Investors — As Founders we love you, need you and appreciate you. But the relationship feels very one-sided when we're pitching for capital. As Founders, we just need a better way to communicate not only the evil word "NO", but the equally evil word "Maybe." "Yes!" we seem to have figured out.
All we're asking for here is to be treated with respect and dignity. We don't need to be coddled, we just need a clear "No" when the time is right and ideally some basic kindness along the way. It doesn't take much, but we could really use some shifts in how we communicate these days.
I've met with and pitched hundreds of investors. If there's one thing that I could never figure out, it's why so many act like raging dicks. Not all of t...
Ben Horowitz recently published his book The Hard Things about Hard Things. It’s no exaggeration to say I love it. As a third-time founder having experienced many of the challenges firsthand, I wish that book had been written 15 years ago, when I was trying to build my first company (although I’m not sure I would have read it back then; learning seems to be easier in hindsight). One of the great things about Ben’s book is that it focuses on sharing the hard lessons when it’s not all smooth sailing.
Inspired by this, I thought I would add some of the lessons from Tradeshift. Just like Opsware, Tradeshift is a company in wartime, as are most B2B companies try- ing to break into highly entrenched software markets controlled by incumbents with ...
In 2008, the world got a new music streaming service named Spotify. It was developed in Stockholm, Sweden, and provided digital rights management-protected content from record labels and media companies. It may have started out as a local thing, but the freemium service quickly expanded. Today, Spotify has more than 140 million monthly active users and over 50 million paying subscribers.
I had the pleasure of meeting up with Andreas Ehn, who was Spotify’s first employee and CTO. Andreas was responsible for the product and platform architecture as well as hiring a world-class engineering team, of which many have gone on to become successful entrepreneurs on their own.
After Spotify, Andreas founded Wrapp — a mobile online-to-offline customer...
It's really hard to convince people that money isn't the most important metric of a startup's success. Especially if those people happen to be investors, in which case, it actually is the most important metric.
But what we're talking about, as always, is what's important to Founders, and by extension to the people that work within that startup.
The broken part of the startup narrative has become this — "If it's growing fast and making money, it's successful, no matter what other costs are incurred."
I'd like to just go crazy for a moment and offer a new narrative — "If it's making everyone's lives geometrically better, then it's successful, and hopefully that means it's making money."
I know, I know. W...
I had the pleasure of talking to Blake about his ideas and experiences as a social entrepreneur. I started by asking him about how TOMS started.
Blake: I started TOMS after a trip I took to Argentina in 2006. I noticed that many of the locals wore shoes that I learned were alpargata. I also noticed that in rural villages there were many children who were without shoes and how that was affecting their daily lives. I had to come up with a way to help and knew that relying on donations alone was not a sustainable solution, so I used my knowledge of business to come up with an idea. The result was a for-profit business model that empowers customers to help children through their purchases. For every pair of shoes purchased, a new pair is given ...
Long after our startup is done, no matter what the outcome, our Founder reputations will live on.
And for many of us, that could actually present a real problem.
Unlike our resumes, which present essentially one dimension of our lives (our job performance), our Founder Reputation is built on how our performance affects so many people — employees, investors, customers, the media, and even our personal relationships.
From the get-go, we have two huge obstacles working against creating a great reputation.
First, we're about to build an organization that will likely (statistically) fail. It's sort of hard to build a winning reputation on the back of a potential failure that could result in the loss of job...
Capital raising isn't about pitching investors, it's about getting in front of them to begin with. But how do we get introductions from investors if we don't know any?
We start with forming an Advisory Board.
The suggestion here isn't to form an Advisory Board specifically for raising capital — since there are a ton of benefits to having an Advisory Board. However, as a first step toward raising capital, it makes a ton of sense to surround ourselves with smart, well-connected people who believe in our product but also have been through the very gauntlet we're entering into. In the same way we'd hire a dev team to build an app, why wouldn't we round up a team of smart, well-connected Advisors to build our capital raise?
We don't need to be s...
Founders are really bad at asking for introductions.
On a daily basis I get a request that looks something like this: "Hey Wil, I see that you know (some investor), would you mind introducing me to them? I just had this idea 9 seconds ago and I'd love to see if they'd invest in me!"
Now, mind you, I make a living by helping Founders (my dream job) so making introductions is a huge part of my job. The problem isn't my willingness to make them, it's the inexperience of Founders in how to ask for an introduction.
As Founders, our ability to get introductions is the lifeblood of our growth. Here's how to do it incredibly well — and what to avoid like the plague.
Every time I make an introduction to someone, I'm...
A Founder that doesn't understand startup finance is a liability to the company.
The very survival of a startup comes down whether we have enough cash to survive. If the Founder can't answer that question, it'd be like hopping on a jet with a pilot that doesn't understand how to read the altimeter, compass, or fuel gauge. They might be a great pilot, but without knowing the fundamentals, that trip is going to end poorly.
Fortunately, Founders don't need an MBA in finance to be competent, we just need to understand a few basic principles very well. While I'm the Founder + CEO of Startups.com, I'm also our CFO. That's because I learned long ago that with a solid understanding of just a few key principles, we can make (and avoid!) really criti...
As Founders, we spend an inordinate amount of time setting and pursuing goals, yet the ones that truly matter — the ones that affect us personally — are often amorphous. If we're spending every waking moment working toward a goal, it stands to reason that our goals should have an insane amount of fidelity.
If you ask a startup Founder what their goals for the startup are, they may say something like "To sell for a billion dollars!" But that's a pointless goal unless that Founder needs exactly a billion dollars (or their percentage of it) to achieve their goals. Also, if you have a plan for spending a billion dollars please call me - I want to hang out.
A better goal would be "I need $281,520 to pay off my ...