The Secret To Launching A Successful Startup

What’s your secret?

In his book Zero To One, Peter Thiel asks the question “What one thing do you know that no one else in the world knows?  What’s your secret?”

The answer to that question is the secret to starting a successful company.

downloadWhat Thiel is suggesting is there are things in this world you observe, intuitively know and understand more than anyone else.  By peeling apart those layers and understanding where there could be value creation you will find the golden nugget.  Then it’s as simple as creating a new company, building the product and releasing it to the world.

What he is also illustrating here is that success comes from ingenuity and uniqueness, not copying others.  The world doesn’t need another anonymous messaging app or social network.

It needs your secret.

Do you realize there are things only you know about the world?  Most likely there things you continually notice about your everyday life, the city you live in or the technology you use that keep bugging you.  There are problems you continually encounter where you might be wishing someone fixes them.  Do you maybe see a better way to do them?  Do you keep getting frustrated at the same places and times each day?  There might be something you can do about it…

Once we come to grips with the magnitude of this reality starting a company becomes a lot different.  You now realize each and every one of us have the ability to create successful companies.  All it takes is a little focus and observation of the world around you, and then having the fortitude to create a scalable solution.

Today, think about what might not ever be created if you don’t build it?

Advertisements

When A Founder Crosses The Line Towards Godlike Hubris

I recently noticed a frightening trend with certain founders in the tech industry.

–> Have a great idea.  Get a few key people to join you and build it.  Launch the product and raise money from investors.  Experience massive success.   Raise more money.  Gain hundreds of millions of users. Raise billions of dollars and fight off regulators.  Have unfiltered access to billions of people’s data.  Exploit it.  Believe you are the second coming of a God.  Act like an uncaring, immoral capitalist.  Care only about your wealth and not what you are doing to everyday citizens.  And so on…

With the recent Uber misteps and observing the resulting outrage which ensued, it has come to my attention that we, as an industry, need to take a long look in the mirror.  Founders need to take full consideration in how they are running their company, the culture they are creating, the data they are generating, and the ultimate consequences of their actions.

I hope Uber realizes they are doing to their users exactly what they were furious (I assume) about the government doing to them as citizens when the Snowden files were revealed last year.

We all need to understand we are standing at an unprecedented time in the history of business and technology.  Everyday Joes now have the opportunity to create an app or platform that one day might just become indispensable to mankind.  With its use, Joe will collect billions upon billions of data points on everyday citizens – like where they are currently, where they are going, who they talk to, what they typed, to whom, what they viewed on their phones, whom they connected with socially, etc..  With all this happening, Joe will find himself directly in the middle of our society, holding a treasure trove of personal data and a devil on his shoulder just waiting for the right time to temp him into exploiting it.

I mean, it’s like big brother!

But surprisingly it ain’t the government doing these things.  Imagine what Facebook knows about you.  Couple that with your Uber or Lyft usage data.  Toss in your twitter clicks, Instagram photos, Gmail history and Google Chrome browser history.

We are doing this to ourselves.  We are the ones creating this new world of massive data collection which is resulting in unprecedented spying, snooping, breaches of security, cloud hacks and the like.

This is your fault.  And mine.  It’s all of our faults.  All in the name of making more money.

I am not here to end the data analysis, in fact I believe in it and when done correctly it makes for a better end user experience.  I also know data collection is only going to get more prevalent with the expansion of categories like the Internet of Things and connected homes.

Yet, I am urging us to start thinking about things using a different filter, or scope of perspective.  Start asking yourself these questions:

Recognizing all possible data about myself and every other person is now being collected, how to I structure my platform to preserve mankind and the humanity inherent within our society?

How do balance personalization of my technology with personal security of my users?

How do I proceed when I know I CAN do something but unsure if I SHOULD do something?

Where’s my “do not cross line?”

How can we best usher in a new era of technology applications where security is inherent within the structure of the product, not an afterthought when plugging holes after launch?

How do I shift my perspective from making the most money possible with my application towards making the world a better, more secure and protected society?

Please start thinking about these questions and more…  It’s time we call a spade a spade – WE are the ones creating the exact surveillance society we were deathly afraid of growing up.  We just thought it would be the Big Bad Government or another foreign country, not ourselves.

Please understand hubris will sink anyone who thinks they are immune to it.  You – as a founder and someone desperately wanting to change the world – can now no doubt do just that.  You and your technology can alter the history of humans here on earth.  Just make sure you know what change you are putting in place.

