Alex's Tech Thoughts

Mismanaging Time + Money - Problems With Burn

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There has been a ton of hoopla about startups and the problem with cash flow and burn. Many big investors are sounding the alarm that late-stage companies are spending too much money. The idea is that if they continue to spend as they have and growth isn’t where it should be, they could disappear overnight. This will have a trickle-down effect on earlier-stage startups.

I think this is fair. But I also think this is always the case. Mismanaging time and money will vaporize any startup. Maybe the reason for the noise at this time is because investors think this is more likely to happen now which is completely reasonable.

So what does this mean for your early-stage startup?

I think this means a few things but the most importantly to make sure you manage your monthly spend and company focus (i.e. time). Build a roadmap, hit self-imposed deadlines, don’t have any dead-weight on the team, are things you should always be doing but even more so when money becomes tight.

If Winter is truly coming, stay sharp, focused, and good luck.

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Time Money Mismanagement Startups Burn
Making Progress At Your Startup - Public vs. Private

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Startup progress is a funny thing. Sometimes progress is in form of an outward-facing product. Sometimes its in form of raising money to give your business more oxygen. Other times it is in form of putting time into fixing your infrastructure to scale to millions, something that is not so public facing in terms of the progress (as your product is expected to “just work”). I’ve thought a lot about the concept around progress at startups and what a good balance to have is.

Public and private progress is tantamount to startup success. Having a well-oiled machine and churning out product improvements (whether it be adjustments to an existing product or fully new product offerings), revenue or user progress, and more is key for public perception (which is reality). At the same time making non-public advancements at your startup are great and needed. The problem usually arises when you focus too long on one over the other (public vs. private).

For example, if a company focuses all their attention on advancements that are press-related (big partnership, new funding, new product, etc) they may get all this inbound and excitement around them while the non-public things get pushed to the side (the biggest one I see is product infrastructure). So while you have all this hoopla, you are building a house of cards that will ultimately collapse.

On the flip side, if you focus all your attention on private advancements that the public will never see and never know about you may go a long time without the public caring about you. “Public” could mean new and existing users (if you are a consumer-facing company) or new and existing clients (if you are B2B or B2B2C). Both scenarios are not good - striking a balance of public and private is important.

From my experience (and I’ve seen companies do both) - public progress should be seen at minimum once a month or once every six weeks. This could be in the form of a new product, funding announcement, partnership announcing, new key hire or even just a some small feature updates on your existing product. At the same time you should be getting all the private advancements in order in order to get to bigger public progress.

How do you handle public vs. private progress at your startup?

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Startups Private Public Announcements
Slow Dripping News

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I’ve been interested in the dynamics around press and startups since joining Aviary back in 2010. One of the co-founders took me under his wing, teaching me some of the ins and outs of putting together a story, pitching, and generally getting someone covering tech to be interested in covering a product launch. I’ve taken the knowledge I’ve learned there and applied it to all my endeavors as well as with helping other companies get out there publicly.

I’ve been involved with announcements on everything from fundraising and product releases to partnerships and new hires. Sometimes it is an exclusive and other times it is embargo’d with a bunch of outlets covering. One thing I haven’t tried yet is slow dripping news. What I mean by that is having enough news or content that even if someone gets an exclusive, there is still so much “stuff” that is interesting and exciting that the shelf life is long and there is a lot more opportunity for coverage. We (@SocialRank) have some things coming out before the end of the year and I think one of them really fits this criteria, so I’m excited to try it out.

Have you ever had news you could slow drip? How’d it work out? Hit me up here or on email (Ataub24@gmail.com)

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PR Press Startups
The #1 Quality In A Startup Employee

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There are a ton of qualities you look for when recruiting for your startup. Everything from problem-solving and previous experience to creativeness and getting previous work recommendations. They are all important. But I think, for startups particularly, there is a #1 quality and it is the ability to self-start.

Startups are fairly hectic, with improvisation happening often. Once plans are laid out you want your team to ask themselves one question: “What do I need to do to make this successful?” Then to go out and execute.

Having the ability to self-start and not always needing to ask what to do next adds value to the team. At an early stage the last thing you want on your team is someone weighing it down because they aren’t using their mind to figure out what needs to get done.

