Don’t Drink (Too Much of) Your Own Kool-Aid

[This article was originally published on GeekWire, June 25, 2011. ]

When we humans believe in something strongly we naturally seek out others who believe similarly. This Kool-Aid drinking tendency applies equally to politics, religion and startups.

Buy me a beer sometime and I’ll tell you what I think about the echo chambers we create around our political and religious beliefs. But I’ll tell you what I think about startup echo chambers right here, right now, for free.

As I’ve written before, passion for an idea can make us blind to the viability of an idea to become a business. As a hedge to our Kool-Aid drinking tendencies, the wise among us seek validation from knowledgeable characters around them.

If you’re not actively doing this then you are failing, day by day. But even if you think you are actively seeking honest, qualified feedback on your idea/market/model, you still may be failing.

Here’s how things often go badly:

When entrepreneurs first begin to look for people for feedback on their idea, they inevitably start with family, friends, colleagues — people who know them and probably like them. So the very earliest third-party validation that lots of entrepreneurs get comes from people who want to support them and encourage them and, frankly, aren’t qualified to add much value (and even when they are qualified) they rarely have a clue about what valuable feedback for a startup looks like.

It’s also the case that many early entrepreneurs don’t know what valuable feedback looks like either. Our natural Kool-Aid drinking tendency will make you want to find the folks who will tell you that your idea is great. (And doesn’t it feel good when you find one!)

Each new friend/family/colleague you talk to pours you that tall, refreshing drink of Kool-Aid that tastes and feels so good. Each time, your assumptions are reinforced, your passion justified — setting them in your mind ever more solidly.

But they aren’t telling you anything you didn’t already believe. Sure, you’ll get some good ideas about useful features you could add or how your model could extend into other industries. But is that really what a newly minted startup needs? No way!

In my humble opinion, what you need to do is seek out qualified people who DON’T like your idea.

–Customers who say they’d never use it or don’t understand it.

–Investors who say they’d never invest in it.

–Industry veterans who know why the same idea failed before.

It may not feel like it right away, but folks like that are gold. Even if you really don’t think they are right, still have the conversation, ask questions, listen closely and drill in everywhere you can.

In academic philosophy, students are taught a very useful technique for proving that a premise is true by assuming first that it’s false.

The technique is called reductio ad absurdum, which means “reduction to absurdity.”

Very basically, if you start from the premise that your claim is false and can show that doing so leads to an absurd conclusion then you must have been right all along.

Applying the technique directly to validating your startup’s assumptions would be a lot of work and probably not the best use of your time. But the main idea of starting from the premise that you’re idea/market/model is not the bread slicer you think it is is a very healthy approach.

But you’re drunk on Kool-Aid and so when you finally do find a qualified critic of your idea you feel like you have the “data” you need to blow them off as “he just doesn’t understand” or “she’s not really in our target customer demographic” or “we’re just not a good fit for their portfolio” or “you can’t please everyone” or “I’m sure I could answer those objections but I just don’t have time to do the research.”

If you find yourself saying things like this very often then you very well could have drunk too much or your own Kool-Aid.

Early on in the ideation process, I’m constantly on the look out for smart critics; and when I find one that’s willing to talk in depth they get my full attention. If you want to feel a rush as an entrepreneur, then try converting someone who initially didn’t like your idea into someone who loves it and wants to work with you on it… or at least no longer hates it and is suddenly interested in joining the beta when it’s ready. Booyah!

So next time you ask someone for feedback and you find that the person really likes your idea, say thank you, smile and nod… and then put the cork back in the Kool-Aid bottle and go find someone who thinks you’re out of your mind and offer to by them coffee.

Think Like a Serial Entrepreneur

[This article was originally published on GeekWire, June 22, 2011. ]

I’m struck by the question of whether, and how, an entrepreneur might act differently if they were mindful that their current startup probably won’t be their last. In other words, chances are you’re likely to continue to be a “serial entrepreneur” whether you like it or not.  This actually might be a good thing to dwell on once in a while. Even if you’re only on your first startup. And even if you’re only just thinking about starting your first one.

