Tag Archives: Startups

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

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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.

Founders RAW: Find Problems. Create Solutions. Scale Quickly

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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.

Talk To Enough Successful People And Patterns Emerge

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I am truly grateful for what have the opportunity to do each and every week.

We started Founders RAW a few months ago and are almost to our 10th full conversation with entrepreneurs here in Seattle.   For those who aren’t aware, Founders RAW is a new multimedia property where we showcase videos of casual conversations with other startup founders.  When I realized I was having great conversations with my founder friends at local startup events I decided we need to record this stuff and push it out to others.  Maybe you can learn something as well.

Check it out for yourself >  Founders RAW.

I typically sit down with one person each week, grab a beer and dive deep into what it’s like to start a company.  One of the big things I have taken away thus far is how patterns emerge during these conversations.

Founders RAW behind scenes

Sitting with Simon Crosby during our Founders RAW conversation at the WTIA TechNW event in Seattle.

What do I mean by patterns?

By patterns I mean in how these founders identify the challenges they face and how they dealt with and overcame them.  Not to say all entrepreneurs experience the same things, but as I peer deeper into my conversations and read between the lines, certain characteristics or principles seem to be emerging.

The founders also seem to allude to similar experiences of company near-death and despair – yet they continued forward when all seemed lost.  So yes, no one is immune to the inevitable challenges and tough times ahead.

Benind scenes 2

Sitting with Carlos Guestrin during our conversation at the WTIA TechNW event in Seattle.

Vision

Each founder I talk with embodies a strong sense of vision – they know where they are going and what they want to accomplish.  Vision is what sets them apart from their competition and allows them to navigate changing waters when their market matures and shifts with the times.  John Cook had a vision of digital media even when he was working  as a reporter for a traditional newspaper.  Amazingly, he pitched them on rolling out a whole new concept involving the web and digital properties, only to be shot down my management.  So he left and started it himself!

We know now who had the vision and who was stuck in the past.

Strength

The founders I have spent time with all have the quality of strength, meaning they are able to endure and deal with the challenges ever-present in entrepreneurship.   Whether it be dealing with co-founder issues, standing up to advisors and investors when their business model is challenged, or when push comes to shove they determine to out innovate the competition.  Adam Lieb, founder of gaming social network Duxter, displayed a strong sense of character as he detailed out his experience raising money from angel investors.  It’s not easy for startup founders to raise money, especially here in Seattle vs down in the Valley.   The lesson I took was investors want to invest in strong, vision oriented founders, not weak leaders who will bend at any sense of difficulty.

Flexibility

Lastly, as market forces change the tech landscape founders must be flexible and change with it.  Advancements in technology are only speeding up and drastically influencing how we build our companies.  Just a handful of years ago AWS/Amazon was nowhere to be seen.  Now, because startups can now host in the cloud using services like AWS and Heroku, startup costs have dropped dramatically and thus have allowed a founder to launch a company in under $5K initial investment.   Bob Crimmins made a huge point regarding this as he spoke about what he is seeing with the TechStars companies he mentors.  “They act quickly, test frequently and iterate often.”  That is why the successful ones are growing – the lowered cost to start and grow has allowed for more/quicker iterations of web products and services.

It’s been fun thus far and I can’t wait to see what happens next.  And I think you should do this too!  No, you don’t have to record your conversations like we are but I think Mark Suster was onto something when he says you should take 50 coffee meetings this next year.

John Cook

Chatting with John Cook of GeekWire during our Founders RAW conversation.

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

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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.

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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

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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

Founders RAW: John Cook of GeekWire Tells His Awesome Startup Story

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“If you just hang around long enough… you’ll make it.”

In the latest installment of Founders RAW I recently sat down with John Cook, co-founder of GeekWire, a growing media resource here in Seattle covering technology and startups.  It’s a great conversation, ranging from his memories of his entrepreneurial parents to his lessons from youth sports and onto his crazy startup experience with launching GeekWire.

Founders take note, John is not only a budding entrepreneur himself, but since he covers other successful founders he knows what it takes to make things happen.

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

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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!

Here’s My New ‘Current Projects’ Page, So Y’all Can Keep Tabs On Me

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I am noticing a trend forming in my life.

I’ve been more open to starting a few new projects lately and so I decided to update this blog and create a spot where you can go to at any point in time and check out what I am working on.  You can find the link at the top right of the header menu bar on this blog.

Current Project page.

Below you can see a snippet of things I am up to right now.  More will probably come soon but this is what is happening at this point in time in my life.  Given the fact I am currently also doing some outside contract work for other companies, I am only listing the projects/companies I have founder or equity stake in.

Enjoy.

And reach out to me if you are interested in partnering or getting involved with any of them.

Current Projects

Seconds logo

Seconds is a payment system allowing you to swiftly complete transactions via the desktop web, mobile web or text message. It shouldn’t matter what method you use, the payment experience should be as quick, simple and intuitive as sending a text message.  Realizing how important ongoing relationships are between customers and merchants, and also realizing the main point of entry into our world is now through our mobile device, we see an incredible opportunity.

