Category Archives: learning

Jul 18

Learning from 9 year olds: Creativity & Patience

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826michigan

826michigan (Photo credit: Wikipedia)

Today’s venture involved volunteering at 826michigan.  ”826michigan is a non-profit organization dedicated to supporting students ages 6 to 18 with their creative and expository writing skills…”  Like the other 826 chapters, 826michigan in Ann Arbor has a unique facade, making it “cool” for kids to come to tutoring & other activities.  Ann Arbor’s facade is a Robot Shop.

Beyond the Robot Shop is a back room bursting with energy, creativity, & kids that haven’t even lost all of their baby teeth yet.  I just recently started volunteering there & am slotted to teach a comedy writing workshop there in August.  Since I’ll be leading a workshop, I thought it’d be a good idea to help facilitate someone else’s workshop to get a feel for them.  Tonight’s workshop was “Choose Your Own Adventure” for 9-11 year olds, where the kids split into groups & created a Choose Your Own Adventure style story.  My group’s story involved a mysterious spooky house that 2 young kids braved into.

I try to learn something from everyone I interact with, so it was no surprise that I took away 2 key learnings from these rambunctious aspiring writers:

Creativity.

These kids held nothing back.  There were explosive bunnies, slimy dead guys, sounds of calking birds, broken paths, & more.  Their use of descriptive adjectives was impressive for kids so young.  They let their creative juices flow & came up with some really original ideas.  Sometimes it takes experienced writers time & special exercises to get to such an original place.  What led these kids to be so creative?  I think it was their confidence.  They weren’t afraid to share any idea they had.  They had no filters.  No barriers.  They haven’t yet learned “social norms”.  They live in an original place.

As we get older we learn “social norms”, we get rejected, we receive strange looks & as such we openly express less originality & creativity.  There is a fear that our ideas will be rejected or our statements will meet strange reactions.  That’s why we add a filter to what we say & do.

We can get back to that original place.  We can be more openly creative.  Tap into your inner 9 year old & remove the filters.  Be original & have no fear.

Patience.

Since the kids were openly creative, their ideas were all over the place.  Ideas were bouncing off the falls & focus was hard to come by.  That being said, patience is definitely put to the test.  Have you ever worked with kids?  If you have I’m sure your patience has been tested.  Mine sure was.  Kids needed to be reminded of things repeatedly & it took them a lot longer to read & write than it would have taken me.

The temptation to write for them or form their ideas into sentences without letting them put the pieces together, was tempting, but wouldn’t have taught them the best lessons.  Instead, I made suggestions, helped when I could, but handed the pencil over to them to do the real work.

Creativity & Patience are great skills stretching beyond writing & working with kids.  For instance, creativity clearly has applications in the business world.  So does patience.  And being a great leader involves being able to hand over the reins / delegate sometimes, even if it means waiting a little longer for something to get done because the person is learning.  It’s key to growth & sustainability.

Try it out. Channel your inner 9 year old. Be creative. Be patient.

venture on,

mel, the venture gal

 

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May 21

Learning from First Virtual

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RPM Ventures Founder & Managing Director, Marc Weiser, aka GreatLakesVC, was an entrepreneur before turning VC.  He started First Virtual (FV), a company he later took public.

Awhile ago I read FV’s white paper which explains what they did & how they did it from a managerial perspective.

What was special about FV?

To me what stood out about FV’s system, was that the financial tokens that underlie commerce (e.g. credit card numbers, bank account information), never appeared on the internet at all under FV.  Rather, they were linked to the buyer’s Virtual PIN by FV. (This is pre-encryption)

Sure there are other cool things about FV.  Read the white paper to see what stands out to you.

FV: The Virtual Company

The company’s biggest challenge was growth management.

They had no physical offices until 15 months after the company was founded (8 months after the system was operational).  The larger the company grew, the more seriously its productivity was impeded by communications difficulties, which ultimately led to the decision to consolidate the bulk of the operations (particularly new hires) in a small number of offices.  The biggest problem in running a distributed company were the more mundane aspects of any corporation – administrative tasks, scheduling meetings, making presentations to customers, etc.  It was harder to get people together for informal brainstorming sessions.  Difficult to guarantee everyone would speak with unified voice in public statements about the company.  Difficult to avoid duplicated efforts.  Harder to integrate new hires.  Actual supervision of remotely located employees was big challenge.  It is also challenging to keep up morale in a virtual environment, as it becomes easier to feel “out of touch” with the company.

