CONVOSPARK BLOG

Adventures in Fundraising: What I Didn’t Know and Sort of Know Now

Monday, April 11th, 2011

The Asked Out (new name still up for grabs) team has been on the fundraising hustle for the past 4-5 months.  We have had our successes…we have our rejections…and stumbles along the way.  I personally have not been the most integral part of the fundraising process…but I have contributed.  Therefore I have been able see the process unfold from a birds eye view (if the bird was flying sideways…eyes are on the side of the head )…without being involved in the real nity gritty.  For me…I have made connections, pitched, answered questions and charged the room/Webex with some good ol’ fashion Gen-Y start-upper energy!  My first time doing the valley circuit has been a tremendous learning experience not only in the “hows” and “whats” of fundraising; but also in how to align a team, product and vision.

Let me sum up what I learned with a few key points:

The formula is simpler than you think:

Just like a start-up does business development…raising angel and venture capital is a very similar process.  One: you take a look at who you have relationships with and see who they have relationships with.  Two: You reach out to those connections/ investors, present the opportunity or asked to be put in touch with someone who would be interested in the opportunity.  Three: You pass on materials, pitch or demo.  Four: You wait and hope.  Five: You take on “next steps”.

Yes this is a simplified format and you most likely will be more creative and deviate from this process…however I learned that the process is simple.  Don’t over complicate things…investors like simple…they talk to hundreds of people every week/ month.

Traction (whether you like it or not) it is what gets most companies funded:

We have been pitching on the lower rungs of “traction”…meaning what we have to show is some fantastic test partners and alpha feedback.  However for products that have any type of consumer side, you almost always need traction.  Traction doesn’t mean that your model is scalable…it means you have results.  When you don’t have traction…many will love your concept…not necessarily the opportunity.  So when it comes to getting a product out there…build lean, deploy quickly, iterate…focus on traction!

“You have a huge vision?  So what?

Investors say they love the “change the world type businesses”…however “love” is not always synonymous with investing money. Many investors (mainly angels) like to “hit singles” in this venture ecosystem (as a few of colleagues and advisors have told me). Therefore big dreams can be scary…they may be too robust of a solution for a broad market.  Many investors would rather see a niched model that may catch the interest of Google in a few years.  When investors do believe in your vision…they next want to assess the team.  Can this team execute this grandiose vision or can’t they?

Most won’t give it to you straight (at least a 100% straight):

Most of the investors I have met are fantastic people… interesting, successful and very nice.   In some cases their niceness prevents full self expression (at least it seems to).  We haven’t hear that our concept sucks once (it is a terrific concept however I feel we should expect at least one “this sucks”).  When they do give it to your straight…take full advantage…take in their feedback (don’t always act on it) and ask for advice.  They don’t know your model like you do but they might know the space much better so every piece of feedback counts.  Basically you will have do some introspection to really figure out why you are getting “no’s”.

Separate your belief in your start-up from your response/ success rate:

Like I said it’s important to take in feedback but it’s much more important not to take feedback to heart.  The more you allow “no’s” to bruise your ego the more it will affect the overall start-up.  Feedback is simply feedback…it doesn’t mean your model won’t work…or that your team is not right…it’s just feedback (good feedback from incredible people also doesn’t guarantee success).  Some feedback you will act on…other feedback you won’t.

The rest of what I learned and have began to implement can be summed up in this video by Naval Ravikant of Venture Hacks.  This presentation further expanded what I did not know…always fun to find out you don’t know much :) .  Watch it!!

3 Ways to Inspire People to Work for Equity

Thursday, March 10th, 2011

This is a guest post by my good friend and remote entrepreneur Austin Evarts of FullFoundation.com.  Austin has traveled the world while building Twepto , creating an online course on passive revenue generation called The Remote Entrepreneur, all while getting featured on Tim Ferriss’s blog The Four Hour Work Week.