So, why not take a moment to consider that you’ll have another startup someday… maybe someday soon?

Whoa, wait a minute, did I just suggest that you may not be working on the next Facebook or Zynga? Is it pessimistic or defeatist to dwell on the thought that your current startup may not be your last? We’re supposed to be eternally optimistic and always be reaching for the brass ring, regardless of what the naysayers tell us, right? I say no.

I’ve long had a penchant for reality-based thinking, influenced by my days as a philosophy grad student where the official department T-shirt slogan was:

“Everything is what it is and not another thing.” — Bishop Joseph Butler, 1692 – 1752

Joseph Butler (Wikipedia image)

How’s that for a hip T-shirt? In any case, you very well may be blessed with the good fortune of Bill Gates, Jeff Bezos, Michael Dell or Mark Zuckerberg. One and done. You might also win the lottery. I sincerely wish you the best of luck with both.

But if you’re like the rest of us poor slobs who didn’t start right out of the gate, then you might consider what it means to be signed up as an entrepreneur, i.e., you may be at this for a while and it may take you a few before you land on your crowning achievement.

So what if, upon reflection, it dawns on you that the startup you’re working on right now won’t be your last? Would that recognition cause you to do anything differently? Mind you, I’m not saying that your startup will be a success or a failure (however YOU measure that for yourself).

After all, lots of folks keep going after their next startup even if they do achieve some success. I’m just saying that lots of entrepreneurs end up doing more than one startup and I’m guessing that most (maybe all) of them didn’t really think much about that when they were starting their first one.

It’s a little like asking a 14-year-old holding their first cigarette whether they realize that they are going to be addicted to nicotine for the rest of their lives, that their clothes are going to constantly reek of smoke and that they are likely to eventually develop very serious health problems as a result. It’s just not part of the thought process when you start smoking. And thinking that you’re gonna have another startup after this one is just not part of the thought process for an entrepreneur.

But having a clear understanding that your current startup probably isn’t your last is actually a really positive thing.

For example, I recently met a really smart, aspiring first-time entrepreneur who (in my opinion) was stuck pursuing a problem and a market that would be very hard to create a sustainable business around.

We talked about it at length several times and I really tried to imagine a possible path that would lead to him ending up with what he wanted: Namely a business that could (eventually) make money for him, his team, his family and possibly for investors.

I’m pretty flexible and creative in how I think about problems and markets. But I just couldn’t get this one to fly — even in imaginary flight.

The idea he had was interesting. It was fun. It was even useful. And building the product was well within his team’s reach. But what then?

No matter how we ran the scenarios and crunched the numbers, it was going to require a lot of really hard things to go really, really well and then even if they did (which they just never do) the result at the end of all that just wasn’t likely to get him what he wanted.

As it turns out, I wasn’t the only one who was telling him that. I was, however, the only one suggesting that he consider himself a serial entrepreneur, even though this was his first one. What this did was create the possibility of a conversation about opportunity costs for an entrepreneur who doggedly sticks to an idea that no one is telling him has a decent chance to succeed.

Once he grasped that this was only his first startup and that there would almost certainly be the next one and the next one, then he could begin to take a more objective and critical view of his project.

The realization that his current startup didn’t have to be his last (and probably wouldn’t be anyhow) allowed him to take a more-objective perspective on what he was doing. It also opened him up to considering what might be next. Like lots of entrepreneurs, he had a handful of other ideas that he had been wanting to explore but couldn’t act on them because he was bound up in the current idea.

When we started the conversation, he was struggling figure out how to make his startup work and wasn’t sure himself whether there would ever be a sustainable business even if he did figure it out. But he just wasn’t ready to let it go.

By the end of the conversation, there was a shift of tone to genuine hope and possibility, even excitement.

Am I really saying you should sometimes give up? Admit defeat? Be a quitter? Yeah, I guess I am.

But it’s not a negative thing. Your startup “is what it is and not another thing.”