Despite all the challenges with being a virtual company, the founders lived in four different parts of the country & the company could not have started any other way.

What worked best was creative projects led by small, motivated, skilled teams.  The customer support system also went well.  FV did nearly all of its customer support over the internet & customer service operators work well remotely.  FV was able to employ people with physical disabilities for its customer support team.  Training was the biggest challenge as the team grew.

By nature, any Internet service company will be somewhat “virtual” because of the need to support fully international operations.  FV recommends asking not “should an Internet company be virtual?” but asking “How virtual should an Internet company be?” & then figuring out how to maximize the benefits of a virtual company, & minimize the disadvantages.


What does this mean for you?

It could mean a lot of things.  To keep it simple, at least takeaway the following:

Do something innovative, think outside the box, work hard & be successful.

Venture on,

MEL aka Venture Gal

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May 01

Stumped on Stocks & Options?!

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Regularly I am asked about stocks & options.  Entrepreneurs have sent me their equity packages to look over for a “sniff test” & first time entrepreneurs ask for general information about stocks & options.  Depending on the specific situation I usually point them in the direction of David Weekly’s “An Introduction to Stock & Options for the Tech Entrepreneur or Startup Employee”.  This overview does a great job of simplifying & clarifying what stocks & options mean.  If you haven’t read it & are at all questioning stocks & options, I recommend checking it out.  In the meantime, here are some things from the intro that I’d like to point out & elaborate on:

The Board.  ”Most people don’t realize this but shareholders are, legally, at the top of the totem pole.”  The Board is appointed to serve the Shareholders, but the Shareholders have a right to change the Board at anytime.

In other words, the CEO is not the boss.  If you own a share in a business you are the CEO’s boss’s boss.

The Board must receive notice of a board meeting at least 48 hours in advance.  Remember, a majority of Board members (aka quorum) must be in attendance (either in person or via phone/Skype/etc).

Equity.  “ownership in a company”

A cap table is used to organize & track who owns what.  Advice to entrepreneurs:  KEEP THIS CLEAN.  Update it whenever there is a change, make it legible, & keep in mind when raising money that all investing parties will need to be accounted for in the cap table.  You’ll thank yourself for keeping this updated regularly, as opposed to waiting until the day before your company is acquired to go back in time & get the cap table up to speed.

Dilution.  ”reduction in ownership”.  A touchy subject for many entrepreneurs.  No one wants to own less of her/his baby.  Keep in mind CEOs…no investor wants you to own so little of the company that you are not motivated to make the company a huge success.  The investors’ interests (should be) aligned with yours.  They want a return on their investment too!

Common vs. Preferred Stock.  Preferred Stock are “shares that grant special rights”.  Those rights vary depending on the investor, investment round, & other factors.  Examples of Preferred Stock are Series A, Series B, Series B-2.  Series Seed shares are also considered Preferred Stock.  We are seeing more & more Series Seed shares issued.

Weekly also discusses types of investors – angels, VCs, & a bit about how venture firms work.  One thing he mentions that I want to point out & comment on is that Associates/Analysts/JuniorVCs will call you sounding really excited about your company, but if no partner is involved in the discussions it is not worth your time.  That’s only half true.  True – all deals need to eventually get to the partners’ desks.  However, a way to get there is through the Associate/Analyst/JuniorVC.  You’ll have better luck getting a phone call with a Junior VC than a partner her or himself,

Oh & on that note…Junior VCs aren’t stupid.  Don’t try to be their friend & then only call them when you want a meeting with a  partner.  That fakeness shines right through & reflects on you as an entrepreneur & a person.

On that subject, Weekly also brings up the typical “weekly Partner Meeting” that most VC firms have.  True story.  If a VC brings you to pitch to partners at a Partner Meeting that’s great.  For smaller VC firms, not all pitches in front of the partners are made at the Partner Meeting.  In fact, rarely do we have entrepreneurs actually come pitch during our Partner Meeting.  We schedule other times during the week instead.  I imagine that may not be the case for larger VC firms with many partners who are all on different travel schedules.

Raising money?  Have a term sheet?  That’s not the end.  Once you sign a term sheet there is a “closing process” & the VC will continue to do some “due diligence” while things are getting legalized.  Once “closing documents” are prepared & signatures in place, then the money is wired (by 1 pm Pacific Time ideally).  So no, a signed term sheet does not mean you have cash in your bank account the next day.  It’s only the beginning of another process.

