A friend of mine recently emailed me three questions she is struggling with about pre-pitching and I thought I should share the answers here as well.
The three questions were:
"1) Finding the right person and right level: I have a general idea of the department of the person I want to speak with, but how do I figure out if it is the right person?
2. Appropriate method of contact: If I do find them, do I send a LinkedIn message? Or use a sales program to obtain an email address?
3. Pricing: Competitors do not publish their pricing online, so it is difficult to know if we are competitive or how others price. Any insights on how to remedy this?”
For the first question I responded:
I usually think about who would need to be involved in the conversation to get the deal done. Sometimes it is the business team but other times it could be the product or engineering team. I would walk through the selling process and see who needs to be sold on the idea to make it happen. That’s usually the right person to begin with.
For the second question I responded:
I would shy away from blind reach outs. I would use your network to get in front of the right people. It will save you time and rejection. I would use LinkedIn to identify the right person or someone connected to the right person. Then I would find the mutual connections, ask them for an intro (while giving them context) OFF of LinkedIn. Then get a warm intro in. If not possible, then short, blind reach out is ideal.
For the final question I responded:
This is tough. Something we are dealing with now at SocialRank for some more premium stuff. For this I would ask the company you closed (note: the friend had stolen a client away from a competitor but more by chance and was trying to replicate it). I wouldn’t put it in an email, rather I’d get on the phone or meet with them in person and ask what the industry pricing is. Let them know that this is so you can offer a more effective and cost-saving pricing and want to know so you don’t over-price. If they have worked with competitors then they should know, right?
I think these types of things should be shared. What would you have answered?
Kramer tries not to watch the World Cup after “overdosing” in 2010. “The highs are high, but the lows? Oh, they’re low! They’re low, Jerry!”— Modern Seinfeld (@SeinfeldToday)June 12, 2014
I’ve been thinking a lot about the stress of startups recently. The above tweet from @SeinfieldToday expresses the highs and lows of startups pretty well.
For the most part, SocialRank has been a smooth ride so far (I probably just jinxed us). We left our jobs and took in $150k which was supposed to last us until the end of the year. We put out a product, we got traction with thousands of brands beginning to use us, we went and closed $1M. Sure there was a ton of rejection here and there but for the most part it was smooth sailing.
Actually there is one story that was super stressful. I thought I wrote it somewhere in a previous post but can’t find it. The story is that with 4 minutes to go on the February 25th launch of SocialRank, the website completely crashed and Michael couldn’t figure out what had happened. In 4 minutes articles from TechCrunch, Mashable, The Verge, Business Insider, The Next Web, Forbes, and more were planning to go live with articles about us. And our website was completely down. Michael and I looked at each other with the deepest fear possible. Michael would tell me after that he was more scared in that moment than any moment when fighting in Lebanon for the Israeli Army. With 1 minute to go Michael figured out that he cleared the wrong database, so he cleared the right one and the site went up with 20 seconds to spare. That was quite stressful, but for us so far it has been the outlier.
So back to the question. Is the stress of running a startup worth it?
The answer is: it depends.
It depends on your stress tolerance. It depends on what your life goals are. It just depends. There are ways to mitigate the stress and risk, but it will always be there. Right around the corner. If your goal in starting a company is to make money, then there are many ways to make money with less stress. Sure, a successful startup will net you more than 99% of other jobs. But there are easier ways to make enough money to be financially well-off.
The stress of hiring, firing, managing, building, re-building, pitching, closing, shipping, rejection, fundraising, legal, and a million more things can and most likely will take a toll on you. Starting a company is not for everyone. And that’s not saying that people starting a company are better or worse people than people who don’t. It is just the reality of the level of stress one can deal with.
This post was triggered by my friend, Seth Bannon’s post about the mistakes he made as a founder. His startup Amicus has had a pretty bad month or so. The raw emotion and stress in the post will make any founder shiver. I know when I read it, I checked our bank account to see if we were paying taxes properly (we are).
So is the stress of running a startup worth it?
I know that people who pre-ordered it on Amazon have been receiving it early.
The book was a fun process and would never have happened if not for Ellen DaSilva’s tireless work. I owe a big gratitude to her.
Also - feel free to email me at Ataub24@gmail.com with any questions, feedback, comments, jokes, etc.
Here is my latest Forbes piece: http://onforb.es/1nl1SQH
Let me know your thoughts!
When we went out and raised our seed round for SocialRank I learned a lot about what investors are looking for and how to play the fundraising game (it most definitely is a game and the people that want to raise funds have to learn how to play it. I’ll write about this topic another time). The biggest thing I learned was about how the positioning of your company, specifically expressing how you are going after a massive industry, is what most excites investors.