If you’ve looked out into your future and you cannot see a path that ends up somewhere you think you’d want to be, and if none of the other smart, qualified people you trust can see a path either, then it may just be the case that your working on one of those startups that teaches you some really valuable lessons and adds to your credibility as a “seasoned serial entrepreneur.”

As someone who’s stared that beast in the face a few times, I know it’s not easy. But the alternatives can be worse.

So what do you think?

Startups and Free Will Have Something in Common…

Believing your startup will be a big success is a little like believing you have free will… you can’t help but believe it, even feel it, but deeper consideration suggests there are lots of reasons to be suspicious.

Thanks Dad

I haven’t thought about my entrepreneurial roots in long time but this Fathers Day, in the midst of launching MoonTango, I can’t help but think about all the entrepreneurial lessons that I learned from my dad.  Throughout my life, my dad was (and still is) very entrepreneurial.  My mom was right along side him the whole way and was an entrepreneur in her own right as well; but dad was the instigator.

As far back as I can remember, my brother, my sister and I worked in the family businesses.  Yes, that’s plural, business-es.  Through very high highs and very low lows, my dad took us all on an entrepreneurial adventure… from rabbit farming, to garment making, to retail, wood product manufacturing, to furniture making… and a bunch of stuff in between.  One year we’d be in the poor house… the next year we’d buy a new house and a new car right off the lot — with cash!  Throughout the years, we’d move through these cycles again and again.

The experiences gained and lessons learned along the way were formative and invaluable to me — from the importance of family and the basics of accounting, to operating a chop saw and optimizing manufacturing processes.  If dad was a banker or a fireman or a foundry worker I would have learned other things that I would hold dear… but you dance with who brought you and for me that means the lessons of business.

My first job was feeding the rabbits at B&G Rabbitry, our family’s small commercial rabbit farm.  (“B&G” stood for Bob and Gloria, my mom and dad.)  I was only about 8-years-old and I didn’t consider it work… it was fun.  B&G’s business was selling rabbit meat to supermarkets.  I still remember walking around barefoot on the cold, bloody concrete floor of slaughterhouse.  By the time I was nine or ten, I was stretching those poor bunnies skins on wire racks and hanging them up to dry a huge shed.

This was hard (and often disgusting) work for a ten-year-old.  And the skins had to be stretched within hours of being removed from their former owners or they would begin to rot; so my sister and I would often be working late into the night… even on a school night.  Sometimes we didn’t get them hung up soon enough and the smell would make you gag.  We worked very hard and we complained about it… but we did it because it had to get done — lesson learned.

After a while of selling the meat to markets and the skins to furriers, my dad realized that the furriers and the garment makers were making most of the money.  So he took it upon himself to learn how to tan hides.  Back in the seventies, before absolutely everything you’d ever want to learn was available online, commercial tanning techniques were a closely guarded secret of the furrier guilds and so figuring it out wasn’t easy – there was no Wikipedia page on tanning.  But dad figured it out and we stopped selling the hides and started tanning them ourselves.  We kids were never allowed anywhere near the caustic tanning process… but we still kept our jobs stretching and drying the fresh hides.

So right before my eyes, as a child, I saw the family business change to compete with a new product in a new segment of the market.  At the same time, we (dad) turned what was initially a byproduct of the business sold cheaply to anyone who wanted it into a new line of business that would quickly come to dwarf the original meat business… and which would become the impetus for several future (and substantial) business pivots.  I didn’t fully understand what was going on at the time, of course, but I was watching it happen and I was doing it right along with the rest of the family.  I can’t help but think that all those family-business experiences helped shaped the entrepreneur I am now.

I told dad today when I called him to wish him happy Fathers Day that I wanted to help him capture the story of all those family businesses in writing so that I can pass that history onto his grandchildren someday.  I realize that I’m taking my own  family on an entrepreneurial journey right now as well and I hope that someday my kids look back on the lessons of this time in there lives with some sense gratitude as well.

Thanks dad.

Entrepreneurial passion: A blessing or a curse?

