Way back in August of last year I recieved an email from Annette. It is still in my inbox. The subject line was "Some flattery and a question!" It reads in part:
I recently stumbled across your website and wanted to complement you on a really good blog, i skimmed longer than I probably should have (considering I'm working!) but your posts were so simple and to the point, I just kept going, lol. I was also impressed with your recent recruiting plan, that's pretty proactive and smart but I can't think of many people who would consider scouting through twitter, at least not yet. Anyways, I didn't stumble onto you by accident though and was hoping you could help me out.
I am currently interning with John Greathouse, venture capitalist and 'serial' entrepreneur (aren't they all?), in an attempt to reach more emerging entrepreneurs via his blog, infoChachkie. From the outside looking in, it appears John's content is a really good match for your readers. Please check out John's site. If you agree that his site is complimentary to your readers, we would appreciate it if you could share...
Nice note.
I checked out his site and started following John on Twitter. And over time I discovered that I was reading more and more of John's articles. I started to enjoy his Iconic Advice Series. Bascially startup tips from famous entrepreneurs. Eight Startup Tips From Mark Zuckerberg tipped me.
So the past few days I have been hanging out a bit in the nifty new Flashpoint accelerator space. It's kinda a cool open space with high benches and work seats. Very open flow to it. And it is quite shocking to see a logo you helped create in a larger than life execution. We wanted the green to pop and boy does it. Kinda hides the fact those are official Georgia Tech blue and gold colors in the logo.
Flashpoint had it inaugural class kickoff yesterday. The accelerator program run through Georgia Tech, and which I played a small part in getting together, has selected its inaugural class of 18 teams to participate in the first cohort which runs from September to December. These teams are being funded by the $1 million Flashpoint Investment Fund I which is led by Sig Mosley of Imlay Investments. The program will culminate in two demo days, one in Atlanta and one in the valley hosted by 500 Startups.
Led by Merrick Furst, Flashpoint has an interesting focus. The accelerator intends to de-mystify the startup process by improving on a repeatable process of scalable business model discovery and further developing principles that support real world value creation. They call it startup engineering. Along with Merrick's startup risk framework, Flashpoint is using two textbooks to help the teams with the process. The Four Steps to the Epiphany which has been a personal favorite and Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers which seems so practical that I have already ordered a personal copy and may get the iPad app.
It is going to be interesting to both help a few of these initial teams as a mentor and see what pops out at demo day come December.
I am a member of the Jason Nation and over on the Launch blog Mr. C has a nice article. The overall post itself is about management misdirecting employees. While I don't always agree with everything Jason says or does he nails the startup sales equation.
Dealing with a rabid pack of sales wolves is perhaps one of the hardest management challenges in business.
Sales people are an odd group of mercenaries, and the best ones seem to have a perverse sense of competition and drive that is unique in the employment landscape. They are very aware of incentive structures and seem to love being put in them.
They like having a percentage of sales targets to hit, and levels and bonuses associated with certain milestones. The more complicated a structure and game, the more turned on and tuned in they seem to become.
Great sales folks seem to look at life as this huge casino or Zynga game, where they are placing 20 bets on five different tables.
I've long learned to embrace this dynamic at new companies by setting
a) absurdly low base salaries (think $30K to 60K)
b) absurdly high commission structures (10% to 25%)
Why?
It's a filtering mechanism for me to get the most insane, rabid and self-confident sales folks -- and filter out the lame "professionals." The times I've put up six-figure bases and the standard 3% to 5% commission structures, I've gotten the weakest, non-rabid, meek sales executives who are more concerned with driving almost fancy cars, wearing fine clothing and having lush expense accounts than their actual commission structure.
Those sales folks are death at startups. They lack the drive and creativity to sell new products because they are -- largely -- old, fat dogs.
At some big company with 300 sales folks, they're great for managing existing accounts. At a small company with under 10 sales folks, those "professional" sales types are the kiss of death. They need everything handed to them on a silver platter, and they can't close deals because of the product, the marketing kit or the fact that we're doing something new.
