More advice from dogs
I love those “all I ever needed to know in life I learned from my dog” posters. Driving home from work the other night, I noticed a small sticker on the side of a car I was passing, that I thought was a great summary of all that dog wisdom:
Wag more. Bark less.
Joining a startup?
My friend Sarah sent me this link to a post written by Guy Kawasaki on 10 questions to ask before joining a startup. Now, Guy knows a thing or two about startups, so I was interested to read his thoughts. I had also seriously considered joining an IT startup over the summer. Having reached deep into my personal network for coaching on thinking through the decision, I was also very interested in comparing Guy’s thoughts with comments from my friends and colleagues on the decision.
So following are Guy’s 10 questions along with my comments, where appropriate.
1. How much money do you have in the bank? This is a simple question. You just want a number. If you’re told that “investors are ready to put in more” or “we have a line of credit,” beware because a promise of money isn’t the same as money. Ask yourself this question: If I promised money to a company and it’s about to crash and burn, would I put the money in it anyway?
This is an important question that I would re-phrase as “How long can you afford to live with zero income?” The question isn’t quite that simple as different startups are are different places in their lifecycle. If they are early stage, then you probably won’t be offered a salary; later stage companies may.
2. What is your net outflow per month? What you’d like to do is take the answer to question 1 and divide it by the answer to question 2. This will tell you how long before your company runs out of money and dies. If the answer to the question centers around “We will achieve revenue soon so our net will improve and give us more runway,” it means the company is in trouble because no product ever ships on time nor achieves the company’s “conservative forecast.”
This simply speaks to basic due diligence, as does several of the following questions. The overall basic question you are trying to ask is simply what do you think the probability of the startup succeeding is? More importantly perhaps, how much can you increase that probability by joining the company?
3. What is the post-money valuation of your last round? “Post-money valuation” is the value of the company after the last round of money was put in (again, lines of credit and promises don’t count). If the company doesn’t have either seven digit annual revenue or tens of millions of page views per month and post-money valuation is greater than $10 million, it usually means that raising another round will be difficult because previous expectations were set too high. If it cannot raise another round, it will die.
4. What can you do that your competitors cannot? This is good to know because it speaks to the defensibility and value of the company. Life is challenging for a company that has undistinguished products and services. This doesn’t mean the company will fail, but it has to be “special” in some way soon.
5. What can your competitors do that you cannot? This is how you can determine if the company management is optimistic (good), delusional (sometimes good, often necessary), or just plain pathological liars (always bad). The actual capabilities are not as important as much as the moral character of the answerer, so listen carefully.
Here, I disagree. While the “moral character of the answerer” is important – I do not think it is more important than the actual answer. DO you have something your competitors do not? If you don’t, then regardless of the startups moral character, you will have an uphill battle growing the company. On the other hand, if you can verify that the startup has some sort of “secret sauce” no one else does, then you may be looking at an excellent opportunity.
6. Who are your investors? Hopefully, there are one or two well-known venture capitalists. However, a perfectly acceptable—and perhaps even better—answer is that there are no investors other than the founders, and the plan is to bootstrap the company as long as possible. These days revenue is the best source of capital.
Here, Guy shows his history of working with IT startups, as they are relatively easy to bootstrap. Many other startups are much harder unless the founders have plenty of capital of their own. I’d look not only at the investors, but the startup’s funding strategy and roadmap. These may be what they are bringing you on to develop, but if they don’t even have an idea of what they need and when, then that may be a red flag.
7. Who is on your board of directors? If there are outside investors, they are likely to be on the board. That’s cool. But you should beware of boards that are only the founders and their family and friends. You need at least one “adult” on board who can be the hardass bull shiitake detector.
Also try to evaluate the personality fit between you and the Board. A Board with members that are highly networked in your target industry are extremely valuable. I’d also try to evaluate how motivated and engaged the Board is. Do they view themselves as merely “advisors”, or are they motivated to help create the startup’s success?
8. Has anyone in the engineering team actually shipped a product? You may think I’m kidding. I’m not. Shipping a product is very different from being a programmer. A company only gets paid for products that ship—not for trying hard to ship.
And shipping your first product, especially if a customer paid for it is a huge step in the eyes of investors.
9. Assume that you have $0 for marketing, how would you market the product? Any bozo can market a product with a million dollars. What you want is a team that can (a) make a great product that markets itself and (b) catalyze people to believe in the product enough to market it for you. If the answer you get is, “When we’re ready to ship, we’ll raise more money to market it,” you should run for the door.
10. What keeps you awake at night? This is an excellent question to figure out what the major challenges are for the company. If the answer is, “Nothing, we’re on the brink of worldwide domination,” look for the door again. If the answer is, “Scaling fast enough for our anticipated demand,” try not to laugh. The right answer is, “We’re a startup. I worry about everything: money, sales, engineering, support, and recruiting. I hope you will join the team and relieve me of some of this burden.”