[This article was originally published on GeekWire, June 9, 2011. ]

PassionI’ve met a lot of really bright engineers and entrepreneurs who I think could do great things if they pursued a big, interesting problem in a big, interesting market. But instead they get enamored of scratching their own itch, i.e., solving a problem they themselves have experienced and then didn’t find, didn’t like or didn’t even look for someone else’s solution to the problem.

What’s wrong with that approach?

There was a time when I would have said: Schmassion“Nothing, it’s great.” And I still think it can be great. But I no longer think it’s definitely great. Regrettably, too many otherwise really, really smart people believe that doggedly attacking their private obsession with great passion is THE way to do a startup.

Sorry. That’s just wrong. And it’s got me rethinking the role and value of entrepreneurial passion.

We’ve all heard the stories of entrepreneurs who experienced a problem and then attacked the problem, fanatically, until they figured out a simple solution. They built a prototype, raised seed capital, worked hard and then sold to Google for a ton of cash.

Some of the stories include apocryphal accounts of entrepreneurs who believed against all odds that their idea was meaningful and would amount to something, even in the face of dozens and dozens of investor rejections, colleague admonitions and the cold shoulder from customers.

See, the myth goes, all you have to do is passionately pursue a solution to a problem you’ve experienced and you’ll be rewarded. Believe in your dream. Prove them all wrong. Never give up. Bullshit! There are two major reasons why passion alone for your idea can be dangerous.
1) Your idea doesn’t know a damn thing about business.

There are countless ideas that I, you, and everyone else, have that just do not warrant spending any more than “hobby time” on. If you want to create a business (which I read somewhere is the point of being an entrepreneur) solving a problem isn’t, well, the problem.PassionBlindSpot

Solving a problem in a way that creates value sufficient to justify someone paying money for the solution (an amount of money sufficient to sustain and grow the business) is the problem.

Investors have a nose for this. And, if your problem doesn’t smell like one that people will (eventually) pay enough money for, then they are unlikely to invest. And if you’re gonna bootstrap (i.e., not take Other Peoples’ Money) then you need to get QUALIFIED external validation of your business because you won’t be getting it from your investors.

Your wife, your best friend, your co-worker, your aunt Judy and your neighbor are not qualified to give you advice on whether your idea might also be a viable business.

If I were going to bootstrap a new business, I’d still look to talk to investors for feedback on my idea as a business. Short of that, find some serial entrepreneurs to talk to, preferably ones who have lots of arrows in their backs.

2) Your passion doesn’t know a damn thing about business.

Passion is by definition not rational; and it’s certainly not business savvy. I would go so far as to say that passion (a close cousin of faith and love) is blind. Be careful. I get a little shiver up my spine whenever I hear an entrepreneur justify what they’re working on because it’s a problem they’ve experienced.

It’s as if the mere existence of their passion is what is going to make the difference in their success or, worse, that their passion is what qualifies them to solve the problem in the first place.

The reality is that mere passion about an idea is not a good reason to pursue it; nor is it an indicator that you’re capable or qualified to solve the problem you experience. In fact, the more passionate you are about an idea the more vigilant you should be about getting QUALIFIED third-party validation that your idea could actually be a business.

I don’t mean that you shouldn’t trust yourself. But I do mean that you should not trust an irrational, emotional drive to solve a problem as evidence that the problem is worth trying to build a business around.

Even if there is a business that could be built around solving that problem, that doesn’t mean that you are the one who can solve it. If you get some business validation around the idea and it is in the realm of possibility that you could build that business then your passion may turn out to be an asset.

Now that I’ve railed on passion, I have a confession to make.

I am a dangerously passionate entrepreneur. I also believe that passion is a tremendous asset to entrepreneurs. I would characterize it as necessary, but not sufficient. So what’s passion good for?

Passion can be the spark that gets you going. And it can be the fuel that keeps you going. It will keep you awake late nights. It will inspire confidence as you build a team, raise capital and engage early customers.

There are better things to be passionate about than scratching your own itch. Be passionate about building a great team, passionate about designing a great product, passionate about delighting your customers, passionate about making a difference in people’s lives, passionate about finding and scaling a sustainable business model.

