The Startup Process by Rob Delwo
A really well-written, informed piece that talks about the various funding rounds in terms of what that company looks like from a risk, product, and team perspective. Read it.
Every startup should apply to an incubator
I’ve been working on Signal Genius since early September 2011. It’s already been quite the ride. The team has been bootstrapping since then, with contracting consuming a good chunk of our time. Despite that, we were still able to get our first paying customers — yes, contrary to popular belief, startups can actually generate revenue ;) — in January. I’m a firm believer that every startup should apply to an incubator program no matter how mature the team or idea. We applied to TechStars for Signal Genius back in January, and even though we don’t know if we’re in yet, the experience has already been worth it.
I’ve been in Boulder now for over a year and a half, and while I don’t think I can apply the “local” label to myself yet, I’ve gotten to know a lot of people. Since Boulder is the original and HQ of TechStars, a day rarely goes by where I don’t cross paths with a mentor, alum, and other applicant to the program. So, applying for the summer program back in January was a no-brainer.
But, I realize it might not be a no-brainer if it’s not in your face every day.
“Getting into an incubator” should never be the goal of a team, the goal should be building your business. That being said, “applying to an incubator” can be a strategic part of building that business. The initial application forces you to put down on paper what the hell you actually do. The feedback you get is real, and doesn’t just apply to the cool tech you’re building or the relationships you have. The best feedback can often be feedback that exposes an incorrect assumption about just how difficult “getting users” or “recommending the best X” — things that can be easily glossed over in the face of your ‘actual idea’ — can be.
The people that run these programs have literally seen thousands of ideas come across their desks. They’ve seen complete newbies and experienced serial entrepreneurs. They’ve probably seen 20 variations on the idea you’re working on. Their bullshit meters are highly tuned, and they have no problem dishing out the hard advice. So do yourself a favor, and go apply to an incubator. As of writing this post, applications for TechStars Boulder Summer 2012 are still open, but they close on Friday. However, you can apply for TS programs after that, or YC, or any other of the dozens of incubators that have popped up in the past couple years.
Go. Apply. Now.
One year ago today a startup was born
This morning, my roommate Jonathan Woodard and I woke up at 6:00a, and without many words, got dressed, walked out to my car, and made the drive out to Mapleton & 30th for our 6:30a workout at Crossfit Roots. The workout was especially entertaining: 100 burpees. Stand up straight, lay down on the ground so that your chest touches, stand back up, jump up in the air, and clap your hands your hands above your head while you’re in midair. Do that as fast as possible. 100 times. Jonathan and I both finished in just over 9 minutes.
We got back in the car and, still with few words, anxiously awaited getting back to the apartment to massacre some veggies, sausage, bacon and eggs. During the massacre, Jonathan speaks up (we had finally woken up), “Hey so 4sq & 7 emailed me this morning. It was a weird series of checkins a year ago today, and then I figured it out: It’s our 1 year anniversary.” One year ago today, Jonathan and I were at Walnut Brewery and discussed, for the first time, working together.
I arrived via U-Haul, Volvo in tow, in Boulder on August 2nd, 2010. Jonathan got here the day before me. We didn’t know each other. For the next several months, we kept seeing each other at events all over town. I would see him on Twitter and at Atlas. I would wonder who this guy was at BOCC being even louder than me. Eventually we met, started talking, and one night while out at the Walnut Brewery for dinner, I asked him if he wanted to create a startup together. In between staring at the cutie waitress, we decided to go for it. “Let’s see what happens.”
One year ago….
And with that, we were off. We looked at, and in most cases prototyped, a lot of ideas. I can think of at least 5, but I don’t rule out the possibility I’m forgetting one:
- an app to help plan ski trips
- an app to help buy consumer electronics
- a social widget that gave online retailers insight into the minds of their customers at the point of sale
- an omniscient browser extension that would monitor what you’re doing online and automatically let you know when those in your social circle had previously done something similar
- our current project, which isn’t exactly a secret, but not something I’m ready to blog about
A lot happened in the past year. We looked at raising money, met with VCs, had discussions about a potential merger with another fledgling (but better capitalized) startup. One product came to fruition (the 3rd one in the list), launched at BDNT and Boulder Beta, got some early users, but never panned out as expected. We haven’t given up on that social insight widget, but it’s on the back burner for now. The omniscient widget idea started to get prototyped, but after consulting with some very smart people around Boulder, we decided it just wasn’t something we wanted to pursue right now. We applied to TechStars twice, once in Boulder and once in NYC. Obviously, we were not accepted. We also never raised money, and never merged with anyone.
