Miles To Go.

Xin’s Thoughtful Gift: PBJ and Ramen 2

Being an entrepreneur is a lumpy business at best. And while I’ve written extensively about the mortality rate (95%), I’ve never written about how hard it is along the way for those 5% destined for greatness.

It ain’t easy, and it ain’t easy on everyone.

This is a basket of Ramen Noodles and Peanut Butter, presented on my Birthday by a very appropriate, thoughtful entrepreneur I backed; Xin Chung. Xin certainly has the moral authority to present the gift: he was liberated from Saigon as a child, spent time in an internment camp, and grew up in Valdez Alaska before settling in to SoCal and pursuing his dreams as an entrepreneur. He is now Founder and CEO of TrustCloud which has emerged from a “walk in the wilderness” with 10k passionate users and a growing number of interested clients in the social check space.

The Ramen and PBJ is our shorthand for being capital efficient, a must for start-ups.

My system at Vaux usually provides $250k of less for a team to develop a product that addresses a meaningful market problem, and do it within 90 days or so. This means most for the proceeds are dedicated to product. The next $250k usually goes to determining if anyone cares. The numbers vary, but either way the Founders and early employees do not get rich in salaries off of angel money. Frankly, they have to be prepared to barely eat, and when they do eat for strength. This is part of the ugly underbelly – and not a full underbelly! – of the dedication it takes to pursue your dreams. Every dollar you don’t waste can go to a better product or a better viral coefficient.

And of course, stuff takes longer than you expect. And costs more money than planned. This puts tons of pressure on the entrepreneurs as they debate the next crucial steps, often on an empty stomach. Probably once in my last 10 start-ups has a company got it right, right out of the box and kept doubling down all the way. Most try with a product, revamp, try again, tweak, and try again until there’s no track left. And it leads to some very difficult conversations about where to invest precious resources: make the product better and more people will come… or tell more people about the product and they will spread the word. Development vs. Marketing vs. Biz Dev. It often provokes difficult conversations, and sometimes desperate measures (these guys slept in a van on a Biz Dev road trip that lasted months).

And so the entrepreneurs themselves, while pursuing their dreams of autonomy, making a mark on the universe and yes winning riches, have to absorb the vagaries of what precious resources to assign where… including their own sustenance. I get queasy when I hear comparisons to the comp someone could make in the corporate world, which simply doesn’t apply in start-up-ville. And I get nauseous when I hear debates about how deep down the rabbit hole start-ups should go pursuing the next pivot (which is another term for fail and try again). Luckily  angels don’t have that much patience or that much capital for endless restarts. Which is why, when interviewing prospective partners I always look for that unique combination of resourcefulness, willingness and mental toughness that will see us through. And a dose of reality to know when to put a fork in it.

Entrepreneurship is not a straight line to the summit, it’s a jagged ascent and we have to be prepared for the whole ascent not just the sprint at the top.

~~

Save runway: TrustCloud’s sample T&E guidelines

Use personal credit card; expense every month with invoice. Avg trip: 2nts/3days, $800, $1000max

1. Air: economy $250

2. Ground:  $25/day

3. Lodging: Airbnb $50/nt

4. Entertainment: $75/day

5. Badges: pre-approved

6. Big dinners: pre-approved

Start Up Choate NYC

Ivan Taback and Proskauer hosted the final at bat of our Start Up // Choate Spring Road trip in their gorgeous space at 11 Times Square. It was a fitting finale to a great week which gathered over 100 Choaties from three cities to network, learn, and share experiences about starting and growing businesses.

The Panel was definitely skewed young and mobile, with Alex Moazed and NT Etuk joining me for the final night. We polled the crowd and we surprised to learn that there were 10 entrepreneurs, 6 angels, 8 service developers among the crowd that gathered. All said, I’d estimate 2/3 of the crowds in all three cities were involved one way or another with start-ups in their everyday lives.

Who knew.

As usual, the panel had some great nuggets to share. Here we some of my favorites from NYC: When we talked about forming an ideal team and looking for co-founders, NT Etuk said “Don’t look for a partner in the mirror” – meaning having opposing points of view when developing a product, a business, and an organization is key. When we discussed “what would be the plastics for tomorrow”, Alex Moazed was sure that mobile was the answer for how profoundly is has affected our lives just five years into the show. He also added the analogy of the toy business, which never got around to thinking like a tech company: result is that toys (plastics, plush, etc) are now $20B industry, and digital games are about $18B. Gotcha.