 

Callin'it logo 2

Callin’it is a mobile web based real-time sports prediction and data analysis platform.  Using Callin’it, people are able to test and share their sports knowledge by publically predicting – or calling – stats, plays or outcomes of an upcoming sporting event.  For instance, right now I am calling the Miami heat will have more rebounds than the Chicago Bulls in tonight’s game.  Using real time sports data, we then compare the specific call with the actual result to build out a score for each user based on the accuracy and difficulty of their calls.  If Twitter and the ‘SAT’s for sports’ had a baby, Callin’it would be their lovechild…

 

Founders Raw logo2

Founders Raw is my newest project, a video blog with conversation style interviews focused on bringing out  raw stories early stage founders experience in their rough and tumble entrepreneurial journeys.  I invite founders to talk openly over a beer or a coffee about the “truth” of how they survive and grow their companies.  We intend on slicing up the conversations and sending out daily videos no more than 3 or 4 minutes long so we all can receive daily nuggets of the entrepreneurial truth.

 

Published Books

The Agony and Ecstasy of Entrepreneurship

The Agony and Ecstasy of Entrepreneurship has been adapted from this blog, So Entrepreneurial, and placed into book format.  They are my thoughts and musings on all things entrepreneurial, meant to help you understand what it takes and how to think like an entrepreneur in today’s world.  Far from perfect and by no means the only way to go about the journey, they represent my lessons taken straight from the trenches.  Since my thoughts originated as blog posts it’s best to take them piecemeal, maybe even digesting just a few topics each day. You will find my main perspectives are around mobile, digital and internet technologies but the principles can be applied to any other entrepreneurial focus.

When Your Startup Feels Less Like A Hockey Stick And More Like A Hip Check

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We all love to talk about the hockey stick moment for a company, referring to the moment when users and usage really starts to take off.  It’s fun.  It’s exciting.  And  it’s so elusive we all want to dissect what the specific company actually did to achieve the stratospheric growth.

But what about the hip check?

What’s that you say?  Never heard of the startup hip check?  Well, take a look at the image below and I think you can get an idea of what I am talking about.

3HipCheckPretty scary huh.

This head-over-feet-over head-over-feet feeling can happen at any moment of a company founding experience.  Sometimes it happens within the first few months of a new idea as the honeymoon wears off and founders realize the pieces don’t fit and they don’t have a starters chance of even putting something together.  Other times (like mine) you get up and running – even get some initial customer wins under your belt – and then it hits you when you least expect it.

BAM – “what the hell was that!?”

In any regard, getting hip checked throws you and your company completely off your feet and off course.  There is a good chance an injury has occurred and you may never recover.  It feels like what I imagine the hockey player above must have felt as he was brutally checked right onto his a**.

And you know what?  It happens to EVERYBODY.  All athletes.  All entrepreneurs.  everybody.

So what do you do once you shake the cobwebs out of your head and realize you just got taken to town?

Pause

Simply pausing and taking account of your status is the first thing you should to do.  At this moment do not let tempers or emotions get the best of you.  Athletes ask themselves questions like: Do I have all my limbs?  Are my legs situated in the right direction?  (Anyone watching this years NCAA basketball March Madness tournemant will know know you should now check all your limbs after a bad fall.)

Rather than get emotional and retaliate, athletes need to assess why it happened.   Was I too slow?  Did I make the wrong move?  Was he just flat out better than me?

Entrepreneurs need to ask similar questions:  Why did that just happen?  What did we miss?  And what is our financial status, how much money do we have in the bank?  What do the others on the team think and feel about our situation?  Are they hurt and need to go recover, or can they keep at it?  Also, who else knows we just got hip checked?  Was it reported in the media and did we take a PR hit?

Through these questions you will determine if the company can and should continue, or if indeed it’s best to step off the ice.

RICE

Rest.  Ice.  Compression.  Elevate.

My education taught me RICE was the simplest injury treatment protocol, basically placing it in a state of limited movement and maximum preservation.  Same for a startup.  If continuation of the company is desired, I am suggesting taking a similar approach with your startup.   You have to stop the bleeding (financially) and start the healing process (working) as quick as possible.  If needed, go get a paid gig as quick as you can so cash starts flowing into the bank once again.  I waited way too long on this one and can tell you it wasn’t pretty.  Cash really does solve many problems and helps to open back up the creative process since a huge pressure valve is released.

Open the communication lines with your team, have long discussions about why the hip check happened so you can start the healing process.  Through these discussions the weaknesses will be revealed and the ways forward will emerge.

Elevate yourself.  A strange (albeit predictable) thing happens when founders get hip checked – depression.  Since it takes a certain chutzpah to start a company, namely audaciousness and ego, I have noticed those also work against the entrepreneur once they find themselves face first on the ice.  Of course this isn’t what you expected as you started out and most definitely how you didn’t want others to see you.

But there you are.

You must get up.  You must inflate that ego (figuratively speaking) back to where it was before, when you believed in yourself and your team.  A positive and forward looking perspective is the only way to recover from the hip check.

Skate Again

If you watch a hockey game it doesn’t take very long to notice how often hits and checks happen to all players.  And you know what?  They get back up and shake it off.  They try again.  It’s quite the same in the startup world.  Everyday, founders are getting hip checked to founder hell and back.  Yet, the ones we end up reading about are the ones who got back up and tried again.

Elon Musk has probably been checked more than most other successful entrepreneurs out there.  Did you know there was a time he was literally broke as he was building Tesla and SpaceX?   At one point he put the last of his millions he had made previously into his companies so they wouldn’t go under – personally financing them and risking everything he had worked for  – and then lived off loans from his other millionaire friends.

Yes, and now people say he has it too good as a billionaire and CEO of two incredibly innovative technology companies.

Hmm, well there’s a reason Musk refers to founding a company as “it’s like eating shards of glass and staring into the abyss of death.”

Because it’s true.

I simply say: Just get up and keep skating.