One prospective investor put it this way: “The trick of raising money from VC’s is to be able to focus on the tree in front of you (i.e. the product you have that users/clients/customers love) AND see the larger forest, and the skyscraper in the distance, when you lay out the vision and roadmap.” If you can do this and convince them that you are the team to take them to the promise land, you have a good shot at convincing any VC to put money into your company.
This past week when Ron (the Managing Partner at Vaizra- our lead investor for SocialRank) and I were talking and he (half-jokingly) said, “I don’t want SocialRank to return the fund, I want it to return the firm.” For those who don’t know startup inside-baseball terminology, returning the fund is when a company exits for so much money that it covers the entire investment fund (i.e. if you have a VC firm with $40M to invest and one of the companies you invested in (and own 10% of) exits for $400M - you have returned the fund). It is a rare occurrence in the startup world but does happen on occasion (ex. see Uber for most of their early investors). Ron was basically saying that we should return the firm - meaning all of the funds they have raised (usually VC’s have multiple funds if they are successful enough to raise more capital to deploy- for example, First Round Capital is on fund number five which is $175M in size).
The comment made me think back to the conversation with the prospective investor when we were raising and how the mindset of going for a moonshot is an important one if you want to successfully fundraise. I’m not sure first-time founders realize this when they initially set out to fundraise and I think it is important to understand. The go-big-or-go-home mentality can be scary for first-time founders but I think it is important to always strive to think bigger, especially if you want to raise venture capital.
So here is to the moonshot mantra of “Don’t return the fund, return the firm.”
I’ve been around the block with product announcements, fundraising news, and everything in between from my time at Aviary and now at SocialRank (I didn’t do any press stuff at Dwolla; Jordan there was a stud). I’ve always struggled with the time-frame necessary to give a reporter enough time when trying to get coverage. I don’t have all the answers and I think the real answer is that it really depends and is situational. However, I think I’ve nailed down the time-frame for giving a reporter a heads-up about an upcoming product release and would love to share it here.
Let’s take a hypothetical upcoming product announcement that is newsworthy (i.e. you have a cool story that said reporter might be interested). Let’s say you plan to release it on September 24th, 2014. From my experience the best time to make first contact to set up a time to either get on the phone or meet in person is 9/4 or 9/5. Now it may seem like a long time before release but you need to give yourself some breathing room in case a) the reporter doesn’t respond and you need to try someone else b) they don’t have availability the next week but do the week after.
Hitting up the reporter on a Thursday or Friday also allows you to follow up early the next week if you don’t receive a response. The goal in your pitch is to give enough to information to pique their interest but not enough that you have nothing to talk about or show when you end up talking.
If someone doesn’t respond to the initial reach out or the follow up then it is fair game to hit up someone else from that organization in the attempt to get their interest. But never, ever mass email all of the reporters together because this is a) annoying, b) will piss them off, and c) they will either not cover you or cover you in a mean way (it has happened before).
Lastly, whenever you can, try to get a warm introduction to a reporter. They get hit up a lot and if you go in through the route of a friend or business relation you have 100x chance of them being interested in at least reading your email.
Pre-selling a product is a risky game to be in and it can blow up in your face if you do it wrong. The truth is, it can even blow up in your face if you do it right!
Before pre-selling anything you need to believe three things:
1) I believe that the prospective customer will not be lost if I don’t have exactly what they want when pitching them.
2) I believe that I can internalize the feedback from prospective customers, use it for more pre-selling, and successfully express to my team what the customer wants/needs.
3) I believe in my team’s ability to build the product that the majority of people want, in a timely fashion.
Don’t sleep on #3 as it is the biggest risk you are taking by pre-selling. It happens all the time. You pre-sell well but can never sell-sell well because the product never comes into fruition.
Okay- so you believe in the three things above. How do you start?
Everyone needs to start somewhere and that place usually is a) with close friends in the industry (maybe not a customer per se) and b) with some idea of what it is you are offering/selling/pitching.
You do this because usually friends will not start ignoring your emails when you pre-sell them on something you are working on/thinking about (to clarify- this is not a hard sell and is more of a “catch up + this is what I’m up to, what do you think?” situation). On top of that, good friends will give you real advice on what works and what doesn’t.
Once you have a few friend pre-sells that have gone well, the next step is to pre-sell some potential clients. Start with people closest to you and go from there.
Pre-selling is really a more intimate way of doing market research. In each of your pre-sells you need to tell the other side what it is you are offering/doing but more importantly you need to LISTEN to what it is they are saying about their wants/needs. If you can open your ears, listen, take the feedback and come back with a product offering that fits what a majority of people have told you (don’t build one-offs) then you will be sitting quite nicely when it comes to closing deals.
I’ve written before about the four reasons why someone would want to partner with your company. They are: you’ll make them money, save them money, you’ll grow their userbase, or improve their product. Then once you determine what bucket you fall into, the question will be what are their priorities, or what is important to the other side. This will depend on where they are in their company cycle. Once that is determined they will want to know who you have done this (i.e. what you say you want to do) with before.