These passions will serve you well whether you’re solving your own problem or someone else’s problem.

But passion just about your personal experience is actually shaky ground.

If you’re so passionate about solving your own problem, then you risk missing some really important things. For example, your market might share your problem too. But they might think about in a very different way.

If your passion about your solution to the problem is incongruous with the way your potential customers think about the problem then you’re in for a tough run. Beyond that, lots of startups end up pivoting their product/market/business pretty substantially away from where they started. This is healthy.

But, if you’re obsessive about solving your problem your way, then you may just miss the real market opportunity. And, if you end up pivoting and land on a product/market that you’re not as passionate about, then you’ll have lost the motivation that got you started in the first place.

Passion may just keep you in the game when nothing else will. When the dark days come (as they usually do) it can be hard to keep going. In the dark of night when you’re running out of money and can’t make payroll, your competitors are beating you badly, you’re being sued by a former employee and 1,000 other things that suck, your passion for the business can keep you from returning that call from the Amazon recruiter.

A closing thought.

If we had to wait around for entrepreneurs, first to suffer from every problem worth fixing, and we had to wait around for the ones who were also passionate about fixing it,strapspreadsheet and we had to wait around for them to successfully build a viable and sustainable solution, then not very many problems would get fixed. And not very many successful businesses would be built.

If you personally experience a problem in a way that makes you passionate about building a solution then congratulations — you have a reason to think about whether there is possibly a viable business that is worth spending time on. Now, go formulate and test your assumptions about the problem, the solution, the market, the revenue.  In short, first strap a spreadsheet to your passion and then see how high you can fly.

Geeks on a Trail

Time to Get Off Our Collective Behinds

I used to be in decent shape. I worked out… I ran 10K races ~five times a year… I even did a few triathlons. And then I became an startup entrepreneur… and I quickly got out of shape. Our days are filled with meetings, airplanes, whiteboards… and of course lots of computer screen time. I know a LOT of entrepreneurs who just don’t make the time any more to get active. Recently I started doing six-mile-ish walks on the weekends and it’s been great. Turns out that walking a mile and running a mile burns about the same number of calories and is amazing for reducing stress, lowering blood pressure and improving the cholesterol math… and it doesn’t beat up the joints like running does (which is really important for us big guys.) I’ve decided to expand my walks into the work week and will be inviting a bunch of startup founders to join in if they want to.

I admit that “Geeks on a Trail” is a rip off of one of my most favoritest tech event names ever, “Geeks on a Plane”.  I haven’t asked Dave McClure for permission to plagiarize (sorry Dave)… but I think he’d be cool with it.  You’re cool with it, right Dave??  And, Dave, if you’re ever in Seattle then I hope you’ll join us for a walk (I’m just sayin’).

If you’re interested in getting some solid activity built into your week then please feel free to join in. There’s no requirement to socialize… do whatever you want while you’re walking.  Listen to your iPod, make phone calls, hold an executive teem meeting, catchup on email… whatever justifies you making the two-hour investment in your health.  I’ll be trying to be as productive as I can; in fact, I’ve already decided that I’m getting a tablet computer just so I can be more productive while I walk.  Here’s the GOAT schedule:

Monday afternoons, near the Seattle waterfront. The trail we’ll follow is about 1.25 miles each way, so back and forth is 2.5 miles. I’ll be doing two loops, i.e., 5 miles. If you only have an hour then you can drop off after the first loop. Sponsored free parking nearby is available if you need to drive to get there — thanks to Graham & Dunn!

Thursday mornings, at Greenlake. The inner trail is 2.8 miles. I’ll be doing two loops, i.e., 5.6 miles. Again, just do one loop if that’s all the time you have.

If you want to get added to the invite list and the calendar reminders, send an email to BOB [.dot.] CRIMMINS [at] GMAIL and I’ll add you on. I’ll also let you know the exact meeting places and times so you can hook up with the rest of the Geeks.

Hope your can join in.


