Giving up the ghost early

There is four times as much seed capital in the venture market this year as there was 1 year ago. Because of this, it’s easier to attract seed funding than it has been in the past.

I’ve noticed a disturbing new trend and I think it’s related. Startups are “quitting” when the first year doesn’t go as planned. The founders shut the business down, and either take a job or go out and start a new company with more of that plentiful seed funding. In some cases, they just exit with an acquihire and get themselves a nice compensation package without any material return of capital to their investors.

Startups are hard. Rarely does the first year or two go exactly as planned. The hockey stick doesn’t emerge quite like you thought it would. It takes persistence and determination in almost every case, if you hope to be successful.

The thing I worry about is that the Facebook movie and tons of seed funding have made it almost too attractive to get into entrepreneurship. Founders can live for a year or two on seed capital, have some fun, and punch their lottery ticket. If things don’t take off immediately, they can simply move on to something else.

I’m not saying this is the norm or even typical. Most founders are well intentioned and in it for the long haul, of course. This is just another of the myriad problems in figuring out what’s real given the oversupply of seed capital in the market today.

If you’re thinking of starting a business, think about it as a minimum of 5 years and likely 10+ years. That’s what it’s going to take to be successful. And that’s the commitment you should make before taking money from outside investors.

 

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Separated at Birth: Techstars and Startup Weekend

Today we announced that Techstars has acquired UP Global, which includes Startup Weekend and many other fantastic events and programs. Startup Weekend is my absolute favorite global event for entrepreneurship. If you’ve never been to one, you’re really missing out. At these events (there about 1,000 per year from Boulder to Mongolia to Chile to New Zealand), entrepreneurs and the community gather to build startups in 54 hours. It’s all fueled by an incredible global network of people on a mission to inspire, educate, and empower individuals and communities through entrepreneurship.

Startup Weekend was quite literally born in my office at Techstars in 2007. During the first ever Techstars class, Andrew Hyde (an early Techstars employee) came into my office and told me about his idea for Startup Weekend. He said he had been inspired by the Techstars “startup summer” that he was witnessing, but wondered what it would be like to inspire others with something similar over the course of a weekend. My reaction was simply “go do it.” And boy, did he. Andrew organized that first Startup Weekend that same summer, right here in Boulder. All of the 10 companies in Techstars participated in the weekend and worked on something with the community called VoSnap. While that company never went anywhere, something important had happened. Many people were inspired to go do a startup of their own. Teams were formed that would last nearly a decade.  Lawyers, accountants, programmers, designers – everyone showed up to contribute. It was an adrenaline fueled weekend of pizza, coding, and learning by doing that I will never forget. The end result was an expanded community of entrepreneurs here in Boulder, many of whom I still keep in touch with today.

A few years later, Andrew had scaled Startup Weekend into a global phenomenon. Events were happening all over the world. Andrew was literally flying to and organizing each one, fueled by the passion he had for people discovering their love of entrepreneurship. Ultimately, he decided this wasn’t scalable and the business was formalized. Marc Nager, Clint Nelsen, and Franck Nouyrigat got involved and brought real structure and operating chops to the table. As CEO, Marc built Startup Weekend, and UP Global, into an important part of an emerging global startup community. Techstars remained involved informally – we hosted and attended events, promoted them, and ultimately funded many companies that emerged from these weekends through our accelerators and venture capital funds.

About six months ago, Marc and I were sitting around talking about the “journey” of an entrepreneur from discovery and love of startups through to accelerator, funding, and IPO or exit, and how this all plays into mentoring and giving back. It’s always been fairly obvious to us both that UP Global (through Startup Weekend, Startup Week, Startup Next, Startup Digest, and more) was inspiring and encouraging entrepreneurs to “get going”. Techstars was helping the ones that were building businesses by growing their networks, providing intense mentorship, attracting seed capital, and scaling up through additional funding. It suddenly felt like it was the right time to join forces because we had built such complementary portions of highway along this “entrepreneurial journey”. We looked at each other across the room and basically said “you complete me”.

