Traditions and the annual guys HARSfest ski weekend

Every year -- except for last year -- for the last 10 years, I've been going skiing with a group of guys from college.  This weekend has become one that I look forward to each year -- there's something very special about finding friends in life and then managing to mark time as you age together and enter new life stages.  The group now is entirely married with children and when we started I was married and had just had a child.  We're definitely middle aged -- and dealing with the the aspects of aging bodies, paunch stomachs, creaky knees, and later starts to the slopes.  

Writing this post and it makes me think of the movie Stand by me and Hangover -- looking forward to hitting the slopes. 

 

Great first event at Code Fellows last night -- some tactical and strategic lessons learned

It's been a whirlwind 2 weeks since the first public launch of Code Fellows on Jan 2, 2013.  Last night, we had a great job learning event called "How to get an awesome job at a Seattle startup?" -- the event was aimed at high growth early stage technology companies with a focus on engineering and design candidates. 

Overall the event was really good.  Feedback was positive from both the companies attending and from candidates.  We had over 100 candidates there and 10 recruiting companies in attendance. We learned a lot -- and it's funny the kind of lessons one learns when you launch stuff like this. 

A lot of the lessons are tactical and trivial. For example, big tactical lessons were lighting for our CTO panel was terrible.  Also -- there was a tv on behind the panel that was super distracting to the audience. These lessons came from simple feedback from the attendees.  This feedback is great -- and critical to us doing a better job next time. 

The more valuable feedback was :

* The fact that we were able to pull this event off as successfully as did is a tribute to market validation that we're onto something.  In many ways, this first event was our MVP and we wanted to see if we could event get attendees -- we actually had a waitlist to attend the event and we soldout the company spots!  

* Lots to do as we prepare for the first class of Code Fellows which we will be sold out as well.   

Onward and upward. 

 

Boring can be sexy....in business

This statement doesn't apply to life and interactions with the opposite sex. But I've been pitched two pretty boring ideas by really good entrepreneurs and I thougth that both businesses had the potential of being pretty sexy and attractive.  The first one had to do with online manuals for products and the second had to do with backend plumbing and glue for email.  See what I mean -- boring stuff.  Yet, each entrepreneur saw something unique in these starting points that made me interested to follow the progress of the company over the next 6 months.  While these businesses might turn out to be nothing -- I'm guessing there's actually likely something there.  One of the big challenges for both entreprneurs will be in making the boring sexy to customers and to investors. 

lessons I learned from having cancer

It's interesting.  I tell people that I'm happy to put 2012 in the history books. This is my way of stating that I'm happy to be done with having cancer and relieved to return to health.  And that's true. I am.

But this is a massive over-simplification of the most intense year of learning I've had as an adult.   I realize I say this phrase in part because it is true but more than that...I say it because it is what people want me to say. It's what they expect me to say. It's a nice way of packaging up a serious mess of an experience and it allows them and me to move on and get back to "ordinary" life.  As I sit here writing this post, I can feel the emotion well up in my chest and eyes.  In many respects, I'm deeply thankful I had cancer. And if you talk to enough people with cancer -- you'll hear over and over again, that also don't regret having the cancer at all.

Why? Well, it's trite but I am totally down with the life is short meme. I think this could be the defining meme of the next many years of my life.  Carpe diem. Sieze the day. Tell someone you love them. Hug your kids. Don't work so much. Basically, we're all going to die -- we deny that we don't know when. That it could be any moment freaks us out too much and makes living and planning impossible. I've already started to prioritize vacations and time with friends and family in a way that I didn't before.  The thing about this meme is that I now have an emotional understanding of this concept. It's easy to say and to understand -- life is short.  But unless you've looked at a doctor as they told you that you have cancer (substitute any life threatening illness), or you've driven down the road and thought that this could be the last drive of your life, or had to tell a spouse that you have cancer (or other major illness)...then the understanding and the clarity that comes from this meme is likely illusive.

I learned how important friends are.  I was shocked at how important it was for me to hear from people who just sent an email or a facebook message and said. "heard you're not well...thinking of you...get well".  And the friends close to me who cooked dinners, dropped by the house, came to my chemotherapy, called me.  These people made my heart sing and helped me through a tough time. I am forever thankful and changed by their reaching out to check on me.  As a result, I'm much more aware than ever the importance of checking in on people. 