In the early stages of a startup you often need to pay people in equity rather than salary.  Not only is it cheaper while “bootstrapping”, but you want to be working with people who see the most value in being paid with equity.  These people truly believe in the project and are willing to sacrifice payment to see it succeed.

So the problem then becomes:  how do you keep people motivated? As “CEO”, “Chief Motivator”, “Lead Cheerleader” – whatever you want to call it – how do you keep people pushing when they are basically working for free?

I’ve learned (usually the hard way) a few tricks that I would like to share with you here.  Please note that I am not a programmer (although I’ve been learning).  My experience comes from building and motivating teams around concepts that came from my head.  In more cases than not, I am the “non-technical founder”.  So how can you motivate the masses without paying them cash?

1.  Be a Cheerleader
•    Remind people why this project is a “game changer”.
•    Remind people that when this works out, it will be far better than their day job (i.e. you can be making millions and working for yourself).  Be very clear with people upfront that if this project is to succeed, they will at some point be expected to quit their day job.
•    Share good news.  If you come across an interesting article on Mashable that shows a trend toward what you will be offering, share it with the team.  Articles like this are great kindling to fuel the fire.
•    Know the numbers and get good with statistics.  Send out regular (but not too regular that it is annoying) emails about the potential of the company: market size, potential revenues, etc.  These help to remind people what they are working toward.

As CEO/founder of a startup, motivation and guidance is your job.  Make it a point to cheer lead regularly.

2.  Know What you are Talking About
As the non-technical founder, you are in a unique and often difficult position.  Great programmers usually want to spend most of their time coding, meaning you should be spending your time on the business side of things – finding users, testing business models, etc.  You are essentially, “the business guy”.  The problem that many non-technical founders face is that a lot of programmers (at least the good ones) don’t want to the job of implementing the vision of a business guy.

The solution that I’ve found is to really know what you are talking about.  First off, you should definitely have a deep understanding of the problem that your startup is trying to solve.  The best startups begin by trying to solve a problem that the founders have.  Second, you should  be able to “talk the talk”.  Not knowing what your programmers are talking about creates an unhealthy distance between you and the people you are trying to motivate.  If you are constantly asking, “what does that mean?”, you slow progress down drastically.  If you want a general understanding of what your programmers might be talking about, W3 Schools is a good place to start.

A general desire to learn about the environment around you is an extremely valuable characteristic of an entrepreneur.  If your programmers are coding in PHP, you should probably know what an array is.  That doesn’t mean you need to know how to use one.  Just know enough to talk the talk.

3.  Make things Public
The last thing you need in a startup is a lack of communication.  If someone is slacking and missing deadlines, talk to them about it, find out what is up, and make sure it doesn’t happen again.  It is hard to to keep people accountable when you are not paying them.  Making their ineptitude public, however, is another story.  People are more motivated by the prospect of public failure than they are by the prospect of making millions.  Y Combinator actually uses this as a technique for motivating their startups.
Make sure that everyone on your team knows everyone else’s deadlines.  When missing a deadline means letting your friends down, it’s less likely to happen.

Photo credit: *Kicki*

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What non-monetary techniques have you used for motivating your team members?

Establishing Product Market Fit Before Launch

Monday, January 10th, 2011
The Startup Pyramid (12 in 6)

The Startup Pyramid (12 in 6)

Working with a startup from the soil up has given me tremendous insights into some of the challenges facing early stage startups (especially working with a startup trying to disrupt the market place).  One challenge (a fun and worthy challenge might I add) is establishing “Product Market Fit” while being in stealth mode.  Start-up marketing consultant and entrepreneur, Sean Ellis, defines product market fit as creating a product that  the majority of your users cannot live without.  Finding this fit seems like a prerequisite to building out any truly impactful startup.  So how do you establish product market fit before you actually have real customers?  Good question…I’m not sure.  However, here are some ways of working that we have taken on that will help us get as close to product market fit as possible before we actually have customers.