While we plan to continue to grow their footprint and reach, Techstars will leave Startup Weekend and these other assets largely untouched, and they will not be branded as “Techstars.” Marc Nager will remain in charge of these programs and become our Chief of Community. Along with Marc, we are 100% committed to keeping them open, community based, and global. Effective immediately, fees previously associated with Startup Next have been eliminated – enabling more entrepreneurs to take advantage of that resource to help them prepare to scale. But don’t expect many more changes except for us to try to broaden access to what already exists.  These programs are magical as they are. We can now simply provide a “continuation” for some startups emerging from them and provide access to capital and additional network when appropriate.

I’m excited to work with Marc, Andrew, and the amazing people of UP Global to continue to work towards our combined vision of creating the world’s first truly global ecosystem for entrepreneurs to enable them to bring new technologies to market. I hope to see you soon at an upcoming event.

If you have questions or concerns about TS+UP, please reach out to me directly or visit http://www.whatsup.community/ for FAQs and more information.

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Overhead

Yesterday, I didn’t leave my house.

I was supposed to be in San Francisco for a board meeting but I was forced to cancel the trip suddenly. It left me with a rare day with only that one meeting (which I had to attend remotely) on my calendar. Otherwise, my calendar was wide open. I can’t remember that last time my calendar looked that way. I ended up doing that meeting online, and putting it on my big screen TV in my basement. It was really as good as being there. I caught every nuance because of the big display. It felt great. Obviously I missed the personal interaction with the management team, but that was really the only drawback.

I then realized that the entire rest of the day would have been spent traveling.  I would have missed bedtime stories with my son, but because I didn’t have the overhead I got to do that too. Sure, I probably would have gotten a ton of email done on the plane. Maybe a call on the way to the airport. But really, the travel was pure overhead. Leaving my house would have been overhead too. I didn’t go out to lunch either, I just ate a quick sandwich at home.

Because of the lack of overhead, it was easily the most productive day I can remember. It was pure maker time, except for that one meeting. I crushed my task lists and caught up on several very important projects. I did a couple of urgent calls (this happens daily – something is always urgent when you have a large portfolio of companies). I went to bed feeling energized and great about what I had accomplished.

My only regret was that I bothered to shower or put regular clothes on. That cost me a couple of minutes. But my wife was OK it, especially the shower. And I’m pretty sure the other board members appreciated not having to witness my pajamas.

I highly recommend you have one day in your life with zero overhead. Doing this will help you think about which of the overhead items you want to add back in and which you want to try to reduce or eliminate. You may be amazed by what you find. I sure was, and it’s leading to a few changes.

 

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A better professional network

Techstars is an amazing network of over 3,000 entrepreneurs, mentors and investors. Being part of the network is a lifelong benefit for the companies we fund. One of the most important (but often undervalued) assets a startup needs to create is a strong and supportive network around itself.

For me personally, making connections among people that can help each other is a big part of what I do. I want to put the right people together at the right times so that all of the companies I’m involved in can do incredible things.

Professional networks like LinkedIn don’t help me do this. They’re inaccurate because they don’t understand the difference between someone I met briefly at a cocktail party and someone I’ve worked with for 10 years. And they force me to manually send and accept connection requests in order to keep up with changes to my network. At the end of the day, they don’t actually understand my network or anyone else’s.

What I want a professional network to do is help me navigate my network and find the best ways to connect people. Conspire, a company we’re investors, does this well. Based on email communication patterns, it understands the strength of relationship between me and each of my contacts, along with the strengths of millions of other relationships. The result is a professional network that finds the strongest path of connections between me and any person or company.

When I need to reach out to someone, Conspire finds the best person in my personal network to make an introduction. But, more importantly, it helps my extended network know when I can help them with an introduction, or when someone else in their network is in a better position. Always knowing who to ask for help is powerful.

Conspire’s network has grown to reach more than 37 million people already. Historically, it has only been available to Gmail users. But today they are opening up access to anyone with an email account that supports the common IMAP protocol, so it now works with Outlook, Exchange, etc as well.  I’m excited to see the network grow and become an even better resource for me and everyone else.