So there’s some really good questions to ask yourself should you be approached by a startup. I ultimately decided not to join this particular startup. They are not without their challenges, but I think they have enormous potential. They recently attracted their first investor who put in six figures and they do currently have product in the marketplace. I continue to coach them and it will be fun to see how they grow and how big their success is.
Why didn’t I join them? This is a great lead-in to the question I will add to the list:
11. Are you the right person for the startup? All of Guy’s questions are focused on evaluating the startup, but none really ask if you are the right person at the right time for them. Startups need different skills and achievements at different times in their development. Make sure you are a fit for them.
Training to be excellent
Out for a run today, it occured to me that my approach to training translates well to personal excellence:
Push UP the hills, recover DOWN the hills, and SPRINT to the finish
Encouragement
I had another meeting to discuss the smartphone application project I’m considering. This time I met with a local social media strategist that works for a Internet marketing firm in town. Great conversation – I love talking with smart people that get passionate.
After working through bringing him up to speed on what I was thinking about, I got a lot of encouragement from his feedback:
- Even though he is a social media “expert” and would therefore be outside my target market, he still saw value in my app and said he would use it
- Uncovered a couple more essential value propositions that will be helpful in marketing the app
- He led me in a completely new direction, challenging me to think about even more value I could potentially build on the “back-end” of the app
- Agreed to introduce me to another recognized expert in the field for even more brainstorming
Based on this feedback, I am even more excited to move forward. I do want to have a couple more conversations with my core, identified market just to make sure I’m on track, but I’m feeling like I really have something here.
So if you are a business professional who uses, or is getting ready to use, social networking platforms for relationship building and personal branding AND would be willing to give me some feedback on a smartphone application that might be able to help you, please contact me or leave a comment. I’d love to talk to you.
CB (yes I’m looking West) I will be calling soon!
10 Questions with… Rob Felber
When I started my new position in the incubator a couple years ago, it wasn’t long until I met Rob Felber. I think it was maybe the third entrepreneurial event I went to. It was showcase event, intended to let regional up and coming young entrepreneurs network and show off their startup. There was Rob, taking on of his entrepreneur clients around to meet and greet.
After that event, I saw Rob quite often and finally took the time to get to know him a little better. Rob is one half of Felber & Felber Marketing (the handsome half I’m sure he would say). Having got to know Rob, and hear him speak a couple times now, I have come to understand what many in the region already knew – Rob and his company are a great resource to entrepreneurs and businesses of all stripes as they look to promote their company.
We often tell entrepreneurs that one of the benefits we offer as part of our coaching services is connecting them to “entrepreneurially-friendly” service providers. Rob made it easy for me to put him in that category. And it just so happens that Rob himself is both entrepreneurial, and friendly. You couldn’t ask for a better combination.
So, on with the interview…
Own your room
If you are not reading Chris Guillebeau’s blog The Art of Nonconformity, you should be. Chris regularly writes on three topics: life, work and travel.
His view on work, and life, is that you don’t have to live your life the way people expect you to and if you don’t decide what you want to get out of life, someone else will do it for you.
Chris’ writings on personal responsibility and excellence are some of the best I’ve read and reflect the nature and spirit of the topic I try to impart on this site. In a recent post talking about personal responsibility and “showing up”, Chris had this to say:
To be truly awesome, you have to go above and beyond the efforts of those around you, look for alternative solutions, and refuse to back down from the truth. There’s a whole article about it for those who are curious.
But it all starts with showing up. Or, as a friend of mine puts it:
“I’m sorry you feel bad about not meeting your goals– what I would suggest is that you begin meeting your goals, in order to feel better.”
Insight such as this is difficult for some people to accept. Just imagine the excuses you’d hear:
But that’s not fair! But I tried to do it and something else came up! But some things are out of our control!
You can probably think of other excuses – in fact, you’ve probably heard them many times over. Thankfully, for those of us who do take responsibility, there’s good news on two levels. The first good news is that we automatically stand out. In a world of buck-passers, those who decide to take responsibility are unusual. Yay. You get the yellow jersey by default. (You still have to win the race, but no one is surprised when you do.)
But on a deeper level, the bright side of taking responsibility is that you can own your own success. Sure, other people helped you get there, but you were the one who actually crossed the finish line. You showed up. You did it. If you have to own the struggle and failure, integral parts of any goal worth pursuing, surely you can also own some of the success.
Remember this: many people can help you achieve success, but no one else is RESPONSIBLE for your success.
I can’t speak for you, but for me this is pure inspirational genius.
I was reminded of this post last night. I was attending a meeting of a local angel investor group. There was an entrepreneur making a presentation in support of an investment decision by the group. I love watching these presentations – I pick up so many ideas on what does and doesn’t work in a pitch presentation; especially in situations like these when it’s an actual, real-live pitch with money at stake!
The presenter was doing a good job; clearly he had done this before. But then I noticed he was doing one of the no-no’s we coach our entrepreneurs about: he was constantly looking back at his slides. He hadn’t fallen into the trap of reading the slides, but he was looking at them quite a bit.