PS. These are invite-only walks are for tech startup founders, execs and investors only… so please no service providers unless you are explicitly invited by one of the Startup Haven team.

13 Tips for Getting Help for Your Startup

[This article was originally published on Xconomy, March 24, 2011]

It takes a village to raise a startup. TechStars, and other mentor-driven accelerators, understand this. Experienced entrepreneurs understand this. Investors understand this. New entrepreneurs often do not understand this; and those new entrepreneurs that do understand it often don’t know who they need in their village or how to work with them once they figure it out.

The composition of a startup’s village will depend on the individual needs and personality of the startup, but a common thread will be a network of formal and informal advisors—business advisors, technical advisors, legal advisors, personal advisors. If you’re Andy Sack, Rich Barton, Dan Shapiro or Dave Schappell, then you are an easy phone call (probably speed dial) away from a beer with the top minds in startup ecosystem. If you’re new to the tech startup world, then you need to get busy building your network with folks who can help you. Whether you’ve already found someone willing to spend time with you or are still looking, here are some tips for making the most of their help. As both an advisor and an advisee, I hope to learn something new from your comments as well.

1) Know why a particular advisor is a good fit for you. Early on, it’s tempting to want to talk to any potential advisors who will listen. Resist that urge. Have an understanding of why, specifically, you think it’s valuable to talk to this person. What is it in their current for prior experience that makes them a good fit for you. Do they have relevant expertise within your market, with your technology, with your customers, with potential strategic partners. The person you want to talk to should agree with your assessment. Remember, too, that every good advisor won’t be a good advisor for you. It has to be a good fit on both sides and if it’s not, then don’t force it; close the loop and move on.

2) Go after the correct “tier.” This is corollary to number 1), above… and may sound elitist… but get over it. You may think you want an audience with a hotshot in your space but keep in mind a couple of important things. The nearer the stratosphere an advisor is, the less time (and patience) they’ll have for you. And, if you don’t have your ducks in a pretty straight row then your one chance to make an impression may be squandered. Coupled with the effort it will take to get a warm introduction into them and the long wait to get on their calendar (could be two months or more), this is often a losing proposition. And don’t be surprised when your top-tier advisor’s assistant e-mails you the day before your long-awaited meeting to reschedule because “something has come up.” Also, top-tier folks are just not gonna have much time to spend with you, so you’d do well to think of them as connectors to other people and resources. As such, they will likely be cautious about referring entrepreneurs that they hardly know and/or aren’t confident are ready to risk their reputation on. So keep your powder dry. Work your way up. As your startup (and you) progresses you’ll naturally be ready for more and more top-tier help. It’s not a literal hierarchy and it’s not a caste system, but there are circles of trust and circles of influence; as your network expands and you gain the confidence of experienced people, then your circles will expand and will eventually overlap with higher and higher tiers. In the mean time, you may be better served working with folks closer to earth but with more time and energy to spend with you.

3) Be respectful of time. Know what you want to get out of the time an advisor spends with you. Be concise and specific. It’s easy to spend an hour chewing the fat about your new sliced bread machine, but that’s not a good use of their time or your own for that matter. Ask for 30 minutes instead of 60. Pick a coffee shop within short walking distance of your advisor’s home or office, or ask them to choose the meeting place. As the scheduled end of your meeting or phone call approaches, offer them a graceful exit.

4) Don’t be disagreeable. You don’t have to agree with what an advisor has to say about you, your startup, your product, your market, or your strategy but don’t assume that they are wrong and don’t be defensive. Presumably, you reached out to them for their perspective. If you don’t think they’re right, then drill in more to understand their view. In most cases I think you’ll discover that, if they seem not to “get it”, it’s because you weren’t clear in your explanation of what you’re up to.

5) Be totally f#cking honest… about everything. Experienced entrepreneurs and investors (the folks you’re likely seeking advice from) know how hard it is to be successful with a startup, i.e., it’s really, really hard… even when it’s easy it’s hard. “Fake it till you make it” is bullsh*t and if you aren’t candid with an advisor they are probably going to know it and they will be unlikely to continue to invest their time in you if they don’t trust you. Of course, there may be sensitive topics you’re not ready to talk about and that’s fine, but just say so—serious acts of omission are tantamount to deception and will not help you.

