Mar 15

6 Lessons from Katy Perry

Katy Perry at the Life Ball 2009, Rathaus, Vienna.

Katy Perry at the Life Ball 2009, Rathaus, Vienna. (Photo credit: Wikipedia)

I’m not ashamed to admit that I watched the Katy Perry documentary, Katy Perry The Movie: Part of Me.
It was highly rated and available on Amazon Prime.  I’m glad I watched it.  I’m incredibly inspired by learning more about other peoples’ journeys and Katy has a fascinating story.  For those of you who haven’t seen the documentary (what are you waiting for?) I won’t spoil it too much, but share with you a key takeaway and lessons learned from Katy’s journey.

First, let’s be clear…Katy Perry was not an overnight success.  She worked for years, experiencing many challenges along the way.  She persisted and was driven to accomplish her goals (which took more than one night to achieve!)

Some of the reasons Katy succeeded and lessons we can learn from her story include:

Be yourself.  Katy’s father was a minister and Katy grew up with conservative rules and wasn’t even allowed to listen to non-Christian rock music.  Needless to say when her first top single, “I Kissed a Girl,” became a nationwide session, her parents weren’t jumping up and down with excitement.  Katy never compromised herself to be something she wasn’t.  She listened to her heart and carved her own path.

Persevere.  Fight through the hard times.  As I highlighted earlier, Katy was not an overnight success.  There was a time when Katy was completely broke and even asked her brother for money.  She was dropped from labels, divorced, and hit some major lows in her life.  Did she give up during these challenges?  No.  It was hard I’m sure.  But that didn’t stop her.

Be disciplined.  Especially when facing challenges it’s incredibly important to stay disciplined.  After Katy and Russell Brand divorced, Katy was crying before her show and then pulled it together to get onstage…that’s discipline.  Focus.  Commitment.  Not many people can pull off that kind of transformation and focus during such a difficult time.

Love what you do.  As the saying goes, “If you love what you do, you’ll never work a day in your life.”  That rings true.  When you love what you do it doesn’t feel like work.  Katy clearly loves what she does.  It’s a lot of work…time, energy, commitment, bruises.  All not worth it if it’s not truly what you love.

Be positive.  Smile through the storm because a positive attitude can get you through the darkest of times.  Life is more about how we respond than what actually happens to us.  Our attitude shapes our perceptions and energy and how we progress (or do not progress).

Impact comes in many shapes and sizes.  There are many ways to make a positive impact in people’s lives. Katy has impacted many people.  Whether or not her career is a multi-decade endeavor, she will have at least impacted the lives of many during the time she did.  Kudos Katy!  Similarly, we can make an impact in many different ways.  Think broadly about your legacy and the impact you will make in the lives of others because impact comes in many shapes and sizes.

Venture on,

mel, the Venture Gal

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Mar 28

ES569: Jan Garfinkle, Arboretum Ventures Founder & Managing Director

Healthcare investing is great because beyond the possibility of generating significant returns, the companies invested in save lives & really impact people.  Yes, there are huge risks.  Huge risk, huge reward.  At this week’s class, Jan Garfinkle, Founder & Managing Director of Arboretum Ventures spoke to the class.  Jan started her career as an engineer & in 2002 founded Arboretum Ventures.  The firm celebrates its 10th birthday this year & has successfully raised 3 funds.

Jan focused her discussion on financing companies, answering common questions that entrepreneurs ask:

How does an entrepreneur figure out how much money the company needs?

  • Start with a budget.  VCs want to know what is the most important thing the company must do to increase its value (aka a milestone) & how much money will it take to reach that milestone.

How to decide which source of funds to pursue?

Consider

  • Cost. What are the cost of the funds you raise (i.e. cost in terms of ownership)?
  • Flexibility. What level of decision making responsibility do you want?
  • Supply. Where is capital available?
  • Entrepreneur’s goals long term. Do you want to build a lifestyle business that you can work at for the rest of your life?
  • Type of business.  Not all businesses are venture hackable.

What are sources of capital?

  • Yourself
  • Grants (government, foundations, universities)
  • Debt (customers, bank, venture debt)
  • Equity (friends & families & fools, angels, VC, IPO)

What do VCs look for?

