Do More Faster

by Brad Feld

  Brad then called a company meeting, something he never did because he didn’t believe in company meetings at the time. The remaining 11 people gathered around the conference table while Brad nervously announced what he had done. There was a moment of silence, immediately followed by Bonnie, one of Feld Technologies’ brightest and funniest software engineers, asking, “Can I have her chair?” That broke the ice; not surprisingly, everyone knew this person hadn’t been working out and were watching Brad and his partner to see if and when they would eventually fire her.

  That day made Brad, and his company, a lot better. In hindsight, it could have happened a lot quicker and the company would have been better off, sooner. But startup founders are often hesitant to fire people, thinking that they’ll work out with time, or believing that they’ll work out in a different role. That might work in an established company, but in a startup, you need to be able to understand the situation quickly and seize the moment.

  Chapter 26

  If You Can Quit, You Should

  Laura Fitton

  Laura was the founder and CEO of Oneforty, a Twitter apps marketplace, and the coauthor of Twitter For Dummies. Oneforty raised $2.35 million from Flybridge Capital Partners, after completing Techstars in 2009. It was acquired by HubSpot in 2011.

  I’ll admit it; I’m addicted to my company.

  I started Oneforty as a 38-year-old single mom with no technology management background. I had never built software before in my life. I felt so thoroughly unqualified to pursue the opportunity that I started making phone calls to people who I thought could build the company for me. I simply wanted to see it come to life and I thought the best way was to recruit someone else to carry out the vision so that I could be an advisor to the company.

  I had two very young, cute, reasonable excuses (my kids) why it was a bad idea for me to do a startup. I had no cofounder and I knew better than to do it alone. I tried to give the idea away and to get another group to do it. And when that failed, I quit. Well, at least I tried to quit.

  I spent another four months trying creative new ways to quit the idea. I kept trying to find someone else to do it because I didn’t want to do it myself. But no matter how hard I tried, I just couldn’t quit.

  I like to tell other founders that you have to be so stuck on your idea that you literally can’t quit. There are going to be a thousand times in the process that you’re going to want to quit, so if you’re going to quit it’s smarter to do it before you start. If you can quit, you certainly should.

  Even if you’re really into your startup idea, try to quit now anyway. And if you are able to quit, do it. In my case, I was so obsessed with the idea for Oneforty that I literally couldn’t quit. I had to see it come to light.

  If you can’t quit no matter how hard you try, then you have a chance to succeed.

  Amazing entrepreneurs are like forces of nature—they are unstoppable. Laura fits this description perfectly. The first time Brad met her was several years ago at the Defrag Conference. Everyone knew who @pistacio was and she couldn’t stop talking about all the incredible things you could do with Twitter. While this might not be a big deal today, at the time Twitter was only being used by a limited number of techies and the phrase “social media marketing” hadn’t yet been created.

  Laura just stayed with it. When she applied to Techstars, she was a solo founder. We told her that her chance of success as a solo founder was low. She didn’t care—she said she’d figure it out. She didn’t have a technical cofounder. She told us that it was not an issue—she’d recruit someone quickly. By this point, we had no ability to quit Laura—she’d hooked us. Laura got off to a great start: she had a great team, strong investors, and was acquired by HubSpot in 2011.

  It can be difficult for the first-time entrepreneur to reconcile the difference between failing and quitting, since to the outsider they appear to be the same thing: the company is no longer viable. But what Laura is actually talking about is assessing your own intrinsic motivation and passion. If it’s there, you should not quit—and if it isn’t, you’ll probably never be successful.

  Founders with no quit in them working late at the Bunker.

  Chapter 27

  Build a Balanced Team

  Alex White

  Alex was the cofounder and CEO of Next Big Sound, a company that provides online music analytics and insights to over 750,000 artists and bands with 30 million songs. Next Big Sound raised about $1 million from Foundry Group, Alsop-Louie Partners, and Uncork Capital after completing Techstars in 2009. The company was acquired by Pandora in 2015.

  I wish I was a good programmer, but I’m not. If I put the time in I could probably be good at it, but I don’t enjoy it at all. Instead, I handle the business side of things for Next Big Sound. Before coming to Techstars, I always seemed to find myself surrounded by really smart people with great ideas and no way to execute them.

  From my experience, interaction between technical and nontechnical entrepreneurs is often minimal. When I showed up at Techstars, I found the tables completely turned, as I was one of the least competent developers out of 30 founders—they had me surrounded!

  At the earliest stages of a company, it’s foolish to have more than one nontechnical cofounder. Think about a nontechnical small business such as an auto mechanic, sandwich shop, or tailor. On one side of the equation is the actual product or service that makes money, such as fixing engines, making sandwiches, or sewing clothes. On the other side is everything else that gets in the way of making money but still needs to be done; things like renting a garage, keeping the counter clean, and purchasing thread and other supplies.