Going to work for a startup?  Here’s what to expect…

A vesting schedule with cliff.  No that does not mean that you are put on the edge of the cliff with a life or death scenario.  Vesting is done so the employee earns stock purchase rights over time (typically a 4 year period).  That vesting doesn’t start until a “cliff” is reached (generally 1 year), which means the employee won’t start to vest any purchase rights until she/he has been employed for one year.  Vesting gets you the right to purchase stock…you still have to exercise options to purchase though!

Read Weekly’s “STRATEGIES & PITFALLS” section.  It covers Alternative Minimum Tax, filing an 83(b)…must knows if you have stock purchase rights!

Any specific questions?  Ask in the comments or send me an email.

Venture on,

MEL aka Venture Gal

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Apr 02

Breeding More Entrepreneurs

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Last year I read The Mating Mind, a book that takes Darwin’s theories about natural selection & others & applies them to mating, dating, & “sexual selection”.

Bottom line message:  not only do the strong survive, but the sexy survive.

The example of the peacock does a great job of illustrating sexual selection in action.  Male peacocks have bright big feathers because female peacocks prefer them.  Even though they’re not the best feature to help the peacock avoid predators (bright colors & large shape isn’t actually conducive to camoflauging the peacock from predators) since females peacocks are attracted to these traits peacocks evolved to have the sexually desirable traits.

Does evolution play a role in entrepreneurial endeavors?  I think yes.  It materializes in a few different aspects:

Business models.  Business models evolve as the world evolves.  Competitive landscape changes.  Technology & resources change.  Consumer interests shift.  Netflix is a great example.  Netflix is Blockbuster’s business model evolved.  Blockbuster rented out videos.  Netflix rents out videos.  Netflix’s model is different.  It takes account new technology resources, a different process, & ultimately crushed Blockbuster.

Facebook is an evolved Myspace, Friendster.

Craigslist is an evolved garage sale.

eBay is an evolved auction.

Amazon is an evolved…bookstore, retail store, grocery store…

By Darwinian theory, how do we “produce” more entrepreneurs?  Entrepreneurs need to be sexy.  If females start to choose mates with entrepreneurial traits, we will breed more entrepreneurs.  Just like the peacocks.

Think about it.

Venture on,

MEL aka Venture Gal

Mar 15

Growing Companies – Culture & Leadership Featuring Serial Entrepreneur Jennifer Baird

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This week our class hosted our first guest speaker for the semester.  Jen Baird, serial entrepreneur, currently CEO of Accio Energy & former founder & CEO of Accuri Cytometers.

Jen got her interest in being an entrepreneur when interning for a VC firm.  After graduating from the University of Michigan with a psychology degree & from Kellogg School of Management with her MBA, she worked in consulting for over half a dozen years.  After consulting she took the leap into carving her own path, a route that was quite challenging for her.  When she co-founded Accuri Cytometers she was at the start of a 5 year journey creating, launching & scaling a product & team.  She grew the company from 2 to 80 employees, raised close to $30M in capital, launched a European subsidiary, & approached profitability.  Jen claims to really excel at is the people part of the organization (which I would argue is the most important part!).  She claims “companies are built of people.  They are the building blocks”.  This makes sense given her psychology degree & operational experience building & leading teams.  She clearly has learned a lot from her experiences.

What really stood out to me about Jen is that she knows herself well, exudes passion, is very personable, & is quite confident.  In particular, this is what I learned from listening to Jen & reflecting on her discussion:

“Power of focus is what you choose NOT to do”

On any given day my to do list could be pages long, but really do I need to be doing all those things?  Where is my time best spent?  I have been attuned to this lately & the way Jen described “choosing NOT to do something” caught my attention as a different way of thinking about prioritization.  Another piece of advice she had was to check in every 6 months to see what else can be delegated or eliminated.  Otherwise I become a restraint (similar to how I felt at Iorio’s – stifling our growth).

There are aspects of us that are similar.

Jen’s open style of management mirrors my open book philosophy & values based management style.  A few things we both advocate: all hands meetings, open door policy, building trust & communication.  She also mentioned that she likes to share details & has learned that sometimes it’s better to not share too much.  Something I’m working on also.