Throughout the year, we flirted with bringing on a third founder 5 times. The first four didn’t pan out, and we were lucky in that all the business relationships ended amicably and left the personal relationships intact. For us it’s turning out that the fifth time is the charm. Alec Uitti, a designer with a ton of experience, joined our team a few months ago, and we’ve been plugging along ever since.
For the entire time, Jonathan sustained himself as an independent contractor. I was working for Punchbowl.com until May of this year, and have been working as a contractor since then.
So one year later we have no revenue, we have no product, we have raised zero dollars, and while we’re incredibly excited about what we are working on now, there is as of yet no guarantee it’s going to work out.
So how do I summarize the last 12 months? Was it a waste? Have we been spinning our wheels? Are we stupid failures?
Hell no.
For starters, we’ve learned one of the most important things that founders can learn about a partnership: that we can work together. Jonathan and I share a lot. We work together. We live together (he moved into my spare bedroom in January 2011). We fly in similar social circles. We are both in the same ski house up in Vail this winter. We both hang out at Atlas Purveyors. And as mentioned at the start of this post, we workout together at Crossfit Roots. I’ve yelled at Jonathan. He’s been furious at me. I’ve apologized. He’s apologized. We’ve gotten very drunk together. I’ve tried to give him a haircut while he was brushing his teeth one morning. He’s videotaped me throwing up. We haven’t killed each other yet, and we (probably) won’t in the future.
We’ve both gotten a hell of a lot smarter and more pragmatic. There’s something to be said for biding ones time in search of the right idea. Any business takes a little bit of luck to work, but you can maximize for luck by being smart about how you select an idea, and we’ve gotten better at that. Any one of the ideas in that list above can be made into a successful business, but for one reason or another, none of them are right for us right now.
One of the most interesting things I’ve noticed is that we’ve ‘settled’ into Boulder. When I moved to Boulder, I didn’t know anybody. I was alone. I attended every event I could, I talked to people, and I reached out to strangers. But it took over 2 months before I ever got invited to go socialize on a weekend (thanks Chris Hough). Once I started to make real friends here, I wanted to make the most of it: socializing all over the place, never turning down an invitation or a public event, tweeting at everyone constantly, watching the Bachelor & Bachelorette at Alpine0210 every week (thanks Joni & Alexis!). Back in March, when I was finally about to give my notice at Punchbowl, I didn’t have much of a savings. I went out to the Mountain Sun with Chris Rosen (owner of Atlas Purveyors) and told him I was pretty scared. He looked at me, smirked, leaned in, and as he looked left and right around the room, said “Dude… you’re here.” He didn’t mean the Sun dining room. He meant Boulder. He meant the community; the family. In just a year, I really have come to feel like I’m a part of it. I feel safe here. And with that comes the ability to be comfortable putting my head down for 3 weeks and not socializing or trying to make new friends.
So now, after a year of doing what we’ve been doing, this is the state of things: We have a killer idea that fits us — and Boulder — perfectly. We have the skills to build it. We have enthusiastic early users with cash to spend. We have advisors that I trust in and that believe in us. We trust each other. We’re working our asses off.
For the past year, Jonathan and I have been working in a startup: a temporary organization built to search for a business model. After a year of doing that, I feel more ready than ever to turn this startup into a business.
So here’s to the next year, Woodard. Let’s go knock this out of the fucking park.
Mea Culpa? Me-a bummed out.
It’s a bummer that Mark Suster was bullied into this:
http://www.bothsidesofthetable.com/2011/08/24/mea-culpa
It’s a bummer because his original post (here) was brilliant. It was even-tempered, rational, and necessary. The dozens of FNAC corporations that get bought each year and get plastered all over TechCrunch are poisoning the minds of current, past, and future entrepreneurs - mine included.
I’m not saying there is no value in FNACs like group messaging services GroupMe & Beluga. There clearly is value; it’s apparent in their acquisition. But that does not make them a business. They are a cool set of features with some cool tech, great vision, and a talented team. Everyone on those teams deserves what they got in terms of cash and equity.
It’s admirable to take a chance on some cool new technology (I’ve done it twice) but to do it under the guise that you’re building a real business like everyone else is a tragedy (only did that the first time :) ).
I think we all could benefit from the wake up call that Mark gave in his original post. There is a difference between a Feature and a Company. Make sure you know which you’re getting into.
Required reading: http://www.bothsidesofthetable.com/2011/08/22/fnac-feature-not-a-company/
A great funding presentation from Mark Suster
EDIT: I’m sorry about the weird whitespace in this post. Tumblr or DocStoc insists on injecting some iframe that I can’t get rid of. #nerdrage.
