Join me in welcoming Geoff Entress to Founder's Co-op as a partner

I just wanted to welcome Geoff Entress as a partner at Founder's Co-op.  Chris DeVore and I are super excited to have Geoff join us. His work as an angel in the Northwest generally, and Seattle specifically is unparalleled and makes him a perfect addition to the Co-op.  As we ramp up our activities in the very early stage investing area, Geoff is a perfect addition. Geoff brings a great track record of successful deals and complements Chris and I from a personality and skill set perspective!  Special thanks to Voyager Capital in making this transition smooth from everyone's perspective -- they're very supportive of Geoff and Founder's Co-op union and we very much look forward to working together with them (i.e. Voyager) in the years to come. 

You can look forward to more news from Founder's Co-op over the next few months. 

My new favorite show: Cake Boss

My daughter introduced me to Cake Boss and I've decided it's my new favorite show.  It's a reality television show about Buddy and his family business of making the most outrageous cakes you've ever scene.  I'm not sure why it's my favorite show: I like the main character, I like seeing the insides of an Italian family business, and I really enjoy watching the process of designing and making the cakes. I think the thing I like most is that it just seems like this guys life is about creating and making people happy. I'm a sucker but I started to tear up after watching one episode. 

Top 10 reasons NOT to apply to TechStars

  1. You like your cubicle
  2. You think 12 month software release cycles are just fine
  3. You aspire to be a middle manager
  4. You'd rather sit in meetings all day than actually do stuff
  5. You don't believe the world could be a better place (change isn't something you believe in)
  6. you like pushing paper
  7. procrastination is a game you enjoy
  8. Your definition of risk is a board game
  9. The Nike commercial of Just do it didn't do it for you
  10. You're afraid, very afraid

Applications are due by June 1, 2010. Apply here

What people don't understand about TechStars...

I get asked about TechStars all the time -- and I think a number of folks don't understand the benefits of applying.  I've started at least 4 and sold 3 companies successfully -- if I were starting a new company, I'd seriously consider applying and doing the TechStars dance. Here's why:

  • Stand out from the rest of other startups -- TechStars really helps young companies stand out from all the other startup noise that is in the marketplace. Getting into TechStars give you the opportunity to talk to lots of folks that you wouldn't otherwise --and make the case as to why you and your company will succeed. 
  • Get feedback from smart people -- TechStars gives you lots of feedback from smart people of all types. This feedback is incredibly valuable. If you're not in TechStars, you've got to hustle, call and seek this feedback out on your own. It takes lots of time and is hard. Because of the relationship to the mentor community, we make that process much easier. 
  • Get introductions to potential customers and partners  -- For companies that get into TechStars, your ability to get access to people at other companies is awesome. Mentors will really help you get doors opened that you otherwise wouldn't be able to open. 
  • Be surrounded by other people living the same dream -- You will have fun. TechStars is fun. 
  • Raise money at a higher valuation than you would if you weren't in the program -- I don't think you should do TechStars simply because it helps you raise money. I don't think the real value of the program is the money. But I know a number of you can't help but calculate this in your head and be skeptical of all the folks supporting TechStars. Here's the simple math you have to believe: TechStars will increase  your valuation more than the dilution that occurs at the beginning of the program. In my mind this is a no-brainer. Moreover, TechStars will help me find, pitch and close investors more quickly than if I didn't do TechStars.  Let me be clear -- we make no promises. It's up to you as an entrepreneur to get into TechStars and then to raise capital. But we certainly can give you every opportunity to succeed. 

If any of this rings true for you, you can apply here before June 1, 2010.

No BBQ allowed. Any thought on how I should respond are welcome?

I received this pleasant email today:

Hello:

 

I got a report from other tenants in the building that there was a BBQ in the parking lot with alcohol being consumed today.  Alcohol or not, this is an office building and both of these activities are inappropriate for a professional setting.  Other tenants have clients coming to the building and this is not something that should be going on.  If people need to be involved in an activity like that there are parks nearby that can be used.  The report that I got was that it was your office that was doing this.  If this is true please contact the people on site and make sure this does not happen again.

 

Thanks,

 

Rich

 

There are a number of responses to this email that I can think of....but I'm not sure yet what the best one is yet. Any thoughts of how I should respond?

Feedback on symbolic corporate cocktails

I got this email from NearlyWeds, one of my companies that does awesome wedding websites --

"we are sophisticated and complex, hence the reason for the difficult drink decision.  we would like to say to our customer that we are the veuve clicquot  type.  And we appreciate the widow very much, and do enjoy her beverage greatly.  day in and day out though, we are micro-brew sort of people.  we love a good handcrafted micro brew or monk-brewed belgian.  but if we were to celebrate after an acquisition or something, then we would probably skip the microbrew and enjoy a bourbon or scotch, or maybe even a bourbon drink like a bourbon sidecar.  our customers are sophisticated, so are we.  you don't wear the same clothes everyday, why would you drink the same drink for all occasions.  


and just like brides, we love to be difficult about simple questions."