But there is one piece of the deal-closing puzzle that is missing from the above equation and that is “removing the friction.” If you can continually remove friction for the other side, the timetable of closing the deal will speed up by lightyears.
Just recently there was a brand we wanted to work with at SocialRank that seemed all into the product but for some reason was not moving forward with us. One of the people from the brand said something that tipped me and team off to why they were holding back. It was a big thing on their end but a small thing for us to add. They hadn’t expressed this properly to us but once we figured it out we decided to expedite the process of adding that feature. This is removing the friction of ‘yes we like it but can’t use it’ to ‘yes we are in!’
How are you removing the friction to close more deals?
I’ve started a new trend in my work flow that is working out well. Previously, when getting emails I would reply whenever I got around to it. So if I got an email during the day and only got around to responding to emails at night, I would reply then. I noticed that the response rate for emails sent late at night (11pm and on) was pretty low. I decided to change my process.
Now when I am writing emails at night I hold off from sending them until the next business day. I prepare them all at night, save them in a draft and blast them off in the morning. The response rate has jumped dramatically for important emails. I’m pretty sure this is the reason. I think my night emails were getting lost in busy people’s inbox and now that I am sending the emails during the day it is top of mind.
This is a small change but I wanted to share it to see if other people have the same or a similar experience.
Whenever I talk to people who are unhappy at their jobs, whether it be at a bigger co or startup, I try to remind them about the idea of the grass always being greener on the other side.
It can look like things might be better if you leave your job and join a different team, but most times you’ll just encounter different problems at a different place. The better idea is to take the time and try and rectify the problems at hand.
That’s not always the case, sometimes you do need to leave. It’s hard to figure out when you should be on the move and when you should make do. Your best bet is to talk to enough close friends, family, mentors, and close colleagues to figure out what is best.
I’m also here if you ever want to talk about it: Ataub24@gmail.com
I read this great Quora answer by Jim Cantrell, the co-founder of SpaceX, where he talks about how Elon Musk learned enough about rockets to run SpaceX. It is a great read. My favorite part is the quote about him having the inability to consider failure. Cantrell believes this is why he could go up against big banks and credit card companies (PayPal), US motor industry (Tesla) and the entire aerospace industry (SpaceX).
This idea jives well with how I try to live my life. I’ve written about it a bunch of times but the main difference between winners and losers is how you deal with rejection. If you give up and hide away you will fail. If you bounce back and don’t ever consider failure, you will come away victorious.
You can read the posting here.
Today’s piece is a guest post from an up-and-coming entrepreneur named Mike Wilner. I met Mike during my time at Dwolla. He is launching a company and thought my blog would be a great place to share the concept and his RocketHub campaign. So without further ado: Mike’s post.
One of the most important things for an entrepreneur is the ability to make decisions on the margin. The right decision is the one that leads to a better tomorrow. Therefore, time, energy, and even money sometimes need to be deemed sunk costs. In our case, we made the tough decision to stop something we had put a lot of work into in order to chase something better.
Back in January, my friend Taylor Sundali and I started working on a side project that we called Gather. We became frustrated by how difficult it was to accurately gauge how many people would actually attend a social gathering, as people usually tend to RSVP “yes” only to bail at the last minute. So, we sought to create an app for event organizing that used a crowdsourced method, in which invitees play a larger role in the event’s fruition, resulting in a stronger sense of commitment.
For 5 months we worked nights and weekends repeating the same cycle over and over again: lean experiment, fail, iterate on false assumptions. While frustrating at times, we were learning a lot, and eventually, we did a lean experiment that worked exactly as we intended, and we effortlessly organized a pop-up social gathering with over 40 people.
This was a big win for us, and we now had enough validation of our assumptions that we were prepared to start building a product that people could use. Things were looking good.
Then I went to Atlanta for my sister’s graduation. It was all about my sister, but my family found the time to ask me how Gather was going, and I was excited to share some of the cool new developments with them.
All was going well, and I was excited about the potential for this project to turn into something bigger.
But then something happened. My parents asked if they could have some of my time to discuss a few things regarding their small businesses. This wasn’t unusual—I always talked off the cuff with my parents about their businesses. But this was the first time they formally asked me for some time.
The time we carved out was peppered with questions about social media, web design, suspect advice they’d received from self-proclaimed experts, and more.
In about a half hour, I was able to save my parents hundreds of dollars by explaining that they didn’t need the services that they were considering paying for. I also showed them more efficient ways to spend their time with social media, and provided them with insight into basic web design. After I explained to my father how easy it is to make a mobile website with Squarespace, he asked me to make one for him.