Test, Analyze, Iterate

Some startups have the luxury of developing a product, openly creating a community of alpha/ beta testers, and iterating…others may have to be more thoughtful in their approach depending on what type of product that is being released.  Our product requires a very involved approach to testing, therefore there are many things to take into account before gathering feedback.  We have to find the right groups to test, create the right process for testing, and then create a method for for analyzing feedback as it relates to the product and the process behind using it.

There are things we will discover organically and other indicators will appear based on our assumptions.  No matter how the feedback arises there is a need to analyze the feedback objectively and not be overly reactionary or dismissive.  I have a tendency to dismiss some very important feedback as it does not fit into the overall architecture of the design.  Sometimes this smugness can pay off as you know what’s best…but most of the time you don’t know best, and it’s best to listen to the feedback.

Iterating based on the feedback is something that has to be done mindfully.  All changes and add-ons need to fit in to the core DNA of the product.  Everything is connected…therefore too much change can create too many loose ends.  Sometimes it takes careful evaluations of a feature to make sure that change fits within the schema of the product…sometimes it takes considering that specific feature and how that feature relates to the rest of the product to make sure the adjustment fits.

Build Lean

Before you can test you need to make sure your product is “testable”.  To be testable you need to build what is necessary to test, without building up too much mass where it will be hard to pivot.

Building lean allows you to prototype rapidly with little resources.  This will move you into each testing stage faster and rely on qualified feedback to fully flush out product rather then conjecture.

Build too bulky, you will find yourself taking more time stripping out a fixing what doesn’t work than building and moving forward.  Agile development works if you want to move faster and smarter.

Scale Your Testing

We have to test in phases.  Each phase means we incorporate a new user type and scale up our testing group.  We have decided to have different goals for each phase.  One phase we are testing a small group on both the product and business processes.  The next phase will be all about scaling (both the product and our internal processes).  Then we beta test publicly which should really show if  we have hit product market fit!

If you can’t establish product market fit before your bring your product to market…you can bring a well fitted product to market.

How Rec.fm Can Change the World

Friday, December 31st, 2010

Rec.fm Superman

A little over a month ago I began a stint as a consultant with Rec.fm, a new startup out of the valley that is dedicated to merging social commerce with cause donations.  A month later I am becoming more and more aware of the Non-Profit landscape and the themes of creativity and innovation.  The majority of the charities I talked to sparked from a possibility, an idea that would make the world a better place…most got to where they are today through innovation and ingenuity.  Rec.fm is based on an idea that we direct a slice of the billions of dollars moving by way of social commerce to causes that better our world!  The vehicle of product recommendations is the innovation needed to gain a slice of the bigger pie.  Just the type of innovation these NPO’s spawned from.

How it works:

Go to Rec.fm and start recommending products you love and find product recommendations from your friends and other people.  You can also ask the community for specific recommendations on product types.  For most people, the real exciting part is choosing a cause to give back to.  You can browse from our partner charities to find a cause you care most about and contribute to that cause with every rec you make.  In my eyes much of the beauty of Rec.fm is that it gives people an alternative way to give back.  Forget digging into your pockets to support entrepreneurs in a third world country (I contribute to Kiva.org), instead do actions you do on a weekly basis anyways (chat about a movie, talk about your Mac Book, etc.) and through that…give to those entrenrpeurs in third world countries.

How it can change the world:

Success stories like the Facebook app Causes and Charity Water are proving that many people want to and can change the world with the use of social media.  Bring social commerce and an individual’s social equity together and you have something powerful.  Rec.fm facilitates social powered buying based on recommendations from trusted sources…THE PEOPLE YOU KNOW!   With 90% of consumers participating in peer recommendations, (stat from Nielsen) we look to our friends for product recs than we do Google.  Now allow those people recomending products to their social circle to give back to causes they care about and you have a natural behavior followed by an altruistic motive.

