Don't hire your friends just because they are your friends. This, along with slow decision making, is portrayed as Ev's downfall and the reason for his ouster as CEO.
Have no mercy. When Ev pushes Jack out of the company he leaves him with a ceremonial board seat. Jack uses the seat as a place to plot his revenge and oust Ev.
Backup your application. At one point pretty far in there is no backup of the Twitter database.
People behave differently when a lot of money and power are at stake. What begins as a small team trying to do their best to start a company can turn into something much more complex pretty darn quick.
Fred Wilson comes across as a hard ass. Nothing at all like the friendly guy on A VC. Not sure if I believe the portrayal. Then again, people behave differently when a lot of money is at stake.
I don't know how accurate the tales are in Hatching but it is a darn good read with many lessons. Highly recommended.
There is a lot of startup events and conversations happening around Atlanta, it is exciting to see, but I am wondering: “is it really helping, honestly, is it helping create better entrepreneurs and more awesome businesses?”
The short answer is yes.
The longer answer is a little more complicated and I have written about it before (the link is worth the trip for the comments). My short take is that there are too many events, or to be a little more specific there is an opportunity for entrepreneurs to attend too many events if they are not disciplined in focusing on creating products, getting customers, and building companies. Attending events is easy. Those other three things are hard.
Since I wrote that first article on the subject back in 2010 I have moved from helping entrepreneurs to running a business. I have taken my own advice. I typically do not attend more than two events per month. I have also taken to following David Cummings advice on work life balance throwing out the word "average." No more then one evening event per week. It forces me to make choices and keeps me focused.
Back in the day when I used to listen to lots of investor presentations I was sitting in a room one day listening to a pitch with a group of angels and VCs doing exactly that. The entrepreneur got to his financial projections slide. Everybody started shaking their head yes. They liked the numbers.
At that moment it dawned on me that every time I saw numbers in that range I would see the same reaction from investors. I wrote them down in my trusty Moleskin.
The other day I was helping an entrepreneur with his financial model. And like a flash those numbers came back to me. I did not remember them but I knew where to look them up. My notes from December 2008.
While certainly not right for every startup these numbers seem to be pretty good guidelines for the type of ramp that early stage investors like to see in presentations. Fact of the matter is any number put together like this is purely a work of fiction and achieving them takes great execution and a little luck. Very few startups make it to revenue numbers like year four and five.
But if you are looking to pass the sniff test of early stage investors having a solid financial model with results somewhat in the range above will have you coming out smelling like roses.
Alan Dabbiere wrote a most excellent article on the WSJ blog The Accelerators. A lot of folks (David Cummings and Stephen Fleming to name two) have been writing about why Atlanta is a great place to build and scale a startup recently but Alan really hits the nail on the head. This is from a guy that started and built two billion dollar market capitalization companies in the ATL. The money quote:
"Here you can start and build a great business, meet your first customer, access to a deep bench of talented individuals and the innovation produced by our great universities. At its core, Atlanta is also a great place to live."
Atlanta has the ingredients to start companies. Being a great place to live is just the cherry on the cake. That's why I'm still here.
Somewhere along the line I ran into Alan Taetle. Pretty soon the conversation turned to dress.
"What is it with the Atlanta technology scene dress code. I just got back from Austin and everyone gave me grief about how I was dressed in khakis, a button down, and a sport coat. Everyone told me I was overdressed. What is it with Atlanta that makes everyone think they need to put on a suit? It's ridiculous!"
Standing there in my open collar grey suit I had to agree. Even more so as I wore jeans and a nice t to work and took a suit to change into to attend the SVB event. I felt pretty ridiculous at that point. It's because it's the South I said. It's because people call on other businesses and need to be dressed up. It's because entrepreneurs get coached to dress up. It's because investors wear suits.
Alan was not buying any of it and after a little debate either am I. No more hauling suits to the office for me. It's just a waste of energy to dress for the approval of others without any reason for doing so.
The subject of startup equity distribution is one that seems to generate a lot of interest. Mine was piqued again by James Altucher's brilliant article on The Ultimate Cheat Sheet for Starting and Running a Business. I wish I had have written this one line, "The rules are: I'm going to give no explanations. Just listen to me." It's a masterpiece. If you want to start and run a business and don't have the time to read this article just stop right now. It's that good.
My suite neighbor John ripped on the post and one of his favs was also mine. Number seven.
How much equity should you give a partner? Divide things up into these categories: manage the company, raise the money, had the idea, brings in the revenues, built the product (or performs the services). Divide up in equal portions.
It is a little unfortunate that James used the word equal portions. Just listen to me. Equal is bad. But I am going to use a hypothetical to highlight what I believe James was saying.
Imagine it is early 2015. Both Accelereyes and nCrowd are setup for exits. Gonna happen. John and I are hanging out on the yet to be built roof top of Atlanta Tech Village for Friday night happy hour and start talking about what is next. We get in this quite intense discussion about how we can leverage the GPU and camera functions in computers to determine what consumer offers on a web page are most enticing in real time and sell this to local advertisers to create more efficient online marketing campaigns (I made this up on the fly, just accept it.)
It is our idea. The two of us. We each get a share and start working on seeing if this is real. It is.
Several Friday night happy hours go by and somehow or the other I am able to convince John that I am a better business guy than him. That I should focus on running the business. One share for me.