What I Learned Launching A ‘Crazy’ Bitcoin Startup

The months leading up to the announcement of our new company was chock full of lessons learned.  We launched Coinme on May 1st at Spitfire in Belltown during a well attended launch party, complete with our first Meetup and an entertaining expert bitcoin panel.

It was the culmination of many long days, phone calls, emails, re-designs, re-brandings, and all sorts of other seemingly frustrating things.  Below I have detailed three of which helped me realize a few things – namely the biggest risk of all is not taking a risk.

Setting a deadline is essential

Setting yourself a deadline – be it a launch party, a internal team milepost or some other marker – is the single best thing you can do to push yourself and your team to execute and actually complete what you set out to complete.  We set May 1st as our launch party, and determined the machine needed to be there, dressed in its new costume and ready to take live transactions in front of more than an hundred people.

photo (9)We also – very importantly – needed to get passed through the State of Washington as an officially licensed money transmitter business before this date.  You have no idea what was required for all these pieces to come together, and before we began this process I didn’t either.  But given we had committed to launch this company, we held ourselves to the deadline and pulled through right at the end.

I have painfully seen it time and time again with other startups in Seattle… they never release their feature or finally launch their company.  Crazily, they just keep working on things.  In the end, they simply don’t set themselves a deadline to stick to so they just remain in startup purgatory. This is not the right place to be as a startup – trust me.

Being early is both good and bad

One big thing I have learned is it’s very early in the bitcoin world, probably too early for most consumers.  Most people still have no idea what it is, why they should purchase it, and why they should use it for payments.  Although the answer to those questions will be left for future posts, suffice it to say the entire world is still trying to figure it out.  Coinme, as a company, believes in the transformative nature of the technology and feel it can influence not only financial transactions but many more industries.  And again, it’s way too early to tell.

But we feel our opportunity to influence such an early industry was/is too great to pass up.  We see areas where we can help educate and inform people about the positives, negatives and in-betweens of this new cryptocurreny world.  We’d rather be early to the party than too late.

Being early to the market can be good for a startup, but it also can be not so good.  If you are too early to the market you risk spending all of your available capital without generating enough revenues (assuming at some point you need to run on revenues, not invested capital) which will ultimately end the business.   Successful businesses are able to time the market in a way where they achieve both early mover advantage and customer adoption.  One without the other spells doom for any high growth company.

Calculated risk is worth it

I touched on this last post but I feel so strongly about it I think its worth addressing again.  Taking a calculated risk – hopefully a number of them – is one of the best things entrepreneurs can do to accel their careers.  Doing what no one else is willing or ready to do places a person in a very select group of people, a group where things are created, companies are sold and millionaires are made.  Even if the venture ultimately fails, the business (or tech) community will consider the founder a leader, an innovator and a healthy risk taker.

And you know what?

That’s exactly the person investors want to invest in.  That’s who others want to follow when they take their next job and join their next company.  That’s who the media wants to cover when they write about the next generation of business leaders.

No imagine if you don’t take that risk…

Trust me, what I learned over the last few months is that the biggest risk of all is not taking a risk.

 

Okay Founders, Stand Up And Take A Risk

As it turns out, I was indeed part of the group who brought the first bitcoin machine to the State of Washington and the greater Pacific Northwest.   We launched Coinme on May 1st at Spitfire in Belltown during a well attended launch party, complete with our first Meetup and an entertaining expert bitcoin panel, including Charles Fitzgerald , (angel investor), Patrick Murck (General Counsel for Bitcoin Foundation) and Will O’brien (CEO of BitGo).

We had a great time and it was an awesome way to ring the new venture.

Interestingly, one of the most asked questions I get now is “So, why bitcoin?”  What is it about bitcoin that made you jump at this opportunity?”

My answer may not be what you expect, but if you are a founder – or thinking of becoming one – it’s what you need to hear.

I jumped at this opportunity because I sensed something seismic rattling under my feet, I felt the inevitably of it becoming such a transformative force in our world I knew I would kick myself later if I or Seattle didn’t get involved now.  I had this crazy notion that we are now experiencing a tremendous change in the way we relate and interact with money/currency/privacy/data and wanted to be a part of it.  I noticed the most common way people were perceiving this new technology was with ignorance and confusion, stating things like “bitcoin is a Ponzi Scheme”, which tells me they just need to be educated.  I realized we are watching an industry mature right before our very eyes, growing from a child into a gangly teenager, struggling with growing pains along the way.  With a little luck maybe I felt I could guide that teenager in the right direction.

It was a risk I simply couldn’t pass up.