A great jockey, riding a great horse, in a huge race.  In other words, a great entrepreneur, commercializing a great product, in a huge market.  Jan, like many VCs I know, prefers an A team & B product, over a B team & A product.

What do VCs do when they due diligence?

Try to learn as much as possible about tit!

  • Management
    • Track record
    • Relevant experience
    • Highly motivated
    • Honest & ethical (how are decisions made? how does the team communicate?)
    • Make sure you can recruit the right people
  • Financials & exit potential
    • capital requirements
    • exit price & timing
    • talk to strategic corporations to understand what they need to see in order to be interested in buying the company (*we at RPM don’t do this well)
  • Product need
  • Market size
  • Time to market
  • Competitive positioning
    • existing technologies
    • emerging technologies
    • IP

Material company provides & how long it takes to get the materials to the VC are indicators of how the entrepreneur will be like to work with.

What is the best way to get VCs’ attention?

Get a warm introduction/referral!

In addition to the insights Jan shared in response to those particular questions, she also shared a few notable quotables:

  • “Your career will not be a straight line. Be flexible”
  • “If it’s a great exit, every body wins. Even the janitor if he got shares”
  • “The more touch points you’ve had as problems the more successful you’re be as a CEO”
Selecting investment opportunities & selecting funders involves building relationships.  Getting to know each other.  Building trust.  Even if you are a great jockey, with a fast horse, in a huge race, if the investor doesn’t trust you, or you don’t trust the investor – that’s not a good way to start an investor/entrepreneur relationship.

Way to go Jan!  Keep up the great work & Venture On,

MEL aka Venture Gal

Mar 22

ES569: People and Culture featuring Serial Entrepreneur Josh Pokempner

Tuesday night’s class focused on People & Culture, the most important part of any organization (in my opinion).  Our guest speaker was Josh Pokempner, serial entrepreneur & founder of several successful companies.  Below are some of my raw notes for that night’s discussion with Josh:

  • Business is trying to control circumstances so intended results happen.  my response:  life is trying to control circumstances to intended results happen.
  • we can’t control how well a product does, but we can control our corporate culture.
  • how to create that great culture?
    • servant leadership
      • rich person = someone so in love with what they do, so much they can’t wait to get out of bed to do it. can’t wait for alarm to go off so you can get out of bed. my response: what is it that i can’t wait for? what is it that makes me wish my alarm will go off?!
    • create & practice a shared mission, vision & values
    • “5 ways of being”
  • book recommendation: “Man’s Search for Meaning” – achieve happiness by dedicating yourself to someone or something.
  • “there’s a soul to a company” – JP
  • “In this business you have to be comfortable with bumpy flights” – JP on the life of an entrepreneur

After Josh shared his stories & wisdom, students asked some thought provoking questions.  Some that were especially thought provoking for me include:

  • How do you balance sharing information with your company & sharing information that scares people? (for instance, the company is low on cash, & you don’t want to scare people into thinking they’ll be cut)
    • Josh recommended “Just tell them”
    • In my own experiences an open book culture is a powerful way to get the team to take ownership & better know how they can impact the success of the business.  People cannot act in the best interests of the company when they don’t know what those interests are.  Being honest & open beats little to no transparency.  Be authentic. Don’t unpleasantly surprise your team & they won’t unpleasantly surprise you
  • For companies early on, low on resources, how do you build a fun team environment?
    • My thoughts: So you don’t have cash to take your entire team to Cedar Point, how do you still incorporate fun team activities (if that’s part of your culture)…do it within your means.  You don’t have to spend a ton of money (or any at all) to build culture through activities.  Going to a park & playing frisbee will cost you the price of the frisbee.  At Iorio’s we do team bonding activities when times are flush & when times are less cash rich.  It doesn’t matter.  Be creative & find a way to make it work.
  • How did you find the people you hired?
    • Josh brought in people he had worked with before.
    • If you don’t have that luxury & you’re starting for the first time, or you need to hire more people than you have previous colleagues, remember this – building your culture starts with your job posting & application.  What do I mean by this?  The language of your job posting & application sets a tone.  If you are a fun & creative company, make your job description & application fun & creative.  This is the best way to attract talent aligned with your culture & give you a great pool of candidates to hire from.

