Category Archives: Entrepreneurship

When do you know that it is time to fold your #startup?

Honestly you never will know. There is always a “what if”.

There are many times during your startup journey, when you get a sense that things are not worth it. When your cofounder leaves. When your customer bails. When you cannot articulate success.

The simplest situation is when you run out of money.

The biggest challenge is knowing when way before your run out of money if something’s not working out quite right.

You get a nagging feeling that the same time and energy you have can be spent on other things to get a better return – whether it is on the next startup or another job.

The constraints that most entrepreneurs face tend to be masked by their bravado.

I hypothesize that the only time you know when it is time to shutdown and move on is when you no longer have a desire for the end state.

When you lose your passion.

That’s it.

If you still have the desire for the space you are in, and the problem you have chosen to solve, then overcoming all other odds is easier, because you still believe there is a wrong to be righted.

Most founders, though dont realize they have lost the desire for the space or the problem until much later. They are taught that persistence is the key to success, so the slog through the early warning signals.

How do you find out if you have lost passion for the space, earlier?

“Going through the motions” is one way to find out.

“Not getting excited to get up and go at it” is another way.

“Inability to acknowledge the small wins” is a third.

I can list many more.

The next part of the question is how do you know if this is “temporary loss of passion” or “permanent lack of desire” for your startup.

It is a permanent problem when your opportunity cost of doing something else is more than your current situation.

A framework for how to take advice – for #entrepreneurs

There is no shortage of advice or number of advisers and the time you are given advice as an entrepreneur.

It can be overwhelming for an entrepreneur, especially when they hear from conflicting advice from trusted sources.

The 3 most important factors that should go into the decision making process for taking advice is a) Who should you take advice from b) What advice should you take and c) When should you seek that advice.

There are 2 kinds of people you take advice from – those you consider as “experts” in the field and those who have “experience” with the specific problem you set are seeking the advice from. Everyone else is rather a big waste of time. So, if you are an entrepreneur and seek advice from someone at a much larger company on what you should do with your product direction, when they are not an expert in the field, then be prepared to be given useless advice. Well, you asked for it so there.

Expertise is easy to ascertain since, it has a factual basis. If someone is a certified legal professional, then they know the aspect of law they practice. They won’t necessarily be the best at litigation or immigration if they are a corporate attorney, but they would be the best at company legalese.

Experience is best couched with situational awareness. If the person giving the advice is smart, they will tell you the specific conditions, background and environment that the course of action worked. From that, you can at least determine if it might work for you in your specific situation.

The worst people to take advice from are those that pattern match. In my experience, most investors, general practitioners and enthusiasts understand a situation by talking to many people and offering their generic opinion couched as “experience”.

If you seek advice from those whose experiences don’t match your current situation, then you will get suboptimal advice. People who are confident may tell you they don’t know, but it is more likely you will get opinions from 3rd party reading couched as experience.

You need actually both expertise and experiential advice for most situations, which is why understanding the contours of the problem will help you explain it to the person you are seeking advice from.

What you need advice on falls into 2 buckets as well. Easy questions and hard questions. Easy questions have a binary outcome. These are fairly rare. Most difficult questions tend to have a range of answers, with complicated if-then-else statements around the answer.

Easy questions are those that can be answered by experts alone. Can you hire someone from your ex-employer is fairly easy to answer if you look at your exit interview or contract and have a legal person review it.

Hard questions typically will give you multiple choices, not just two. Should I raise money is an easy question to answer if you are running out of cash, but the harder question of who to raise money from and how much to raise are harder questions that can run the gamut based on your situation.

Finally, when you seek advice is also fairly binary. You can either seek advice when you need it, or way before you encounter your specific situation. Seeking it after is just a waste of time – it reaffirms your position and makes your feel nice, or it will make you regret the decision since the advice you get is contrary to the decision you already took.

If you seek advice just when you need it, prepare to be rushed and expect to miss out on key details that tend to be nuances and shades of grey. For example, trying to decide what type of company (C corp or S corp) you should incorporate is best done when you don’t need it done yesterday. It will give you time to think about the options if you learn about the options way before you need them and keep the notes handy.

Seeking advice way before you need it is useful in situations when the impact is longer term. When the decision to be made cannot be reversed very easily (for example who you want as a cofounder), you are better off getting advice on the type of cofounder you need.

The biggest challenge is always the conflicting nature of the advice. What do you do when two people, both of who you trust, offer very different advice or in fact the exact opposite advice.

The relative scale of their expertise and experience does not count, so most people go with what they feel “more comfortable” with. Or they get more opinions and do a “vote count”. Either way it tends to be sub-optimal only in hindsight.

Top 5 tips on how to come up with milestones that are measurable for your startup

Most founders will come up with following variations of milestones when they get started with their company.