Thanks

John

If your company were a drink, what drink would it be? Help me name TechStars corporate cocktail

Since the publishing of the video about Founder's Co-op, whiskey and entrepreneurs on TechFlash, there's been an ongoing conversation about each company's symbolic drink. You can think of these as corporate cocktails.  You know - a drink that you start each corporate meeting with (if you were drinking during the day) Here's what we've come up with so far: 

  • LookStat - La phroaig - Single malt scotch
  • Untitled Startup - Dewars
  • NearlyWeds - Perseco
  • Frugal Mechanic - tap water
  • Appature - Russel's Reserve
  • Cooler Planet - Patron
  • AppStore HQ - Maker's Mark
  • On Top Leads - Jack Daniel's 
  • Big Door Media - Stoli and soda with a lime

(Please note that I didn't get ALL Founder's Co-op companies drinks by date of publication....those that are outside of Seattle were omitted. Sorry guys -- the need to publish dominated making this list comprehensive. If you send me a drink I'll post it)

Next week at the TechStars for a Day event, I'll be revealing TechStars in Seattle choice of symbolic drink. I'm not sure what it is yet, but I'm open to suggestions.

Please note -- these corporate cocktails do NOT have to be alcoholic. It's probably not a coincidence that the above list is mostly alcoholic. 

Everybody is getting behind TechStars in Seattle

I'm feeling the community support behind TechStars in Seattle. This is a photo that I was sent by the partners at OVP.  I think this photo was inspired by the photo I posted by Voyager Capital last wee.  It's this kind of community spirit that makes TechStars rock. And it's this kind of support that is going to make the companies that apply and get selected really successful. Reminder -- applications are due by June 1.  

OVP photo
 

Startup Weekend Rocks

I dropped by Startup weekend yesterday -- yes, it was mothers day and yes, it was the nicest weekend of the year. Still -- I dropped by to see the Seattle start-up scene in full swing. Lots of familiar faces and people working hard.  Great vibe -- and some interesting ideas (as always). Look forward to seeing if any of the ideas materialize into something past the weekend. 

I can't wait to do my own startup weekend one of these days. Looks like a lot of fun. 

Capitalism, health care, and my dad

I'm writing this post and my guess is it will be longer than my normal posts. You know when you sit down to write a diary post to sort out your feelings -- that's what this post is. 

I have an MBA and I'm an entrepreneur. I'm a capitalist. I believe in capitalism (for the most part). I understand very well that profit is a strategic imperative. I understand that managers sometimes need to make what appear to be bad decisions or inhuman decisions to achieve profit.  Unfortunately, I understand the rationale of laying off a division of a company because the organization needs to go in a different direction.  In most instances, I view this type of rationale as a strength of the US economic and politics system as opposed to those countries that have stringent rules about when a company can fire a person mandatory employment. 

At the same time, I think I have an understanding of the human toll of layoffs. I feel connected to the people I work with -- and even when it doesn't work out from an ongoing employment situation. I want to be friendly toward them -- and them toward me if I see them at the market.  

However, capitalism shouldn't be a license to fuck other people or to be a dick. Unfortunately, that's what the US version of capitalism has come to stand for.  It's hard for me not to be disgusted by the financial shenanigans of wall street over the past few years. And you should know, I believe in universal health care.

However, this wasn't meant to be a political post. It's a personal post. My dad is a rheumatologist. He's been in private practice for about 40 years and has worked the majority of his professional life with the same hospital. Just recently, my dad's practice stopped receiving referrals from that hospital. No one bothered to communicate that to my dad.  As a result, my dad's business was affected ....but more importantly, his sense of connection to a career and to people has been deeply wounded. 

I'm seeing where I want this post to go now. 

I guess the thing that disturbs me the most is that the hospital didn't call and tell him directly of they're decision to stop referrals. It's this loss of human relation and acknowledge -- that may be uncomfortable or hard -- that is so important.  It's not just business -- it is often very personal.  

I know that the scenario I layed out is subjective and complex. I know there's many other sides to the story. But, I'm feeling bad for the humiliation my dad must feel after working somewhere 40 years and having that disregarded. That's gotta feel shitty. And at the very least -- this post acknowledges him and his work. 

Entrepreneurial tip of the day: remove the hair from the sink, don't hide from the tough or gross stuff

Every entrepreneur faces numerous challenges.  More often than not the hardest ones people attempt to ignore.  Let me give you a few, for examples:

  • revenue isn't scaling at the rate it should
  • one of your VPs isn't a cultural fit and does a mediocre job
  • traffic to your website comes from black hat techniques and you have white hat advertisers

I could give you LOTS more examples. 