After Josh finished speaking, the discussion about culture & people continued.  A few nuggets of wisdom to share:

  • “Culture is based on 99% of what the CEO does & 1% on what he says” – Fry
  • “Culture is the single most important factor in recruiting & retaining key employees” – Fry
  • “Employee behavior consistent with the culture should be recognized” – Fry
  • CEO plans culture, lives it, reinforces it, manages it, tracks & measures it, modifies as needed
  • “Personnel selection is decisive. People are our most valuable capital” – Joseph Stalin
  • “as leadership changes, the effectiveness of people may also change”

And some questions that were asked:

  • Should vision statement be about 1 product (if company only has 1 product) or something bigger?
    • Tony thinks it should be bigger
    • I think a vision is big.  Your core vision for your company is that north star…what are you reaching for.  For instance, Disney’s vision is to “make people happy”.  At Iorio’s our vision is to “deliver sweetness”.  These visions are big & broad.  I have found it helpful to also write “vision statements” that may reflect more tangible, shorter & longer term visions for specific aspects of the company.  A vision statement that is written out could be short term focused & looking out at 1 year from now & that may only include 1 product.  I recommend writing vision statements when launching a new product, taking on a new initiative, starting a new company etc…answer questions like “what does this product/company look like?” “how do our customers respond?” “what are the challenges we are overcoming?”  paint a picture of the future.  Put yourself in the future.  A vision statement should be written as if you are in the future.  For more visioning tips I recommend reading some of Ari Weinzweig’s tips on visioning. I, and many others, have learned from him.
  • What do you think comes first, the culture or the people?
    • Tom mentioned that half the people he meets that start companies don’t think about the culture, even if, as an investor, he hints at its importance.
    • I think culture is an iterative process, especially early on.  Like product iteration.  Create culture consciously. Bring on people that align with that culture, learn from them & team dynamics, iterate culture consciously, bring on more people. Rinse & repeat.

Bottom line: Create culture consciously & continually.  All this talk about culture in class has me enthused about learning more & sharing more about what I’ve learned about culture.  What questions do you have?  What would you like to learn about culture & people?

Venture on,

MEL aka Venture Gal

Mar 08

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

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

Feb 10

If I Didn’t Run a Business…

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

 

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 MLiveEarth TechlingMichEEN, 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


Jan 25

9 Mistakes First Time Entrepreneurs Often Make (from Michael Gaiss, Senior VP at Highland Capital Partners)

This past Sunday I had the honor of judging the University of Michigan Startup Weekend.  Before the ten teams presented their companies, Ben Kazez (Founder of Mobiata) and Michael Gaiss (Senior VP at Highland Capital Partners) enlightened the crowd with their entrepreneurial wisdom.

Michael Gaiss outlined 9 mistakes he sees entrepreneurs make with their first startup, followed by some of his and my suggestions to avoid these mistakes:

1. Don’t research and understand the competition

Research and understand the competition.  If your company has “no competitors” that often signals that the opportunity is not interesting enough to pursue.

2. Haven’t talked to customers

Talk to customers.  Who better to get feedback from than the folks that pay for your product/service?!  Understand their pain and what they want to see in a solution.  And most importantly, LISTEN to their feedback and USE when it makes sense.  Don’t talk to customers for the sake of talking to customers.  Talk to them to learn and react to build a stronger value proposition and company.

3. No repeatable customer acquisition strategy

Acquiring your first 50 customers may differ from the next 100, and so forth.  Develop a strategy to acquire your first customers, but also to continue building customers as the company scales. (And don’t forget about retention – customer service is very important!)

4. Don’t tell a good story

Tell a story when you talk about your company.  Whether you are pitching to investors, customers, recruiting, or even just telling your friend about it…a story is always more interesting and engaging.

5. Know nothing about investors they are pitching

Do your due diligence on the investors you are pitching!  Know their backgrounds, what they have invested in, and their expertise.  Look for an investor that is relevant to your company and will be a value add partner.

6. Make stuff up instead of saying “I don’t know”

Don’t do this.  Period.

7. Seek only confirming, not disconfirming evidence

If you are going to get feedback or do research, and you are only looking to confirm what you already believe and are not open to opposing views…that’s a problem.  Challenge your beliefs, and if you are to err on the side of seeking confirming or disconfirming evidence….choose disconfirming.  You’ll learn a lot more that way.