Earth To USA Today and JP Morgan – There Are More Startups Today Than Ever Before

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A recent column in the U.S.A Today makes the bold claim that there are less startups today than compared to the 1980’s, during the Carter administration.

The rationale:

At any rate, the latest data indicate that start-ups are becoming rarer, not more common. A new report from JPMorgan economist Mike Feroli indicates that employment in start-ups is plunging. New jobs in the economy tend to come from new businesses, but we’re getting fewer new businesses. 

I am going to guess Glenn Harlan Reynolds, a professor and the author of the post, is not an entrepreneur and has never been one.  If he was one he would know basing innovation metrics and the quantity of “startups” solely on the amount of people they employ is an incredibly flawed argument.

Screen Shot 2013-05-06 at 8.00.44 PM

Diving deeper into the JP Morgan study, they lay claim to a few reasons on why we are seeing an apparent slow down in startups:

Hudson’s possible suspects for the slowdown: a) higher business taxes, b) Obamacare, c) an IRS crackdown on US employers that hire U.S. workers as independent contractors rather than employees, and d) a steady barrier erected to entrepreneurs at the local policy level.

But whatever the cause of the entrepreneurial decline, two possible impacts: 1) A less productive and innovative economy, and 2) higher profits for big business thanks to fewer upstart competitors on the horizon.

Here are a few observations on why I feel this assessment is off the mark:

1) Assuming Obamacare is a factor completely misses the point, since Obama wasn’t even in office when the decline in jobs started (see chart above).

2) Although a local policy issue may influence certain industries – since we’re talking the entire nation here it’s irrelevant to include local policies because they vary state to state.  I, for one, can tell you it’s quite easy to get going in your own new venture.

3) The IPO market really cooled off over the last decade, suggesting a rise in mergers and acquisitions.  Simply stated, startups are being bought by bigger companies before they beef up their workforce, which also will affect overall startup employment numbers.

4)  If anything, they miss the most obvious reason why people would choose employment at a larger corporation rather than a startup: job security and dependable paycheck in a shaky economy.   Although this also doesn’t apply since the economy didn’t tank until late 2008 and beyond, so again, not a very high correlation.

5) The largest omission in this report can be seen by evaluating technological progress and the resulting drop in computing costs.  Comparing the chart from the JP Morgan article and a graph of Moore’s Law (which is exponential) you now realize using a simple number like the number of employees of startups is probably the wrong approach when determining the current status of innovation.  Moore’s Law states the computing power is increasing at the same time the cost is dropping.  So, it is easier to start a business than ever before. The cost of computing, virtual work environments, AWS, instant and free communication tools, and the proliferation of the web have coalesced to create a startup nirvana.  Looking at two charts from the same timeframe you will notice the stark drop in jobs at the same time a drastic increase in computing power?  Coincidence?  I don’t think so.

So am I missing something here?

Maybe if they simply stated “startups are employing less people” I wouldn’t have a problem with the report.  But they didn’t.  They claim (in fact lead with) the idea that there are less startups and innovation than in the 80’s and 90’s, which I feel is wrong – or at least how they came to that conclusion is currently flawed.  They go on to make a few solid points regarding higher taxes and government regulation and how those influence an early venture hiring but lack any real depth for their argument.  Maybe they should have consulted an entrepreneur or two who could help them sift through the chaff a bit further.

Moore's Law of Computing Power

Moore’s Law of Computing Power

My take: it takes less people to achieve more today.  What once took a team of 10 to accomplish now only takes 2 or 3 people and a wifi connection.  So I am claiming the exact opposite of the USA Today and JP Morgan.  We are seeing more products, apps, and startups created today than ever before.  Ask any VC or startup founder and I guarantee they will say the same thing.

Hell, Instagram and their entire team of 12 employees was sold for almost $1 billion to Facebook in 2012.  So whatever you do, do not believe there is a lack of innovation and startups out there.  If anything, there’s more innovation and startups created each day than ever before because we can do more with less.

One just needs to look closer and use the right measuring stick.

What It’s Like Inside SURF Incubator After A “Wild And Unforgettable” Year

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Screen Shot 2013-02-24 at 6.52.04 PMIt’s 4:45pm on a cold and wet Thursday afternoon in downtown Seattle. Perplexed and a bit agitated as I walk down 2nd Avenue , I find myself rushing back to the office like I’m late for an important meeting. Being February – still cold and rainy in Seattle – it’s not a good day to be trekking back across a PNW city. In fact, it’s blistering cold. You know those days where it’s a wind-whipping-your-face type of evening, making your walk that much worse. A better idea would be to stop and wait inside a warm building for a cab or grab an Uber.

But I don’t care! It’s happy hour at 5pm at SURF and I ain’t missin’ out!

Over the past few weeks, I have been reflecting on my last 12 months and I cannot talk about the year without mentioning SURF. SURF Incubator opened their first full time location in Seattle almost a year ago and Seconds had the opportunity to be a tenant pretty much from the day they officially opened.

I wanted to take a moment and review the last year with SURF Incubator, what they are about and what they are looking to do next, because I believe it’s one of the best things to happen to Seattle’s tech scene in quite a while and you should probably hear it right from the source.

To begin with I must admit I wouldn’t be here today – not only writing this but as a startup – if it weren’t for SURF Incubator and the support of the two individuals running the show, Seaton Gras and Neil Bergquist. If only to speak for the larger group, I feel the support, encouragement and the SURF community is truly a blessing for an early stage startup still trying to find its way.

Seconds could easily be the prototypical startup Seaton loosely refers to when he describes SURF and its story of survival, evolution and filling a need for early stage startups.

