Over the past two weeks I’ve been working closely Skip Walter on a new project codenamed EnterpriseList.
For those of you who don’t know him Skip is one of the creators of ALL-IN-1 a $1B software product line by DEC, he was the VP of engineering at Aldus which created PageMaker and became Adobe, and founded Attenex which sold to FTI for $91M.
Besides all of his accomplishments Skip is one of those rare people who is ridiculously curious about everything, knows something about every field, but who can also go deeply technical on any of of those topics. It’s rare to meet someone who has both wide knowledge and deep knowledge both at the same time.
While starting a company people talk about the value of learning from experienced mentors but typically it’s very hard for a new founder/CEO to really appreciate and take advantage of this mentorship. It was only through working with Skip on a daily basis have I’ve begun to fully appreciate the experience.
I wanted to share some of the lessons I’ve learned so far through my experiences over the past couple of weeks to hopefully help other founders who are in a similar position. To give you some context right now we are in the interviewing stage with potential customers, planning out the first version of our product, putting together our customer proposals, and building out our initial team.
- It can’t be said enough that the team is so important in the early days of a startup, even more important than you think it is.
- The optimal team is comprised of:
- a visionary who sees a “must have solution”
- an architect who can think in scale and build a product
- a designer who can observe the customer and translate those observations into product
- a lead customer who has that “got to have” need and can spend the appropriate time with your team.
- The composition of the team is so important, you literally can’t settle for any aspect of the team in the early days.
- It’s the visionaries job to find the lead customer, understand the “must have solution”, and communicate the solution.
- There is a huge difference between a “minimal viable product” and “a minimal valued product”.
- It’s very important to think backwards from the end value your customer is getting from your solution, back to how the features of the product achieve that value, rather than thinking of a cool feature and how a customer could potentially use that feature.
- Selling is not an opportunity to pitch your product, but rather an excuse to learn as much as you can from your potential customer.
- Putting together the right set of questions before you talk to a customer is more important than putting together your perfect pitch.
- Ask questions not just about your product and your feature ideas but rather ask questions about their process, how they view their workflow, and about the greater context. It’s important to understand the whole problem space, not just what your product does.
- The act of writing down your customers feedback both solidifies their feedback in your own head and creates a tangible work product that is valuable for your company.
- 80% of the battle in sales is learning where the customer is coming from and what their buying process is.
- It’s not enough to get the potential customer to open up to you but rather you have to ask questions that move customers to a high level of commitment: Examples include: What their budgets are? How do they measure their program/function? How does their group/department/division work and how are buying decisions made? etc.
- Selling is all about getting a customer to a higher level of commitment and getting them to want to spend time with you and want to create a solution with you.
- A sale doesn’t start or stop at a customer pitch, a sale starts way in advance of your pitch and extends way beyond the sale.
- The ideal customer mix is between 3 and 5 customers to work hand and hand with to build a solution. One customer is just consulting, two is a nightmare, and six is too many.
- It’s more important to find the biggest pain points, most valuable workflows, and most valuable solution from a handful of customers rather than just having a lot of interest from a lot of potential customers.
On Thursday I talked with Andrew Lee, who is a senior advisor for the US Small Business Administration, about some of the programs they have for high growth startups. Andrew previously started and sold an social gaming company so it was super refreshing to talk to someone in government who understands startups and wants to make the government more helpful to startups.
I was really excited about the three programs Andrew is working on so I wanted to share them with you.
- RFP-EZ – Most relevant for startups with a working product they are currently selling.
- Small Business Investment Company (SBIC) – Most relevant for early stage investors, including venture capital funds and angel funds.
- Small Business Innovation Research (SBIR) – Most relevant for pre-product startups, especially in the hard technology and science space.
This is a program to help startups get contract work from the federal government. Government agencies needing work post their projects they need help with, startups can register as a provider, and startups can bid on the projects (screenshots here and here).
Here is also some thoughts Tim O’Reilly had on the new RFP-EZ program.
Right now there are two projects that look promising for a tech startups. One the SBA is looking for a transactional email service provider. Two the SBA is looking for a new website/content management system. (hint hint an opportunity for an influential reference customer?)
Early Stage SBIC
This is a program to help give investors more capital through matching funds raised by venture capital firms with government backed debt. For every $1 raised privately the SBIC will provide $2 of government backed capital up to $150M. (hint hint potential relief for the Series-A crunch?)
This is a program to help give research funds to startups working on hard technology with the potential for commercialization. Research solicitations comes from a wide range of federal agencies throughout the year and startups can apply for grants if they are working on one of these areas of research.
Here is a full presentation on the program with more on how it works. Also here are the open solicitations for startups. (hint hint health/science/biotech startups should take notice, here’s an interesting solicitation I found.)
If you are interested in any of those programs check out the sites to learn more information about them. Also if you want to talk to someone at the SBA directly send me a note (chris.r.mccann at gmail dot com) and I’ll try to help put you in touch with the best person.
Both events were sponsored and organized by Enterprise Lithuania, an organization owned and operated by the Ministry of Economy of the Republic of Lithuania.
I’ll have to admit, being an entrepreneur I have always been skeptical of any government involvement with the entrepreneurial ecosystem. Historically I have always taken the approach that government should leave entrepreneurs alone and let them get back to real work.