I still have questions I’d like to ask Jen, & I will ask her:

  • How do you decide which business opportunities to pursue?  Why Accuri?
  • Challenges you faced as female? How did you overcome them?
  • Where do you learn? (books, people, etc)

Following Jen’s talk Tom discussed management styles.  The key thing I took away after this lecture is that knowing who you are you are is a continual process/discovery that never ends.  In particular he asked: Who are you?  What is your impact on people?  What are your values?  What does success look like for you?  We need to figure out who we are.  It is hard enough to be ourselves, let alone someone else.  If we don’t know who we are it’s difficult to hire people around us to make us better.  Tom recommended developing a vision for yourself.  Know what you’re good at & what you’re not good at.  How best to do this?  I’m still figuring that out.  I do know that spending time with myself, in silence, thinking & reflecting has helped me.

He also emphasized the importance of trust.  To earn the trust of others (e.g. board of directors, customers, employees) you must first trust yourself.  If you don’t trust yourself, it will show, & others won’t trust you.  A great book I read that goes into detail about trust is “The Speed of Trust” by Stephen M.R. Covey.

We also questioned “what is the role of the CEO?”  50-75% of the time she/he is working with people. From time to time GreatLakesVC shares his Weisdom with me & he once told me that the job of a CEO is to make everyone else better at what they do.  To achieve the most in a resource constrained organization, the CEO should be controlling about the company vision & values because every employee should know the story of the company & exactly what the company is trying to accomplish.  The danger of being controlling is slowing down progress & not empowering people to the fullest.  The more someone wants control, the more things need to go through that person, & it slows things down (exhibit ME/Iorio’s).  It is really important to get the message right for the first people you hire & make the culture & values clear.  This way, when you stop hiring people, the people who are hiring people get the message right & hire based on the culture & values of the company.  Recently at Iorio’s we saw a great example of congruency without our organization.  One of our team members created a series of “Iorio’s Ten Commandments” to be a way to share the ground rules & operations of the business.  The result – a set of guidelines that scream Iorio’s culture as we created it.  The fact that we didn’t write them…& that they are so spot on to our culture & values is a huge testament to our ability to create congruency in our business.

Eccellente!

Venture on,

MEL aka Venture Gal

Mar 08

Has your company outgrown you? Or have you outgrown your company?

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It’s that time of year when I run errands in the morning, eat dinner in my car, & spend more time at the University than I do at my house…that’s right…it’s the second half of Winter Semester at the University of Michigan (UofM).  During this time, both partners at RPM Ventures teach classes at the UofM.  Marc’s class, “Venture Business Development”, is taught through the Center for Entrepreneurship at the College of Engineering.  It’s a two week intensive course where students work on teams to evaluate a real business idea – everything from developing an elevator pitch, to rapid prototyping, & talking with customers.

Tony’s class “Managing the Growth of New Ventures” is taught through the Ross School of Business to second year MBA students.  This course takes place once per week for half a semester and is co-taught by Tom Porter.  This year is my second year involved with this course & my role is basically the person who does whatever needs to get done to be helpful.  I found articles for course readings, grade homework, track participation, take attendance, & brainstorm ways to improve the course for future sessions.

This week’s class included introductions and a roadmap for the course, as well as a discussion about the five stages of business growth.

  1. Existence
  2. Survival
  3. Success
  4. Take Off
  5. Maturity

The class focuses mostly on the first four stages, building a company from absolutely nothing to a company and navigating the stages of growth along the way.  There is so much more than building product when building a company.  Building team is equally if not more important.  Team, culture, strategy, are the less glamorized aspects of starting a business, but so important.  In this first class I pulled away a couple reflections:

Know Thyself & Discover Wealth

As a leader of a company, being able to be reflective & introspective about your role with the company is very important.  In light of my recent unplugging & reflecting on so many things in my life, this is especially relevant.  During quiet time to thing about life, interests, passions, I learned a lot.  In an organization, for a CEO or leader, it’s important to take that time to pause & reflect on what you’re doing from a high level & ask yourself “am I the right person to be doing this or could someone else do it better?”, “would I be better suited somewhere else in the organization?” “would I add more value somewhere else in the organization?” because someone who may be great at creating and figuring out if something works may not be the same person who takes it from 10 employees to 50 or 50 to 100 and scale the business into the next stages of growth.  Think of companies where the CEO/Founder has been the same throughout all stages…it’s very few…Mark Zuckerberg, Steve Jobs, Michael Dell.  Being abel to figure that out as a leader is very important.