According the Seaton:

“For three years, prior to being in the Exchange Building, I ran SURF Incubator at numerous locations – including Regus, friends’ offices, FiberCloud, restaurants, coffee shops and even my condo’s meeting room. It was a wonderful time to experiment with different ‘products’ from consulting and meetings to networking and roundtable discussions.”

“The sad thing was that I did not have enough square footage to offer any long-term working space for my members. Even so, the membership in my two Meetup groups continued to grow and was more than 1,000 strong when I began looking in earnest for a permanent large space to call home and fulfill the bigger vision that I had for SURF Incubator.”

For those who aren’t familiar with SURF, it provides office space for tech-oriented startups so they don’t have to work out of their homes or in random coffee shops around Seattle. They host events, organize meetups, partner with local service providers (legal, recruiting, etc…) and help young fledging startups with the nuances of getting out of the gate on the right foot.

Maui Huge Wave

Realizing SURF needed a permanent home, Seaton secured office space in the Exchange building in Downtown Seattle and officially opened their doors in April 2012. “Now, with the new location at the Exchange Building with more than 15,000 square feet, we have been able to create and/or host some amazing events. Having a permanent location has really helped SURF Incubator do much more. We have also been able to host some wonderful happy hour events as well as some fantastic networking parties and meetups.”

Four years into their journey and almost a year into their permanent residence (and seeing it first hand) I can say Seaton and Neil have pulled it off. I am quite impressed and it’s only the beginning. Walk down to any coffee shop or talk to entrepreneurs at various events and their ears perk up when you mention you are a SURF startup. It is obvious SURF has exceeded expectations of both their tenants as well as the greater Seattle startup community.

But more waves are forming on the horizon.

SURF just announced their biggest deal to date, and in my opinion have just set in motion a chain of events no one inside SURF could have predicted. The newly announced B2B accelerator 9Mile Labs will be taking residence inside SURF and holding their 3-month program in SURF’s office space.

This is great news and you can literally feel the change taking hold inside SURF. It’s like we just dipped down on the rollercoaster and are now speeding up the other side.

According to Gras, 9Mile Labs was attractive for a few major reasons. First, they are unique because they are focusing on Business-to-Business startups and are offering follow-on support. “Their program was of particular interest to me because they offer more than just a 3-month program. Three months, in my opinion, is not enough time to really gain adequate traction and in the B2B space, this is even more of an issue. So, I think it is wonderful that 9Mile Labs is looking at 3-months to Demo Day, followed by 3 months of continued support.”

And although 9Mile Labs is a newly formed accelerator, they have already gathered amazing traction and a strong board of mentors. The long list of high-quality mentors is very impressive and will positively impact 9Mile startups as well as the larger SURF community. “These mentors offer a vast amount of experience and since experience can make all the difference for a startup, it’s a great opportunity for the chosen group of 9 startups,” Gras added.

Very true: with experienced professionals by your side startup founders are much less likely to make fatal mistakes.

The 9Mile Labs deal cannot be understated. For a fairly new incubator space still in its infancy, SURF just further solidified its place in the larger Seattle tech ecosystem. In addition, by partnering with an “accelerator” program SURF now expands the opportunities it can offer early-stage entrepreneurs.

IMG_0008

Every day is unique at SURF. With the diverse companies inviting friends, families, customers and advisers to take a tour, we have always a different mix of people. The companies run the full gambit from medical and educational to gaming and cloud services (and payments!) and any given day you will find yourself in a conversation with someone who can teach you about a new industry or business model.

In addition to local visitors, people from more than 30 countries have stopped by for a tour.

This is especially interesting for Seaton, since he spent so many years traveling around the world. “For me, it is such a pleasure to get to meet these wonderful entrepreneurs, get to learn about their plans and see their vision unfold. And sometimes, I get to ‘lend a hand’ by sharing my own perspective, which was learned the hard way … my own struggles with building my businesses,” said Seaton.

According to Neil Bergquist, the year has been “Wild, it’s nothing what I expected but has become everything I wanted it to be!” He also added it has been a huge learning experience for not only him but also the entire SURF management team.

To say the last 12 months have been wild is an understatement. My take is it’s quite possibly the best place to plant yourself as an early-stage founder in Seattle looking to soak up startup knowledge and wisdom. You could meet possible cofounders like I did, engage in numerous happy hours and gatherings, learn from various service professionals and continuously meet interesting people. All those are important, especially when you are just getting out of the gate.

“During the last 12-months, we have held about 200 events. Topics covered included two main areas: Business Development and Programming. For the business development, we had professionals present detailed informative sessions on marketing, corporate formation, intellectual property, employment issues, graphic art, go-to-market strategy and much more. For the Programming side, we held meetings where programming languages were discussed and demonstrated. For example, Ruby on Rails, PHP, MySql, Scala, Android, HTML5, XCode and Windows8.”

So what’s next for SURF?

Neil mentioned expansion is on the horizon but the need to operationalize (which comes with growth) is paramount. They will soon be adding a complex educational program for members – both in programming and business development. Seaton strongly believes programmers need to constantly learn about the new features of their particular programming language and hopes the education can be supported by a grant.  “These languages are very dynamic with new features added almost every day. Without vigilant study, a programmer may actually go backwards and may ultimately ship an obsolete project. I know this … because it has happened to me.”

He’s totally right. No matter how seasoned an entrepreneur may be there is always a need to learn the latest perspectives. For example, Twitter and other social media tools have forever changed the way businesses promote their products, services and even their existence. We all, regardless of age or experience, need continual education on how to leverage the latest technical advancements.