1. Ship beta version of the product by Dec

2. Raise $XXXK in funding

3. Get to $YY in revenue.

Unless there is a team that’s large enough to have each person take on ownership for each of the milestones, the founders are the ones that are responsible for them.

This means that there is little else you can do other than focus on these milestones.

Lets assume you have a cofounder and you split the roles into technical and business.

The technical person takes responsibility for the beta version and the business person for the funding and revenues.

Now a few months in, a new set of responsibilities come forward including managing your board, your mentors, talking to potential partners and others.

Your team has not expanded to take on the executive level challenges, so you still have the 2 cofounders taking on more.

Some of these new tasks are enjoyable – having conversations with partners or mentors for example, so you get “distracted” and the top 3 goals no longer get enough time. That’s when you realize you need a to-dont list.

A few weeks go by and you hopefully realize you are behind and try to catch up, this time removing the new tasks on your list and replacing them with items on the top 3 milestones.

The problem is getting to the new items is tough until you have enough folks on the team who can take on the high level, cross functional priorities.

Here are the top 5 tips I have learned to come up with milestones that you can manage. You may have heard about SMART goals, so I am going to skip that portion and assume you already do that.

1.One person per milestone. You cannot have joint owners for a milestone. Even if you and your co founder are “two peas in a pod” and “complete each others sentences”, have only one person assigned to each milestone. You will achieve greater accountability that way.

2. One milestone per person. If you have more than one milestone assigned to a person, reduce the number of milestones. Obviously if you are a solo founder, that means work on one thing at a time until you have a management team to help you take tasks off the plate.

3.  Milestones cannot be overloaded. Milestones need to be specific enough for one area of work. If your milestone reads “raise a seed round and ship version 1 of the product”, that’s 2 different milestones with responsibilities for 2 different people.

4. Milestones need to have a specific date, and be reviewed weekly. To track your progress, I have found that a weekly review works better than daily or monthly. During the weekly review, you need to understand the tasks and projects that make up the milestone and understand where the blockers are with an “plan B” for any blocker.

5. The owner of the milestone needs to have cross-functional authority. You may have silo functional ownership of roles but most milestones, if they are important have cross- functional impact. So if you need to ship a beta version of the product, the owner of the milestone may need to get customer access from another person and market data from a 3rd person. Even if they are peer’s for the success of the milestone, the owner needs to have full authority to help get the resources to get the milestone done on time. This ensures that even if you have to transition from a role of control to a role of influence, you still have the ability to execute on the milestone.

Everything I learned about entrepreneurship, my mother knew already

My mom

Happy mother’s day. I still miss my mom. She passed away a couple of years ago. Most everything I learned about entrepreneurship over the year’s she knew already and tried to tell me but, I had to learn it on my own, making my own mistakes. Here are the 5 things I learned from her.

1. Have a bias for action: My mom was not one who would talk too much when you needed help or if you needed to get something done. She’d lead by action and focus on “doing” not saying. Her actions truly spoke much louder than her words. When you are working on your startup, it is likely you will have advisers, board members, investors and mentors who will provide you will all the advice you need. The best advisers have a bias for action.

2. Be helpful and give generously: Before “Pay it forward” was a big deal, my mom would practice it. I follow a similar but more selfish approach to paying it forward – Dig your well before you are thirsty. My mom would help others, without expecting anything in return. Do that before you start your company and it helps you when you build your startup. Take as many chances to help others as you build your startup – if you have some time to help, dont pass up the opportunity. Whether it is to help a fellow entrepreneur recruit, critique their website or help the trouble shoot a problem with their technology. It will come back twice as fast and return you twice as much.

3. Your attitude matters more than your state of being: My mom’s attitude was “always sunny”. She would carry the weather with her. Not in a way that made you think things were not difficult, but she’d never get you down because she was in a troubled spot. Her attitude was one where she’d focus her energy, when she was down towards making others feel better. She’d remind me that most people will remember how you helped them feel when they were down.

“I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” - May Angelou

 

4. Focus on things under your control: My mom would obsess over the salt in the sambar, the right sized cuts on the okra and the temperature of the rice before she served it. She would focus on things she felt were under her control and many times the little things. As an entrepreneur, I have found that even if you set the vision and mission, the strategy and plan right, if you dont execute the small things well, you will do poorly. If you worry more about the competition than your own product direction, you will do badly.

5. Turn your biggest challenges into opportunities: My mom’s attitude towards adversity was enlightening. Although her first instinct was to run from it, she would tell herself that it was going to be better because of her bias towards action. She could find ways to optimize the way to make the biggest challenges into her opportunity to make a difference. As an entrepreneur, you will find customer development challenges, hiring challenges, fund raising challenges, etc. The best way to overcome these is to find a way to accept the challenge and brainstorm to execute the plans you lay out toward eliminating them.