Lastly, at least for this post, I learned compassion and vulnerability.  I don't assume that everyone I meet in my day isn't struggling with some life event that makes them feel hurt, vulnerable, or something else.  I'm aware that people have all sorts of shit they're trying to overcome and it doesn't always look pretty or nice or calm.  I personally feel stronger in my vulnerability than ever before. I cry easily. The world and people touch me and I'm happy to be touched. I watched Jodi Foster on the Golden Globes and I cried.  I talk to my mom and she tells me she isn't doing well and I cry for her.  I carry my compassion and vulnerability with me in easily accessible pockets -- they're emotional handkerchiefs I easily can wave and wipe a tear with.  

I thought that was my last point it wasn't -- I learned how important and vital health is.  We all take it for granted and there's nothing more valuable than one's health.  I think I read this on twitter --  We spend our time building our wealth, when we should be building our health. 

 

TechStars Alumni New Year Party Tonight

I invited the past 3 classes of TechStars Seattle alumni out for cocktails to celebrate the new year tonight. We all went out and had drinks and some appetizers.  It was really fun. We had a great turnout. Lots of familiar faces, passionate entrepreneurs, and general good vibes. It was such a success that I decided to host this quarterly -- and to include mentors.  Stay tuned for the April fools alumni get together (no april aprils joke intended !)

3 lessons I learned from meeting with a 21 year old entrepreneur

My friend, Dan Levine, introduced me to a nice young Jewish boy named Grant, the 21 year old. Grant is going to graduate UW in May 2013 and wanted some life advice.  Grant emailed me and asked me if he could bring his friend, Tony, the 22 year old who graduated in May 2012.  I scheduled to meet them this week at Zoka, a local coffee shop for 30 minutes.  We were scheduled to meet at 4PM.  I showed up at 4:10 and Grant and Tony were sitting by the door.  We had never met but I knew it was them that I was meeting.  They jumped up and introduced themselves.   I got a soy latte and sat down with them.  Grant started to talk. I wasn't sure exactly where the conversation was going to go but it was the end of the day and their enthusiasm was engaging.  It became clear -- 3 minutes into the conversation -- that they wanted to talk about their mobile app and business that they had been working on for the last 6 months.  I heard about the founding of the business -- Tony had started it while he lived in San Diego.  He had moved back home to Seattle and had partnered with Tony while Tony was finishing up at UW.  They weren't making any money yet.  But they had this little business and were trying to figure out whether it was worth continueing to pursue. I'm not going to divulge their business idea -- but in the past 6 months they clearly demonstrated some learnings from the market. I was impressed with what they had figured out -- and I was more aware than them of what they didn't know that they didn't know.  But in the end -- I end up staying and talking with them about their idea for 2 hours. Trying to help them and give them tips so they might actually turn this thing into a success.  At the end of the coffee meeting, I reflected and realized I had learned at this meeting...

i) Naivete and enthusiasm are an entrepreneurs friend.  These attributes can be a HUGE asset and what may seem impossible ...may in fact not be. 

ii) Writing down ones key assumptions and figuring out what tests one wants to run is the entrepreneurs job.  The definition of the test reflects the frame or lens of the entrepreneur.  These assumptions and tests point the direction of the most likely learning that will be obtained. A lot of the learning that one actually does in these market tests can not be known a-priori. 

iii) Listening AND selling are equally critical skills to accomplishing the entrepreneurial goal. 

How to recruit excellent engineers in Seattle?

Well -- that seems to be a great question that lots of people are asking and no one has a great answer to....And while I'm not sure if I have a great answer either. I'm pretty excited about the answer that Brad Bouse has come up with : Code Fellows -- an engineering boot camp that guarantees (for now) a 60K job offer to its graduates.  The first camp -- a ruby on rails boot camp is starting on March 4 and applications are starting to role in.  

Check it out.  

 

Something you might not know about TechStars...

Each TechStars company now gets $118,000!

