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
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!
I’ve been a member of Product Hunt for over six months now. In the past two months it has been taking off in the press and in the startup world. Where I used to be asked for an upvote on Hacker News, it is all about asking for upvotes on Product Hunt now. I’ve thought a lot about Product Hunt and how it can be massive and I’d love to share my thoughts here.
For those who don’t know, Product Hunt is the place to go and discover new products every day. Users can upvote and comment on products. Right now most submissions are new products. I think Product Hunt has a really high ceiling and can become the go-to place to learn about products, whether they are new or just pushing new features/changes.
To become the place to learn about new products I think they need to evolve the product a bit more. To me, if Product Hunt offered company profiles that allowed for pushing new products, product updates, and everything in between relating to the life-cycle of a product it would play an important part of every company’s game plan when announcing a product or announcing new features.
For example with SocialRank, I learned about Product Hunt when Michael and I announced we were leaving Dwolla to start our company, incorporated under Modern Mast. Someone submitted “Modern Mast” then. There wasn’t much to say or even show. Two months later we put out the product SocialRank, and we posted it. We then announced a new tool in early-access SocialRank Market Intelligence, and we posted it again. I’d love to be able to link all three in one consolidated page.
The way Product Hunt can make the user experience accommodate this type of change would be if the posts would have color coded tags and filtering for Pre-launch, Product Launch, Product Update.
A bunch of people complained when “Modern Mast” was posted, saying there is nothing here (they were right!). Those submissions should still happen but users should have the ability to filter out those options.
I think if done right, there is a chance Product Hunt can be some sort of Github for product stages/revisions.
What do you think about Product Hunt?
Earlier this month my buddy Greg McBeth wrote this post about Startup Moneyball. It focused on CEO/founder pay + equity compensation. It’s a good piece. It made me think about how one would go about building a startup team using Billy Beane and the Oakland A’s original strategy.
Now for those who don’t know the moneyball strategy it is one where the management looks to assemble a competitive baseball team by taking an analytical, evidence-based, sabermetric approach. In baseball they look at runs scored as the metric to improve. The more runs you can score the higher chance you have to get wins. Wins get you in the playoffs. Traditionally you would look at RBI’s (runs batted in), steals, or batting average. But Billy Beane and the A’s found that on-base percentage and slugging percentage were just as good, if not better, metrics to look at to determine runs per game. They were also cheaper to get on the market. The 2002 A’s had one of the lowest payrolls ($41M) but were a few outs away from beating the Yankees with an over $125M payroll that season.
So how would one apply Moneyball to startup team building? While I don’t think it is completely clean yet, I think the way startup founders can play team moneyball is by finding talent that is underpriced and undervalued and help them reach their potential. The early PayPal team did this, they would find great misfits (at the time), have them lead teams and promote within instead of hiring outside management.
I see the biggest application of this when someone joining has just come out of school. I see bigger companies look at school pedigree first over potential talent in this early stage and here is where startup team moneyball can really take your company team to the next level if you do it right. I think personality traits, communication skills, and raw talent should be looked at way before you even look at schools. For example, Michael went to California State University-Northridge which is great and all but he isn’t a Stanford, MIT, or Caltech grad (I went to Yeshiva University, so I’m not one to judge). But ask anyone who works with him, he is an unbelievable technical talent. For me, Michael was my first moneyball bet (unconsciously obviously), and it has paid off in spades.
I remember when Michael and I were at Dwolla and he was looking for a developer evangelist intern. Michael found a young talent who was graduating high school (yes, high school). It wasn’t easy and he needed to fight for him, but bringing on Gordon Zheng was a great decision and has paid off in dividends. Gordon is still at Dwolla right now, kicking ass and taking names.
So how do you figure out who has tons of upside and who doesn’t?
I’m not 100% sure yet. We’re trying to figure that out at SocialRank. We have made two hires so far. Zhanna came on in May as our lead designer and front-end engineer. She came from Digital Ocean and Quirky before that. She has been nothing but stellar since day 1. Our second hire was Olivia. She is only in week two right now but has been great working with me on BD/Partnerships. Olivia doesn’t have any deal experience as she worked in finance for two years and then was a teacher for two years. But she is very personable and has strong communication skills which is really what you need to do well in BD/Partnerships.
For us, we plan to find future hires in a similar fashion. People that may get overlooked by bigger tech companies because they don’t necessarily fit the traditional mold, but have tremendous upside. These are just some of my initial thoughts on how to build a startup moneyball team. Leave your thoughts on the concept below.
