Why late nights, tequila and ping pong are vital to your start up

While none of the things listed in the title of this post in particular matter; what matters is the spirit behind these things. It's important to develop, foster, and embrace startup culture.  And developing a strong culture of lightness and fun for a startup becomes more important to do this as time and a company march on.  Building a startup is hard work and the companies whose founders keep a spirit of fun about themselves and their work place have a higher likelihood of success in my opinion. 

I was recently talking an entrepreneur who has a profitably company that is approaching 3 years old. HIs company has been setting monthly revenue and profit high water marks each month this year. Yet, he was feeling melancholy and down. I told him that he needed to overcome the 3 year itch of a startup. I told him to go away for a week, get rejuvenated, set up fun things for himself and for his team to do over the next 12 months and that doing so was part of his job. 

TechStars: Seattle's Brewin'

I got this email from David Cohen the other day-- the founder and grand-poobah of TechStars....

Andy, 

Boulder   rocks , I <3 Boston, Seattle _________?

David

He suggested "Seattle is Super" -- I told him that was stupid. He agreed. 

"Seattle's sunny" -- oddly inappropriate. 

So....Seattle's brewin'. Expect to see that tagline around.  

And this logo.  Seattle techstars icon
 

Crazy, excellent day to start TechStars Seattle open applications: an awakening

We had OpenCoffee at Louisa's today -- and it was a dedicated informal coffee for those folks who wanted to learn more about TechStars, the application process, the selection process, and the results to date -- which are impressive (7 out of 10 TechStars companies gets funded to a legit series A).   

Entrepreneurs and teams abounded -- I found myself in a number of really interesting conversations. One of the best was one entrepreneur who explained how excited he was to have quit his day job at BIG company locally and to be starting his own company. He explained in a voice that was all to believable how deadening it felt to work at this particular company and how energized he was by the process of starting a company and by the energy at Louisa's this morning. His explanation resonated for me -- it reminded me of when I started my first company and the whole experience was awakening and enlivening.  Helping people like this in Seattle reminded me of why I am working with TechStars -- like the entrepreneurs -- ti's certainly not the PAY!  It's all about the feeling!

There were a number of investors in TechStars Seattle who came to check the coffee out: Greg Gottesman from Madrona, Michelle Goldberg from Ignition, and Brad Feld from Foundry Group were there. 

Thanks to everyone -- sorry if I didn't get a chance to buy your coffee -- it had been my intention to buy everyone coffee but Louisa's couldn't figure out how to do that easily!  Oh well.  

Getting lost in the entrepreneurial woods is dangerous? You may not emerge

This post could have been about the great aspects of being an entrepreneur. The sense of adventure and discovery that comes from working toward your own destiny. That's not what this post is about. 

Rather, this post is about the danger that early stage technology companies face when they lose their way. It's normal for entrepreneurs to not have all the answers and thus to feel lost at times. It's part of the job and the sense of adventure. However, there are times when early stage companies totally lose their sense of direction. I've seen this -- even experienced it. It's not fun. 

When this happens, the whole start up organization starts to leak energy as the company drifts in this direction and that. It's very much like a row boat at sea with one oar. 

Don't allow this to happen to you in your company. 

The way to avoid this is to stay super close to your customer and keep solving and addressing their needs.In addition, you should develop forcing functions for yourself as an entrepreneur. For example, write down the list of short term decisions that have to be made each month and what milestone has to be met -- and then, don't let yourself slip from that timeline and schedule.  This practice can act as a forcing function to make decisions about moving the product, marketing, and organization in some direction. And some direction is better than no direction.  The direction may not be the best or right direction but it at least gets you moving out of the entrepreneurial woods -- i.e. moving out of the vortex and whirlpool of founder's who are confused about what business they're building. 

The opportunity cost of thinking about opportunity cost -- is real

I spoke to an entrepreneur today who asked me about the opportunity cost of his startup. His company was 2.5 years old and doing about 30K per month.  They weren't growing fast or getting rich and had enough money each month to pay the principals. He told me that he was starting to think about opportunity cost of his time.  

I told him he was 1/3 of the way through a marathon and that I thought we (as entrepreneurs)  were spoiled by the 1990's internet bubble.  The days of quick exits and instant millions are gone.  In my opinion, it takes at least 5 years to build value into a company -- sure there are exceptions and it's wise to look for them. But don't be deluded by the green pastures of an easy path to profits.  Doing a start up is hard and the line between success and failure is all too thin.  It's a CEO's job to quiet the conversations about greener pastures and opportunity cost in his mind -- and to focus on leading his company to a market where margins are good and money can be made.  Getting to break-even so that you can play again another day is a major accomplishment. Don't under appreciate it. 

