Startup Mixology
Page 21
And not every exit brings in a profit. Your friends may all be congratulating you on selling your company while you cringe inwardly because you didn't even return all the money to investors. Cofounder Mo Yehia, who sold a startup called Sqoot, writes, “We saw a seven-figure deal evaporate into thin air because we had no leverage. Buyers toyed with us like a great white [shark] toys with a seal prior to devouring it. Ultimately, while most investors made nominal money, others lost big time.”
Other times, you may stay at the acquirer only to see your product get used in a way you didn't expect. Once you sell, you no longer have full control. The acquirer may want to fold your product into theirs, get rid of your brand, or shut it down altogether. That's what happened to Gowalla, which was acquired by Facebook in December 2011 and shut down in March of the following year.
Celebrate: Enjoy the Journey
In the growth stage, you're still racing hard, but it's a great time to look back and see how far you've come. You've reached product-market fit, something that many startups don't achieve.
Be grateful that your team is getting bigger, which means that the group of people who believe in your vision is expanding. You can take off a few of your many hats and breathe, because it's time to delegate some responsibility to others.
“As a startup we had a small team that was always on the same page and shared a vision. Scaling requires adding more team members and other employees, getting them to buy into your vision and work toward achieving a common goal. This can be challenging but rewarding when it all comes together,” says Hannah McConaghy, marketing coordinator at UberPrints.com.
Exits can be celebrated for a similar reason: you've found a group of people—a whole company, in fact—who believe in your vision. And, of course, you're finally being externally rewarded for the value you've created.
In Startup Life, Brad Feld and his wife, Amy Batchelor, recommend taking 10 percent of your earnings and splurging on something special to celebrate the moment. After that, wait 90 days to figure out what to do with your newly earned payout. It's easy to rush into a decision, when you really should be taking your time.
“You've worked incredibly hard to get to this point; figure out shared things and experiences that will be special to you. While they don't have to be tangible, the memories can be long lasting,” they write.
Take a vacation, get some sleep, exercise, and say thank you to all the people who helped you along the way. It's their celebration, too.
Final Thoughts
Despite its challenges, Automattic has made sure to scale at least one thing incredibly well: its culture. They've always valued transparency, so bug fixes, features, and other changes are discussed out in the open. The founders shun hierarchy and bureaucracy in favor of meritocracy: job titles aren't important, and the people who get the most respect are those who create and contribute.
Unlike many founders, Mullenweg doesn't talk much about exiting. He believes in longevity: he sees WordPress as his life's work and would be happy working on it for years to come. And the product is deliberately set up that way: no matter what Automattic does to WordPress, anyone can take the open source code and “fork” it to form a new version. WordPress will live on.
The most important lesson that Berkun took away from Automattic is that work doesn't have to be serious or meaningless. Automattic showed him a place where employees find passion and meaning, as well as humor and joy. And that is something that many new entrepreneurs discover.
Conclusion
This is the conclusion, but the learning doesn't have to end here—keep in touch with us at http://tech.co/book.
Parading down Las Vegas Boulevard with two llamas by my side, surrounded by conference attendees, startup founders, friends, relatives, and our Tech Cocktail team, I felt a sense of momentary relief, happiness, and accomplishment. We had just completed the first day of our Tech Cocktail Celebrate conference in downtown Las Vegas.
It was the culmination of a yearlong event schedule, as we toured the country in search of the hottest startups in every city we visited. The final stretch consisted of a 12-event road trip in the last month leading up to the big day. Then, my team surprised me with the llama parade to our evening festivities—they knew that I loved llamas and it would surely put a smile on my face, as well as our attendees'.
We were now less than 24 hours from crowning the hottest startup in the country, and all the months of preparations had come together. Although there were, of course, some hiccups along the way, we had persevered and learned a lot in the process. It was a big year: we had expanded our team and raised funding to accelerate toward our goals, and for that moment we felt on top of the world, while knowing this was just the beginning. We still had a future to look forward to as we continued to expand and grow.
Knowing the nature of the startup journey, I expected the roller coaster to race back down and even out soon enough. So with that in mind, I decided to be as present as possible, marveling in the llamas and just enjoying the ride (or parade) as it happened.
Starting a company is hard work. Will you face hardships? Probably. Will you work harder than you have in your whole life? Most likely. Will the reward be worth the frustration? Absolutely.
So get started on your startup adventure, armed with this mixology of startup ingredients to help you find your way. Here's to you!
Cheers,
Frank
Acknowledgments
I'd like to take a moment to say thank you to everyone who made this book and my startup life possible.
Thank you to my family and friends (in no particular order)—Jen, Paulette, Frank, Linda, John, Joe, Maureen, Jessica, Mike, Brittany, Mackenna, Ryan, Jack, Beverly, Charlie, Anne Marie, Tim, Audrey, Ben, David, Fran, Mia, John, Elliott, Jasper, Sam, and Wolfgang Wolfdog—for all your support and understanding throughout my startup journey and life. Thank you to my old friend John Guidos, who urged me to continue to pursue writing a book—let the good times roll!
Thank you to my amazing team, who worked tirelessly to make this book a reality. Merci to Kira M. Newman for being the compass that guided this project ahead. Your research helped infuse each chapter with a diverse and lively set of perspectives. You truly are an integral part of this book and our story, and I could not have done it without you—thank you!