When thinking about a leadership role in a growing company, I think there are two aspects to consider:

  1. Role, in terms of what functions you are  best at doing.  Where do you add the most value?  Where do you thrive?  Is it the operational details, making sure money is the bank, paychecks are sent out, wheels are turning day to day. Or are you more strategic, thinking about where the company is, where it’s going.  Are you great at graphic design? etc.
  2. Stage.  What stage of growth is your paradise?  What time during the company do you want to be there?  When the company is 3 people with an idea & lots of ambiguity?  or when the company has 100 people with more developed systems & lots of names & faces to remember?  Holding your role constant, if you’re doing the same role in a 10 person company, it’s going to be different (even in that same role) than in a 100 person company.

I don’t think you need to figure out one before the other.  For me, I’m still trying to figure out what the function is optimal for me & even more broadly, what industry, general space interests me most.  What’s the space? What makes me tick?  Now I have several interests in broad areas & am exploring them further to discover what really could be right for me.

In terms of stage, I like the early stuff…the ambiguity, figuring things out, the creation, having a blank canvas.  I’m energized by a small team, setting the culture, & taking on the start of something with big plans. in a small team.

Transitioning Leadership

Another thing that came up when discussing the 5 stages of growth was this idea of transitioning from each stage, when you need to transition leadership.  Let’s say a leader isn’t a right fit in a company that is going from Survival to Success & that leader could better be replaced by someone else to lead the company, & the original leader could be better off somewhere else in the company (with a different role perhaps).  For the original leader it’s tough to make this transition…this is his/her baby, his/her creation. It’s very difficult.  I’ve experienced this personally with Iorio’s.  Just two weeks ago was the first time handing the reins over to someone else to run Iorio’s Gelateria in Ann Arbor.  I think our delay in transitioning leadership has limited our growth because things are funneled to go through few people & there’s not breakup of decision making at a higher level.  My biggest challenge & opportunity is preparing transitions so the company can successfully operate without the presence of the founders & early leaders.  The first experiment for this went well. Transitioning leadership also illustrates the importance of hiring people & building a team of people you trust.  It makes it a smoother transition if you trust the person you’re transitioning to.

I have also seen this play out in RPM Ventures‘ portfolio.  In particular, there is a company where the CEO is doing a lot of operational/day to day things that maybe he doesn’t have to bother himself with. If he brings in someone else, he can step into a more strategic role, which is what he loves & is really good at.  For instance, he could spend more time on things like product, vision, & leading the team in that direction.

Transitioning leadership is a common thing for companies.  Though not just high tech, as Iorio’s is a great low tech example, it is prevalent in high tech as well.

What does this all mean?

When starting a company, think about how you are going to work yourself out of a job.  How do you develop a company, build a culture, put systems in place, that will exist without you?

Sometimes the best thing you can do is pull yourself out of your company, or take yourself out of your current role, & do something else.

Have you ever transitioned leadership in your company?  What did you learn?  Do you think your company is ready for a transition?  Is your current leadership team holding your company back?  I’d really like to hear about your experiences!

Venture On,

MEL aka Venture Gal

Mar 05

Unplugged

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I recently returned from a week of “unplugging”.  I ventured to Mexico for my cousin’s wedding & decided not to bring my laptop or use my phone.  I decided to take the opportunity to turn it into a quasi – personal retreat.  My decision to unplug was mostly inspired by a desire to really disconnect myself, fully enjoy the people I was with, what I was doing, the environment, & sometimes pure stillness.

Before I left I read “The Joy of Quiet” in the New York Times.  This article was great inspiration for my week of unplugging in Mexico.  Some notable words of wisdom that were especially motivational:

  • “the more attention we pay to the moment, the less time & energy we have to place it in some larger context”
  • “Distraction is the only thing that consoles us for our miseries” – Blaise Pascal
  • “The man whose horse trots a mile in a minute does not carry the most important messages” – Henry David Thoreau
  • “When things come at you very fast, naturally you lose touch with yourself” – Marshall McLuhan
  • “the more that floods in on us, the less of ourselves we have to give to every snippet”
  • “We have more & more ways to communicate, but less & less to say”
  • “We’re rushing to meet so many deadlines that we hardly register that what we need most are lifelines”
  • He also refers to an “Internet Sabbath” as “turning off online connections”

The beach. A great place to walk, talk, sit, think, sleep, run, write, relax.

Unplugging 

For me, unplugged meant I didn’t bring my computer & my phone was on airplane mode the entire time (so I could still use it for pictures).  I spent every morning walking or running on the beach, & throughout the day would lie on the beach or hammock writing in my journal.  Some of the day was spent with family (some of which I haven’t seen in over a decade) as well as some of my family’s friends & bridal party.  A personal retreat is typically defined as being personal…as in only you & no one else around.  I’m very glad that I got to spend this time with my family & new friends.  I enjoyed it more without my technology & learned more because of my time with them.  I learned about them & I learned about myself. And I got to witness & celebrate the fabulous wedding for my cousin & her new husband.