We’ve been quiet at SocialRank for the past 45 days. We’ll continue to be quiet for the next few weeks or so. The real magic at startup companies is doing the things nobody sees.
On the technical side, the stuff no one sees can be infrastructure architecture, user experience flows (although the end result is experienced) and more. On the business side, the things no one sees can be the work that goes into building out a pipeline of customers/partners/clients, qualifying what and who to spend time on, figuring out the optimal direction of the business/product, and more.
For us, we had to take some time to overhaul the infrastructure and design of our site. This sets us up to do some impressive things you’ll be seeing soon, as well as adding more networks like Instagram, Pinterest, etc.
Doing the things nobody sees is not glorified in the startup world but if you don’t execute well (and try to enjoy it) your startup will have significant problems and will probably not work out.
People always ask me “how can I land this or that job?” Or “how can I land this or that investor?” The key to “landing” that thing you want is usually being able to prove you can do something or that you deserve something before you actually get it.
In the job scenario, if you start thinking about what you would do if you got the job and went ahead on your own and did it, you immediately would have a leg up on every other candidate.
Same in the investor scenario. It is very very difficult to raise money as a first time founder without proof you can accomplish what you say you will. This is why you need to go out and get traction, you need to prove that you have a real shot at building this business before anyone will entrust money into your care.
In every scenario where you want something and someone is deciding whether you are worthy of said thing, if there is an action you can take to prove you deserve it, do everything you can to do so.
The fear of getting fired is something I know happens all the time but is rarely discussed. In the world of BD I think it happens a little more often than elsewhere because of the nature of the role. The whole concept of a BD role is a pre-sales function where you are trying to find great opportunities for your business, do a few similar type deals multiple times, put together a process and then hand it off to a sales team to blow out of the water. But sometimes the deal is hard to replicate. Or you spend time on an industry you think might work and it doesn’t. The fear of getting fired is strong then.
I think I’ve written about it before (this is post #682 for those keeping track so it was hard to find) but I once felt I was very close to getting fired from Aviary early on. It was back in 2010 and I was just learning how to be part of a team (I had previously been a one man show in NY for an Israel-based startup) and was also just learning how to do BD and Partnerships the right way. Aviary was in the midst of pivoting into what it is now a photo editing API for web and mobile and I was working with @Msg on talking to prospective partners. My job was to build out a pipeline of industries and companies that would make sense to pitch and learn everything I could about said industries/companies.
I look back in disbelief but at the time I “wasn’t getting it”. I was having a hard time understanding and learning how to approach the research and how to approach the companies to make the product and offering successful. Looking back it was because I wasn’t putting in the time and effort to truly understand what I wasn’t getting. That was until @Msg said something along the lines of ‘this isn’t working out, I’m off to SF for a week, spend all the time during the week to get this right. When I get back we will have a sit down about it. If things aren’t working by then then I’m not sure this is going to work.’ It was very direct, it was very scary, but it worked. I killed myself that week working on understanding what I was doing wrong (it happened to be I was just trying to memorize companies and spit it back and not holistically learning about what they do and what they care about to understand if they would/could even care about us).
@Msg came back, we had a talk and I “got it.” In retrospect I see this as a big turning point in my career. The day I got it. The day I understood why one company would want to work with another company. I was 22 at the time and still learning my way but the fear of getting fired really propelled me to where I am now.
I’m not here to say that the fear of getting fired is good for everyone. It worked for me, but I am not you. I will say that fear can push people out of their comfort zone and make people a little desperate. Desperation can lead to doing things you didn’t believe you could accomplish, which is why the fear of getting fired can propel you to the next level.
This past week I’ve been interviewing a few potential summer interns for SocialRank. There is high demand for the upcoming SocialRank Market Intelligence and I need some help this summer figuring out who we should be working with while in early-access.
One of the candidates and I were talking about pay and I said that no job is worth starving for, that we plan to pay our summer interns at SocialRank because it is the right thing to do, and that at the end of the day when people get paid for their work they do a better job. It means more.
I’ve been an unpaid intern before. It wasn’t necessarily a bad experience but looking back I see how it can become a bad situation. If you intern for free for too long your work becomes less valued by prospective employers as well as by yourself.
The bottom line for a business and an intern is that if you actually need help, in the form of an intern or part-time worker, then you should pay for said work. If you want to use the argument that the intern’s training is enough compensation then don’t be surprised when the intern “doesn’t work out.” Remember, you usually get what you pay for. If you pay nothing, you probably won’t get an intern who will contribute that much.