  As the nontechnical cofounder, I view my role on the team as everything on the nontechnical side of the equation, which entails things such as renting office space, raising money, paying the bills, and setting up schedules, lunches, and travel. I also have the connections and domain expertise for our particular industry, so I’m focused on making sure that what we’re building is valuable. I also sell what we’ve built.

  The healthiest startups have overlaps in key areas. My cofounders David Hoffman and Samir Rayani don’t have to spend time helping me set up our payroll system or handling questions from our lawyers, as every minute they spend doing something I can handle myself is essentially wasted. However, I want them to be included in things like sitting in on meetings with early customers, hearing direct feedback from users, and meeting with high-level investors, as they have valuable and unique contributions to these activities.

  Finding a cofounder to complement your skill set is difficult and involves a strong element of luck. I had the idea for the first version of Next Big Sound for three years before finding my cofounders who could actually bring the website to life. The programmer types and business types I know run in separate circles. I can’t believe that the guys I work with can stare at code all afternoon and they can’t believe that I can have back-to-back phone calls for a week straight having what often seems like the very same conversation.

  The real magic in our team has been growing into overlapping and complementary roles. While we were lucky to find each other, we also work really hard at this, regularly talking about how we are spending our time and whether our efforts overlap in effective or worthless ways. While we don’t always achieve perfect balance, we are always working on it and get better all the time.

  Observing Alex throughout his summer at Techstars, we discovered that he had many subtle and rare leadership qualities. One of them was that he knew how to stay out of the way of his technical team. He trusted them implicitly, so he didn’t overmanage them, and he balanced the team by spending much of his time clearing roadblocks for them so that they could be more efficient.

  Sometimes Alex took this to extremes. During the summer of 2009, when Next Big Sound was in Techstars, the founders all lived together. Before there was a product to sell or customers to work with, Alex handled details such as paying rent, doing maintenance, shopping for foo
d, and leading chatty visitors away from the office. While these are not your typical CEO duties, Alex felt that it was more important for his cofounders to be writing code during Techstars than dealing with distractions.

  In addition to creating leverage for his technical cofounders, they also learned to trust him with a wide variety of activities that would have otherwise wasted their time.

  Chapter 28

  Startups Seek Friends

  Micah Baldwin

  When we wrote the first edition, Micah was the CEO of Graphic.ly, a social digital distribution platform for comic book publishers and fans. Micah has been a Techstars mentor since 2007 and joined Graphic.ly after the company participated in Techstars in 2009. After a long stint at Amazon Web Services, Micah is now running Create33 in Seattle for Madrona Venture Group.

  Salespeople sell. It’s what they do. Have you ever seen the play (or the movie) Glengarry Glen Ross? Salespeople sell. Want the pink Cadillac? Sell. Want the Glengarry leads? Sell. Don’t sell? You’re fired. It’s really that simple.

  In sales, the process is focused on having the salesperson win. The salesperson cannot think in any other way, since his only purpose in life is to sell. For a salesperson, the customer’s only reason to exist is to buy. While there is much discussion about the importance of the relationship, the relationship’s only importance is to allow the salesperson to continue to sell. It’s not evil—it’s just how it works.

  However, this pragmatic, black-and-white approach doesn’t work for early-stage startups because the sale is not what is important. In early-stage startups, the relationship reigns supreme. Why? Because startups screw up a lot. If you have solid relationships, people allow you to fail and stick with you, just like your friends stick with you.

  Take Lijit Networks, the startup I worked for before becoming CEO at Graphic.ly. Lijit provides a search widget for publications that aggregates social content for individual sites and multisite content for a publisher network, and then makes it searchable. Early on, we brought on a publisher network that tripled our monthly page views. Despite the hardware we purchased and the code we wrote, the additional page views slowed down our search results, in some cases drastically. However, because we had developed solid relationships with the 1,000 publishers we had at the time, they stuck with us, as did our new publisher network. As a result, not a single customer uninstalled our service.

  How did we do it? We built a relationship with each member of our community. It didn’t take much: an email here, a tweet there, a regular update about what was going on with our service. Our newest customer worked with us to find ways to reduce the strain on our system. We worked hard at it and established even stronger relationships with our publishers.

  When we brought on another new publisher network that quadrupled our traffic, there wasn’t a bump. Not even a wiggle. Everything worked smoothly. How did we land this new publisher network? An earlier customer—the one that tripled our previous traffic—recommended us!

  When two-way relationships are developed in ways where there is real value for both sides, the ability for both partners to learn from each other and grow together multiplies dramatically.

  Salespeople hunt pink Cadillacs. Startups seek friends.

  Many first-time entrepreneurs are afraid to sell. Others have sales backgrounds and view everything as a potential sale. Micah’s statement that “startups seek friends” is an important way to think about sales in a startup context.