I really like this guy:
How to run a startup (Or why I just got a man crush on David Karp)
Yeah.
We roll out changes to the site every day at 11 a.m….
After we launch a new feature, I keep a close eye on how many people are using it. If it’s unpopular, we’ll discontinue it and try something else. Every feature has some maintenance cost, and having fewer features lets us focus on the ones we care about and make sure they work very well. For every new feature we add, we take an old one out.
Holy crap.
This is how a startup should be run. I love every single sentence in this article.
One of the things I love most about this article is the pragmatic nature of it. It’s just a series of statements with no attempt to be poetic or egotistical. It’s just David saying “Here are some bullets points on how I run my company and why.”
Damn, David Karp. I salute you.
Low barriers to entry are awesome
I attended Gluecon last week. It was awesome. I had a phenomenal time talking to some really smart people. While I was talking to someone at one of the demo booths about FourthSegment, one of my all-time favorite lines came up: “Yeah but it sounds like there’s a low barrier to entry there.”
I smiled. ”Hell yeah there is.”
“But what if someone copies your idea?” said my new buddy.
“Then that means I’m on to something” I replied with a huge smile on my face.
Let me very clear: I love low barriers to entry.
At it’s core, the idea for FourthSegment is a straightforward idea. You can go to our homepage, see what we’re doing, and if you’re really good you can probably code up a tech demo in a few days. If you’re average, you can probably do it in 2 weeks.
But if you think for one second that FourthSegment is just a website - that you can just go copy our functionality and make money - then you’re not getting it.
FourthSegment, like all ideas with apparent ‘low barriers to entry’ came out of the collective intelligence of a couple founders who were searching for an idea for years, scores of meetings with hundreds of people, and some really difficult realizations along the way.
Every single inclusion and omission in what is about to be the first version of FourthSegment is the result of these discussions.
- Why do we only let people share on Twitter and Facebook and not over email? You would have had to have listened in on a 2 hour conversation Jonathan and I had at 2am a few weeks back.
- Why are we going to be charging right out of the gate? That’s something I’ve thought about for years. Another 100 hours of conversations, reading, and thinking over past several years, combined with the mistakes I made at MessageSling.
- Why aren’t we providing any kind of dashboard to visitors? That something that could actually be pretty valuable. There are times where I’ve wanted it for myself. The decision to ditch that came from some experiences that Jonathan and I had while working on our last idea.
And a 80 other things.
The bottom line is that a low barrier to entry means that the product is streamlined — optimized. Copying functionality might get some dollars in your pocket, but they’ll never make you a market leader.
So if you think there’s a low barrier to entry when it comes to any product, I encourage you to put your money where your mouth is and try to compete. It’s never as easy as you think.
Seeing the country for the forests
“…we were struggling to make sense of the bubble and its aftermath, what it meant for technology and what it meant for venture capital.”
-Fred Wilson
This quote from a recent Fred Wilson blog post reminded me of something I’ve been going through lately.
I’m out in the world. I have a “neat idea.” I talk to a lot of people about it. I get lots of wide eyes and “whoas” and great feedback. After months of searching for a great idea, it’s easy for Jonathan and I to rest on our laurels and think “well that was hard, but we worked hard and talked to a lot of people and did a lot of research and we finally got it.”
Not so fast.
Now that we have a product, Jonathan and I have to figure out what it really means in the grander context. Where does it go? What is the future of the product and the brand? These are questions similar to what Fred was talking about in his blog post: what do we go from here?
When I first saw Square, I thought to myself: “Thank you, Jack!” But I also thought to myself “hrm that’s nice… buuut is that it?” I wondered what would be next for them. What’s next for them is Card Case, and while the fantastic design of Card Case is a shining example of seeing the forest for the trees, the evolution of the Square payment platform from ‘just’ Square to Square + Card Case is a level higher: it’s seeing the country for the forests.
Square is not just building a product. They’re building a company with a greater hunger and vision. That’s something I am looking forward to doing with FourthSegment. I’m looking forward to reminding myself constantly to never stop thinking about the bigger picture; to never stop seeing the country for the forests.
Now hopefully this blog post will do its job and help me remember that ;)
FourthSegment Blog: Welcome to the FourthSegment Blog
Check out what I’m working on next:
Hi,
I’m Ryan Angilly, and I, along with my business partner Jonathan Woodard, want to welcome you to the blog for our new company, FourthSegment.
Back in November, Jonathan and I started to ask ourselves: What’s the next big thing? What’s coming down the pipe that is going to…