Here were some of my favorites from Boston and San Fran:

One of my favorite comments from Boston was Bain Capital’s Jeff Schwartz (P’16) was embrace your ignorance. It can be a valuable tool. Dream about how to solve problems. Live in the future, and build what is missing.

Jeffrey Mullen (Founder and CEO, Dynamics, Inc.) who is a legit freak of nature (lawyer, EE degree, patent holder, CEO, addicted gamer, nice guy) was around the question of singularity (will we live forever if we live to 2046, per Ray Kurzweil). “Sure, I checked it out- living forever is basically an engineering problem”. And you know, he’s the one person that I believe probably has.

Michael Holthouse former CEO of Paranet (sold to Sprint) added that the “plastics” of tomorrow may well be energy. How we make it, store it, and consume it will become vital to our future sustainability.

My favorite comment of the San Fran night from Seth Sternberg was on the makeup of founder teams: While he stressed the fact that Eng’s (his abbreviation) had to form the core of the product and it’s build, having a business guy that does the deals/money was also a healthy add. One point we all agreed on: avoid replicants. Having divergent points of view are key. Last point form the audience was this: consider how “geared” your co-founders are to start a business. It’s a long haul, with plenty of dips.

And, proud to say, Choate finally started to get its social groove on: the  LinkedIn group (now one of the school’s most active) has been full of good pointers, suggestions, and comments and a twitter feed (at this point twitter’s most inactive account , but getting better ) picked up steam in New York (this is a relative term- it’s a humble beginning. Check us out at #startupchoate

Soup to nuts, this whole thing came togehter in less than six weeks from the time Ron Fleury and Joe McAndrew posed the question: “what the hell do we do?”. And while Choate has been effusive in its praise and gracious with its thanks during this whole process (and tireless in its coordination), I attribute my contribution to nothing more than “doin’ what come naturally”. Hard as this may seem to some, it is really, truly all in a days work. Special praise also to our hosts at Connect Solutions in San Fran and Choate Hall (coincidence) in Boston. So now Choaties with start ups, who have a great network anyways, now have one on mobile, social and local to press the advantage.

Which is perhaps the greatest start up lesson of all: do what you love and your efforts can make a tremendous impact.

Panel at Choate Hall- great space!

Last week, when putting the final plans together for our Boston stop on the Start Up // Choate Roadshow, the bombs went off. And so we paused, briefly, to assess what it meant and what needed done.

The response that came back from our hosts and panelist pretty much sums up what make Boston unique, and what makes entrepreneurs special. While acknowledging the practicalities of navigating Boston after the bombing, the message came back loud and clear: events like this are what we do as start-ups and Americans. We’re undaunted builders of things. We cherish our freedom of thought, expression, and opportunity. It feels great, and we won’t quit. Let’s go.

And so, in a dense rainy night in Boston we had a great crowd of entrepreneurs on hand to listen to a great panel.

One of my favorite comments from Bain Capital’s Jeff Schwartz (P’16) was embrace your ignorance. It can be a valuable tool. Dream about how to solve problems. Live in the future, and build what is missing.

Jeffrey Mullen (Founder and CEO, Dynamics, Inc.) who is a legit freak of nature (lawyer, EE degree, patent holder, CEO, addicted gamer, nice guy) was around the question of singularity (will we live forever if we live to 2046, per Ray Kurzweil). “Sure, I checked it out- living forever is basically an engineering problem”. And you know, he’s the one person that I believe probably has.

Michael Holthouse former CEO of Paranet (sold to Sprint) added that the “plastics” of tomorrow may well be energy. How we make it, store it, and consume it will become vital to our future sustainability. 

So, I ‘ll remind those from Choate that are reading this (sorry, group closed otherwise)… We started a LinkedIn group (now one of the school’s most active) and a twitter feed (at this point twitter’s most inactive account , but getting better ) and planned a road show highlighting the best and brightest minds from the Choate universe of StartUps. We’ll do(ne) SanFran, Boston (last night), and New York (tonight).

So far,  while I think this will become a HUGE benefit for our alumni, it is actually our gift back to  Choate. It has long deserved a great start-up network. And for Choaties themselves, who have a great network anyways, this one is finally going on mobile, social and local to press the advantage.

Which seems entirely normal to me. Doesn’t it you?

DC in Bloom, early morning

The shots of DC mornings have been rolling in from friends this week with cherry blossoms in full bloom. Got me thinking.

I once had a great mentor in Washington DC who simply adored Johnny Walker Red. Pounded the stuff, well into his seventies and deep into the night. Though we were 50 years his junior, we tried to keep up while he showed us around the social scene of DC in the 80′s: big ballrooms full of taffeta gowns, art auctions with amazing numbers, crazy black gas guzzling limos. We made a lot of noise. Thankfully, he paid.