I can tell you 12 months ago I had no idea I would be sitting here thanking these two individuals for not only opening their doors for me and my team but changing the Seattle startup landscape in the process. It’s amazing what they have accomplished in such a short period of time and I can only imagine what this next year will bring.

I know one thing for sure – those typical “two guys in a coffee shop”, even though they are working dutifully, are definitely making a mistake.

Blood + Sweat + Tears + Code + Polish + Sales + Luck = Startup

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Startups are tough…..  Here’s a simple equation to get you headed in the right direction.

Blood + Sweat + Tears + Code + Polish + Sales + Luck = Startup

BloodSweatTears_02

Blood – Like an initiation to a gang, founders basically cut their hand and make their pledge to build a successful company.  No Blood, No Commitment.

Sweat – A massive work ethic and a JFDI attitude  will be required to break down all barriers and knock down all doors along the way.  Better bring your gloves, water bottle and a sweat towel.

Tears – You will feel pain.  You will cry.  It’s ok.  A better way to think about it is if you haven’t cried because of your startup experience you are on the road to nowhere.  Comfort doesn’t equal success.

Code – Something needs to be built and someone needs to code it.  Piecing together other services or just pulling API’s is not defensible long term.  Figure out what you – and only you – can create and then protect the IP.  Once you build the secret sauce you can outsource all other technical needs of the product.

Polish – Design is quickly becoming the great differentiator between the good, the bad and the ugly of technology.  User experience, or how the end user interfaces and understands your product, should be your number one focus.  If a user doesn’t enjoy using your product why should they tell their friend to use it?

Sales -Plain and simple, customers pay the bills.  A startup’s need for sales and marketing talent is still undervalued in today’s technical heavy Silicon Valley.  Minus a large investment, your startup will wither on the vine if no revenue is ever generated.  And if VC’s ever do invest they will want to see revenues, so either way sales and marketing are a core function of startup success.

Luck – Perhaps the most important of all is luck, which unfortunately is out of the hands of the founders.   But the saying goes “you make your own luck” so being in the right place, at the right time, in the right market, talking to the right people and releasing the right product all can be influenced by the founders.  The more chances you take the more lucky you get so get out there and get discovered.

Pretty simple stuff.

Startup Death Valley: What It Is And How To Get Out

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I’m sure a large number of teams reading Techcrunch or other tech blogs right now are in the same situation my company found itself recently.  It probably goes something like this: you have a startup, a product, users and a maybe little revenue.  You are growing month over month but really you aren’t where you want to be.

Most likely you are answering questions with reflexive responses such as “well, we are just testing some assumptions right now” or “we’re heading in the right direction, just need a few more engineers on the team.”  Or, how about this one, “oh, we’re still in stealth, you could call it alpha…”

Give me a break.  Quit lying to yourself.

To put it bluntly, you are in Startup Death Valley.  And you need to get out as soon as possible.  If not, your startup will certainly die.  It might make you feel better knowing Death Valley is where most startups end up – not quite done but definitely not making anything happen.  If you do feel better thinking you are not alone, you are most certainly destined to fail.  Finding yourself in Death Valley is scary and should result in only one question: “how long until we’re dead?”


You and I know it wasn’t always this way.  Not too long ago your team was driving forward toward a goal, excited as hell to be at the office until midnight or later hammering away to the launch your latest concept.  And you absolutely knew, once you launched, millions of users were going to flock.  Revenues were supposed to grow.  Investors were most definitely going to call you back.

And then… Crickets.

Now, it’s become a lot more difficult to get out of bed.  You’ve noticed it’s not as exciting to load up the email or go into the office, and definitely not as fun to field questions about your startup.  Reading all the media out there you just wish you could be on the other side, reaching milestones and attracting investment dollars at record levels.  But you’re not.  You get up each day wishing things would be different instead of actually doing anything about it.  In a word, you are complacent.

If this is how you are feeling, you are currently in Death Valley and have little time left.   So, how do those select few companies – the ones gaining all the attention and money – get out (or stay out) of Death Valley?

First and foremost, they make their own luck.  They pick up the dice and roll them again – quickly.  They get out by putting it all on the line and betting the company, just as we did recently.  Oddly, when faced with inadequate growth too many startups just keep heading blindly toward danger only to drive right off the cliff.   This is, quite literally, insane.  They are not self aware enough to sense what needs to change, when, and how fast.  The ability to sense market shifts and adjust accordingly is an incredible skill that can be found in all of the successful founders, especially ones the ones you don’t find in Death Valley.

Without going into detail about my startup, here’s the playbook we just used to redesign and deploy a brand new product within a month’s time, reviving our company and paving the way for a whole new market opportunity.  If you are a founder or early employee of a stagnant startup, maybe this playbook will help you too.

Make a commitment to change
The first step is to determine what you are going to do and how you will go about it.  To get clear on those issues, you need to take an account of what you have or have not accomplished up to this point.  This requires a long and painful look in the mirror by the founding team, revealing truths that will hopefully save the company.

Has your vision changed since the last big development?  What has the larger market and your existing user base told you since your last product release?  What features are engaging users on the existing product?  What is not engaging and not being used.  Point blank, what’s not working?   What assumptions were proven true and what didn’t pan out?