8. Pick advisors that are easily accessible, not relevant

If you have a big name on your advisory board that may look fancy and catch eyes, but if you speak to that advisor once a blue moon then what good is that really doing you?  There may be a role for big name advisors, but in general, when you are starting your first company you’ll want accessible advisors that add value to your company’s development.  A quality advisory team also highlights a team’s ability to attract talent.

9. Treat fundraising like it’s an end, not a means

The purpose of raising money is to support entrepreneurs in building a company.  Money is the means to building a successful, sustainable company, and that is where the focus should be.  Think about it this way, once you raise money, you aren’t done. Now it’s time to use that money to focus on nailing your value proposition and building a successful and sustainable company.

You have been forewarned.

Have you made mistakes or observed mistakes to add to this list?

MEL aka Venture Gal

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Jan 05

No New Year’s Resolutions for Me

I do not make New Year’s Resolutions.  Not because I am some sort of New Years scrooge.  Rather, I approach each day like it is the start to a new year.  Really it is.  Think about it.  Today is January 4, 2011 (my half birthday) and the start of a year that goes from January 4, 2011 until January 4, 2012.  I need not wait until January 1 to make resolutions.  I can make resolutions anytime.  February 17.  October 9.  Whenever!  There is no better time than the present to commit to making a positive change in your life.

On New Year’s Eve this year I did try something new.  When sitting with my mom and sister preparing to watch the ball drop, I asked them, “What do you think I should work on in 2011?”  My younger sister told me I needed to relax and my mom told me that I needed to stop passing out (see the photo for some evidence).  I did the same for them, and my conclusion is this… I recommend asking other people, close to you, what they think you should work on in 2011.  Why?  Because we only see so much about ourselves, and have our own biases about our own behavior.  Others look at you with different lenses, and thus have insights into what they think will make you a better person.  It is easy to make the typical resolutions – eat healthier, work out more, volunteer, and spend more time doing some activity – and all of that is great.  Do those things that YOU think will make you a better person.  But also get feedback from others and try those things that THEY think will make you a better person.  I am going to follow my sister and mom’s advice (except I do not always control when I pass out), because I want to grow to be a better person not only for myself, but also for those that I care deeply about.

May you live each day like it’s the first day of a new year!  Happy 2011,

MEL aka Venture Gal

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Nov 21

What I Learned at Michigan Emerging 2010

On Wednesday, November 17, I attended the Michigan Emerging conference in Dearborn, MI.  This event was a featured event of Global Entrepreneurship Week and featured entrepreneurs and investors, among others.

From the morning keynote and Emerging Sectors Panel.

  • More than half of energy produced is lost just getting to us. (Gerald Zack, Founder, President, and CEO of US Renewable Energy Association)
  • The U.S. Ambassador to Moscow is from Muskegon, Michigan.

From Atomic Object’s Demo Pit Presentation.

  • 50% of mobile usage happens on Facebook.  Yelp sees 27% of searches coming from the iPhone.
  • It is very challenging to make money on an ad-driven app.  Apps cost between $8,000 to $80,000 to develop.  The most economical way to develop a mobile app is to develop hybrid, but then it won’t be native, so cannot be posted to the Apple App Store.  A Hybrid Web App uses HTML5, CSS3, and Javascript, and is developed for iPhone and Android.  People use apps because of usability, findability, off-line operation, and monetization (mobile apps monetization strategy is clearer than websites – for instance, can distribute and sell an app on the App Store).  When building an app, think about it on notecards.

From Sales & Marketing 3.0 with Catherine Juon (Catalyst & Co-Founder of Pure Visibility), and Michael Baird (Chief Marketing & Chief Communications Officer, Girl Scouts of Southeastern Michigan)

Part 1.  Building a Brand

  1. A brand is more than a logo.  It is an identity.  It is everything you stand for and believe in.  It seeds company culture.  It is emotional.  It is an experience.  Know what’s your story, who are you telling it to, and what do you want people to feel when you are done telling them your story.  Know what makes you so special.  It needs to be tangible and a game changing experience.
  2. Exercise – ask everyone in the company to write down what the company does in 10 words or less.  It will be very likely that not everyone writes down the same description.  Everyone needs to be on the same page though, communicating the same message to others.
  3. Position your company so peoples’ expectations are set appropriately.  For instance, TOMCAR (an off road vehicle) sells for $17,500 and Yamaha sells for $5,000.  Positioning TOMCAR will set customers expectations to expect to pay more.
  4. A mission statement is not the product.  The mission is what happens when the product gets to market.
  5. 2 eyeballs is great.  4 is better, and 200,000 is even better.  The more eyeballs on something, the less likely something will go wrong.