When I told this to the entrepreneur, he looked at me as if I told him something he already knew. He was relieved (I think) and disappointed because it was still hard work ahead. 

As I've been known to say -- "chop wood, carry water" and "be careful out there" .  

Want to learn more about TechStars in Seattle? Come get free coffee at louisa's cafe on 4/6/10 at 8:30AM

If you want to learn more about TechStars in Seattle you should attend Open Coffee on Tuesday 4/6 at 8:30AM at Louisa's Cafe on 2379 Eastlake Ave E in Seattle. Brad Feld will be attending and the two of us will be answering questions in an informal way about the program. If you come, there will be good free coffee provided by TechStars. Sorry, you'll have to pay for your blueberry scones. Please help spread the word. 

I'm looking to hire a part time marketing assistant for TechStars Seattle

I haven't even fully crafted the job description yet but I know I need some help getting the word out. If you know someone or are interested in helping on the marketing and administrative side of TechStars in Seattle I'd appreciate it. When I get the job description written -- I'll be sure to post it. Should be in the next 24 hours. 

Help me spread the word on TechStars Seattle applications

TechStars is not about me, it's not about Founder's Co-op, it's not about the list of investors. TechStars is about making Seattle an awesome and supportive place to build very successful technology companies. 

TechStars is about creating community and supporting technology entrepreneurship in Seattle.  We hope you will join the effort in whatever way you can. Please blog, email, retweet and generally help spread the word that TechStars Seattle applications are open.

To apply to TechStars, click To apply to TechStars, click here.

How TechStars came to Seattle?

Below is the somewhat long story behind TechStars Seattle. I usually don't write long blog posts but I'm super excited about TechStars and applications for the Seattle program open today. A number of people have asked me the story behind TechStars coming to Seattle -- so here it is in its full detail.  You can apply for TechStars Seattle here and theschedule of important dates for the program are here.

I first contacted David Cohen in January 2008. At the time, I had just started working on Founder’s Co-op and wanted to speak with David about his experience with TechStars. I thought that TechStars was onto something and I wanted to learn from what David was doing and consider doing something similar in Seattle.

Chris DeVore, my partner at Founder's Co-op and I decided we didn't want to mimic a 3 month incubator in Seattle – in our opinion, TechStars and Y-combinator were both occupying that market space pretty well.  I opted to start Founder’s Co-op, a mentor driven seed fund.  When I spoke to David on the phone, he was kind enough to share some legal documents with me. Shortly after that call, I became a mentor of TechStars Boulder.

In January 2009, I learned that TechStars was expanding to Boston. I emailed David Cohen and Brad Feld and said that if they ever considered expanding to Seattle I would be interested in working with them.   David and Brad both encouraged me to spend more time in the summer at TechStars to get to know the program. They said that they were interested in exploring the possibility of working together.

In May 2009, I went to my 20th college reunion at Brown University in Providence RI. While I was back east, I stopped by at the Boston TechStars 2009 orientation. Turns out that Shawn Broderick, an old friend of mine from the 1990’s Boston technology scene, was the executive director.  Shawn asked me to speak to the incoming class of TechStar companies.  I did – and I’m not sure exactly what I said – but as I spoke I choked with emotion.  The weekend had already been a trip down memory lane for me – walking the campus at Brown already pre-disposed me to feeling nostalgic. But I wasn’t prepared for the raw energy emanating from the founders of the 10 Boston TechStars companies. I spoke to the founders of the 10 companies. I told them what it was like for me to start abuzz in 1996. I shed a few tears. I got into my car and called Brad Feld and Jerry Colonna – the venture capitalists who invest and bet on me in, abuzz technologies, my first company.  I decided then – that Seattle needed a program like this and that I wanted to run TechStars Seattle. Now, I just needed David Cohen to be willing to open TechStars in Seattle.

In the summer of 2009, I made another two trips to Boulder in an effort to get to know the TechStars program and David Cohen better. After the second trip, David said that he was very interested in opening TechStars Seattle but didn’t want to make a decision until October 2009.   He also wanted to get to know the early stage technology scene in Seattle better.  He went about meeting entrepreneurs and investors in Seattle and even came to a Founder's Co-op LP meeting.