The media likes to cover the “downfalls” and the “catastrophes”, mostly because shock media drives more page views than intelligent and analytical dissection of challenging topics.  But along with all the negative press bitcoin has received, there are golden nuggets of wisdom one shouldn’t turn a blind eye towards.  Look hard enough (and follow the right people) and you will read bitcoin analysis that will blow your socks off.   Please follow Fred Wilson, Marc Andreesen and Naval Ravikant for such nuggets of the wisdom I am referring to.

It’s fascinating.  You’ll read things like bitcoin is the new internet of money and will soon power machine to machine (droid to droid?) payments, opening up a whole new part of our daily economy.  It has the opportunity to transform many different industries outside of finance, it could become the new domain/identity protocol for online citizens, it will aide in calming identity theft and consumer privacy, allow for more efficient commerce and transactions across the web, maybe even help media outlets collect micro-payments from readers for access to their posts, and many, many other things.  Simply put, this ain’t your daddy’s financial system.  These and other reasons played into my decision to be a part of Coinme and help grow the crytpocurrency in Seattle.

So with all this crazy “Bitcoin” (air quotes) coverage and other startups making questionable business decisions around the cryptocurrency, why the heck would I decide to start a bitcoin business?

“The only thing necessary for the triumph of evil is for good men to do nothing.”
― Edmund Burke

I acknowledge the above quote can be quite overused, but in this instance I think it fits perfectly.  We started Coinme because we saw an industry taking shape but yearning for more quality leadership from the innovators and executives of those companies.  We made a pledge to ourselves to be one of the good men (or women) leading this new industry.   The bitcoin economy desperately needs innovators, entrepreneurs, legal advisors, regulators, politicians, consumers and business owners to all work collectively for the advancement of our society.  Not just for the advancement of their own selfish interests, but for the betterment of the world.

Who knows, Bitcoin might drop through the floor and Coinme might fall flat on its face as a result.  But by taking this risk I will have learned A TON about a new and emerging industry (and myself) at a time when everyone is still trying to figure out what it is. I will have laid the groundwork for my next 10 – 20 years as an entrepreneur and established myself in a small but growing industry.  I will have looked uncertainty in the face and chosen to proceed when the path is not exactly clear, teaching me to acknowledge my fear of the unknown but move forward anyway.

And that is what I encourage you with today.  Seattle has tremendous leadership in the technology space and is home to many recognizable and industry leading companies, yet, we need more leaders – the future of our local economy depends on it.

You may not be launching a bitcoin startup but you do have an opportunity to be influential and guide your market in the right direction.  You have an opportunity to take a risk, to put Seattle on the map – or more aptly allow us to become even more attractive for both entrepreneurs and investors and hopefully put to rest the whole Valley vs. Seattle argument.   We hear it all the time from the investment community here in Seattle – Swing Bigger.  Well, here’s your chance.

You have right in front of you a choice: take the easy road and solve a derivative of an existing problem, making things just a bit easier for the few that may experience it.  Or choose the hard road and take a larger risk to do something no one has ever done before, with a greater reward waiting for all of us at the end.

In speaking for the greater Seattle tech community, I urge you to choose the latter.

The Road Ahead

I have often said being an entrepreneur feels like you are a circus clown on a unicycle, riding on a tightrope and juggling 5 different things at the same time.

Yep, that’s pretty much what I am doing right about now and it feels a bit crazy.  My hope is that it settles down a bit as we get these things in motion.

Below is a glimpse into the road(s) I am looking down right now and if all goes as planned it will be most of my career focus.  They might be general – on purpose – but they are the trends of the next 20 years and industries I am both interested in and feel are at inflection points historically.

Payments – mobile and otherwise

road

Most of you know I have been in the mobile payment space for a few years now.  Our first try with Seconds payments didn’t go as smoothly as we had hoped.  BUT, we learned something really valuable – remote mobile payment/billing is going to be huge.

We learned this from realizing the act of forcing someone to make a payment with their mobile device while standing in line at a coffee shop/target/local market/etc actually takes more time and is more complicated than giving cash or card.  The end solution just has to save all parties valuable time.  It will be years before this becomes commonplace and who knows how much it will take (billions invested) to make it happen.

But, you know all those letters you received (or still receive) from utility companies, munipalities and other entities basically telling you 1) here’s the total you owe and 2) here’s where you send the check or 3) log in at this url to pay?  Well, we can save people a lot of time and hassle with a new direct mobile billing experience.  That can all be achieved by a simple notification on your mobile device informing you of a balance due, should you opt into receiving it.  And with your payment credentials already in the system all you need to do is simply respond with “pay” and it’s all taken care of.   Business gets paid, consumers account is cleared, no re-entering payment credentials… Simple.