If we as consumers began to consume intelligently and recommend product for a purpose we can make a huge difference in the world.  With Rec.fm donating over half of all site earning to the causes of a user’s choice, just a few recs from you can make a large impact.  One tweet and one shared link on Facebook can bring in hundreds or potential thousands of dollars to an important cause.

There are infinite possibilities.  Rec.fm can be a clear and simple way you and your friends connect when it comes to recommending products, it can be a source in searching for what celebrities buy (all in support of the charities of those celebrities).  It’s a powerful tool to use you “social equity” to do good!

I encourage everyone to use Rec.fm in 2011 (and beyond for that matter).  Start sharing with friends…ask your friends what they recommend and give back to causes you are passionate about.  I would love to hear back from you with any feedback you may have on how Rec.fm can better change the world!

Lean Products = Faster Adoption

Friday, November 19th, 2010

Photo Credit: Simon Peckham

Building a startup is challenging…consumer facing, enterprise or some other product type, you need customers/users to turn your startup into a business.  Most new internet based business models aren’t even relevant until the product reaches some type of critical mass.  If that is the case, you better start building fast…because since you can’t depend on cash flow to sustain your business, you’re talking about burning investment money one day at a time in pursuit of profit.

Figuring out how to create “viral adoption” is the now the holly grail of user acquisition.  A strategic invite feature hear, some gaming elements there, don’t forget to connect to Facebook and Twitter…all are method of helping create faster adoption with internet products.  However, what many fail to understand and what I am learning as I help design a product for my new startup, is it’s by far more important to adopt a “lean product” methodology first and think about user acquisition later.  Instead of thinking…”how do I get users to use my product“…think…”how do I eliminate all reasons not to use my product”.  It’s a small but extremely important distinction to make.  Be minimalistic…and don’t build something that sucks (the robust platform and the incredible product will come as your gain adoption).

As my startup goes deeper into the prototype build out we have been finding more reasons to do less.  For example, we have been thinking about building a specific feature that helps our customers communicate with businesses in a way that has not yet been explored.  However, we found that this feature will require a certain level of product adoption before it adds real value to our users.  By walking through a user case we have found that this feature will most likely create too much mass and noise in the early stages; this is the time when the user’s goal on the platform should be dead simple to identify.  By creating this feature too early we will give our users another feature to manage and might not fulfill their exceptions…potentially giving them one good reason not to use our product.

Our product team and myself has found a few other examples just like this…which has been effectively moving us to a leaner product and hopefully less reasons to say no and one great reason to say yes.  By reducing the moving parts you maintain clarity of focus and thereby will minimize objections to your product and increase the chances to create a positive network effect

…make it a no brainer.

Photo Credit: Simon Peckham

Better Than an Energy Drink

Monday, June 21st, 2010

For the past couple weeks I have been traveling, building business, ideating…all requiring alot of mental and physical energy.

Realizing that coffee is a short term fix for eye droopiness…I found a high powered recharge over the weekend.

At GenJuice San Francisco I was able to connect and collaborate with an incredible group of passionate innovators who loved to help others and share ideas.  Emerging yourself in an environment like that does something for your mind, body and soul.  You feel the positive wave of possibilities and can’t help but to ride it.

Getting together with amazing people that empower others is my new energy source of choice.

Introducing ConvoSpark: A Social Media Agency

Tuesday, April 13th, 2010

convospark logo

Last week I declared that I have made the full fledged nose dive into self-employment.  This week it’s time to reveal the company behind the entrepreneur (at least more extensively).

I have been fortunate enough to partner up with some amazing business people and friends to create ConvoSpark; a social media agency that focuses on creating social technology that engages and sparks conversations about our clients’ companies.  What exactly does all that marketingy copy mean?  It means that if you have a conversation that needs to be started with a group of people, we help you craft your message, customize an application that will carry your message and execute a strategy to spark a conversation with the right groups.  We leverage platforms that consumers socialize on like Facebook, Twitter, iPhone and the Android to help build out polished social media presences. To sum it up, we bridge the gap between our client’s current digital properties with their future social properties.