This goes both ways. The management team needs to be able to express what is coming and outline the roadmap for the employees to be able to self-start.

So what do you think? Is this the #1 quality? What other qualities should you look for in a prospective employee?

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Hiring Qualities Startups
Initial Step In Building A Roadmap For A Small Team

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On the heels of the last two posts, one of the big things we did at the offsite was set ourselves up to build out a roadmap. It is an easy task to build a roadmap when you are a small company; it is not an easy task to stick to it. The reason being that things change so much at early-stage companies that what might have made sense three months ago now has changed.

So what we are doing, instead of building a proper roadmap and sticking to it, is listing out all the things we want to do as a company and perform a Bang/Buck analysis on it. This allows us to figure out the level of impact it will have on our business (Bang) and what it will cost us in time (Buck). We listed out 20+ things we want to do and are now figuring out in what order we will do them.

While we generally know what is next, doing this exercise helps us clarify. I think it might help you too if you are in a similar situation.

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Startups Roadmap Small Teams
Offsites

This past week Michael and I had our first SocialRank offsite. We did it two nights last week (Wednesday and Thursday from 6pm-9pm) with one of our company advisors acting as the moderator/facilitator.

We discussed everything from what we want to be when we grow up to what roles we need to fill to be successful. It was really necessary and I highly recommend that any company should take 4-6 hours, go out of office, and do some game-planning with your co-founder.

It is hard to take a step back during the busy-ness of work. But, I think, if you don’t do this every 6 months or so your startup will hurt long term.

So, have you taken a company offsite recently? If so, how do you feel about it?

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Offsites Startups
Want To Break Into VC? Here is a Surefire Way

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"How can I break into the VC world" is the second most asked question I get after "How can I break into the startup world."

To most, VC is sexy. VC, especially at the seed and A round, is really sexy. But there are very few VC jobs. Like next to zero. The chance of you getting a VC job is not as difficult as winning the lottery but there is very little supply and a huge amount of demand.

So how do you get a VC job? And just to clarify, I’m talking entry-level VC, not becoming a partner or above — that’s a whole other ballgame.

Well the truth is that it is simple to understand but not easy by any means.

The answer is — source as many good deals as possible. If you send high-quality deals to investors that they end up investing in, you will be looked at as a vital source of deal flow. There are only two things that every VC needs and that is a) $$$$$ to invest and b) access to the best deals. If you aren’t going to give $$$, your best bet is to be a point of access to the best deals.

This seems simple, and conceptually it is, but it is definitely not easy. At this point I’ve sourced a handful of deals to a variety of funds and it takes a few tries to get the right company/team to the right investor. I’ve found that the best way to help investors is to get a follow-up email from a company you meet (something like—- Hey Alex, it was great sitting down last week. Here is what we do…….. Let me know if you think anyone would be interested in talking to us….) Then I forward this along to a handful of people I think might be good fits.

There are some hits and some misses but it shows investors that I’m seeing companies before they are. This is key in the seed stage. It’s reached a point where some investors even want to know about high-quality potential founders when they are still at a company or in school so they can meet them BEFORE they even venture out. At a certain point if you are good at sourcing deals the VC firms you send deals to will want exclusive access to your deal-flow. This means they want you to join their team.

So if you are interested in getting into the VC game, what do you do? Well you go find great companies and get them in front of investors before the investors even know they exist. The companies can be childhood friends, some girl that your college friend is dating, some guy that you met on line at Whole Foods, etc. You need to keep your eyes open and ears to the ground. This is one of the only surefire ways to break into VC.

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VC Jobs Startups Breaking In
When To Start Tracking Growth

I’ve been thinking about the concept of “tracking growth” recently. In the startup world, there is a difference between gaining traction and growth. Traction can be having interest from the right people (customers, investors, etc.) Growth is a number you track every hour, day, week, month, year. Growth is the lifeblood of startups. If you are growing quickly, you can do anything in startup-land. But when should you begin tracking growth?

The easy answer is “from day one.” But I also strongly believe that the data you get from tracking growth from day one, if not looked at through the right lens, can be detrimental to your company. I think you really start making decisions based on the growth information when you have the right product that is ready to grow. This seems obvious but many companies track growth early and get too crazed about growing month over month before they really should be. The problem with the above is when you don’t have the right product ready to grow, the numbers you will be tracking will (at best) most likely disappoint you, or at worst cause you to do stupid things or gray area stuff to hit the numbers you want to be hitting.