Part 2.  SEO

  1. Use Google Insights for search because it doesn’t matter how you are optimizing if you are optimizing for the wrong thing.  For instance, even though Fat Head positioned itself as “wall graphics” the company still used “stickers” in its language, because “stickers” is more commonly searched for than “wall graphics.”
  2. Keys for SEO
    1. CMS and Content.  WordPress is common and straightforward.  Volume of content is important – need at least 100 pages to be in the expert category.  Tell your story!
    2. Links!  From places with authority and relevance because this provides evidence that others believe in you.
    3. Google Places.  Claim your Google Places page!  Include reviews, description, and YouTube videos.
    4. Keys for Conversion
      1. Use Call to Action.  For example, “Visit Us,” “Buy 1, Get 1 Free.”
      2. Use Landing Pages.  A page for every product and service the company has.
      3. Improve Site “Flow” (aka Usability)
      4. Measure it!  Use Google Analytics, Google Webmaster Tools, and others to build and track success.

From keynote speaker, Tim McCormick, former University of Michigan and NBA Basketball star, current ESPN Color Analyst and NBA Players Association strategist

NBA = Never Be Average

His keys to success…

  1. Hard Work.  Attack the day with effort.  Complacency is someone’s greatest enemy.  “Big producers keep evolving” (they continue to grow).
  2. Enthusiasm.  Your energy is a catalyst.  When you are fired up, productivity soars.  Ralph Waldo Emerson once said, “nothing great was ever accomplished without enthusiasm.”
  3. Perseverance.  Aka “bounce back ability.”  Focus on what you are good at.  Be excited about possibilities in life and the future.
  4. Optimism.  “Be a playmaker.  You can achieve anything you want, but no one is going to give it to you.  Go get it!  Be like a basketball.  When you get knocked down, bounce back up.”

It was great to meet many people passionate about building Michigan, and to learn from some successful Michiganders!  Thanks to all who made the event possible!

MEL aka Venture Gal

 

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Oct 29

Hodgepodge of Startup Tips

Each week I am going to post a collection of tips that I learned throughout the week from various sources (all of which I will include at the bottom of the post). Here are some various tips I learned this week. Feel free to add your learnings in the comment section!

1. Don’t spend too much time describing the market…rather, provide detail on the strategy to dominate it.

2. Startup office rent should be no more than 4-6% of the total operating cost.

3. Five qualities to look for in a co-founder: 1) Loyalty to business idea; 2) Honesty; 3) Versatility to focus on more than one aspect of the company; 4) Connections; 5) Flexibility in the face of changing circumstances.

4. When an investor asks you a question during your pitch, answer the question. Do not tell them that you will answer that later in the presentation.

5. Create a culture in which employees are encouraged to share feedback, trusted, and empowered to innovate.

6. Get feedback on your startup idea! Do not hide it in a closet. Tell people about it, hear their opinions, questions, ideas. For web startups targeted at individuals, putting up a simple landing page, asking people for their email address if they’re interested, and then running a small ad campaign, is a great way to see if there your idea has legs. Of course, don’t share any “secret sauce” but enough to give people a good idea of the value your company provides.

7. “Incubators are the new grad schools.” Learn by doing.

8. Put yourself out there. Meeting with people is great, but you can connect with many people by broadcasting yourself via tweeting, YouTube, and other online venues.

9. The American Express Platinum Business Credit Card has 0% interest for 6 months.

10. Invest in a whiteboard. It’s a great tool for brainstorming and tracking metrics.

What tips do you have to add to the list this week? Please share in the comments!

Sources:
Art of the Lean Startup
Personal experiences
Rypple Co-Founder & CEO
Customer Motivated Entrepreneurship & the Lean Startup
Naval Ravikant from Venture Hacks