I spent lots of time in hammocks. Great venues for writing, thinking, sleeping, & doing nothing.

Reflecting

As I think back, this was the first time I had been completely unplugged for that duration of time in over 2 years.  Last I remember, in Patagonia, South America I was internet and phone-less.

Not surprisingly, I love warm weather.  The sun & warm weather makes me all happy inside =)

Somewhat surprisingly, I did not miss my computer or checking my email.  Of course, when substituted with great time with family, making new friends, beautiful weather, and fun outdoor activities, I can see why not.  Technology is not a substitute for great people & great experiences.  This time reminded me the value of being in the present, enjoying any situation you are in, while you are in it.  Otherwise, you miss out on what’s happening, what’s special about that very moment.

Sometimes it is nice to have no plans, just do whatever feels right at the time.  Live spontaneously.  Improvise.

Beautiful scenery.

Life is an art.  There are no right combinations.  There are bright spots, but sometimes it’s dark.  Sometimes you jump in before the painting is dry.  Sometimes the finished product looks better when you don’t put it together alone.  Ultimately, it’s all in how you look at it.

Unplugging is valuable for clearing my head & examining my life at a high level.  It may seem hard to imagine a world without online connections, but it’s possible & beautiful.  Here is a brief list of non-connected ideas I created for myself & possible inspiration to others who are seeking a break:

  • Read
  • Reflect
  • Go for a walk, run, bike ride
  • Cook an amazing meal
  • Write a letter to an old friend
  • Write
  • Practice yoga
  • Practice another language (for me, Spanish or Italian) or learn another language
  • Clean & get rid of things I don’t need anymore
  • Draw
  • Horseback ride
  • Rock climb
  • Take a bath
  • Brainstorm
  • Be creative
  • Ask the “Altucher Questions”
  • Call someone
  • Play guitar
  • Sit & do absolutely nothing! (Sounds lazy, but it’s re-energizing)

There are so many things to do to occupy my time that don’t involve the internet.  It just takes discipline to avoid the internet when it is so pervasive in my life and such a daily habit.  Taking time away from the internet will also help me focus on some of my other goals which typically get neglected.  Most importantly, the quiet reflection time to myself is really valuable.  It’s good to sit and look at my life from a high level.  I think it’s also crucial in transforming intelligence to wisdom.

This will not be my last extended unplugged venture that’s for sure.

Venture on,

MEL aka Venture Gal

Feb 10

If I Didn’t Run a Business…

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A couple weeks ago I hit an edge…it was a day in which everything seemed to be pulling against me.  The day included needing to replace our iPad POS because it was dropped & shattered, someone not showing up to work on time (a big deal with a brick & mortar store), my car dying, my nose bleeding, leading to cancellations of meetings & surviving off trail mix all day.  It was the universe’s way of telling me to breath. Sometimes I go, go, go until I break.  Or have a wakeup call of sorts.

Since, I made some changes & am making more time to reflect…at least an hour a day.  On one my reflections I started thinking about all of the things I want to do & things I would do if I didn’t run a business.  Here are some things that came up:

  • own a dog
  • go to my friends’ concert with Snoop Dog (the night I was reflecting on this happened to be the night I was missing their concert)
  • volunteer
  • exercise more
  • read & write everyday
  • sleep more
  • create improv videos
  • travel more
  • try new things
  • cook more & develop more of my own recipes
  • finish writing my book
  • spend more time with friends & family

Reviewing that list in my head I realized that these are all things that I CAN do while running a business.  It all comes down to time management.  How am I spending my time.  How am I not spending my time.  How am I making the most effective use of my time without coming out of balance & reaching my “breaking point.”

I also listed things that running a business allows me to do, including:

  • meet new people
  • lead
  • create
  • inspire
  • learn
  • experiment
  • impact peoples’ lives
  • make money
  • develop an expertise
  • invest in myself
  • travel
  • try new things

Examining this list it becomes clear that there are lots of other ways to accomplish these things.  These are all things I can do without running a business.  What does this mean?  Being an entrepreneur isn’t a “job”.  It’s a “lifestyle”.  Running a business is not easy.  Consider your objectives.  If you want to “be your own boss” or “control your schedule” think again, as these are not necessarily true of running a business.  Consider aligning your interests with your business objectives.  Then these two lists become one: what you are doing.