I think a good middle ground is, at the early stage, to track things with the knowledge of bettering decision-making but not for “growth” purposes and then once you have the product ready to grow, then track the hell out of everything related to things you want to grow (usually users, activity, and $$).

What do you think about tracking growth at startups?

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Growth Startups Tracking Data
NY Tech: NY Tech Meetup + NYC Built

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The New York Tech industry is awesome. Mature enough to have some great companies, but still early enough to make a name for yourself in the scene.

Tonight, Michael and I are presenting SocialRank at the NY Tech Meetup. If you aren’t coming, you should. I remember going to my first NY Tech Meetup (I just looked it up and I joined the NY Tech Meetup on August 4th 2009). It was at FIT, and Hunch, Blip.tv, and Comixology presented. It was an eye-opening night and cemented my desire to enter the startup world.

I’ve been on the stage before while at Aviary presenting the Web API, but never to present my own thing. Michael actually presented MVF back in 2012 (as “Hack of the Month”), but I was in SF for work so I couldn’t be there. So I’m really excited about getting on stage tonight.

Another thing I’d like to share here is a new newsletter called NYC Built. It is curated by a small group at RRE Ventures. NYC Built highlights the launches, new products, and funding of startups in NYC and Brooklyn. You should follow them on Twitter and subscribe to the newsletter. I received the first one and it is pretty great.

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NY Tech Meetup NYC Built Startups SocialRank
Product Launch Strategies (Besides Press)

We launched SocialRank 2.0 yesterday and a lot of planning went into it. There are obvious outlets to get the word out about a new product or company, namely press from tech blogs and mainstream press. But there are other product launch strategies worth noting. Here are three:

1) Pre-seeding the product to friends and industry professionals

This is one effective strategy used when pre-releasing before launching a company, product, or new feature. We did it with SocialRank 2.0 earlier this week. On Monday, Tuesday and Wednesday morning before launch, we hit up friends and people with medium and large followings on Twitter and turned on the new features for them before our 11am announcement. This, a) Let them play around with the features before other people, giving them a chance to evaluate it properly and praise the product if warranted, and b) Let them access the tool before the system was clogged up with announcement/press traffic.

2) Product Hunt

recently wrote about Product Hunt and how it can be massive. Things have only become better for Product Hunt since. Posting your company or product on Product Hunt is a surefire way that players in the tech world will see it. You’ll also get great feedback. At a minimum, you’ll get a bunch of users interested in seeing and playing with new products.

3) Emailing existing user base

Once you’ve put your product out there, you need to let your existing user base know about it. What we’ve done at SocialRank in the past is send out an email to our user base the following morning after any big product launch. This allows us to continue the inbound of usage once the press day is over. I like the format of having three stories in the email newsletter. I like the lead story on top (in our case this month was SocialRank 2.0) and then two other stories below, one on the left and one on the right side. The subject line should be related to the new release (and should be catchy if possible, Quora does a great job around this). Remember this strategy is only for companies that are releasing a new product or feature as you already have a user base.

What other launch strategies do you use at your startup?

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Strategies Startups Launch
SocialRank 2.0 Launches Today

For the past few months we have been working towards SocialRank 2.0. Today we released it. It is awesome. Check it out at SocialRank.com

Here is the blog post we published.

Here is some press about it: BusinessWeekTechCrunchPandoVentureBeatThe Next WebTech CocktailTechZulu, and on Product Hunt.

Let me know what you think!

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SocialRank Startups Tech Launch
3 Things To Figure Out Before Pitching

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?

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Questions Answers Startups Pricing Pitching Closing
Is The Stress Of Running A Startup Worth It?

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?

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Stress Startups
Imoji, a Personalized and Creative Emoji, Launches Today

Here is my latest Forbes piece: http://onforb.es/1nl1SQH

Let me know your thoughts!

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Forbes Imoji Startups
Don’t Return the Fund, Return the Firm

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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.”

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Ron Rofe Vaizra Startups Fundraising