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.
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?
"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.
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?
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.
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
I 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?
Here is the blog post we published.
Let me know what you think!
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?
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.