None of this was new to me: for years I’d seen my parents struggle with some of these questions and pay thousands of dollars for websites and other tech services. The only difference was that after a year of working in tech, I had the answers on how to help them as efficiently as possible.
My father raved about how helpful I was, and he said to me, “If you want to make some money, I know a lot of business owners that need help with these things.”
And there it was—for the first time, an entrepreneurial opportunity found me, instead of me needing to go find it.
When I went back to Detroit, I quickly met with Taylor. We had one of our regular work sessions, but I mentioned to him that I was thinking of a something different. I pitched him the idea of connecting small businesses with people like us, who can provide advice and tech services efficiently and honestly. It immediately resonated with him, but we both agreed to keep it on the back burner.
However, the next week, when we were encouraged to submit an idea to the VFA Innovation Fund. We were faced with a tough decision—go forward with the idea we’d been working on for over 5 months, or start over with an idea for which we didn’t even have a name.
We agreed that we needed to deem the previous 5 months sunk costs, and choose the project that we wanted to work on for the next 5 months.
But while the costs were sunk, we carried the lessons we learned from Gather with us. Taylor and I had learned how to efficiently work with each other and how to galvanize people around an idea. Both of these things would remain valuable no matter what we decided.
We chose the new idea, and aside from writing this post, we haven’t looked back. We’re as excited as ever to move forward with what we’re calling…
Compass- a community of tech people providing small businesses with tech advice and services. We hope to empower these small businesses to harness technology to grow their businesses rather than letting technology hinder them.
And boy does it hit home for us—as people with parents that own small businesses, but also as VFA fellows who have worked at tech startups for the past year.
While we in the tech world debate whether parallax scrolling is good or bad, 93% of small business websites—the same small businesses that account for 55% of US jobs—have websites that are not mobile friendly. This is bad news, especially when you consider that by 2015, 50% of internet searches are going to be done on mobile.
And that’s just the tip of the iceberg.
So we want to flow some of that tech knowledge back to the small businesses that need it the most, and that starts with our Rockethub campaign. If you know a small business that could use our help, you can sponsor them by funding our project. They can receive anything from advice over the phone, to their first Google AdWords campaign, to a brand new website, all provided by our community of skilled tech people.
It’s an unfair playing field right now, and we want to help level it.
Since 2012 I’ve taught a Skillshare class about Business Development and Partnerships. I eventually put the class on Udemy (which needs a little updating as it still says I work at Dwolla). This past week the fine folks at Coursmos added my class to their database. You can find it here.
The class is sort of a precursor to my book coming out (sounds surreal saying that). I’m excited. Ellen and I worked really hard on it and the people who have read it so far really like it. The book comes out on the 25th of July. You can pre-order it here.
Let me know what you think!
This past Thursday I published a post on Medium about how we acquired the .com for SocialRank. It was pretty widely read (over 15k views on Medium stats). It was a detailed account of how it came to be, the good and the bad. I’m happy we got the domain but definitely not proud of everything we did to get it. No one is perfect. I definitely made a ton of mistakes during the process (the biggest one being threatening legal action with very little to stand on). But I do believe in sharing experiences like this due to the fact that there is no blueprint for some things when building a company and by sharing this type of story it will help educate people to not make the same mistakes I made.
For the most part, the feedback was positive. People commented, emailed, tweeted nice things to me, thanking me for the details of the story. A ton of other people asked to be connected to Eric Friedman for his assistance. But as with every potentially controversial subject, there were negative comments. I saw a few saying we strong-armed the domain owner (even though his LinkedIn says he is a professional domain seller - which I only added later to clarify). I saw others saying we were assholes for launching a business knowing he was working on something with the same name. While I respectfully disagree with both, I think the second one is something interesting to be discussed.
Launching a company with a similar or same name as another company: It seems like common practice that the person with the .com is the sole heir to that company name. But why? In SocialRank’s case, we had the Twitter handle, the .co, the Instagram handle, the Pinterest handle, the Facebook handle, the Vine handle. We even were the first to trademark. Does someone with the .com without any website, with no working product, no prior trademarks have the sole right to call their company this name? I think not. I think if you let other companies dictate what you end up doing, whether it is naming your company, putting out of a product or something else, you will not go very far with your business. Also, you’ll probably have nothing to name your company as most good names are taken on the .com level!
These are just some of my thoughts on this situation. At the end of the day, we took a risk. It paid off. But it almost didn’t. If the owner didn’t come back after two weeks of being MIA, we were probably going to change the name of our company when we release version 2.0. I’m glad it worked out. I’m also glad I wrote the post and shared it.
Today’s post is one of the longest I’ve written. You can find it on Medium where it shall live and (hopefully) flourish. I don’t think enough people write about acquiring domain issues. It is uncomfortable. But I like discomfort so I wrote a nice long post about it.
If you enjoy it, recommend it on Medium!