But, he had one rule: breakfast is at 8.

Now matter how late the night went, no matter how far we walked with Johnny Walker the night before, we all got to the breakfast table by 8, and to work by 9. He went off to practice as a partner in a very large law firm. We were in school. But the bargain stuck.

And so, I’ve gone on to my world of creating, building and leading start ups with some great co-founders over the years – most of them slightly younger than I. We often blend their urgency with my long range vision, their naturally updated thinking with my tried and true processes. Their tequila to my Burgundy. But somehow, it works, and often the work spills deep into the night. And the next night. And the next.  Much like those parties in Washington I remember so well. But every morning as the sun rises on our start up and every other throughout the country, we have to answer the bell. Make the great pitch. Push the next release. Counter the next punch from the marketplace. There simply is no room for sleeping in. No tolerance for being less than sharp when presenting or hosting at trade show or conference. No excuse for being late. Sorry, doesn’t work that way.

Yes, the late nights of my younger days marauding through the streets of NW Washington had some enduring value. But only because of that one hard truth: the bill is due in the morning. So do what you must to blow off steam. Enjoy yourself, often to the fullest. But never, ever let that effect how you perform the next day, or how others see your performance.

It wouldn’t be right.

(this was written well before 8 btw)

360 respect for Someone that looks up to you

I recently read “On Raising Boys” and it brought out some very interesting points that I think apply to start-ups as well. One of the three key phases to development for a boy is having mentors in his teen years that are outside their main family unit, that have perspective, and come with authority in some field.  He can rely on this guidance to make important decisions outside of his direct family unit while building interdependence and confidence on his own.

Same goes for mentoring entrepreneurs.

I recently wrote about my mantra of Discover. Develop. Deliver. Which in very broad terms means I am always looking for young-at-heart entrepreneurs with fresh ideas. But equally important is the willingness to develop themselves  their product, the message, etc.

So here are some experiences I have drawn from mentoring lots of entrepreneurs over the years:

Know what you are mentoring to

Sounds crazy, but often the mentee does not know what they want out of the relationship. “Sounding board” is often the catchword for “ I need someone to talk to”. Rather than that generalization, I find I have always been more effective when we focus on a specialty need. It could be finances, business models, business development, partners, motivation, time management, you name it. But knowing what the mentee wants out of the relationship allows me to think on their behalf through the lens that they asked for guidance.

I don’t give personal advice when business advice is asked for- or vice versa.

I try to share my experience wherever possible. I tried this… I realized this…. I once had trouble with this… so that the entrepreneur can see things through another lens, and not be defensive about hearing “you should do this.. try this… break that. Entrepreneurs are tense enough; they don’t need an office parent telling them to eat their vegetables. I was reminded recently of one of my classics in this category: breakfast begins at 8. I work with so many younger entrepreneurs, who has a quite different idea of “bedtime” on “school-nights”. Rather than try to correct that behavior, I simply scheduled important meetings at 8am. They soon got the message that no matter what is done the night before, the bill is due in the morning. Here’s the link from Richard Dinan ‏ breakfast is at 8

And I try to help people discover the talents within themselves by asking questions. Lots of questions. Lots and lots of questions. Eventually, we run the table from vision to execution and are ready to make some bold decisions. Having what Covey called “the courage of our convictions” means all the available facts have been surfaced, and intelligent discussion held, and the best course chosen. It’s never a lock, but it sure helps to enter the rapids with some sort of thought out plan.

And, most importantly, I try to behave like someone whose opinion is often sought. That’s perhaps the most important lesson of all.

Work with a mentee that actually is coachable

Some mentees want window dressing: so-and-so is on my Advisory Board. Some want a sounding board, but have their minds made up anyways. Some are just lonely. To me, neither are a great use of mentor time.

The mentee that has a thirst to learn, a gift for presenting situations with options, a curiosity to experiment and learn gives the mentor a sense of usefulness that is so key. Good mentees have the elements of challenges or opportunities worked out in their minds, but often lack the confidence to make a decision or fear some blind spot they haven’t considered. Those are great examples of where mentoring can really help cut to the chase, or save some dead ends.

The biggest gift you can give someone is to beleive in themselves – AJ Joshi

If you are doing it to make everyone money, let everyone know. If you are doing it for charity, make sure it’s worth it.

