Definition of a hot startup

The following is from the WSJ
"Tableau defines “rocket ships” as companies that reach $50 million in annual sales in six years or less. Only 28% of the nation’s top software companies met this mark. Novell Inc., which pulled in nearly $1 billion in revenue in 2008, touched the $50 million mark the quickest, just three years after it was founded in 1983…A “hot company,” in this analysis, is one with $50 million in revenue in the first seven to 12 years." 
Number of years it took for publicly-traded software companies to break the $50m in revenue barrier:
Adobe: 6 yrs
SuccessFactors: 7 yrs
Microsoft: 8 yrs
Red Hat: 9 yrs
Concur: 10 yrs
Omniture: 11 yrs

Randall Lucas hard at work at RevenueLoan

Randall lucas photo

If you can't tell, I'm posting a lot of pictures a test of the saying -- a photo is worth a thousand words. Here's a photo of Randall with a Cheshire grin -- working hard at RevenueLoan. The last few months both Randall, John Roper, (whose photo I'll try and post this week because he looks like such a hippie developer) Christian Jacobsen and I have been working to make this business really move. Stay tuned for some interesting developments. 

Yes. I am back on my blog. And for those of you who are wondering, yes, I will write posts that actually contain a thought or two. I want to provide you all with a bit of context to my last few photo posts:
i) I purchased an iphone and am discovering the wonders of mobile photography
ii) I want to make my blog more visual
iii) I meet with lots of investors and entrepreneurs in Seattle and thought that having their photos on a blog would be helpful and fun
iv) I struggled with coming back from 3 months of not blogging and found the act of photoblogging a nice incremental step.

Make sense? Does that help?

TechStars, StartUp America and David Cohen ....job well done!

Sometimes you work with great people and you know they're great. Those people have a harder time surprising and impressing you because of the high expectations you already have.

Well, I want you all to know that I am blown away by the work David Cohen (and to a lesser extent Brad Feld) have been doing with TechStars. In the past six months, they published a great book (that I wrote a chapter in) -- Do More Faster. And today, David Cohen and TechStars were part of the launch of StartupAmerica.  What's so awesome about TechStars -- and fundamentally different than Y-Combinator is that TechStars isn't about David Cohen or Brad Feld -- it's about supporting innovation in the cities across America. It's about job creation. It's specifically not about Silicon Valley.  TechStars focuses relentlessly on getting great entrepreneurs to help other aspiring entrepreneurs to reach for their dreams and in so doing, to get funded, build great companies and create jobs. TechStar's community approach is super effective! I say all this...and I say it as a point of differentiation but in no way is it intended to detract from the power of what Paul Graham is doing with Y-Combinator. They're great and Paul is doing a great job.  In fact, Y combinator had some super interesting news this past week too and I hope to comment on that in a post later this week. The purpose of this post is to acknowledge that David Cohen has been kicking some serious ass and making great stuff happen. I want him and others to know how impressed and proud I am of him.  Well done Cohen!

If you want to learn more and understand why I am so impressed....read on.... below is David Cohen's post today --worth reading if you want to know about StartUp America...and why I think David is so impressive. 

I'm at the White House today and we're just kicking off the announcement event for Startup America, a White House campaign to celebrate, inspire, and accelerate high-growth entrepreneurship throughout the nation. This coordinated public/private effort brings together an alliance of the country’s most innovative entrepreneurs, corporations, universities, foundations, and other leaders, working in concert with a wide range of federal agencies to dramatically increase the prevalence and success of America’s entrepreneurs. One of the key factors is access to mentorship.

We are incredibly honored to be launching the TechStars Network today as a featured partner of the White House Startup America campaign. We've had tremendous results with TechStars, and now we're formally helping other programs to have the same impact.

The new TechStars Network launches with 17 independently owned and operated seed accelerators that replicate the mentorship-driven startup acceleration model pioneered by TechStars. The TechStars Network provides opportunities for networking, sharing best practices, training and ongoing support for members of this regionally diverse network, and includes members from Miami to Seattle and from Nashville to New Orleans, and beyond.