Every TechStars company now receives an automatic offer of $100,000 convertible note in addition to the traditional $18,000 investment.

There was a lot of buzz about the Star Power Fund when it was announced last fall. However, in case you missed it or forgot, I'd like to highlight it here because it's pretty freaking cool.  This additional $100k investment is from about a dozen investors who got together to form the Star Power Fund. To clarify, it's an offer, so it's optional. My hunch is that 99.9% of companies will take it.

Why this rocks for entrepreneurs:

1. Rounds will already have some traction.

2. It's an entrepreneur-friendly investment.

3. No more living on ramen noodles.

4. It's a good indicator that investors are excited about the quality companies they see coming out of TechStars.

5. Teams without a designer can hire one or outsource temporarily.

6. Softens the, "I can't afford to be an entrepreneur because I have a mortgage" problem.

7. More run way if needed.

8. It's $118,000 dollars more than you had before :-) 

I'm looking forward this year's class and how this incredible offer will benefit them.

Applications for TechStars Seattle are open. Early application deadline is May 25th and final deadline is June 15th.

 

So how am I doing (since being diagnosed with testicular cancer)?

It's hard to explain exactly how I am doing. 

Physically -- post surgery I feel fine. I'm walking about and should be back to normal in a day or two. 

However, every creek in my body now gets associated for a moment with potential cancer.  I have a cramp in my side and I wonder -- might that be cancer?  I don't remember feeling that before - I wonder is it connected to some cancer organzism growing in my body? 

My progrnosis -- post treatment -- remains excellent 95%+.  So on one hand -- I feel like the same Andy and a person who ihas it now worse than someone whos going to have a bad reovery from a surgery. Kind of like I'll need 6 months of PT. I sort of imagine myself going through the equivalent to someone post a major shoulder or knee surgery. Most of the time I can hold onto my prognosis -- even though most other people hear the word cancer and associate it with all the bad cancers and bad outcomes they know about. I find myself saying that I was diagnosed with testicular cancer and that it "almost certainly is cureable" and has "95% cure rates" so that people can calibrate what I've got more readily....and so that I can avoid the look of "sorrow" or "portential death" on their face. When I do this -- i do it for them ....and for me. 

The weight of the cancer word on my psyche and on other people's psyche is real -- I am changed through this  in my eyes and in others.....and that's the real impact of this illness.  A couple examples:

  1. When I walked down the hall to see the doctor, I felt middle aged and frail and vulberable.  I wasn't the 30 something kid ready to tackle the world.  I was Andy Sack with cancer. 
  2. And I've changed in the eyes of others -- on of my friends was asked how he was donig....and his response was ...."my best friend has fucking cancer, how do you think I'm doing". This is significant because I don't feel that bad and doint' think of myself as very different....and yet in his mind and heart I have a fucking cancer and might die. 

And then there's the practical implications of the cancer. Now I find myself worrying about all these associated implications to my life.  I got worried that your partners might want to back out of backing techstars....or that someone might impose a new leader for "my own benefit" . I worry about health insurance and now that I have cancer will i be able to get it if I'm not working at a bigger firm. 

How's that for a real answer to "how are you doing"?

 

Life takes sharp turns: Diagnosed with testicular cancer 1 month ago

This is the post I wrote at the time -- February 7, 2010

I was diagnosed with cancer on Tuesday.  Events have been like a slow motion movie on one hand and like a speeding train on the other.  I had spend much of Monday joking with people that I was scared that I had testicle cancer and had a swollen nut. It was swollen enough and uncomfortable enough to ask my wife to examine it and to call the doctor. When I spoke to the doctor and told him my age, and what was going on he said most likely it's an infection but let's fit you in tomorrow. Go have an ultrasound and I'll examine you. So I went and had an ultrasound.  I remember looking at the screen --and not really noticing anything odd or different. It was 4:50PM and the ultrasound technician seemed to want me to go to the urologist Erik Torgenson before 5PM. Which I did. We talked for a bit about Tom Robey's diagnosis and life....and then he started to examine me ....and pretty quickly told me I had testicle cancer and that I'd be operated on next Tuesday.  He told me to get dressed and come to his office. He drew a diagram that represented a decision tree -- I wasn't allowed to keep the paper because it was my order firm for surgery.