  If you are an entrepreneur who is either afraid to sell or doesn’t like to sell, recognize that your goal at the beginning of your company isn’t actually to sell stuff. It’s to make friends. You are trying to find as many people as possible who want to be friends with your company, who care about what you are doing, and who want to help you. Long before you have anything to sell, you’ll have made a bunch of new friends, all of whom are ready and eager to help you succeed.

  If you are naturally a salesperson, recognize that at the beginning of your company you really don’t have much to sell other than your vision. People are rarely going to pay you for your vision, but they will become your friend and spend time with you if they are inspired by your vision.

  Focus on making friends first. Then remember to treat them that way. You’ll have plenty of time to hunt for pink Cadillacs.

  Techstars teams make deep, lifelong friendships.

  Chapter 29

  Engage Great Mentors

  Emily Olson

  Emily was the cofounder of Foodzie, an online marketplace where consumers could discover and buy food directly from small artisan producers. Foodzie raised $1 million from First Round Capital, SoftTech VC, Tim Ferriss, and several other angel investors after completing Techstars in 2008. It was acquired by Joyus in 2012.

  Starting a company is the hardest thing I’ve done in my life. Every day, it’s like I’m walking into a final exam that is composed of essay questions on topics I’ve never studied. That’s the reality for most entrepreneurs—every day is something new you don’t know about. Now imagine walking into that same test, but instead of essays it’s multiple choice and you have someone who already took the same test sitting next to you who is telling you the answer is probably “a” or “b.” That’s how much easier business gets when you have the help of a great mentor.

  When my Foodzie cofounders Rob LaFave, Nik Bauman, and I first arrived at Techstars, we went gangbusters setting up meetings with any Techstars mentor who would give us the time. At the beginning of Techstars, we were in the business of meeting mentors. But then we realized that although we needed to engage mentors, we also had a business to run.

  Mentors should fit into your business, which means that at any given time you should only be working with a few—but their experience should match up with the challenges you are facing at the time. We found that when it came to finding the right mentor, the more specific we were, the better the mentor was. As we crafted our business model early on, we worked with a pricing strategist who helped us avoid an amateur mistake that would have been difficult to fix later. As our team grew, we engaged a technical mentor to help us with the hiring process to not only coach us on best practices, but to help conduct technical interviews with candidates who had more experience than we would have been able to evaluate on our own.

  Sure, you could probably test out an educated guess or read a book to learn some of these things, but once you’re done executing what a book tells you to do, you can’t come back to the book and share how that advice was applied to your business, what worked, and what was an utter failure. Mentors love this part, as it’s a two-way street—they both hear what you learn from your experiences as well as learn new things themselves.

  Mentors get involved in your business for a variety of reasons. They might be passionate about the market you are going after. They might be interested in becoming a formal advisor or an early investor in your business. Or maybe they are simply one of those crazy entrepreneurs who are addicted to the startup environment and thrive off the interactions with enthusiastic, innovative, and smart entrepreneurs. Whatever their motivation, it’s your job to figure that out and try to fulfill it for them, just as their job is to give you good advice.

  Part of managing the relationship means figuring out how best to communicate with your mentor. We’ve tried a bunch of different things and it turns out that you need to tailor what works to each individual mentor. We’ve tried sending weekly emails, setting up a private blog with daily and weekly updates, chatting over the phone, or working together live and in person. Different things work for different people—be flexible and tune it to their needs.

  Make sure that you continually close the loop when you work with a mentor. The initial discussion with mentors about a particular topic is like the beginning of a really good story. Make sure you keep them posted on all the juicy details of what you are doing with their advice, as well as whatever conclusions or resolutions you come to. It sucks to not hear the ending of a story, w
hich is how the mentor will feel if you don’t close the loop.

  There were so many days when I woke up thinking I have no idea what I am doing. It’s no surprise that statistics show that 90% of businesses fail. For the ones that do succeed, I’ve got a good gut feeling that solid mentorship is a part of the secret sauce.

  It’s possible that no one in the history of Techstars did a better job of engaging their mentors than Foodzie. Emily and the gang at Foodzie did a great job of leveraging more experienced people around them. You never felt like you were wasting your time when you tried to help Foodzie. They’ll always let you know that they’ve put real thought into your feedback and ideas. They didn’t always take the advice (also smart!) but they always carefully considered it and closed the feedback loop.

  About a year after they finished with Techstars, David was advocating a “brilliant” idea to Foodzie. He thought that they should send gift baskets of Foodzie goodies to local businesses and view it as a marketing expense. David thought that the reorders would lead to long-term customer retention. Rob and Emily carefully considered the idea and did a couple of quick experiments. They quickly came back to David and told him that this wasn’t something that they were going to pursue because their early tests gave them confidence that this wouldn’t have the intended consequences. Among other issues, the receptionists were simply eating the goodies! Foodzie did a great job of closing the feedback loop and David and Foodzie learned something together in the process.