We've been contacted by around one hundred organizations from around the world that wanted to replicate our mentorship-driven model. It would have been easy to shut them out, and not speak to them. Instead, we asked: "How can we help?" We've spent countless hours actively helping these other communities to replicate our model. The reason is simple: It's good for entrepreneurs and entrepreneurial communities. We don't need any other reason to help.

Through our experiences with TechStars, we have seen what happens when an entire community comes together to support entrepreneurs. We're more than flattered by the activity of other programs that have leveraged our mentorship-driven model and have improved or tweaked the design. In the end, we believe that developing strong relationships and strong communities creates amazing results. Taking this up a level and building a global network of like-minded accelerator programs is what the TechStars Network is all about. To say the least, we’re full of excitement to see what we’re able to build together as a connected community of credible accelerator programs around the world.

Over the last 6 months, we've fully documented our process and are now making it available to members of the TechStars Network. We're taking the lead on making sure we're driving best practices into the seed accelerator model so that it best serves entrepreneurs everywhere. We'll be organizing an annual conference both for the innovative leaders of these programs and also for the founders who attend these programs. Through the TechStars Network, we're sharing our legal documents, ensuring that mentors who contribute their time are recognized and rewarded, streamlining access to investors, ensuring that entrepreneurs have easier access to these programs, sharing deals and resources, and more. What this means for aspiring entrepreneurs is that there will be more high quality seed accelerators in more places, with more mentors, and more support for them.

At TechStars, we've always been focused on quality over quantity. We've vetted all of the members of the TechStars Network, and will make sure that the bar remains high for future members of the network. We're thrilled to be working in partnership with these other great programs and expect the TechStars Network to grow over the coming years.

We are very excited to announce that Jenny Boyd, who helped build the Kiva organization, will manage the TechStars Network.

Here's a video introducing the TechStars Network that is currently being featured on the White House site for Startup America.

 

 

Breakfast with Bill McAleer of Voyager Capital

Bill McAleer photo

On Friday, I had a long planned breakfast with Bill McAleer. I've known Bill for a number of years in Seattle. We talked about TechStars, RevenueLoan, fund raising for a venture firm (i.e. Voyager and Founder's Co-op) amongst other things. There wasn't a particular agenda, point or lesson to the breakfast -- really just a desire to stay in touch and break bread in person. This informal get together over food is something that I've found a very important element to my job and to accomplishing my professional objectives. 

I had my standard goto breakfast -- egg whites with bacon and he had their gluten free pancakes. Gotta love Portage Bay Cafe....and breakfast with Bill McAleer. :-)   

Checking back in

It's been too long since my last post. I've just been swamped with TechStars, RevenueLoan, and Founder's Co-op to come up for air and write a post. I finally have  moment this morning. I've used the entire morning to make appointments: dentist, doctor, hair cut....maybe a pedicure too? 

Excited to see the light at the end of the TechStars tunnel. DemoDay is next week. I suspect my blog will get more attention then. 

Driving mentors to the airport is an easy way to get the feedback you need and want

You can call it aggressive, cheap, crazy....but you should also call it effective. 


I got the following email from Neil Patel ....one of the TechStars in Seattle mentors:

As you guys are probably seeing, mentors are spending less time with the companies. It isn't that we don't care, it's that we are just busy.

One smart thing that one of your techstar CEO's did with me, Phil, is that he started taking me to the airport and picking me up. Which for me is almost once a week. The reason I think this is smart is that he gets 30 minutes of advice each way (dropping and picking).

I save a few bucks by not taking the train and I save time as it takes roughly an hour when you take the train.

You guys should encourage your other students to do the same thing as well. I know they will love the advice... I already have Andy Liu on board and I will be connecting him with a few CEOs who would love his advice. When I mentioned this to a few of the TechStar CEOs, they loved the idea.

You guys should try to create some sort of board of something in which this process can be streamlined. I bet you that a lot of mentors travel a lot. And that your students want more advice from the mentors.