I remember being in the car and thinking how alone I felt. I called my parents and told them. My mother thought I was joking. I wasn't.

I went to my niece Lola's birth day party. 

I remember feeling my mortality as I drove over a hill. I could really die today. That's a scary thought. 

If I don't' die to day what should I do differently in my life?

I'll be posting to catch you up on the journey of the past month -- you should all know that the progrosis is very good. It helps reassure me through what is undoubtedly going to be a really shitty couple months!

 

the game is changing

I'm speaking on a panel next week as part of the MIT Enterprise forum here in Seattle. The topice of the talk is Venture Funding - It's a New Game. The game has for sure changed, and I think the success of Founder's Co-op, TechStars and Lighter Capital shows some of the ways entrepreneurs and investors are adjusting. 

The panel is a good mix of people across the startup funding landscape, with a wide range of experiences. I think it should be a really interesting talk, so no matter where you sit in the startup funding world (entrepreneur, investor, service provider), I think there will be some juicy nuggets you can catch here. Check it out next week - details below.

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Have you heard about recent exits in which start-ups have been acquired for several million dollars within a couple of years of founding with little or no outside investment? Or clean energy start-ups that can’t raise the millions needed to grow their business? Or a game company that sold for hundreds of millions of dollars with relatively little VC participation? What’s going on? 

Join us as Rebecca Lovell, Chief Business Officer at GeekWire, moderates our panel of industry insiders including:

  • Frank Artale, Partner, Ignition Partners
  • Tom Duterme, Corporate Development Director, Groupon
  • Andy Sack, Co-founder of Lighter Capital, Judy's Book and several acquired tech companies
  • Dan Shapiro, Kept Entrepreneur at Google

Our panelists will tell us where acquisition and venture money is coming from today, including specific deals. They will explain new venture funding models such as revenue financing and incubators that offer mentors, connections to investors, and significant cash. More importantly, they will provide a framework for understanding how funding in the Northwest has been transformed by increased capital efficiency, technological development, and the global economic malaise, as well as explain the impact on entrepreneurs and funders, such as angels, VCs, and corporations.  

Audience Takeaways

Audience members will learn:

  • Details of recent Northwest exits and financings
  • What has changed in the last two years
  • About the explosion in new ventures and trends in capital efficiency
  • What acquirers and investors are looking for today
  • What is hard to fund and why
  • About new venture funding models such as revenue financing and incubators with advisors, connections to investors and cash

How to be a fintech company

There are 5 fintech companies that I've been paying attention to as I try to figure out the model for Lighter Capital -- actually -- there's many more than that...but for the purpose of this blog post, let's focus on:

  1. Second Market
  2. Receivables Exchange
  3. Wanga (UK)
  4. Kabbage
  5. OnDeck Capital

There are lots of differences and variants to these businesses but I like all of them and it seems like they follow a somewhat simple formula.

  • Market segmentation -- Each company in its own way focusses on a market that is underserved by the capital markets.  One way or another, the underlying businesses need capital. 
  • High rents (i.e charge a lot) The above businesses make capital available to the customer via the internet and charge a rather high rent. Wanga is off the charts!
  • They've figured out repeatable customer acquisition --  to varying degrees the above customers has each figured out how to acquire customers cost effectively.

At lighter capital, we're trying to make sure we accomplish these goals as quickly as possible. 

Risk adjusted returns: Struggling to balance the gas and brake pedals

My career as an entrepreneur and as a seed stage equity investor has me look at a company and a team and think about what could go right.  It has me dream the possible. While working on refining the boundaries of a RevenueLoan, I find myself really thinking hard about reality -- and what could go wrong.

I find myself focused on risk-adjusted returns and yield. Prior to Lighter Capital, I never really thought about those concepts. Internally, we're debating the benefits of providing smaller revenueloans to companies earlier in their revenue life cycle. So, I find myself wondering -- what risk am I taking by moving earlier? Traditionally, people would say that moving earlier increases the risk -- and that's the obvious answer. But there's some benefit from a risk perspective to moving earlier. The main thing I find myself thinking about is that the fixed costs that get a company in trouble further into the revenue life cycle are not yet in place and so the entrepreneur is able (theoretically) to better able structure the organization to include those fixed costs.