By September 2009, David told me that he had pretty much decided to expand to Seattle but he wanted the community of entrepreneurs to drive the expansion of the program.

In early November 2009, there were a series of dinners in Seattle between Matt McIlwain, Greg Gottesman, Brad Feld, David Cohen, and myself. 

The next thing I knew --  in a 24 hour period Greg Gottesman and David Cohen both called and asked me if I’d be willing to run TechStars in Seattle alongside Founder’s Co-op, the seed stage fund I run with Chris DeVore… and I agreed. 

With the help of Greg Gottesman, I then approached the entrepreneur and venture capital community in Seattle and asked them to collaborate with us in supporting the launch of TechStars Seattle in August 2010. What happened was amazing! We received huge support from an amazing list of experienced entrepreneurs willing to act as mentors. In addition, nearly all the venture capitalists in the city elected to materially support Techstars Seattle !

The list of investors includes:

  • Jeff Bezos Investment Group
  • Divergent Venture Partners
  • Draper Associates
  • Founders Co-op
  • Foundry Group
  • Ignition Partners
  • Linden Rhoads (UW, center for technology commercialization
  • Madrona Venture Fund
  • Maveron Venture Capital
  • Montlake Capital
  • OVP
  • Rolling Bay Ventures (Geoff Entress)
  • Second Ave Partners
  • TechStars Central
  • Trilogy Equity Partners, LLC
  • Voyager Capital, LLC
  • Vulcan Capital(Paul Allen's group)
  • WRF Capital

Turns out, the Seattle startup scene has totally embraced TechStars….and I think that Seattle entrepreneur community is the big winner.  

That’s how TechStars came to Seattle.

Applications open for TechStars Seattle today :  March 23, 2010 and the program starts in Aug 2010. 

If you’re an early stage entrepreneur, you should consider applying here.

 




TechStars Seattle Applications Open Today

Just wanted to remind everyone that Techstars Seattle applications officially open today. if you're interested in applying to the program, I'd encourage you to do so here. 

I think this is going to be a blast -- if you've got a hot new idea for a technology business -- and you want to have the biggest success possible, applying to TechStars is likely for you!

Business tip of the day: interview 10 target customers before building products

The most common mistake I see technical entrepreneurs make is when the entrepreneur pushes solutions onto a market without talking to real customers in that market.  Getting feedback and input is the life blood of an entrepreneur. More is better than less because it lowers the likelihood that you get steered in the wrong direction. 

I know this because I made this mistake in the past -- and spending years pounding one's head against a market wall pushing is not fun (take my word for it). I now am increasingly obsessed with the amount and type of market research that entrepreneurs do before building product. 

Before talking to me about investing in your company, make sure you've really interviewed and understood at least 10 potential target customers. 

Why is passion so important to a startup?

You hear investors and start up gurus talk all the time about the importance of entrepreneurial passion but I haven't seen anyone talk about why it's so important. It's almost as if everyone thinks the answer is self-evident. In my role at Founder's Co-op, I'm seeing multiple companies at the same stage struggle and think I have identified some (by no means all) of the reasons passion is so critical to a startup founding team. Passion gives founders :

  1. The ability to continually motivate and re-invent: By definition, founder's don't have all the answers. They are in a learning mode. They are learning what customers wants, how they're going to charge, how they'll scale, etc.  They are often crude implementations of what they aspire to be and as such, founders inevitably will have to overcome rough patches and patches where they don't know what the right answer is. Enter passion. Passion makes overcoming this lack of answers possible and fun. 
  2. The willingness to work longer hours than the average person. 
  3. The energy to sell customers, employees, and investors possible. It allows you to overcome all the "no's" you'll hear day in and day out. 
  4. The will to take feedback on limitations of yourself and your corporation and actually do something about it. 
  5. The desire to persevere and persist when the going gets tough.  

In a nutshell, passion is the word people use to attach to all the emotional aspects of founding a team that require energy, inventiveness, fun to overcome.

Why Founder's Co-op made a seed investment in Untitled Startup?