Venture on,

MEL aka Venture Gal

Jan 17

The Energy Flair Story: From Flair to Finish

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RIP Energy Flair

At the end of 2011 Energy Flair was officially shut down.  Here’s the story:

A couple years ago I was brainstorming ways to solve the problem of too much energy use. And I’m talking unnecessary energy use…like using a less energy efficient light bulb, or having electronics plugged in sucking up phantom power when no one is actually using what is plugged in.

Inspiration came when shopping with my dad at Menards.  He was looking for more light bulbs, so I went & grabbed some compact fluorescent light (CFL) bulbs (way more energy efficient than incandescent).  He looked at the CFL bulbs, noted the price difference from the incandescent, & opted for the cheaper incandescent bulbs (even after my spiel about time value of money & saving money from lower electric bills, in the long run).  At that time, a light bulb went on in my head! (haha pun intended)

The light bulb – maybe people need an additional incentive to take actions that reduce their energy consumption.  Maybe “savings in the long run” wasn’t enough.  Initially I thought a service like Recycle Bank, which rewards people for recycling with coupons & discounts, would be perfect for energy….reward people for using less energy!

This was 2009 – I was attending the University of Michigan & was a regular entrepreneurial event attendee.  I went to a Mingle N Match event to share my idea for “Energy Bank” – an online service to reward people for using less energy.  At the Mingle I met Rajesh – my future business partner.

Rajesh & I met regularly, usually at the business school, & ended up titling our company “Carbon Perks”.  We did usability studies, consumer research, market research, putting together mock ups, entering business plan competitions, talking to potential customers, & then some.  We had the cutest logo too – a flower that resembled an electric plug.  Clever – yes.  Thanks to a talented student/graphic designer for that one!

We raised a couple thousand dollars through all the business plan competitions, grants, & other programs available to students.  We also applied to Momentum (basically the TechStars / YCombinator of Michigan).  After a couple intense interviews & trips to Grand Rapids, we were accepted & we decided to enroll & move out to Grand Rapids for the summer after graduating from UofM.

Early on we learned valuable lessons, including:

  1. There was a negative connotation with the word “Carbon”.  Carbon Perks’ name had to change.
  2. Real rewards just weren’t economical.  We did analysis to discover that we probably wouldn’t be able to cover the cost of providing real rewards that were meaningful or inspiration.
  3. People were motivated by virtual badges on some new (at the time) mobile app called Foursquare.  People were shoving each other to become Mayor of their favorite local spot (okay maybe that’s an exaggeration, but people were pretty serious about it).

As a result of this, we changed our name to TerraPerks & decided to call our service Energy Flair – where people could earn virtual flair (aka buttons) by using energy more efficiently.  They could share & compare their flair with friends via Facebook, adding an element of social pressure & gamification to the whole thing.

For more on Energy Flair, check out coverage on the company at MLive, Earth Techling, MichEEN, & YouTube.

A Sampling of Energy Flair

We continued speaking & meeting with a lot of potential customers & learning everything we could about utilities, working with utilities, consumer behavior, behavioral psychology, & beyond.  About midway through the summer we had learned some more critical findings:

  1. Utilities are slow moving.
  2. We couldn’t move fast enough.  Not being able to hack away at something ourselves really impacted the speed at which our iterations happened.
  3. Jennifer Aniston did not answer her phone when we called.  (If you’ve seen the movie “Office Space”, you may have an idea why we would be calling her.  If not, watch this scene from the movie & you’ll figure it out)

We “pivoted” our model so our revenue did not depend on utilities.  We explored other business model options & continued to learn & grow.  We developed partnerships with energy affiliated organizations, attended energy efficiency seminars, developed a lot of educational content, & made regular updates to our site.  We even did a program for students at an elementary school in Ann Arbor.  The kids learned a lot & had fun doing so (we led a “beer less pong” game for the students at their big school event).  We received some revenue after adjusting our business model.

EnergyFlair.com Screenshot

After the summer I made the decision to leave working with Energy Flair full time.  I said I’d still be involved in a much lesser role & help where I could with introductions, talking through some challenges, & brainstorming solutions to problems.  There wasn’t enough evidence for me to keep forward at a full+ time pace.   Rajesh stayed on to work on Energy Flair & learned even more since that time.

About a month or so ago Rajesh & I had the conversation.  The conversation when we decided to officially shut down Energy Flair.

Why? 