6) Don’t ask someone to sign an NDA for the privilege of helping you. Read everything you need to know in Dan Shapiro’s post on Xconomy, “What You Probably Don’t Know About Non Disclosure Agreements.”

7) Don’t pitch an advisor on investing… maybe never, but at least not for a while. Before an advisor would consider an investment, or referring you to someone who might invest, they are going to want to get to know your business, your product, your market, your model… and especially you. It’s gonna take more than an e-mail intro and a coffee meeting to get there… often much more. If you think an advisor is also a good investor, or connector to other investors, then you can trust that they will know that too. It’s fine to make an ask, eventually, once the advisor is meaningfully engaged with you… but don’t rush it. See Nicole Glaros’s chapter “If You Want Money, Ask for Advice” in Brad Feld’s and David Cohen’s Do More Faster.

8) Listen really well. You don’t have to take notes… in fact, if you’re not good at taking notes then it can be a barrier. But be engaged in understanding what your advisor is saying. Strive more to understand what your advisor is saying than trying to get them to understand what you want to say. Ask lots of questions and follow their lead.

9) Go where they want to take you. This picks up from 8) above.  It’s really good to know in advance where you want the conversation to go and if you’re well prepared, then you have a good chance of accomplishing what you set out for. But keep an open mind and let the advisor take you in new directions that you hadn’t thought about. Some really good things can happen when you do this. In fact, getting a specific answer to a specific question is often the least valuable thing you could get from time spent with an advisor. So don’t fret too much if you don’t get a satisfying “you should do X” answer—which you shouldn’t be looking for anyway! If an advisor’s comments and examples seem off base or inapplicable to your specific challenge… maybe they are; if this happens too much, then the advisor may not be as good (or as good for you) as you thought, and you should move on. But don’t miss the opportunity to look for the lesson behind the story. You don’t always know what you don’t know, and sometimes you will find that the lesson is more applicable than you thought.

10) Follow up. This is so easy to neglect but so important if you want to develop a relationship with an advisor. Thank them for their time, their insights, their offer of introductions. Tell them what you thought was particularly valuable to you about your conversation. Tell them if they made you think about something differently. Tell them what you’re going to do next based on what you heard from them. Remember also that these folks are very busy, so make your communications as concise as possible. A brief followup is also a great way to politely remind an advisor of any deliverables they may have committed to. Finally, be patient. It’s not uncommon for busy folk to take one, two, three weeks to get back to you. You up your chances of a timely response if your communications are brief and specific.

11) Talk to lots of customers before seeking lots of advisors. There are lots of really good reasons to talk to customers early and often. Doing so will also make your time with advisors much more productive… because you’ll understand your own answers to all those pesky market fit/customer development/business model questions that your advisors will have on their minds. Your advisors will appreciate this and it will give them more confidence that you know what you’re doing… which may even get you some additional introductions that s/he would otherwise have held back on until they were confident that you were ready for an important introduction.

12) Develop your network. The more quality, relevant folks who get to know you the easier it will be to find connections to quality, relevant advisors. Go to events, meetings, conferences, parties, wherever you peers congregate. And don’t be the guy who stands around with a beer in your hand waiting for someone to come up and ask you what you do. And don’t hang out the entire night with people you already know! Find clumps of folks you’ve never met, walk up, stick your hand out and introduce yourself. Ask them what they do. Ask all of them. You’ll meet a lot of interesting people this way. Eventually (and remarkably often) you’ll discover someone who is working on something relevant to your project and before you know it you’ll be exchanging business cards and making plans to grab coffee next week. Some of them may even turn out to be valuable advisors.

13) What about a formal board of advisors? There are legalities and logistics to building an advisory board that go beyond the scope I intended for this post. So, while I believe that all the tips above are applicable to both formal and informal advisors, if you’re considering building a formal board of advisors then I suggest you also read Venture Hacks’ posts on advisors.