We have already been fortunate enough to work with some Fortune 500 brands and some ultra creative agencies.  We look forward to building relationships with many more to come.

If we can help you or anyone else you know, you can drop us a line and schedule a free initial consultation.

Thank you to everyone for your unyielding support with the building of ConvoSpark.  Don’t you worry, you will get your fair share of updates along the way.

You can follow ConvoSpark on both Twitter (@ConvoSpark) and Facebook .

A Journey of Uncertainty is Certain

Friday, April 9th, 2010

jumping off

Last Wednesday:  I Left my job at a social media agency.

Today:  I write my own paychecks (assuming that I can)

And I feel more alive then ever.

There is something thrilling about uncertainty.  Ask my two partners at ConvoSpark and myself about it.  We are now moving full force into a dualistic world of well known work (social media marketing) followed by the unknown self-employment arena.  An uncertain future is sparking an invigorating present.

Not knowing if I can pay rent or buy food makes me hustle harder, conjure up some deep seeded creative juices and value my clients more.   Sometimes you have to make yourself uncomfortable to grow…and now is the time break through the threshold.

Becoming a full time entrepreneur is a whole different ball game than the part time gig.  Of course, entrepreneurship is a state of mind therefore being a full timer doesn’t entitle you to a state of superiority.  However, it does pose a whole new set of circumstances that you have to take into account.

Making a living

You know when people ask you “How do you make a living?”.  Typically, you reluctantly give them a templated version of your day to day.  Nowadays, I can literally say: “anything”.  To most that may sound snarky or overtly existential…however, today, I do “anything” I can (within the confines of the law and the positioning of our business) to make a living.  It’s kinda fun to respond to that question by saying…”anything I want”.

More time=Different time management

When you are an entrepreneur that works a 9 to 5 you also have a 8 to 1. It takes incredible discipline, preparation, task management and delegation to make that schedule work effectively.  When you jump ship and start working full time on your own business you automatically assume that you’re freed up time will lead to greater productivity.  That usually is the case, but for me it took a while.  It took schedule adjustments and equally focusing on a “work life balance” (I live more of a homogeneous model).  Most importantly…focusing on what is most important.

The supporters, the envious and the non-believers

In the minds of many spectators, your entrepreneurial efforts will go from “aww that’s cute” to “what’s this guy got up his sleeve”.  You should be prepared to handle all types of commentary.  Some are going to love what you do and will do anything to support you, others will want to be in the position you’re in and some will think you’re doomed to fail.  You’re mom’s going to want to make sure you can eat from month to month.  Your dad will want to know if you’re making the right career decision.  It’s always of the utmost importance to surround yourself with positive people that believe in your cause but will give you the harsh realities when needed.

Well everybody…here’s to ramen noodle and 14 hours days (I am being a bit dramatic).  Really…here’s to freedom of choice, possibilities and making good things happen.

Check out ConvoSpark.com to see a bit more about what I am doing.

Business Ventures With Friends. The Good, Bad & the Ugly

Monday, December 14th, 2009
Hands in

Hands In! Maybe?

If you are an entrepreneurs, it’s very likely some of your friends are entrepreneurs.  Which is fantastic right?  That means you can come together for ideas, advice and other forms of insightful collaboration.  Of course, there will be many opportunities for you to pursue ventures with your friends.  Pretty exciting stuff, I know.

However, one must consider the possible pitfalls of partnering with friends on ventures (impressive alliteration eh).  Many times friendships get tested and business decisions get clouded.

With a talented group of friends and more and more partnership opportunities coming my way, I have to consider the good, the bad and the ugly before I jump into a new venture.  And you should consider it as well.