If you have a mom, you should call her today (as often as you can every day) and tell her how much you love her, and thank her for bringing you to this world. I did not do that enough, hopefully you can learn from my mistake.

The power of the “to dont” list and why you should keep one

I tend to get distracted easily. I have the shiny new object syndrome disease. I tend to take time to understand what made me master a task or a skill and so I tend to make a lot of mistakes.

Which is why I have a tool in my box called the “To Dont” list. It is not my idea or a new one, but I have benefited from it a lot.

It is a list I keep of things I am not going to do.

I have a list of 3 things I want to do each week and 1 thing I want to get done daily.

I have close to 45 items on my To Dont list. Examples – writing a book, learning Mandarin, learning awesome photography skills.

Every startup CEO and entrepreneur needs a To Dont list actually. Why?

1. Limited resources. When you are small you dont have an army of direct reports who can each own an initiative and “run with it”. If you, as the CEO, are not spending time managing projects and helping remove obstacles for people, you are not getting further ahead. I know a CEO who keeps blaming all the people she hired on her team for “not stepping up” to take responsibility for the top 3 items that the company must achieve. All along while she is working on priorities outside the core priorities she identified for the team.

2. Limited energy. If you are not spending time on your top 3 priorities for the day / week / month / quarter, and dreaming, eating, sleeping, brainstorming and executing those priorities, then your energy and brain power is being consumed by 100 other “shiny” non priorities. It tends to be the “death by a thousand cuts” problem where 7 to 9 things take up your time, and before you know it, it has been over 4-8 weeks and you have not made any progress towards the top 3 things you need to achieve as a company to get to the next milestone.

3. Limited time. If you work 10 hours a day, god bless you. If you work 15 hours a day, you are fooling yourself into believing that you are “working and productive”. I dont know the exact capacity and stamina that different people have for work, but everyone needs some time to rest their brain, their body and their mind. If, for example, you believe you should spend 8 hours on your top 3 priorities and only 2 hours a day on your bottom 7 priorities, I still would question your ability to focus.

The main reason is that it is not time alone that you are spending – you are spending your energy, which is another thing you have in limited supply.

I know that Google has said you have the 20% time where you can work on things that you enjoy doing, outside your core priorities, but you are not Google.

You are a startup, with very limited resources and time.

If you want to work for 12 hours, daily, by all means do so.

Just make sure that your top 3 priorities get the all of your attention – until they are completed.

There are some tasks that you might believe “you cant make progress” on, until there’s something else that happens outside your control.

Bring more things back into your control by spending time and energy on alternative paths.

For example, if you believe the “customer” will take 1 month to get approvals in place for you to get the POC ready, try to get another customer on board, or work the org chart of the customer to get other approvals in place. Dont spend time trying to talk to a new integration partner since that’s not on your priority list.

That should belong on your to-dont list, until it is important enough to belong on your To Do list.

The To dont list should be as sacred as your to do list. Put everything in there that catches your attention until it is worthy enough to make it to your to do list.

The one mistake most entrepreneurs make when they are at an accelerator

I have noticed that the biggest mistake most startups make when they are at an accelerator is that they focus on

“Increasing their total surface area” instead of “accelerating their business”.

This results in the “tail wagging the dog”, where the accelerator schedule, mentors and connections determine what the entrepreneur and the startup does each day. It is important to ensure that you get enough value from the accelerator program, but I would recommend entrepreneurs optimize for acceleration.

If you dont have a clear idea on what to expect from an accelerator, you should spend time with alumni of the program to understand the value their provide first.

It is almost as if after the startup got into the accelerator, the entrepreneurs believe they have a new boss – those who run the accelerator. That could not be farther from the truth.

If you get into an accelerator program, the #1, #2 and #3 thing you should be focused on is validating key assumptions, building product and customer development. Most everything else at the accelerator stage of your company is a waste of time, including attending knowledge information sessions on term sheets, understanding the “local” investor scene or going to “startup events” – unless startups are your target market.

There are 3 important things that most accelerators promise:

1. Learning from mentors, other members in your cohort and industry experts.

2. Connections to investors, potential customers and influential early users.

3. Infrastructure, office space, and a little sustenance money to get your team and product ready for seed investment.

If you look at these 3 items in isolation, there are many other entities that do a much better job individually, but a good accelerator “bundles” these items together so you can have a great experience.

Let me explain with 3 specific examples of what increasing your total surface area is versus accelerating your startup.

a) The best learning is via practice and teaching. So if you spend as little time as possible understanding the contours of the topic you want to learn, you can spend more time practicing and refining your learning. 

Instead, I find most startups attending every learning workshop including “how to sell your company” or “the legal ramifications of your series A investments”. While <10% of the startups in any cohort will really be ready for a series A, 100% of them actually “try to increase the surface area” of their learning by attending sessions that they dont need given the stage of their company.