There you have it… a baker’s dozen worth of lessons I’ve learned over a decade or so of getting help from, and giving help to, startup folks. I hope some of them will help you get more out of your advisor relationships.

Holy Crap!

Has it really been 2 1/2 years since I posted anything here?  Time has really flown by.  I’m feeling “posty” again.

Startups as Poker

For some time I have been struck by the similarities between two of my passions: poker and startups. Some elements they share include patient persistence, mental discipline, controlled aggression, managed risk, subtle strategies, refined intuitions, mental jousting, serious mathematics, personal style and, of course, the thrill of the win.

Some lessons from poker that entrepreneurs would do well to heed:

Bluffing is a tactic, not a strategy. While sometimes you must “fake it before you make it”, you better have something worthwhile to “make” or you’re in for trouble.

Play your game but know your competition… and adapt. There are some tables you just shouldn’t sit down at. Pick your battles and beat your competition where it makes sense to do so.

Be decisive, but not capricious. Decisive doesn’t mean making fast decisions.  There’s a big difference between making timely, thoughtful, justifiably confident decisions and making fast decisions — but don’t take too long either.  Also, understand the limits of the information you have and when don’t have all you wish you had, resort to your experience and intuitions and get on with it.

Know when to hold ’em, know when to fold ’em, when to walk away… and when to run. This is a hard one for a lot of entrepreneurs — giving up is hard to do!   We’ve internalized many of the aphorisms that we hope are true:  “If you follow your passion you’ll be successful”… unless your idea sucks. “Your persistence will pay off”… except when it doesn’t, and sometimes it just won’t.  “Anything is possible if you try hard enough”… except when it’s not possible.  The ability to see past your passion for the possibility of success to the probability is a huge challenge.  This is one area where married entrepreneurs have an advantage — their wives harbor far fewer delusions.

Dragon’s Den — Nowhere in hell….

dragons-denI have always believed there is a special place in hell for the producers of reality TV shows — almost certainly deep within Dante’s 8th Circle. But I must admit I’m now addicted to one, namely Dragon’s Den.

The program originated in Japan in 2001 and has since spread to more than a dozen countries worldwide, with a U.S. based version called “The Shark Tank” trying to get off the ground this year. My favorite is the UK version, now in its 6th season. Each program is a cavalcade of entrepreneurs and inventors looking to fund their life’s dream with money from smart, successful and unforgiving angel investors. However, while it technically is reality TV, it doesn’t suffer from all the BS that so many others do: the contrived living arrangements, the hormone-driven hard bodies, the so-obviously juxta-opposed racial and class backgrounds, and the inevitable infusion of alcohol.. aaarrrrrrrg! Rather, it’s chock full of earnest folks who believe in their ideas but who need to sell the investors through their pitch.

The pitches range from inspired to naive to downright embarrassing — but all are sincere. Relatively speaking, the businesses are not complex and the stakes are small — i.e., typically between 50K and 250K pounds sterling (about $75K – $375K in US dollars). Each of the Dragons is worth in the range of between about $150M to $800M, a respectable fortune by most measures (and certainly worthy of this would be entrepreneur’s respect.) And while the business ideas run the gamut from brilliant to absurd, what is striking is the consistent themes that emerge from the questions posed by the Dragons. Because of the (relatively) low stakes and the occaisional bizzaro pitch, it would be easy to write off the program as an entrepreneurial amateur hour, the Gong Show of angel investing — but that would be a mistake. The themes that emerge are virtually 100% consistent with what I’ve witnessed and learned over the past handful of years of entrepreneurial pursuit. Whether analyzing a market, writing a business plan, developing a product or pitching investors, there are basic lessons that emerge from Dragons Den that transcend the particulars of industry vertical, product category, market size and capital structure. This is not to say that there are not additional complexities and strategies that accompany increases in scale; this is just to say that there are fundamentals that apply startup fund raising across the board. The similarity in the application of these fundamentals is what fascinates me.

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