The other thing to I find myself wondering about is that for each marginal dollar earlier in the revenue life cycle, I think I'm likely increasing my potential return by much more than one dollar. One dilemma for me is how to think about pricing this risk -- and there, frankly, right now, I have no clue! ;-)

Market education and awareness is top of mind

One of the topics that is top of mind for me at Lighter Capital is where and how are we going to get customers familiar with revenue based finance broadly and our RevenueLoan product specifically.

Once entrepreneurs and small business owners understand what we're doing, we should be a lot more effective in coming to terms with them and closing investments. That said, it's clear to me that we're in the early stages of market development for a new type of financial product. We have this new product that has some compelling advantages over other types of funding -- but if no one knows about the product and those benefits, it's hard to get customers.  We have the added challenge of not only having to educate small business owners and entrepreneurs but we also have to educate the lawyers that represent these business people.

In order to educate people about our product and our firm, I think I need to be communicating more about the process of growing this company. This should be straight forward as long as I have the time -- there's lots of interesting nuances and challenges we face.

blogging at Lighter Capital

Phew, in case you didn't hear - TechStars demo day happened last week which was both an awesome event with a lot of great people and another great moment for Seattle startups. For me personally, it marks the end of 3+ months of hectic schedule balancing the whirlwind time I spend running TechStars here in Seattle with my ongoing work at Lighter Capital and Founder's Co-op.

Among the things that I struggle to keep up with (sleep, family time), it's harder for me to find time to blog. So expect me to get back into the swing of things very soon. But as we build Lighter Capital into a full fledged, web-based site, I plan to split my blogging time between here and there. There's stuff I write about here that wouldn't fit for the brand we're building at Lighter Capital, and vice versa. 

As such, today I wrote my first blog post yet on the Lighter Capital blog. Expect more to come, and it may not be of interest to you, but wanted to let you all know that there's now more literary gold from yours truly that you can find over at www.lightercapital.com/blog.

My first post is about fighting financial fraud as a tech-enabled lender. Sound awesome? check it out over there.

Opening a Community Section at TechStars Seattle Demo Day!

TechStars is all about the community. Community-driven, community-supported. So, for the first time ever in Seattle, I'm excited to open a Community Section* at TechStars Demo Day!

Come join us November 3rd, 2 - 4:30pm at the Showbox Sodo. 

The 10 TechStars companies have been working around the clock for the last 3 months - doing more, faster. The most hyper-productive months of their lives. We're showcasing all their progress with presentations from each company. Come check out what they've built!

I can't wait to celebrate with you!

The first 100 people to do these two things will get to join us at TechStars Seattle Demo Day!

1. Tweet about why you love TechStars Seattle. Best, most creative, funniest tweet wins TechStars swag :) We'll track via hashtag: #tsdday. 

2. Make sure you follow @andysack I'll DM you the invite.

See you there, Seattle!

*Important disclaimer (aka buzzkill)...totally excited to invite you to demo day, but unfortunately that does not include the after party. Immediately following the presentations, we will ask the community section to exit. Please forgive me in advance (I've actually sicked Kayla on this - she'll be doing her best bouncer impersonation). We don't mean to be rude, but we have to set up the dinner and investor networking portion of the event. Thanks for understanding!

 

Inappropriate Use of Email

Financing is top of mind here at the TechStars offices. Not surprising...10 of 10 teams are raising capital. I'm happy that most of the companies already have commitments and are actively looking for angels/vcs to close out their round. At today's all-hands meetings, I was asked questions about financing. Here's a quick peek into how the conversation went today...

ME: "Don't discuss terms or ask for money over email. It may seem more efficient but deals don't get done over email. And worse, emails can be misinterpreted. The process of raising money is relationship management. And if you're managing a relationship...it's gotta be verbal...I mean telephone or in person. 

It's like trying to manage your girlfriend, your spouse or mother via email...can't be done. You gotta talk to her."

SMART ASS QUESTION FROM TECHSTAR: "But what if you have multiple girlfriends?" 