 Ah yes, why do we do this. Mentors are rarely ever paid by the hour (though some coaches are, but I contend that is different). I mentor a lot of CEO’s and Founders where I own stock in the company and have quite a vested interest in their success. So by teaching them, I expect to add value to my position. Sometimes, the lessons actually shrink value in the short-term; but that’s why they are called lessons. The worst sin there is to repeat them. Good way to lose a mentor relationship.

But some mentor relationships are just plain charitable. While I have very little free time to take on non-commercial mentorships, sometimes I run across someone who I really believe in, and believe they could use my help. I guess the key point there is that both mentor and mentee know what the other is doing it for, and the ground rules are set and respected.

I’ve been told that time spent and value delivered does not necessarily correlate: you can do just about anything in two minutes… if you spent thirty years perfecting how to do it.

Goats yes, power not so much

I use a mantra since Wadi Rumm called ABC- always be charging. It served me well in the desert, where power was precious and communication was crucial. At many times, we were several days ride from actual electrical power. But to us, the importance of blogging (and tracking!) our where-abouts were crucial to our state of mind, if not our well-being.

There were times when the sun was high and the solar panel would do wonders for laptops, phones and PLB’s but we were so exhausted all we wanted to do was crawl under a rock (literally 15 degrees cooler) and sleep. But Mr. Jones would never let that pass, and soon neither would I. If a recharge is available and the next power is days away, plug in no matter what. This simple rule got us through Jeddah, Wejd, Wadi, and all the way to Damascus.

But I have kept the rule with me. I used it at SXSW, I use it in airports, and of course I use it in the start-up world. On a long journey, in hostile territory one cannot afford to simply “run out”. 

Much like power in the desert, the journey of a start-up has incredible resource requirements. Capital, of course. And Talent. Creativity. Process. And Strategy. If each of those are not recharged regularly, they become tired and weak. We rely on old standards, and resist change, preferring to crawl under the shady rock and wait until things cool off.

So, I try to take a page from my desert adventures whenever I can. Restock on talent, and fill the pipeline with A Players waiting for a chance. Exploring different points of view and different ways of doing things from all walks of life before re-engaging with the problems at hand. And looking at strategy through different lenses and with new data points regularly (but not incessantly).

Yes, Indeed as Saba and Tad taught me well: always be charging.

Great name!

Yes, Marissa Mayer is out there honing her strategy for a next move, and lots of buzz is around Mobile Ad-Tech. I’m quite keen to those developments, because of my activity in the space… you might say.

But before her time, Yahoo made an offer that prompted one of the best “What Would you Do” conversations of our generation. I caught the gist of it at during Peter Thiel’s talk at SXSW, but Inc. does a better job of describing it here:

…Facebook was just two years old. It was a college site with roughly eight or nine million people on it. And, though it was making $30 million in revenue, it was not profitable. “And we received an acquisition offer from Yahoo for $1 billion,” Thiel said.   

“Both Briar and myself on balance thought we probably should take the money,” recalled Thiel. “But Zuckerberg started the meeting like, ‘This is kind of a formality, just a quick board meeting, it shouldn’t take more than 10 minutes. We’re obviously not going to sell here’.” 

At the time, Zuckerberg was 22 years old.

Thiel said he remembered saying, “We should probably talk about this. A billion dollars is a lot of money.” They hashed out the conversation. Thiel said he and Breyer pointed out: “You own 25 percent. There’s so much you could do with the money.”Thiel recalled Zuckerberg said, in a nutshell: “I don’t know what I could do with the money. I’d just start another social networking site. I kind of like the one I already have.”

Now for the What Would You Do part- a/k/a- WWYD.

If I were Mark Zuckerberg, I would have done the same. His talent is towering, his vision is far reaching. I would also say his youth might lead some to say he didn’t know what he didn’t know, but Zuckerberg probably did know. He had one great idea, and the likelihood of having another of such epic scale and impact was remote. He knew that lucky and good are not the same thing, and the former rarely strikes twice. He was, and is, part of an asset light generation that I have written about before.

But, I am not Mark Zuckerberg. Not even close.

I am not a sole founder (um, was Zuck?) and I would not imagine to be able to run something myself without the great work of those talented people around me. I might have other ideas I’d like to back, and more entrepreneurs I’d like to work with. I also deeply respect the stakes held by each of my shareholders, and would give due consideration to what they may want as well. Everyone has a number. And working for Yahoo, especially the new Yahoo, might be quite interesting. I may have hit the bid, not being Zuck.

But most of all, I love the fact that it was a ten minute Board meeting, or he thought it should be!

By the way, What would you do?