Then it’s pretty simple – keep what is working and throw away what doesn’t.  Really, just scrap it.  In our experience it was smarter to cut the fat and trim features rather than just add new ones we thought might work.  For a number of reasons we actually decided to rebuild rather than make additions to existing codebase.  Contrary to popular belief, this is more challenging than it sounds.  Why? Inherently, humans tend to be scared and freeze when making drastic changes on things they spent long periods of time working on.  It all comes down to our natural fear of change.  This is no truer as an employee of a Big Co. than as it is as a startup team reviewing their V1.0 product.  The reason is we fear change.  Yet, this is exactly where we found ourselves with our product – growing but not growing very fast. Ultimately, we decided we weren’t scared of the consequences since we knew if we did nothing, nothing would change.  Actually, that’s not true.  It would have been the end of the line since “good enough” is actually not good enough in the big leagues.

State it VERY publicly
Almost nothing gets done until there’s a deadline.  Although dates set internally are the start of it, they are only as good as your team’s integrity.  Unfortunately, it’s way too easy to fudge on commitments when they are loosely agreed upon between a few team members in a private meeting. Fully committing to a new product release required establishing a public event and trying it to our new product.  To make it even more drastic of a commitment, we also stated this publicly and promised a large group of people they would be using our system, the very product that wasn’t yet built. This was really the only way to move the needle.  Similar to launch parties, larger public commitments set solid deadlines teams must respect.  In fact, DEADline is a great word since that is what you will be if, in fact, you don’t meet it.

Do whatever it takes to deliver
Staying at the office until wee hours of the morning, having intense discussions of where buttons and other little details should be placed, and not spending time with friends or family because a deadline is fast approaching, these are all signs you are doing whatever it takes to make things happen.

The biggest sign: you are more afraid of not delivering and failing in public than anything else in the moment.

We found ourselves performing at levels we hadn’t reached in quite some time, if ever.  The last few weeks were a blur, and we didn’t sleep at all the night before our release, not because we were excited like Christmas Eve, but because we HAD to deliver.  Although not amusing at the time, the moment media was suppose to go live (6am EST) announcing our latest release, our site was actually down.  How fun!  Even more challenging, throughout the entire launch day our system was incredibly buggy due to a DNS change and other small issues.  Yet I was as proud as any startup CEO could be watching our entire team set aside all other distractions, doing whatever it takes to push out a successful new release.

The lesson here is simple – without a predetermined public commitment connected to a larger event we would never have pushed ourselves as hard as we did.  We would have stayed in Death Valley, remaining complacent like the other 90% of startups out there.   We smartly made a commitment others outside our organization could hold us accountable and expect us to deliver on.   It was very risky.

Yet, through the very late nights and stressful moments an awesome feeling started to emerge:  Damn right, we will most definitely make this happen.

image via Flickr user Michael Ransburg.

Café SURF: How A Startup Incubator Turned Tech Hangout In Less Than A Year

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The Seattle startup scene just gets better by the day.  One of the coolest things to come out of Seattle this year has to be SURF Incubator, which opened in April and is now home to more than 40 startups.

Yes, there are other startup spots in Seattle (ones where I have thoroughly enjoyed spending my time), but the progress SURF has made in less than a year is staggering.  Over the last five months they have grown from just a glitter of an idea into a strong argument for the tech startup epicenter of Seattle.

Not a week goes by where something’s not happening in their massive office space.  They’ve thrown a raging launch party, hosted entrepreneurs from 23 countries, facilitated a number of members to join forces and become cofounders, hosted various meet-ups and weekly tech gatherings, and let’s not forget the frequent and tasty happy hours!

Community-supported space for digital startups

SURF is dedicated to advancing the ideas and passions of technology-focused entrepreneurs.

I believe the vision of SURF founder Seaton Gras and Director Neil Bergquist for a better startup experience is the main reason SURF is seeing such awesome adoption.  That, and the fact that paying an arm and a leg for office space is pretty much a non-starter for most early stage startups.

Entrepreneurs around the world can be more productive when they collaborate and have access to a broad network of business and technical resources. Working at home or in a coffee shop makes it difficult to gain exposure to fellow subject matter experts. It’s also hard to maintain momentum or gain any serious traction.  SURF can reduce the barriers of entry by providing flexible and affordable space with a robust community of resources. This reduces entrepreneurial risk and enables startups to operate incredibly lean.

Realizing people love hanging out at SURF, today they are announcing their latest concept, Cafe SURF.

Entrepreneurs who may not be ready to lease office space and typically work in low-cost locations such as coffee shops or local cafes now have another option.  SURF Incubator just created its own cafe inside the incubator’s 15,400 square foot facility in downtown Seattle and has opened it up to the public.

SURF is building the cafe to help integrate the startup ecosystem thereby helping entrepreneurs collaborate with one another and engage with the various support resources available at SURF Incubator.

Highlighting the technology and companies built within their walls.

The thing is, Café SURF isn’t your ordinary coffee shop. With the contributions of resident startups, Café SURF is Seattle’s first tech-focused, fully self-serviced coffee bar. Patrons pay just $50 per month and receive unlimited coffee, 100Mbps internet access, and designated work space.

Additionally, food and tea are available for purchase via Seconds, my company and a SURF resident startup, which deploys a text-based mobile payment system. Café SURF members can also provide feedback to the management through a text messaging comment service provided by another SURF resident; Talk to the Manager. Thanks to the various technologies from SURF residents such as Seconds and Talk to the Manager, Café SURF will be sustained as a fully self-serviced operation.  SURF has also partnered with local coffee roaster, Caffe Vita to help establish the cafe.

Café SURF members may attend open office hours with investors, mentors, and SURF Incubator’s corporate partners who provide counsel and startup services. This startup centric cafe is anticipated to become a central link for innovation and networking within Seattle’s technology community.