MY SMART ASS RESPONSE: "Well, then YOU certainly don't want your answers in writing." 

Full steam ahead...Demo day is 2 weeks from Thursday!

p.s. Are you an investor or member of the press and want to come to Demo Day on November 3rd? Email kayla@techstars.com for an invite.

Adding Rocketfuel: TechStars Seattle Demo Day partners with Seattle Interactive Conference

Screen shot 2011-10-04 at 3.13.31 PM

Seattle is brewing.

Killer, world class Startups, born and bred in the Pacific Northwest.
And im telling you, it's only going to get better. TechStars and Seattle Interactive Conference are on a mission to invigorate the Seattle ecosystem and showcase the talent of the Pacific Northwest! Consider this the North by Northwest event you don’t want to miss!

TechStars Seattle Demo Day – November 3rd, 2 – 6pm. 

We are proud to present the 2011 class of TechStars Seattle to the investment community on November 3rd at the Showbox Sodo.  Join hundreds of angel investors and venture capitalists from all over the country as TechStars take the stage to pitch – in a quick and fun way - their business and investment opportunity. After presentations, we invite you to stay for a dinner buffet and networking.  Followed by a great after party! http://demodayseattle2011.eventbrite.com/ For angel investors and venture capitalists only, email kayla@techstars.org if you would like an invite! 

Seattle Interactive Conference - November 2nd & 3rd.

This event is bringing together industry leaders from tech, entertainment and the arts. Its a spectacle of merging cultures fueling the internet and changing the way we think and live. Its a celebration of disruption and the people, ideas, and technologies that fuel that disruption. World class, provocative, and delivered in a distinctly Seattle manner.  And TechStars Seattle is getting in on the action!

This is an exciting partnership between TechStars and the Seattle Interactive Conference. (Peep all the goodness here.) We are thrilled to co-produce this event. We continue to be humbled by the volume and depth of support this city has shown us. Thanks for the love Seattle!

We got it all here folks. Traction, growth, and the determination to make this city one of the best place to build a startup in the world.

Thanks for proving just how much this city takes care of it's own. We won't let you down.

Now go get your tickets! We're going to be way oversubscribed.

BigDoor acquires One True Fan -- and the crowd goes wild ...at least I do!

I’ve been joking with the BigDoor folks for a while now about how quiet it is in their new office space. I often come down on Friday afternoons and everyone’s working, heads down….it’s as quiet as a college library. The dedication from the team is remarkable and quite frankly a little bit scary but I think a lot of that dedication is starting to pay off.

For one thing the company has been working diligently on a private beta of their truly innovative solution they call the Engagement Economy, which is a new program that will impact how the digital world engages and monetizes their audiences.  That alone is exciting stuff but today BigDoor announced they have acquired San Francisco-basedweb services company OneTrueFan.

BigDoor provides a gamified loyalty platform and since they launched two years ago they have more than 300 partners. Recently the market demand has been outpacing their ability to keep up, so they turned to OneTrueFan as a means of accelerating their product development and overall growth. The demand has been so great they have turned to the OTFguys – Co-founders Eric and Todd and team to help accelerate their product development and growth.  Eric and Todd are pioneers in the game and social networking space (Co-founders of MyBlogLog ,acquired by Yahoo in ’07, as well as IGN.com, Gnip and Cloudspace). By joining forces, this acquisitionfurther cements BigDoor’s role as the largest provider of gamified loyalty solutions (OTF has 1,000s ofpublishers currently using their site). This also gives BigDoor a presence in Silicon Valley.

The former OneTrueFan team will be primarily focused on building and running a BigDoor branded rewards program that is targeted to long tail and medium size web publishers. When they launch BigDoor Rewards next month, it will carry with it many of the same characteristics publishers loved from OneTrueFan; brain-dead simple to implement, great analytics, increased content sharing, and far more user engagement. Shortly thereafter BigDoor will be taking the wraps off of their Engagement Economy private beta, and making it publicly available to larger publishers and online communities. 

I guess the college library atmosphere is working -- these guys are kicking ass!
Congrats to Keith, Ring, Jeff, Matt, Todd and Eric and team!