Tc-mash

 

There's a simple thesis at play in this investment.   UntitledStartup is a great example of the following investment thesis:

i) People First

ii) Market Second

iii) Product Third

Oh and above all -- while you're doing all the above -- has a sense of lightness and fun.  I've spent the last 60+ days co-officing, contributing and collaborating with Damon Cortesi and Aviel Ginzburg (the "gentlemen" and I use the term loosely depicted in the photo below) as they've figured out what their startup was going to do.  The funny thing is -- I made the decision to invest and have invested and I still don't know exactly what it is they're going to do -- and neither do they. Now that may sound crazy -- stupid even. I don't think so.

Damon and Aviel currently embody the new way to build a startup. They are working hard to invite their early adopters into every aspect of the business -- in a kind of continuous collaborative innovation.  When you go to their site -- be sure to go to the backstage  tab. Why is this important? Well -- hopefully, it's going to accomplish the following:

i) Product Market Fit -- Getting feedback and dialogue from the marketplace in every aspect of the product development process increases the likelihood that what they build will serve people's needs

ii) Ensure early customer enthusiasm -- the first 10 and the first hundred customers of any product are always the hardest to attract and engage. The manner in which Untitled is conducting business,  hopefully brings UntitledStartup these first early critical customers.  Moreover,The customers of the US will view the product development as a process and thus will roll through the necessary bugs etc that inevitably occur in the release of a new product. Well that's the theory anyway. 

iii) PR and Buzz -- rising above the noise of all the other startups out there is HARD. Having a story and an angle and a sense of fun make accomplishing buzz a little bit easier. It doesn't guarantee it -- but it certainly doesn't hurt.  

I'm super excited to have made this investment and look forward to the unfolding story that all of you help write at UntitledStatup!

Important life ritual - the college ski trip

Spent last weekend with 3 guys from college. We all attended Brown University and graduated in 1990. Starting in 2002, we began an annual weekend ski trip. This photo below is from our 8th annual get together last weekend. This simple ritual has become an increasing important and amazing marker in time in my own life and in the life of our collective friendship.  When we started getting together, I believe I was the only one married and had one child. Today, we're all married and have 10 kids in aggregate. It's the regular check in as life progresses and the accumulated history that makes the ritual so rich.  

All this is to say -- I had a great weekend this past weekend. We skied at Snow Basin for 3 days. The weekend was filled with skiing, competitive bowling on the wii, alcohol, food, massages, hot tubs, and good conversation. Thanks to my friends for making this ritual a priority -- I love you man.  

SLC ski weekend
 

Maker's Mark vs. Patron: Founder's Co-op defining drink dilemma

Yesterday, we had our now regular all monthly Founder's Meeting at the Founder's Co-op offices. It. was a really good meeting!  At the start of the two hour meeting, I declared that Founder's Co-op and the Founder's meeting were different -- we're different than other "investors" and "venture capitalists" and one way to signify the difference is by making drinking bourbon as a part of the investor-founder meeting. 

The only problem was -- yesterday afternoon before the meeting when we went out looking for bourbon nearby -- all we could find was bourbon. So I took a shot of Patron....and liked it. So, now -- big decision for next meeting is to stick with Maker's Mark or switch to Patron? Decisions!

Why is having a defining drink important to Founder's Co-op?  I'm reminded of my first start-up in Cambridge -- we were called abuzz technologies. We used to work all hours of the day and night in the mid 90's and then climb on top of our building and sit on the roof top and drink whiskey. I'll never forget the freedom and fun and bonding of the founding team that occurred on those nights. Having a defining drink at Founder's Co-op is an homage to that memory. I also think it sets the right tone for sharing at the founder's event -- not everything that is shared is glory and victory... and it's important to have a forum for those conversations. Even if you don't drink -- Chris and I do and will start the meetings off with a toast to that kind of meeting. And --No -- you don't have to drink to be part of Founder's Co-op....but you do have to understand the spirit of having a defining spirit (pun intended). 

Vacation value

I returned this week from a week long vacation to Whitefish, MT.  We went with 2 other families and spent the week snowboarding and skiing.  I didn't check voice mails or emails very much if at all. We'd ski all day until three or four o'clock, go home sit in the hot tub, have dinner, watch Olympics and go to bed.   

It was a relatively simple holiday -- but I found my head clear up and was able to think with perspective after a few mad rushes down the mountain.  Much of the perspective came from just doing something other than regular routine of work. 

I'm excited to be back at work and feel like I'm going to have a busy year. TechStars is going to be ramping up next month.  We're closing a number of deals at Founder's Co-op.  More to come -- I need to ramp my blogging back up too!