John agreed to let me run the business because he knows that he is much better than me at all things technical. He is going to build the product. He gets a share.
John and I are each going to stroke a check from our anticipated exits, but this is a big idea and we are going to need more. He is going to be deep in product development. It is my job to go get the coin. I get a share.
About the same time as all this is going on some BLiNQ Media sales friend decides to get out of Gannett and join our new venture. One share for her.
So at this point there are six portions. I have three. John has two. And the sales lady has one (and she gets paid nice commissions). 50%, 33%, 17%. Not a bad starting point for a more serious discussion about equity split.
Not equal but equal portions based on the division of labor.
Here are ten ways you get people to
read your junk.
1. Sell your bootstrapped
company for $95 million, buy a building to turn into a tech hub, and then start an accelerator with $120k in funding guaranteed to accepted startups. Not going to happen for most of you. Does not
count as one of the ten. Proceed to number 2.
2. Say smart opinionated
things. If you can't do this one thing you should not proceed to number 3.
3. Lurk on other blogs until
you understand the community. If there is no community help start it. The
site owner will be forever in your debt. Comment. It builds links and
drives traffic back to your own blog.
4. Take a stance. Tell people
they are wrong. Stop the rah rah. Focus on what matters. Don't ask for
discussion, provoke discussion.
5. Seed Hacker News. They will
let you know when you go too far. Trust me on this one. The stuff you
write is not worthy of Hacker News? Return to number 2 above.
6. Find SEO voids and exploit
them. What the heck am I talking about? Google what is a technology startup. That FoG SERP
has been sitting there for about four years now. I have a few dozen others
that send me consistent traffic regardless of my recent activity. Always fill a void. Good general rule.
7. Give link love. You will get
8. Time. It takes years to
build traffic to a blog. Unless it is not really a blog but an online
media outlet. Or you sell your bootstrapped company for $95 million, buy a building to turn into a tech hub, and then start an accelerator with $120k in funding guaranteed to accepted startups. Money changes everything.
9. Be consistent. Set a
schedule and try to stick to it. Keep your posts on topic(s). It helps
your community know what to expect.
10. Back to the comment thing.
Allow comments. If you don't allow comments it is not a blog. It is just a
CMS. If someone in your organization is too stupid to understand that a
blog without comments is not a blog and just a CMS you should leave and
find someplace to work where management has a clue. Either that or go into
the wading pool with moderated comments then jump in the deep end when the
parents go to the snack bar to get a beer.
11. Be a person. Blog posts are
written by people.
That is kinda it. It is great to see
all of the startup blog activity in Atlanta. Outside of the tactical errors
the only thing that is missing is someone writing from a full-time investor
point of view. It will be interesting to see who picks up that rock.
Last tip. Keep your posts short, this
one is too long. Later.
A long time ago in David Cumming's blogging time line (and not so long ago in mine) he wrote an article about the rise of the Atlanta startup bloggers and was kind enough to include FoG. You go there and you will see a long list of Atlanta startup bloggers and a few not so startup folks as well.
I took my blogroll down quite some time ago but in no particular order these are the Atlanta area technology oriented startup blogs that I read on a regular or semi regular basis.
Rob's Blog - Rob Kischuk. A catchy name and ability to articulate the entrepreneurial mind set. He needs to write more.
Not Only Luck - John Melonakos. My office neighbor, have to play nice.
JohhnyBird. He actually goaded me into picking up my blog pace.
TechFlash - Urvaksh Karkaria. All the Atlanta tech news you want without a paywall.
Hypepotamus Startup News - Michael Flanigan & Scott Henderson. Good writing style and great way to quickly catch up on Atlanta startup news. Kudos on their emails. They do a great job of sucking you in.
MailChimp Email Marketing Blog - Numerous. If you ask Ben he will say MailChimp is not a startup. He is right. MailChimp is an established mid-sized company. If you aspire to create such a thing sooner (hopefully) or later you are going to want a blog. Like many things MailChimp does it right. Something to emulate.
This is just my personal list and nothing more then that. I am sure that lots of these folks don't read my stuff and a lot of the folks that I did not mention may or may not visit here. It doesn't really matter, it is just a personal preference.
I would be interested in knowing your personal favorites. Not only the blogs themselves but more importantly the why.
It's a much broader than your typical technology startup funding event. It will explore alternative and traditional lending options, angel investments, crowdfunding, private equity and more.
I have the honor of being on a panel, Startups Start Here, moderated by Daryn Kagan of CNN fame. I will be joined by a great group including Daryl Dollinger, Co-Founder of Raving Brands and President of Big Game Brands; Andrew Linder, Partner at Frontier Capital; Sig Mosley of Flashpoint Ventures/Imlay Investments/Mosely Ventures; David Rudolph, Founder and CEO at PlayOn! Sports; Michael Tavani, Co-Founder & Head of Product at Scoutmob; and Mark Wilson, President & CEO at e-Verifile.
Quite the panel.
you are seeking startup, working, or growth capital this will be a nice event to learn about various local sources of captial and find out which are right for your business. It is a bargin at $30 and friends of FoG can get a $10 discount (the discount code is ATCLW).
Force of Good is licensed under a Creative Commons License. You are free to share, remix, and share alike with attribution.
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.