 

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A Smarter Internet-of-Things

I love the concept of a smart home and have a number of monitoring devices. I have Nest for temperature control, Dropcam to keep a close eye on my front door and WeMo for my lights and outlets. But there is one thing I have noticed, they all feel like silos. These products have different apps, independent push notifications, and they all serve separate purposes. I receive so many irrelevant push notifications that I am beginning to wonder when I will miss a notification I actually care about. I won’t deny that they are cool gadgets, but they could be better.

The IoT industry has an opportunity to make products that are actually smart. There are too many notifications and devices don’t learn fast, if at all, leaving a fragmented ecosystem of products, apps, and notifications. Few devices have settings to filter notifications or set rules, and many just send alerts about everything. UX needs improvement!

Real intelligence is missing from my world of “smart things.” Notion, currently in Techstars, has a unique approach – to give me information about my home that I actually care about and only when it’s important. Notion focuses on home intelligence and just launched a Kickstarter campaign and already has $200,000 in orders as I’m writing this. The Notion team has created a multi-function sensor about the size of an Oreo that can detect light, acceleration, sound, natural frequency, orientation, temperature, water leaks, and proximity. Notion can tell you the simple things a home security system can detect, like if a door opens, a window breaks, or an alarm goes off, but it can also tell you if the temperature of a baby’s room is too hot or cold, if a pipe breaks in your basement, if a teenager is getting into your liquor cabinet or if your propane tank is low.

This is cool functionality to be sure, but what I am most excited about is that it actually learns about me over time as I accept and decline alerts. I’ll be able to set my own custom rules in the app too. I don’t need to know every single time my front door opens because it’s usually my family or anticipated visitors. I’m also looking forward to calendar, weather and other useful integrations to customize the UX for my life. All of these improvements are made possible by their single sensor and innovative data technologies.

I love home automation, but what I need are intelligent devices that are more than just gadgets. As the smart home market continues to evolve, the appetite for products that truly make you smarter about your home and your life will continue to grow and become more useful. I’m excited to watch Notion progress and can’t wait to get the sensors I ordered via Kickstarter.

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How To Not Be Heard

For years I’ve worked very closely with two individuals who get extremely excitable, to the point of anger and frustration, when they’re expressing their point of view. These two people happen to be among the smartest people I’ve ever met. However, they often deliver their feedback accompanied by something very off-putting such as the following gem:

“Someone with a brain will eventually figure this out!”

This is what they really said to me! It was immediately followed by some very insightful and important feedback. But it’s feedback most people would never be able to hear.

If you were on the receiving end of this feedback, it would be pretty hard not to feel insulted. The implication that you don’t have a brain would probably distract you from any advice or insights that followed.

Fortunately, I have what I consider a rare and useful skill in my line of work–the ability to cut through the emotion and still listen to the content of the message. However, most people aren’t built that way. They’re going to get hung up on the fact that you’re insulting or berating them and how that makes them feel. As a result they will never give any consideration to your actual message, no matter how amazing your insights may be.

I once heard a great phrase, which I’ve since successfully passed along to these two individuals:

“The fury with which you speak undermines the veracity of your statements.”

So this is how to not be heard: Scream. Hurl insults. Unleash your fury.

If you do want to be heard: Stop. Think. Breathe. Set aside the emotion in your tone.

When I work with startups and give them feedback, I always try to remain even keel and tone the down emotional content. Sometimes I’m really pissed off, and sometimes I’m really excited, but I strive to make sure my message is heard and not my emotion. If you’re the kind of person who likes to scream and deliver a lot of hellfire with your feedback, recognize that many people will never hear your feedback. If you’re the rare example of someone like this who also has amazing, important insights to offer, realize that you’re undermining yourself. Your ideas will almost never be heard.

If you want to be heard, you have to learn to rein it in. If you’re prone to getting excited and emotional, remember: Don’t let the fury with which you speak undermine the veracity of your statements. Tone down the emotion when you’re providing feedback, so that your brilliant insights can be heard.

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