In fact, two sales folks I gave the low-base-and-high-commission structure to easily broke $500K in *commissions* for me in the first two years of the Silicon Alley Reporter and Weblogs Inc.
They both made fives times what I made as CEO -- and I loved it.
Working both sides of the Half Off Depot deal was a lot of fun. Part of that included participating in the due diligence work on behalf of Noro-Moseley Partners. During the course of this process I provided a list of potential due diligence items to the firm. The information request itself ran just over four pages. You can find a copy of the due diligence request on Scribd. The actual information itself could fill up a few binders.
Entrepreneurs and founders are often time surprised by the amount of information requested by potential investors. If you are going down a path to raise funding knowing what types of information potential investors are going to ask for and putting it together over a period of time can prove to be very helpful after you get a term sheet and are working through diligence and close.
This Thursday night at 6:00 is Entrepreneurs' Night. It is my ADTC swan song, and it's going to be a good one. In May we shaking things up a bit and having several Atlanta angel groups present what they are looking for in their deals. I call it the Angel Editon.
Each of these folks will be given 5 timed minutes to present followed by 5 timed minutes of Q & A. Kinda turning the tables a bit. This is the first time that Sig will be talking about Flashpoint Ventures in public. Flashpoint just began accepeting applications today.
This event is open to all enterpreneurs. We would love to see you there. If you plan to attend please register.
So the first ever Digital Summit is taking place in Atlanta next Monday and Tuesday. If it is anything like the Internet Summit held in Raleigh every year this promises to be a good show.
I am looking forward to the venture capital, online advertising, and future of media sessions as well as the keynote by Gary V. I am fortunate enough not only to be an active participant but have the opportunity to jump up on the stage with four entrepreneurs. I am going to be moderating the Internet entrepreneurship panel.
I will be talking with Jamie Bristow Founder, Mynonprofitmatch.com; Mitch Free CEO & Founder, MFG.com; Tim Harrington CEO, eRollover (now FiPath); and Michael Tavani Co-Founder, Scoutmob on Tuesday afternoon. Good group. I know Mitch, Tim, and Michael pretty well and look forward to meeting and learning more about what Jamie is up to. By the time we get to our part of the agenda we will be the only thing standing between the crowd and the bar so we intend to have a snappy fun time.
This bad boy is about to sell out. ATDCF50 gets you $50 off the price of admission. Regardless of if you are going or not what do I need to ask this esteemed group?
Remember that post about FU Money? Here's another one.
I see a problem almost every day with people working their plan to get some FU Money. They only take one path and often time it is the wrong one. The way I see things there are five ways to get FU Money.
Marry it. Don't know anything about this.
Inherit it. Not that interesting to talk about.
Start a company that requires large outside investment. Much more interesting to talk about. But the brutal facts of reality are that your odds of success are really, really, really small. They are particularly small when you have no cash resources, domain knowledge, startup experience, or skills to make a product. People like this walk into my office every day. Many not only have small odds, they have no chance. I even have a term for them. NC. Don't be this person.
Start a company that does not need outside funding. Very smart path for the first time entrepreneur. Dave Wright did it with JungleDisk. David Cummings with Hannon Hill. Tim Dorr with A Small Orange. The Lacours with ShootQ. Ben Chestnut and the rest of the MailChimp team. Get a win. Have a great life. Go bigger.
Join a startup. It's not just the founders that get FU money, its the people that make things happen. Remember, SecureWorks minted thirty something millionaires. Be one of those. The number of people that have taken this path and then started their own company with cash resources, domain knowledge, and startup experience is countless. But with the exception of old dudes that want to jump into a funded startup at some high salary and run it or do strategy I do not see many people pursuing this path. This is the path that the majority of people need to be taking. Find an area of interest, find the startups that include equity as part of their comp package, figure out how you can help the startup, and join it as an early employee.
Force of Good is licensed under a Creative Commons License. You are free to share, remix, and share alike with attribution.
DISCLAIMER
The opinions expressed here are mine and mine alone (with the exception of comments by others of course). They do not represent the opinion or position of any other person or entity. All postings adhere to my personal values.
which seems so practical that I have already ordered a personal copy and may get the iPad app.