However this trip changed my view a bit. It was interesting to see the ecosystem organize themselves around these two big events and bring over 1,500 students and 200 engineers/designers to these two activities combined.
Unlike entrepreneurs, governments have to big opportunity to take the long-term view on the entrepreneurial ecosystem and selectively make a difference across the whole ecosystem.
If you work in government and are reading this, here are a few things I would do & consider if I was in your position (feel free to take these suggestions with a grain of salt):
- The entrepreneurial ecosystem in your country has to form organically from the bottom up, it can’t be created by force.
- One simple thing I would try would be to bring together all of the existing entrepreneurial leaders in your country (founders of startups, investors, community organizers, developers, immigrants starting companies, university leaders, etc) and have everyone sit down over a casual dinner with beer. Let these community leaders tell you what is needed and what’s important to them. Don’t talk just listen.
- Another simple thing I would try would be to bring together all of the existing entrepreneurial leaders in your neighboring countries and do the same as above with your own national entrepreneurial leaders. Again don’t talk, just listen.
- The last simple thing I would try would be to bring together some successful founders of your national decent who have moved outside your country (to silicon valley or elsewhere) and do the same as above. The same with before: don’t talk, just listen.
One of the most important things I feel a government can do is provide long-term connections to the entrepreneurial ecosystem which already exists in your community.
You yourself will never be able to understand what it’s like to start a company (unless you decide to start one) but you can provide the connections of people who do know what that experience is like to your citizens.
Let the community leaders be the star of the show and let them help you decide how to selectively help the entrepreneurial ecosystem in your country.
Back in June 2009 I threw all of my belongings in my car after graduating college and moved up to Silicon Valley, not knowing anyone here, with the intention of joining or starting a company. Because I was new I started going events like meetups, hackathons, and workshops to meet other people like me. I noticed that being an outsider to the startup community, it was hard for me to know which events were worthwhile to attend so I started choosing the best ones for myself and creating my own list.
Some of my new friends I met were also interested in learning about these events to so in November 2009 I emailed 22 of my friends about the good startup events going on in Silicon Valley and the SF Bay Area for the week. This was how StartupDigest began.
Almost three years later StartupDigest has grown up a lot. Now we have 100 publications, spread across 43 countries, with a community of 120 curators, 230,000 email subscribers, and support by the Kauffman Foundation. Throughout all of this growing up, the past 3 months have been some of the most emotional, intense, and interesting months of my entire startup life.
Over the past three months we started exploring two new paths for StartupDigest. The first was taking our pre-existing StartupDigest VIP recruiting product for engineers, designers, and startups and applying it more generally to other groups.
One thing that has always been interesting with our VIP product is while the product was originally intended for only recruiting, a lot of other groups who have seen it have asked if they could use the same product for their groups. Most notably was my friend Danielle Strachman, who runs the Thiel Foundation’s Fellowship program.
When Danielle saw our VIP product she didn’t think of it like a recruiting product, she thought of it like a group management product she could use for the fellowship, with fellows on one side and mentors on the other side. We too this input and threw up a landing page, gave it a name – GroupTie – and talked with 80 other groups were also interested in using the product.
At the same time we also started talking to a few companies who were interested in StartupDigest themselves. Most of the companies we had deeper discussions turned out to be not great personality fits between our teams and community. Going through with this teaches you that many potential deals turn out this way mostly because of the personality & touchy-feely aspects of combining two different organizations together.
However the first person I called up while going through these talks was Marc Nager from Startup Weekend, because our communities had always been well connected. Marc and I have know each other for a long time and became good friends while we were both asking for Kauffman Foundation support at the Global Entrepreneurship Week Congress in Dubai.
After long discussions back and forth we decided that our philosophical beliefs, communities, and teams were so close together that we had to do something together. The end result of these discussions is Startup Weekend has officially acquired StartupDigest.
Here are the results broken down:
- Startup Weekend is acquiring StartupDigest. We absolutely love the Startup Weekend team & community and together we reach a huge portion of the startup & technology world through both physical events and online publications.
- Startup Weekend organizes events in more than 300 cities in 100 countries, has thousands of volunteer organizers and has had over 75,000 alumni go through their events.
- StartupDigest has 230,000 subscribers, 130 curators, and 101 publications spread across 99 cities in 43 countries.
- If you’re interested in reaching our combined audience email joey@ startupweekend.org
- Brendan McManus and Jessica Ford, two of the four StartupDigest core team members, will be joining Startup Weekend to continue to grow the combined communities of both organizations and keep benefiting the world at large.
- Chris Burnor and I will be building GroupTie, a software solution that came out of StartupDigest centered around making the group organization process easier and more effective for organizers, full time from here on out.
- If you are interested in talking about GroupTie at all send me an email anytime firstname.lastname@example.org
I am very thankful for everyone person who helped make StartupDigest what it is today, especially Brendan McManus my co-founder, Jessica Ford and Chris Burnor on the StartupDigest team, every single one of our current and alumni curators, and every person who helped and supported StartupDigest along the way!
I am super excited about the massive future potential of these two incredible organizations combined and the continuation of our fun #startuplife journey :)
*If you are going through the acquisition process yourself I highly recommend this Warren Buffet quote which helped me out a lot through the twists and turns.
** I will probably get this question so I will answer it directly. Everything with StartupDigest is staying the same and only getting better. All of your account information and newsletters subscriptions will stay intact and you won’t have to any migration at all.