I'm sitting in the TechStars first 5 minute pitch practice. As a first start to TechStars presentations, the teams are doing a good job. That said, the teams need to follow the basic rules of business presentations :
i) Rule 1 of presenting: Tell them (the audience) what you're going to tell them
Tell them
Tell them what you told them

ii) Rule 2 of presenting:
Show don't tell - a picture is worth a thousand words

iii) Rule 3 of presenting:
Tell a story about their company that illustrates the problem that ou're solving. Real stories allow audiences to understand and engage.

Top 5 tips for a company offsite or retreat

  1. Have a sit down company dinner.  Cooking, eating and cleaning are good community activities especially when the food is "community" or "family" style.  Italian food goes well. 
  2. The majority of the agenda should be no agenda. Give people lots of free time to just chat and connect.
  3. Have alcohol available for those that want to consume. You never want to run out of beer. 
  4. Poker is a nice add to any offsite. 
  5. A community game -- get people to play something so they get to know each other out of the professional context. 

TechStars and Founder's Co-op open house is cancelled. Will be Rescheduled!

It is with deep regret...that I need to inform you all that we will not be able to host the "who let the geeks out" BYOB party on August 13, 2010.  Yes, we've moved into our new office S. Lake Union ....and yes, we're super excited to share the space with all of you in some kind of party. BUT, we have furniture everywhere and like most good startups are overextended trying to get ready for the start of TechStars in Seattle. So forgive me....we're going to need to reschedule the event.  The party next friday the 13th is postponed!

I have plans to attend GeekWeek with Chris Pirillo....but won't have the honor of hosting the inaugural party!  Stay tuned for a rescheduled date after TechStars concludes. 

Reader Appreciation - Thanks Maggy!

Maggy Young lives in the UK. I think Bristol...but maybe London. She's been a longtime reader and commenter on this blog and in a weird way we've developed a nice online relationship. I just sent her $10 via paypal to thank her for her readership, support, and comments. I told her I wanted to buy her a beer or a drink from overseas. I hope we get the chance to meet one day. 

It's a small token of my appreciation -- comments and acknowledgement is why most people blog. Thanks Maggy and all the others readers. I promise to do this again sometime....but don't expect a beer just because you comment on my blog :-) 

The story behind RevenueLoan...and why I'm excited about the company

I started RevenueLoan because I am on a mission. I have a passion for entrepreneurship. I've been starting and running technology companies for 15 years now.  I love entrepreneurs and generally find myself spending all my time trying to help them with all aspects of their business. 

Why do I do this? Well, two reasons. First, I received lots of help as a young entrepreneur. I wouldn't have been nearly as successful had it not been for the help and mentorship of lots of kind friendly people. Second, I believe MANY people aspire to be entrepreneurs and to build something that they and their employees believe in and can be proud of. To accomplish this goal, financing is a often a core impediment to realizing small business success and growth. 

Two and half years ago My partner Chris DeVore and I started Founder's Co-op because we thought that the traditional venture capital model was broken.  We thought success for a startup company was better facilitated by a super angel entity than by a traditional vc fund. We continue to believe this....and are in the process of proving it! I want to be clear -- this does NOT mean that I think venture capitalists suck or are useless. On the contrary, venture capitalists play a vital role in the startup process. 

During the first year of operating Founder's Co-op, we perceived another opportunity to support a group of underserved entrepreneurs. These entrepreneurs had small businesses and big visions and were impeded because they didn't fit traditional bank debt or traditional venture capital or angel equity models. This market insight-- which was  facilitated by Erik Benson and the partners at Voyager Capital -led to the creation of RevenueLoan, the company. We did the first two RevenueLoan investments under the Founder's Co-op umbrella (or flag) before determining that the opportunity required a separate investment vehicle. One of those deals has already proven to be very successful for the entrepreneur and for us!  

Founder's Co-op is on a mission to innovate in the area of financing of early stage technology companies. RevenueLoan is a vital innovation.  The reason I'm so excited about the company is because I think it's the best investment agreement I know of that truly aligns entrepreneur and investor incentives.  RevenueLoan puts an extra focus on increasing top line revenue growth which for any entrepreneur is a critical success metric!

In conclusion -- and just to put a fine point on it -- I'm excited about RevenueLoan because I think it is going to help a large number of entrepreneurs grow their businesses.