The technologies and services being integrated into Café SURF are outlined below:

Seconds – Deploying a text-based mobile payment system.

Talk to the Manager – Text message comments to the SURF Café management

Knotis – Online marketing, advertising, daily-deal promotion

Imaginative Design – Creative work

Equilitree – Logo and SURF Café page design

Best Practice – Space design and architecture planning

Caffe Vita – Coffee

Hey Seattle Tech Startups, Should We Host Another Startup Crawl?

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Last year we threw a party called the Startup Crawl, and it was awesome.  On a Friday in August we had 4 various startups around downtown Seattle host for one hour and we crawled to successive parties.  If any of you made it you remember it was great times indeed.  Here’s a bit from last years event.

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 with Cheezburger Inc./Decide.com as the first co-hosts.  After a drink or two, the group moves on to the offices of Estately/Nine-by-Blue to continue the festivities.  Next, around 7pm the group (probably growing at this time) will arrive at Habit Labs on 9th and finish up with a stop at Big Door in South Lake Union.  The afterparty will begin immediately afterwards, held downstairs (in the same building) hosted by Founders Co-op/TechStars.

So, should we do another one this year?  Please let me know and if enough people want another excuse to toss a few back and get social maybe we can quickly get it together.

Also reach out to me if your startup would like to host for an hour during the event.

Hey Coach, What Is A Startup CEO Supposed To Be Anyway?

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As I was chatting with another CEO friend of mine tonight he said something that caught me off guard.

He said:

“I was talking with another person and we determined as a CEO you push your people in just the right way to get things done… you’re like a coach.  We realized that is a good thing and need to do more of that type of leading in our startups”

Some of you may be familiar with my history so being referred to as a coach might not be much of a surprise.  But in light of the context in which this conversation took place it was a surprise to me.  My CEO friend is farther down the startup path than I am and I tend look to him as a mento-friend.  I appreciated the kind words and thanked him accordingly.

Yet this begged the question: what is a startup CEO anyway?

My take is my friend was exactly right: a coach.

Okay Nick, then what is a coach?  A coach is a Leader.  A coach is someone who is responsible for the outcome of the team – win or lose.  The coach determines who plays on the team and who gets cut. Coaches push players to the brink and guide them in achieving levels of success previously thought impossible.  Coaches know the most about each opponent and dictate the playbook accordingly.  And most important, the coach evaluates each and every player, helping them identify where they are weak and exploiting where they are strong.

Ladies and gentleman – that’s a leader.

Given I am still at the beginnings of the exciting growth of Seconds and my personal journey as a CEO I will not take any credit of success – history will be the judge on that one.  But I couldn’t help but notice myself in the exact moment of this conversation grasping a few lessons regarding leadership I think are important for CEO’s at the startup level.

Face it, you ARE a coach

Like it or not, as the CEO you are the coach.  This should not be taken lightly and in the wrong hands it could lead to disaster.  One of my favorite quotes from author John C. Maxwell is “everything rises and falls on Leadership.”  The statement could be viewed as general toss-grass-in-the-wind pontification.  I tend to just take it at face value – life happens because leaders make things happen.  Or they don’t.

Leaders (CEO’s) determine the pace, structure and culture of a young startup company.  Understanding this should weigh heavily on a CEO’s heart and mind as they relentlessly plow forward.  What you say and what you do will hang like London fog within your small company.  You should think twice about each and every word, positively and negatively directed toward cofounders or customers.

And whether you know it or not, your team is looking  right at you to make decisions.  These decisions can be as mundane as the color of text on your site and as crucial as choosing to relocate the company or adding a co-founder.  Great leaders consistently make the right decision, and even better, teach and empower others to make the “right” decisions for them.

You are also a player

One of the toughest things about being CEO is the fact that you are a player – equal with other team members – at the same time being the coach with added intangible responsibilities.   Highly self-aware CEO’s intuitively understand this dynamic and can navigate the waters accordingly.  Some days you need to get your hands dirty with specs, feature fixes and other product oriented tasks – things you are probably drawn to more naturally as you flex your engineer or designer muscles.  Other days you need to put your coach hat on to lead your team by dictating the vision, talking to investors, evaluating opponents, interviewing new hires, connecting with media or visiting customers.

These things may not come natural to you but believe me they are essential.  I am convinced the drastically high level of failure experienced at startups is due to a failure of leadership.  Delineation too far in any direction from a leader for too long spells doom for a fragile company being built on a hope and a prayer.  If “everything rises and falls on leadership“, startup success must surely follow the same principles.

Leadership is in short supply

My friend mentioned something interesting as we were talking.  He said “I just don’t feel I can push them very hard… I guess I have that Seattle passive thing going.”

I said, “look, people actually want to be led.”  And it’s true, (most) people naturally want to be told what to do.  Quite frankly, they are scared to make any important decisions so they naturally default to having someone else tell them what to do, in case it doesn’t work out and they have someone else to blame.  That’s the harsh reality view.  The more positive view is people want to be led and inspired, hoping that the time they are taking away from other important areas and people in their life is actually going to turn out to be something positive.

Unfortunately we have too many people more concerned with not pissing people off then accomplishing the current mission.  Appropriate and authentic leadership is definitely in short supply.  I am not advocating being a jerk or other unmentionable words.  I am calling for people to get more in-tune with the dynamics of human nature and motivation.  This is not rocket science, it’s all right there at the intersection of psychology, sociology and biology.  Notice how I didn’t mention technology…

I also noted to my friend the most common reaction from anyone who worked for Steve Jobs.  I said “dude, most people have said Steve Jobs was a jerk, an asshole, and generally not enjoyable to be around.  They also follow that statement up with the fact that he actually inspired the best out of them and they were somehow able to perform and deliver well above levels they ever thought possible.”  

