly caught me off guard, given his current job at a fairly well known tech resource here in Seattle.

“How do I meet more cool and smart founders and engineers around Seattle?  I mean, what do you do?”

Although he is young – about a year out of college and just getting his feet wet in the professional world – I was still taken aback.  It struck me as odd that someone wouldn’t know where to go and where to look to meet other entrepreneurs.

But then I realized it might not be as obvious to others as it is to me.  I’m a bit more social than most and have had the opportunity to get tied into the Seattle startup community over the course of the last few years.

So if you find yourself asking the same question this person did, here’s a few ideas on how to meet more people doing cool stuff in your community.

Go to a lot of events

It may seem obvious but going to local startup events is one of the best ways to meet new people.  The only drawback is you have to get over the awkwardness of being around a lot of people you really don’t know and looking around to find someone to talk to.  There’s no point in taking the time and energy to go to an event and just sitting on the side by yourself waiting for someone to come talk to you.

Just bite the bullet, find someone in the crowd who is not mid sentence in another conversation, put out your hand, introduce yourself and start the conversation.  BUT remember – only stay in conversation with one person for 5 or 10 minutes before gracefully wrapping it up, grabbing a card if you want and moving on.  No one likes to be cornered by a stranger for an hour.

Go to Hackathons and specific meetups

Hackathons, by their very nature, attract smart and talented people.  If you want to find the people who are hacking away on the newest ideas, you need to start going to local hackathons.  By the end of the first night you will have found a new team to help  build something new and in the process make a handful of new friends.  

Also, seek out a few meetups that fit your interests and just show up.  There are groups meeting in your city on almost anything imaginable.   If you can’t find something that interests you – start one!

Ask your close friends for introductions

Asking the people you already know to introduce you to someone they think is smart and would be a great connection is another way to expand your network.  It’s best if you identify the person you want to meet and specify the reason for meeting them, it makes their intro a lot easier.  One thing to remember on intro’s:  The person doing the introduction is putting their reputation on the line when they introduce you – so make sure you follow through and act professional.   If not, it looks bad on you as well as the  person who connected you.

5o coffee dates

Mark Suster wrote a while back about committing to 50 coffee meetings in a year.  While extreme, the point is clear – committing to having coffee with others in your community will lead to introductions and opportunities you never would have thought were available to you.  So next time you are out at an event or meetup, simply ask the person you are talking to if they can meet for 30 minute coffee next week.  At the end of the coffee meeting, ask the person who they would recommend you meet next.  It works…

Start writing

When I started blogging and guest posting on other media outlets, it opened up another channel for people to reach out and connect with me.  In fact, that is how I founded Seconds (actually, my cofounder read an article I wrote on GeekWire and he cold emailed me to ask if we can meet for coffee – see how it works!)  Putting your thoughts and words on screen and publishing them out into the world allows others to “virtually” get to know you and how you see the world.  On your blog, make it easy for others to connect with you, via Twitter, Facebook or email.  Trust me, it does wonders for your future.

So there you have it.  Don’t be afraid to put yourself out there and get noticed.  Go to events.  Put out your hand.  Say something.  Write something.  And for god sakes book some meetings!