Grazie to my loving wife and partner, Jen Consalvo. I'm grateful you joined me for this journey, for your years of support, and for bringing stories, perspective, knowledge, and a critical editing eye to bear throughout this process.
Gracias to my mom, Paulette, for jumping in to lend your editing skills and time to making sure this book passed the mom test.
Danke to Justin Thorp for helping brainstorm and act as a sounding board throughout the process, along with pour-over coffee—best seller or bust! To Mollie Andrade for shielding my schedule so I could crank on this book. To James Barcellano for making our Tech Cocktail technology hum for book readers. Thank you to our early employee Julia Fischer for believing in the vision before we had a team or funding to support it. Thank you to Zach Davis for contributing insights, stories, support, and long-bearded inspirations. Thank you to Tori Burroughs for all of the fabulous illustrations in this book. Thank you to the rest of our team: Kim Blackburn, Mary Ellen Delaney, Steve Kann, and everyone else, as well as the growing list of fabulous contributors.
Mahalo to the island of Kauai for a few rainy days and rainbows on my honeymoon, which enabled me to work on some chapters and not feel quite as guilty.
Thank you to Tech Cocktail's partners and supporters, including .CO, American Airlines, the Knight Foundation, AOL, Cars.com, Intel, Microsoft, the Kauffman Foundation, Startup Weekend, UP Global, 1776, iStrategyLabs, FR&R, Evan Brown, Saper Law, SingleHop, ChicagoMicro, Sprint, and the hundreds of others who have supported our efforts along the way.
Thank you to Eric Olson for teaming up with me back in Chicago in 2006 to bring Tech Cocktail to life, building a foundation, and continui
ng to support its growth along the way. Thank you for your hard work and dedication to get it off the ground. You were right; this could be big. Most important, thank you for your friendship. Of course, thank you to Laura, too, for putting up with our crazy ideas and long Tech Cocktail brainstorming sessions. And to Eric's family, including John, Carolyn, Laura B., Laura O., Jeff, Jack, and Caesar, thank you for your ongoing support.
Thank you to Brian Solis, Rohit Bhargava, Jenn Lim, Sarah Lacy, Paul Simon, Amy Jo Martin, and Matt Sitomer for your help, support, and book industry knowledge. Thank you to early blogosphere friends, including Michael Arrington, Om Malik, Richard MacManus, Orli Yakuel, Marshall Kirkpatrick, Gabe Rivera, Lee Odden, and many more.
Thank you to Tony Hsieh, Fred Mossler, and the Downtown Project for believing in Tech Cocktail and partnering with us.
Thank you to all the people in my life who have volunteered in some way—whether it was pouring wine, managing registration tables (especially our long-time Chicago bouncers Jess, Kelly, and Melissa, early Chicago and DC supporters and countless others), helping me with code, giving me a place to crash, or introducing me to someone else—I am eternally thankful. There are too many of you to list, which makes me even more appreciative and grateful.
Thank you to all of our Tech Cocktail nation. If you have ever read one of our articles or attended one of our events in any city, you know who you are. To all the Ron Mays of the world, you kept us on our toes. A glass tip to you—cheers!
Much love and gratitude to everyone who has ever supported and believed in me and my endeavors. You all played a part in this, and I thank you.
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Index
A/B tests
About.me
Accelerators
Accountants See also Bookkeeping and accounting
Acquisition metrics
Acquisitions
Action celebrating
cofounders, finding See also Cofounders
customers, defining
developing project while employed full-time
full-time job, decision to quit
getting started
mentors, use of
personal investment limits, establishing
prototypes
starting simple
tips for getting started
Activation metrics
AddThis
Adler, Charles
Affordable loss principle
The Age of Context (Scoble)
Agile software development
Airbnb
Airport Life
Aleksenko, Val
AllFacebook,
Alliance Data Systems
Alpha stage
Altimeter Group
Amazon
American Airlines
Andreessen Horowitz
Andreessen, Marc
Angel investors. See also AngelList described
venture capitalists compared
warm introductions
AngelList
AOL
Appalachian Trials (Davis)
Apple
AppSumo
Arrington,
Michael
Atanacio, Alfredo
Attorneys See also Legal advice
Aulet, Bill
Automation
Automattic
Avis
BabbaCo
BabyList
Baldwin, Micah
Band, Zvi
Banjo
Bank loans
BANT (budget, authority, need, and timeline) criteria
Barefoot Books
Bartering
Basecamp
Batalion, Aaron
Batchelor, Amy
B-Corps
Beck, Q
Belmont, Veronica
Berger, Dan
Berkun, Scott
Bessemer Venture Partners
Beta testing
Bezos, Jeff
Bhargava, Rohit
Bing
Birch, Jonathan
Bisciotti, Steve
Black, Joanne
Blackboard
Blackwell, Trevor
Blank, Steve
Blip
Blogger
Blogs company communication tool
and content marketing
and product launches
and relationship building
and sales
search engines
spam blogs (splogs)
Blue Origin
Book Report Network
Bookkeeping and accounting See also Tax considerations
Bootstrapper's Manifesto (Godin)