The Good

The single most important thing is that expectations are set.  There must be one vision and one team moving in unison.  If they fall off track a bit, they have the wherewithal to hop back on and get moving in the right direction.  Since birds of a feather flock together, your friends most likely have some of the same skills, talents and interested.  That shouldn’t mean that roles and positions aren’t set.  Egos may be tampered with when one friend is named the CEO over another but a group must define roles in order to have expectations met and the organization operate effectively.  Setting expectations and defining roles based on each individual’s strengths and desires is the only way a business friendship combo can work.

When all is accounted for and everyone is on the same page, you can only imagine the benefits.  You are working side by side with people you care about on a project you care about.  There is nothing better in this world then spending quality time with good friends.  If you are able to start up a successful business with your friends, you live the virtues of spending quality time with them while changing the world and making money.  Doesn’t get much better then that.

The Bad

Business decisions sometimes takes emotionless fortitude to move the right direction.  On the other hand, for friendship’s to flourish, one must have the capacity to empathize with their friends on a deep emotional level.  If you cannot find a balance between the two temperaments, be prepared for a short and bumpy ride.  To find this balance the team must be committed to being as open as possible.  Disclose all, from you finances to your feelings.  If you stumble across a partner that is not willing to be open, pick up your bags and roll out.

Say you do get to the point where each team member can strike a balance between business and friendship and prove to be open with each other.  You’ve made it passed step one.  However, in step two, money is something that will need to be accounted for.  Many entrepreneurs have the idealist notion is that you create something great and the money will fall into place (I still work under the notion…yes I am a romantic).  But at some point some type of reality sets in, either your costs are piling up or money is flowing in (hopefully the later).  If your friends and business partners does not have a clear picture of their capital contribution things are liable to get bad.  Never, never let friendships break up over money.  Be smart and bring in a trusted third party part time CFO if you need to, the money is worth the money.  If you are in this position, go talk to my friend and financial expert Trishan. He is a honest and knowledgeable guy that will set up your company’s finances for you.

The Ugly

My first venture Blacktop Hoops is the quintessential example of friendships and ventures turned ugly.  I ended up collaborating with a friend I only knew for a short period of time.  We had our differences but since we believed we needed each other we stuck through it.  He later brought his friend on to be our developer.  Communication was terrible and there was far too much tippy toeing around people’s feelings.  End result, is that the partnership is now dissolved.  Learn the whole ugly story here.

Conclusion

Make sure you know what you are getting your self into before you jump into it.  Set expectations, roles and most importantly make sure your group compliments each other.  No good friendship is worth ruining over business and no good business worth ruining because of a friend. 

Have you worked with friends before?  What have you learned from the experience?

When Your First Start-up “Fails”. What Do You Do?

Tuesday, November 3rd, 2009

Photo from Ethan Hein

Photo from Ethan Hein

If you are working on or thinking on working on your first startup, read this. It should help you avoid a messy situation.

In the journey of entrepreneurship, ups and downs are expected. So when BlackTop Hoops had an entire month of everything going right, it was to be assumed that the perfect storm was waiting right around the corner. Here is a quick story of how the perfect storm hit my first big scale entrepreneurial project, BlackTop Hoops, how I handled it and how you can do better.

I tried to forge the river and my wagon got flooded (everyone likes nostalgic analogies right?).

For those of you not familiar with me or BlackTop Hoops, I have been working on “BTH” for a little over a year trying to figure how to help recreational basketball connect and organize. I set forth to create social platform which would allow online communities of basketball players to highlight their basketball skill set, find courts to play on and organize game to play in (this was BTH’s core). Our (I’ll tell you the reason for the “our” usage later) grandiose plan was to help basketball organizations (leagues, tournaments and trainers) promote their companies and organize their members. We believe that rec. basketball is far too segmented to the detriment of basketball players …so we would build the community, bring in the organizations and create a meaningful/ profitable company Yayayy!! Easier written then executed. It turns out that when I started I knew absolutely nothing, but was ballsy enough to take the leap of faith and get going on the project. I guess I knew so little that a year later, I still didn’t have a finished product to push public. (more…)

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