The point of this post is that given that there's lots of hard stuff to face, the sooner you acknowledge the issue, the sooner you can step up to fixing the issue. It's rare -- if ever -- these issues just resolve themselves without direct confrontation.  One skill you need to develop is the ability to step up and bring these issues from the dark into the light and to deal with them effectively, cleanly, and generously. 

It may be easy to hide -- but hiding only makes the problem linger. 

What bothers me still about Seattle?

I've been living in Seattle for a decade now. I have grown to really like Seattle and the pacific northwest, more generally. However, I was reminded this past week of a few things that I don't like about Seattle. The following is a list of stuff that bothers me about Seattle:

  • Matzah ball soup -- there's no good place to get this soup. period.
  • Swimming pools -- I've struggled to find a world class swim center any where near Seattle. And federal way is not close enough to Seattle to make swimming there practical. 
  • Basketball -- losing the sonics sucked. I grew up watching Larry Bird, Kevin McHale, and Robert Parish and the Boston Celtics. Professional sports seemed to be lacking. The Sounders are great! But, they don't play basketball.
  • Traffic -- and the lack of traffic solutions. Why can't we make a friggin' decision about the 520 bridge and the viaduct. 
  • Public access to the water -- I just got back from Vancouver. Why we allowed lake washington and lake union to be private spaces without making the first 100 feet of access more public was a mistake. Just imagine this city if each body of water were like Green lake!
  • Sun in the winter -- I still need more sun than I get in the winter. It's not the rain that bothers me...it's the lack of sun.  That said, this winter was great!

Marketing TechStars: get in on the action

I'm totally having fun with the community -- trying to let everyone know that applications are open and due June 1, 2010.  And, I'm happy to report that folks in the community are helping me get the word out and I'm deeply appreciative. Marcelo and Jennifer of Seattle 2.0 have been helping me. The TechStars mentors have been helping out. The venture capital community has been getting into the spirit. Here's a photo that I received from Erik Benson of Voyager Capital yesterday  - the photo if you can't see it is a picture of the TechStars brochure at Voyagers reception desk. 

TechStars doc at voyager
 

And now you can help too!  Please help me get the word out by forwarding the following email to folks you know in your company and in the community that you think would be appropriate:

Re: Want mentorship and investment for your startup?

TechStars is a mentorship-driven seed stage investment program.  It is now accepting applications for the inaugural 2010 Seattle class.  Applications are due by June 1, 2010 and the program kicks-off on August 16, 2010.  The Seattle program is funded by every major venture capital firm in Seattle.  We are reaching out to every organization in Seattle that works with entrepreneurs to help spread the word about the program.  There is more information about TechStars online, www.techstars.org.  Any help you can provide in promoting the program or encouraging exciting young companies and engineers to apply is greatly appreciated. 

Notes from Founder's only meeting at Founder's Co-op

Last night we had most of the founder's come to the Founder's Co-op office for our second "founder's only" event. We now hold these meetings every other month.  I'd say the event was a win. We met for 2.5 hours and then had dinner.  The meeting started with everyone doing a shot of Maker's Mark whiskey.  I blogged last time how we were going to have an symbolic drink at each Founder's Only meeting -- last time, we didn't have Maker's so we had Patron tequila.  The Maker's Mark set the right tone for the meeting. The agenda was as follows:

  • Everyone go around and give a 1 word assessment of how they're feeling
  • Go around and get high's and lows report from each company. Followed by -- what item would you like to talk about in small groups? or more succinctly, what issue would you like input on from other entrepreneurs?
  • We then broke out into 2 smaller groups: one group was the sales and marketing group, the second group was the strategic prioritization group. 

I met with the strategic prioritization group.  The question we talked about was given the wide range of options of tasks to undertake at a small group, how do you prioritize?  The following tactical steps came out of the meeting:

  • Schedule in your calendar a day a month for the founder's to leave the office and talk about strategy and priorities
  • Every day come in and write down on a piece of paper the highest priority thing to accomplish that day. Get it down before lunch. 
  • If you're making revenue traction, be satisfied with where you're at and what you're doing. It's too easy to get distracted by the company that just sold for 1 Billion dollars and wishing it was your company. It's ok if you're not Groupon or Zynga.
  • It's your job to know where you're headed. 
  • When in doubt, focus narrower rather than expand. 
  • Get dominance before expanding. To do this, you need to define very clearly and quantitatively what dominance means. 
  • Business is hard -- don't expect it to be easy.  Growth is hard. 