Normally this is a very bad thing. In this case, the presentation ended up being very well done. The difference? The entrepreneur took responsibility for his presentation’s success. He was confident. He was credible. He was prepared. And it was very apparent he was passionate and believed knew he was going to be successful. To Chris’ point above, that kind of attitude stands out, mostly because it is too often seen. For the fifteen minutes he was presenting, he owned that room.
The entrepreneur was approved for funding. One could say it was because of a good product and sound business model. One could say it was because of a positive report out of the due diligence team. I would say while those were supporting factors, his funding was approved because he took responsibility for his success.
Whether you are an entrepreneur or someone simply interested in your own personal excellence – take responsibility for your success.
Own your room.
Recession 101
Seen on a billboard heading out of downtown Cleveland:
Recession 101:
It’s a test not a final
Ah, so THAT’s what it feels like
I pitched one of my entrepreneurial ideas to the strategic partner I had identified as critical for this particular idea. They liked the idea, saw great value, and agreed to move me up the chain to the decision-maker.
What a rush! Why have I waited so long to jump off the cliff?
low tech
DCO reader and friend Lauren, recently sent me a Harvard Business Publishing’s Management “tip of the day” she found interesting. The teaser title in the E-mail was The Simple Way to Capture Big Ideas. Clicking through, the actual article’s heading was The Next Big Idea in Management. There must have been something pretty special in that article to warrant those two headlines, right? There was.
Note cards. Those brilliantly simple, 3×5 lined notecards.
The article uses as it’s foundation something called the behavioral school of economics to initiate a conversation around how current management and leadership theory is changing and looking more at how we truly think and operate in the real world as leaders. Towards the end of the article, the author draws a seemingly obvious but nonetheless insightful observation:
The ultimate lesson of the 3 x 5 card school of management is this: in turbulent, unpredictable, rapidly changing times, we’re all looking for things that work.
Amen, brother.
As a Leader – what should matter most?
This point struck me as very similar to a frequent conversation I’ve had in relation to technology over the years. Whether from subordinates, managers or leaders, it seems we all too often forget what the true goal of any project should be: positive results. Therefore one of my consistent mantras in any conversation involving technology is: Technology is a tool, not an end. Over my career I’ve found there are often many ways to achieve the results you are seeking without the time, effort and money to implement a technological solution. I’ve also too often observed the close corollary that many times the value created from a technology solution is not greater than the resources required to implement and maintain it.
Don’t get me wrong – I love technology. I tend to be an early adopter. I’ve been a Director of IT and implemented several high value solutions. I’m a computer game junkie and was a level 60 in World of Warcraft before you probably even knew what it was. And while I wouldn’t be lost without my Blackberry, I would prefer not to test that assertion. But at some point, both personally and professionally, it becomes a matter of focus: what is more important, the results or the method?
My new simple tool
There is another DCO reader out there who shares my passion for the ultimate organizational system. I think we both recognize it is a Holy Grail quest, but yet we continue the search. With my recent switch to a Mac at home, I have a whole new field of contenders to review that claim they want to organize my day and my life. While many offer valuable pieces of the puzzle, and one or two came close to being lifesavers, the process of demo-ing them all simply reinforced the message that my day and my life are in my own hands and I alone am solely responsible for the positive results I create out of them.
I’ve recently come full circle back to that “3×5″ approach to life management. As part of my personal coaching, I’ve come to adopt, and very quickly love, a new simple tool: the Moleskine notebook.
You’ve probably seen a moleskine; you may recognize the name even if you haven’t. Moleskines have a rich legacy:
MOLESKINE is the legendary notebook that has held the inspirations and ideas of everyone from Van Gogh, Picasso and Hemingway to famed author, Bruce Chatwin. Artists, authors, and geniuses of all variety have long appreciated the simplicity and superior functionality of these notebooks.
Originally these books were produced by small French bookbinders who supplied the Parisian stationery shops frequented by the international avant-garde. However, In 1986, the last manufacturer of Moleskine, a family operation in Tours, closed and Moleskines were gone – but not forgotten. As a result of their previous popularity and demand, they did return. In 1998, a small Milanese publisher brought these books back for writers, artists, travelers and all free-thinkers around the globe.
I carry my Moleskine (a 5×8 square ruled softcover) with me wherever I go now. I love the attention to detail and the pure functionality of this diary-sized notebook. It may seem extravagant versus simple 3×5 cards, but I find it to be a fitting repository for my “next big ideas”!
Some simple resources
You can visit the official Moleskine website for overviews and specs of all their products. While you can order off the Moleskine website, I actually found Amazon’s Moleskine Store to be ever so slightly cheaper on a product by product basis, and many times you can get free shipping at around $25.
As is the case with many Harvard Business Publishing’s articles, the author was plugging his book, Rules of Thumb: 52 Truths for Winning at Business Without Losing Your Self. While this tends to annoy me in other venues, I really don’t mind it when HBP does it since their authors consistenly write thoughtful, pragmatic, useful information geared toward personal and professional excellence. Basically, everything we’re all about here.
Tell me – What’s YOUR favorite low tech tool?
Thought for the day
Figuring out who you are is the easy part; being who you are is the challenge.