  1. Team.  Rajesh was working on Energy Flair full time, alone.  After I left working on Energy Flair full time, I’d chat with Rajesh from time to time to touch base & take action depending on what I could do to help.  We didn’t have the people on board to really make this sustainable.
  2. Traction.  It didn’t go viral.  Oops.  Lesson – just because you build a cool thing that you think is awesome & everyone should use, & you add in features to build in “virility”, doesn’t mean it will go viral!  We didn’t figure out the model on a per unit scale…& as a weis (intentionally spelled wrong) person once told me – “optimize first, scale later”.  We didn’t try to go big before figuring out the unit economics.
  3. Tender.  Aka Money.  An important factor when building a business.  It may not be as important at first, when you’re figuring things out & have low personal expenses.  At some point it is more needed though.

What did I learn?

A lot!  Some of the highlights which inform my current & future endeavors:

  1. People.  Make sure you have the right people on the bus.
  2. Product – be able to build it yourself.  Hiring an outside consultant, firm, or freelancer to build your product for you does a few things:  a. slows you down. If you can’t build the product yourself, you can’t always iterate is quickly, something that is important at an early stage when first trying to figure things out.
  3. Customer feedback.  Listen to it, but filter appropriately.  We spoke with dozens of electric utilities, users, auditors, utility consultants, & other relevant parties, & a lot of what they said was supportive of our proposal.
  4. Long sales cycles suck.  Selling something to anyone who takes a year & a day to decide which brand of water to buy for the staff lounge is not an ideal situation.  Utilities are slow movers.  When we “pivoted” (I put pivoted in “” because I think it’s an overused term…but at least people know what it means) away from selling to utilities it definitely saved us from the waiting game.
  5. Make it easy.  Minimize friction on your site.  Don’t make users think.  If your grandparents can navigate the site without your help, you’re golden.
  6. It’s easy to start a company.  It’s easy to shut down a company.  It’s challenging to build a company.

Failure?  No.  There are no mistakes, only gifts.  I learned a lot from the experience & don’t regret it.  I’m smarter for it & will be even better next time around!

Venture on (& go turn off your lights =),

MEL aka Venture Gal


Nov 03

Meeting Marathon

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The past couple weeks have been like a meeting marathon….in a relay marathon though.  Momentum builds up as you prepare for the big day (ie your turn to run) and then when it’s there your running as fast as you can, trying to do everything in your power to perform your best (ie you’re running).  As you finish the meeting the adrenaline still remains for a bit, but the momentum dies down and your energy slowly fades (ie you just finished your leg of the race and you handed the baton to the next runner) and once the entire race is over the entire team debriefs (ie celebrates & gets a massage) and is on to the next challenge.

I make that analogy because it does resemble this time of year at RPM Ventures.  In October we held our annual meeting and earlier this week we held our advisory board meeting.  Both are important but serve different purposes.  The former to update our investors and the latter to well…get advice.

In a previous post I explained why I enjoy our annual meeting!  In fact, I compared them to Christmas (I like the marathon relay a bit better).  Besides the points mentioned there, I also learn a lot at the annual meeting.  This year I was caught red handed taking lots of notes (part of my job, but also to record all the nuggets of wisdom).  Here are some of the things I learned and was reminded of at this year’s annual and advisory meetings:

  • VIP = Vesting In Peace (This article explains it simply as when someone “work(s) for (a) stable company increasing in value, and … doing as little as possible until … stock options are worth something”)
  • Go after businesses that are not obvious
  •  Find key influencers & have them do your marketing for you.
  • As an entrepreneur, share all news with your board.  Good & bad news.  As a VC, don’t overreact to bad news because that will drive entrepreneurs to stop sharing the bad news.
  • Please don’t buy billboard ad space for your tech company.
  • In a board meeting, include the most important topics first.
  • VCs have LPs.  This is an overlooked aspect of the VC industry, especially from the perspective of entrepreneurs.  Similar to how an entrepreneur has a responsibility to his/her VC investors, VCs have a responsibility to their investors as well.
  • Big companies have a lot of cash.  What they will do with that cash…time will tell (and maybe some really good fortune tellers).
  • “Jack of all trades & master of none”. To be or not to be?  Not for RPM.
  • When it comes to building successful companies it is all about the people.
  • Surround yourself with smart people, learn from them, & you might not need another degree.
  • “Take care of what’s in the cupboard now” before taking on new challenges.
What are some things you have learned at big meetings?
Venture on,
MEL