Raising capital is an emotional process not a rational process

The other night I spoke about how raising capital is an emotional process. I can't emphasize this enough. The entire process of raising capital -- is an exercise in managing relationships.  Investors want to feel good about their investment.  Investors want to like the entrepreneur and feel confident in the person's ability to execute the business. Once you recognize this fact, below are some concrete tips for raising capital:

  • Ask investors questions -- understand who they are and their rationale behind past investment decisions
  • Ask questions about who they are - - where they live, what they listen to and what they watch
  • Entitlement has no role in the financing process
  • If you screw up, apologize
  • Recognize the process is a game, play it to the best of your ability
  • When your raise your money, say thank you
  • If you switch investors abruptly, apologize.

Remember it's not business, it's personal .  Entrepreneurs should ignore this fact at their peril. 

Feedback from last nights twiistup event: How to make a great entrepreneurial panel or event

I spoke at an entrepreneurial panel last night with Geoff Entress. After talking and answering questions for about 1 hour I asked the audience if they had any constructive feedback on how to make the panel better. We received the following feedback:

  • Serve alcoholic drinks -- Neil Patel had already figured that out and had arranged for an open bar.  I think panels are really just like weddings  -- you need to hit the audience with alcohol and good snacks immediately after the ceremony. Neil understands this.
  • Improve networking -- During the drink hour, figure out a way of structuring the networking so more people meet the right people. There are lots of ways to do accomplish this -- e.g. a bell or chime where you have to move on and introduce yourself to someone new...The important thing is understanding why the audience is there is less about the panel and more about networking. 
  • Improve one-on-one access to panelists -- The larger the audience the harder it to connect audience and panelist one-on-one.  In fact, making one-on-one connections is hard to do with almost any size audience. However, the audience clearly has the desire to get individual advice and contact with the panel.  NWEN has created a unique "eDate" event where they have a larger number of experts to meet for 3 minutes individually with entrepreneurs. I think this is a great idea and the event has been well received.  
  • Present case studies -- people like to hear detailed stories of financings.
  • Role play -- Someone in the audience wanted to "watch" a real pitch and then have the panel critique the pitch.  

What Seattle startup scene needs?

Seattle needs:

...more big exits from Seattle technology companies

Picnik was nice.  But zillow, redfin, cheezeburger and others. It'd be good if we could get some companies exiting with greater than $100 million exit club. 

....more great entrepreneurial talent

This may be the thing that creates the above exits. And this may be the thing that the city needs most and is having the hardest time developing.  The UW is great - but Seattle can't compete with universities in Boston or San Francisco.   This single bullet point is the thing that attracted me most to doing TechStars in Seattle. Recruiting great entrepreneurial talent. 

....more great angel investors. 

Geoff Entress is the Ron Conway of Seattle. And the group of entrepreneurs we've pulled together at Founder's Co-op are active. But, Seattle needs more individuals willing to take the earliest stage risk associated with technology companies.  More angels investing money means a more vibrant early stage technology scene. 

....more awesome engineers

That are not trained by local HUGE companies. Or engineers that are determined to play with code and keep playing until they figure out stuff that works for people. There can never be enough talented technical people playing with codes driven to build things of value for people.  I'd particularly like to see Seattle capitalize on it's gaming roots and become a bigger player in the virtual economy space. The folks at Big Door Media are great -- but we need more cutting edge game companies. 

The forgotten gift list

I've been very busy lately with work and family related stuff. I used to be good at acknowledging lots of things with the occasional note or gift.  As I've gotten busy, I've dropped the ball on lots of stuff -- not least of which is some thank you notes and acknowledgement gifts. So, here's my list of stuff I've forgotten -- it's not meant to be comprehensive: 

  • Jay Haynes - wedding gift and baby gift. I wanted to get you guys a nice dinner with or without me. At this point, it better be without me. 
  • Michael Oiknine - baby #4 gift. You set the standard of a loving relationship and adding a 4th child. OMG.  Harvard baby clothes might be in order. 
  • My daughter - for getting into Lakeside.  Gotta get a t-shirt from the school....or at least an itunes gift card. 
  • Mitch Brandow - baby #1 gift. Flowers for your wife, a bottle of wine or a kid insurance product might appropriate.
  • Schoeny -- for making a wise job choice.  A bag of Fortune cookies seems appropriate. 
  • Greg Gottesman - I owe you a thank you note
  • Erik Benson & Randall Lucas -- I know you're fans of wine but I don't know the first thing about it. I've been embarrassed to show my ignorance.  Belated christmas/ Hanukkah and appreciation gifts.
  • Geoff Entress -- Some theo chocolates because I think you're a sweet guy -- and I love doing deals with you. 
  • Brother Steve -- your birthday is in two days. I'll likely forget. Happy bday. Happy 40th bday to Christine too.
  • I'm realizing this list could go on and on....and probably should.  Lesson learned. I need to get better at sending these gifts real time.