That’s leadership.  Steve Jobs might not have been best friends with most people he worked with but boy did he get the best out of them.  Indeed, he was their coach.

Lesson: Be Careful With Cofounders, You Haven’t Seen Their True Colors Yet

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While doing some research for a different post I came across this golden nugget from Paul Graham. His post was titled What startups are really like – and it’s the truth. In it he describes how he sent all his founders an email asking what surprised them about starting a startup. Their number 1 response was around cofounders. Boy can I relate!

1. Be Careful with Cofounders

This was the surprise mentioned by the most founders. There were two types of responses: that you have to be careful who you pick as a cofounder, and that you have to work hard to maintain your relationship.

What people wished they’d paid more attention to when choosing cofounders was character and commitment, not ability. This was particularly true with startups that failed. The lesson: don’t pick cofounders who will flake.

Here’s a typical response:

You haven’t seen someone’s true colors unless you’ve worked with them on a startup.

The reason character is so important is that it’s tested more severely than in most other situations. One founder said explicitly that the relationship between founders was more important than ability:

I would rather cofound a startup with a friend than a stranger with higher output. Startups are so hard and emotional that the bonds and emotional and social support that come with friendship outweigh the extra output lost.

We learned this lesson a long time ago. If you look at the YC application, there are more questions about the commitment and relationship of the founders than their ability.

Founders of successful startups talked less about choosing cofounders and more about how hard they worked to maintain their relationship.

One thing that surprised me is how the relationship of startup founders goes from a friendship to a marriage. My relationship with my cofounder went from just being friends to seeing each other all the time, fretting over the finances and cleaning up shit. And the startup was our baby. I summed it up once like this: “It’s like we’re married, but we’re not fucking.”

Several people used that word “married.” It’s a far more intense relationship than you usually see between coworkers—partly because the stresses are so much greater, and partly because at first the founders are the whole company. So this relationship has to be built of top quality materials and carefully maintained. It’s the basis of everything.

This hit home given the fact that I am going through this issue currently. I have never been married but it really does feel like a divorce. Respecting the unnamed (and by no means is this a personal attack), I can only tell you how disappointed I am in this individual. And maybe I am just disappointed in the overall outcome but I can’t help but be bothered at how it ended, with one of us making a B-line for the door once it was obvious this was actually going to take some hard work. For the sake of our “kids” it’s a good thing I am still around to help them grow and mature.

Let this be a lesson to all entrepreneurs and silicon valley wannabe founders out there:

Life is tough and unfair.

Startups are a hell of a lot tougher and more unfair.

Most ALL startups and iPhone applications DON’T GO VIRAL overnight. They take a shit ton of work and thus require a shit ton of commitment.

And know this: the founder who stuck it out and eventually grew a company to be large and successful is more wise, more battle tested and way more respected in the community than an overnight success who usually had no idea why he was successful. That person will fail to repeat it when he tries again because as an overnight viral success you don’t understand what worked and what didn’t. It just happens.

The time-tested individual builds lifelong skills along with a treasure trove of wisdom he can then apply to any other endeavor with a high potential of success. So if you are a founder I would suggest you swallow the pill and make long term commitments your goal.

Please, give success a fighting chance.

The Proper Way Give An Acceptance Speech By SURF Incubator Pitch Contest Winner

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What a great launch party SURF Incubator had last week.  More than 300 people attended the event.  It was awesome.  We hung out.  We drank.  We socialized and networked.  We even had a pitch competition, where 10 chosen founders from SURF startups had 90 seconds to explain their concept to the crowd.

The attendees voted after everyone was done.

And we won!  Seconds wins 2 tickets to fly down to San Francisco to attend the DEMO conference in Oct.

Here’s a video of my acceptance speech, where I am not totally sure at the moment I knew exactly what to say…  but deflecting my own praise and edifying SURF seemed to be what instantly came to mind.  When in doubt, edify the organizer.

(my portion starts about 4:30 into the video)

Below are some images from the event and to find more pictures: bit.ly/SURFphotos

waiting to pitch

giving the pitch

shaking hands with Seaton Gras, founder of SURF 

giving acceptance speech

Do You Think SF or NYC Public Transportation System Could Use This?

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I keep having a reoccurring problem.  My Orca Card – Seattle’s version of the public transportation pass – seems to run out of money a very inopportune times.  On my way to an important meeting downtown.  Balance $0.00.  Getting on the bus to go home later at night.  Balance $0.00.

To keep in better control of my finances I choose to not have it automatically refilled each month, so I am at the mercy of knowing how much is on my card at any one time and if more money is needed, I must take time out of my day to go put more on it.  We have learned the majority of cards in circulation are not automatically refilled.

I either have to go online and pay, which takes 24 hours to process.  Or I have to walk to a physical location around town and make a payment at a kiosk.  It sucks.

Why can’t I just pay on the fly and put money back on the card?

Why can’t I be notified if my balance is getting low?

Others around Seattle have this problem, I know this because that is how we were pointed toward initiating talks with Sound Transit.  I have to believe others in additional metro areas around this country are frustrated by the same inconvenience.  That is why we are now starting to work with Sound Transit on a solution involving mobile payment in Seconds and a pilot is set to roll out in the coming months.

Below is a video of how it works.  Pretty smooth, eh?

I wonder if anyone in San Francisco, New York or any other metro area would want to refill their transit pass in Seconds?