Yep, we got that in the pipeline.

Cryptocurrencies – Bitcoin

Since I am in the payment/financial space I have been watching the rise of Bitcoin for some time now.  It’s very interesting to say the least and everyone has an opinion.

Here’s mine: the world needs a new mechanism for payments to flow around the world and Bitcoin feels like it’s the one.  As both a currency and a technology, it will not only transform money as we know it is but also its place within this new digital/mobile/worldwide economy.  As a speculative commodity, no one knows if the value will hold ($500), massively increase ($100k) or completely tank ($1).  We’ll have to see, but my guess is that its value will not be the greatest impact Bitcoin will have on our world.  As for regulation, the government will have to figure out how to play nice and guide it towards positive impact on our country and world.  I don’t see it completely taking the role of the U.S. dollar so I think that argument is flawed and used politically to take a side, similar to the silly spat between Republicans and Democrats in this country.

So please remember today’s incarnation of Bitcoin will not be tomorrow’s…  merely turning your head and shushing the noise is the wrong answer.  Just as there were many naysayers in 1994 and 1995 about the web, we are seeing something truly transformative take shape and I don’t want to look back in 10-20 years and kick myself for not getting involved in the movement.

That being said, yep…. the road also includes some things around Bitcoin.  It should be an interesting year.

Internet of Things – API’s of life

Another interesting phenomenon starting to take shape is the so-called Internet of Things.  I am not sure I like that term but we’ll agree it means a world where everything is “smart” and “connected” to everything else via the web and sensors.  Just imagine what can be automated or programmed when devices and objects – previously “dumb” and non-economic actors in our world (tables, chairs, driveways, houses, bikes, cars, etc…) are brought online and provided an identity.  Then include an economic identity (hhmm like using something like bitcoin…. now are you are starting to get it?) and allow humans to communicate with and pay and be paid by machines.  The possibilities are endless.

Even more basic is the ability to start automating things in your life.  If you have heard of IFTTT (If This, Than That) you know what I am talking about.  Basically, it means you can set triggers in the world, that when activated, will result in an action you previously determined.   These triggers are offered by various web based components in the form of API’s (Application Programming Interface) which allows you to tap into and easily integrate with other technologies.  For example, if I leave the house (known because my GPS on my mobile) then lower the temperature in my house by 5 degrees.   If Bitcoin falls below a certain price ($300), purchase X more for me.  You get the picture.

Yep, something like that’s in the works as well.

Health Technology – Wearable devices

An amazing area for innovation using connected and wearable technologies is health care.  We are wondering what is possible once people wear something(s) that are able to monitor and collect up to the second data regarding our vital heath?

Given my background in health I am immensely interested in the future of preventative health tracking, and we are in the process of laying out our first attempt at it.  Imagine wearing a small device that, when it senses a certain vital sign has fallen out of the standard deviation for this specific individual, sends a notification to family and medial team with actionable instructions?  Imagine how many heart attacks could be prevented if we knew the second someone was “about to go there”?  Now, I know this vision could collide with the scary notion of Big Brother NSA, but I have a feeling the pendulum will swing back toward a better equilibrium of personal safety and information security.

Yes, although it might be a bit on the horizon this is down the road for me as well.

Content Creation – Founders RAW

The last one is video.  We are starting to see more online video created and watched each day, month and year.   And it’s easier than ever to create and distribute video, especially through social media.  I intent on continuing my work on Founders RAW and experimenting with online media.   Founders RAW is a great playground, since it falls inline with entrepreneurship and founding of technology companies.  My goal is to continue to talk to founders and put out high quality content for all of us to enjoy and benefit from.  It will be interesting to see how content and video grows from here, how we all can take part in it.

So there you have it.

If you are tired from simply reading it, how do you think I feel?  My mind is spinning with all these possibilities and opportunities.  While it may seem like I have some random form of ADD (might be true) it’s more like all these opportunities came to me in the last few months.  Some are being built as we speak.  Some are on their way.  Some are in brainstorming and prototyping stages.  Some might not make it into production, but all are well thought out and well positioned to become something great in the future.  I hope to be a part of them all.

It’s never been a better time to be an entrepreneur.

Image by Flickr user oatsy40.

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

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

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

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

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

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

I was also broke.

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

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

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

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

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

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

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

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

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

I got my mojo back.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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