Instead, I would spend more time accelerating the learning of specific topics from your customers – what real problems they face outside of the pain point your company addresses, etc.

b) The best connections are those that are mutually beneficial. So, if you can help your mentor or adviser learn about your business, the market or new updated techniques of engineering, marketing, sales, etc. they can help you learn more about the nuances based on their experiences. If they are unwilling to learn or are not interested, they are not the right mentor.

Increasing the total surface area is trying to network with every mentor from the accelerator and networking with every potential investor, even if they have not invested in any company in your market or domain.

Instead, accelerating your startup is focusing on specific investors by domain, check size, background, connections, and other criteria you need to help your company grow.

c) While the infrastructure is available to have meetings, get the team together and learn from other entrepreneurs in your cohort, increasing your total surface area is trying to spend every evening with other startup entrepreneurs, networking over beer or having a lot of meetings at the space with other startup influencers from the community.

Accelerating your startup, instead is spending enough time with your own team, learning about the challenges they are facing and understanding how to remove the roadblocks. Or, spending time outside the building, trying to meet potential users and customers to refine and validate your assumptions.

If the accelerator focuses you on increasing your total surface area, they are wasting your time.

How to write the script for your #startup overview video (with examples)

Before you produce the overview video for your startup, you will need to understand what its purpose is and that will dictate the type of video you will create.

When I produced the 2 min video for BuzzGain, the first thing that surprised me the most was how quickly 2 minutes flies by.

There are 3 important things I learned during the process of creating the video, which will help you put together the outline of your video before you actually produce it. I still cringe at my first video produced and made so many mistakes (voice clarity, etc), which I wish I knew before.

1. The outline needs to be clear about the only ONE outcome you can achieve – e.g.to get people to understand what your product does or to show them your demo, and ONE call to action – signup for your service, signup for a newsletter, subscribe to your blog, etc.

Most entrepreneurs forget this important item. There’s only ONE thing you can achieve. You might as well figure out what it is and focus on that alone.

2. For a 2 minute video the maximum number of sentences you can comfortably speak and have people understand is less than 40. This should force you to choose your words carefully and ensure that you dont over engineer the demo video. Dont try to cram too many ideas, concepts or topics in your overview video.

Speaking faster than normal does not count, and it makes the video difficult to watch.

3. The best way to put an outline is to follow the Say this, Show this approach. In this approach, you have a 2 column word document where you will write exactly what you will say (audio) and on the right column what will be shown (visual) on the screen.

Overview Video Script

Overview Video Script

The alternative scrip format that I followed above uses a 3 column format with the optional 3rd column to show the text on the screen to go with the visual.

Here is the set of steps I took to write and produce the video:

1. Writing the goal: Time taken 15 minutes to write and 3 days to refine. I had to test the goal and understand who the real audience was for the video. There were 5 things I had to be absolutely clear about:

  • Who was the right audience for this overview video? – was it the PR Associate, the PR manager, the owner of the PR firm, or the communications manager at the large company?
  • What was the goal of this video? – to tell them about our product, to give them an overview so they know what it does
  • What was the desired outcome and my call to action? Did I want to have them sign up for BuzzGain? Did I want them to subscribe to the blog – since the production of the video happened before the product was ready or did I want them to take the next step – which was to view the next video on BuzzGain’s technology and how it worked.
  • What was the desired flow? What problem did I have to surface (based on my audience)? What pain point did I have to mention? How did I have to show the solution? Did I have to show the differentiation?
  • What were the assets I had to produce to make the video happen? Besides the flow what were the screen shots, the text, the logos, etc. that I needed to have ready?

Here is the original BuzzGain_Flash_Demo_Script_v6.

You will notice, that it has the 3 column format and actual screen shots.

2. Practicing the story telling (audio) and ensuring I hit the key points before the visuals

  • Speak into a microphone and record the entire script 3-4 times before you go and produce it with the video.
  • Play that to 10 people (without the visuals) to get feedback on the script and the voice, tone, key points etc.

The key reason for this step is to ensure that your story can be told even without the visuals. That way you can use the same script when you meet folks at networking events and dont have the visuals to go with it.

3. Going to the studio to actually record the audio in production quality.

4. Putting together the screen shots or PowerPoint slides that go along with the video.

5. Producing the video by mixing the audio and visuals. During that time (2009) I had Camtasia Studio and Jing project as tools to help produce this. I loved Jing project, but migrated to Studio since I found it more feature rich. There are many other tools you can use as well.

6. Uploading the video on YouTube after refining it multiple times and producing 7 useless videos which I did not like. Today I’d use a high quality HD video hosting site like Vimeo.

7. Embedding the video on our front page of the website using YouTube embed.