Two Inspiring Quotes for the Creative

“You have to recognize that every ‘out front’ maneuver you make is going to be lonely, but if you feel entirely comfortable, then you’re not far enough ahead to do any good. That warm sense of everything going well is usually the body temperature at the center of the herd.” — John Masters

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

THE MAN IN THE ARENA
- Excerpt from the speech “Citizenship In A Republic”
- delivered at the Sorbonne, in Paris, France on 23 April, 1910
- Theodore Roosevelt

And a bonus third:

“You must not fool yourself, and you are the easiest person to fool.” - Nobel Prize-winning Physicist Richard Feynman

Startup Purgatory

A friend once advised me to be careful of startup purgatory. The story below was my response to him.

Imagine two people setting out to cross a large lake, each in a small rowboat. The first sets out on a clear day with the lake surface as still and flat as a mirror; a gentle breeze and a steady current pushing the boat from behind. Each time the oars are dipped into the water the boat shoots across the lake. Rowing is easy and delightful. Quickly the rower reaches the far side of the lake. She may congratulate herself for being quite skilled.

The second rower heads out across the same lake during a great storm. Powerful winds, currents, and waves move in the direction opposite the boat. With each pull of the oars, the boat barely moves forward, only to lose most of the distance gained when the oars are raised out of the water for the next pull. After much effort she makes it to the far side of the lake. This rower may feel discouraged at her lack of skill.

Probably most people would prefer to be the first rower. However, the second rower is the one who has become stronger from the exertion and is thereby better prepared for future challenges.

From The Issue At Hand by Gil Fronsdale.

Do NOT Rush into a Founding Team

Most companies get founded when one entrepreneur has an idea that she recruits her friends to build with her.  The common assumption is each founder will work well together because they get along and their skills compliment one and other.  So the founding team gets formed right away, ownership and voting rights are set during the incorporation, and everyone starts working.

The scenario I’ve just explained often leads to one or many founders leaving the company.  They recognize after weeks or months of work that the company isn’t the right fit — maybe the role isn’t interesting, or maybe one of the other founders is too difficult to work with.  A company that loses one or many founders isn’t necessarily doomed for failure, but the process you’ll go through is messy, expensive, and emotionally draining for everyone.

The founding team should be formed carefully and patiently.  By being careful, you’ll save yourself much frustration in the future when one or many founders need to leave.

Here are the steps you should take when choosing a founding team:

  1. Get to know one and other — break bread and drink beer.
  2. Work on a side project — something that won’t share intellectual property with your future startup, yet something you’re passionate about.
  3. Brainstorm — bounce ideas off one and other; make sure you can rev on ideas.
  4. Push a few buttons — see what people do when they’re upset, sad, or vulnerable.
  5. Discuss the startup — the product, go-to-market strategy, branding, competitors.
  6. Discuss roles and responsibilities — who will run product, engineering, sales, recruiting, etc.
  7. Discuss the board and ownership — equity split, vesting schedule, and board seats.
  8. Incorporate and start working full-time, guns blazing.

Here are qualities you should look for in a founder:

  • They have a passion for the product.
  • They’re product minded.
  • They’re onboard for the long haul.
  • They have a skill that will give your startup a competitive advantage.
  • They’re fun to work with.
  • They’re good at communicating.
  • They’re positive, inspiring, and excited.
  • Ideally you’ve worked with them before.
  • They make you better at your job.

Here are founder qualities that should raise a red flag:

  • They’ve never worked at a startup before.
  • They have lots of side projects that they enjoy maintaining.
  • They’re considering going (back) to school or a job.
  • They want a quick exit (acquisition).
  • They’re hesitant to quit their preexisting commitments.
  • They don’t have a passion for the product.
  • They’re negative.

Lastly, here are general tips for incorporating.  These are very subjective:

  • Put everyone on the same vesting schedule — don’t forward-vest anyone. [1]
  • Give all founders a one-year vesting cliff. [1]
  • The founding CEO should be the founder most dedicated to the company’s success.
  • The founding CEO should have control, which usually means they have more stock.  (I used to think otherwise.  And there are lots of varying opinions on this subject.)

Don’t expect founding a company to happen quickly.  You should date potential founders for months before you decide to work together.  The founding team is more important than the idea — the founding team is everything.  Be careful and patient when choosing or joining a founding team.  And do not rush into a founding team.

[1] Each founder will work on the company for years, so vesting schedules don’t matter.

Update: Steve Blank agrees.

One Year, Six Products: 16 Tips for New Entrepreneurs

Exactly one year ago I quit my job with the dream of starting a technology company.  I didn’t have a plan except to work hard and learn.  Yet I could have used a lot of advice in the early days, which is why I’m writing to you today.  My hope is that the below advice will help guide some of you if and when you make the decision to quit your job and pursue a startup.

I have two blog posts summarizing the year and the six products I’ve built.  The first — here — is a telling of what I’ve done, what products I’ve built and what I’ve learned from each.  The second — the post you’re reading right now — is a summary of advice for others who are in a similar position as I was a year ago.

1) Be prepared for dark days: the last year has been both the hardest and most amazing year of my life.  There have been days where I was angry at everyone, scared that my life-long dream would drift away out of reach because of my insufficiencies.  And there have been days when I’ve been on top of the world, literally running down the streets skipping with utter joy.  You’ll have both of these days, but you’ll remember the dark ones.  They’ll leave a stain on you that only washes off with a good attitude and a happy candor.

2) Try not to freak out about your personal runway: I have a panic attack once every few weeks about my personal finances.  I’ve emptied multiple 401k plans, consulted on the side, and sold other financial holdings that shouldn’t have been sold.  I’ve done what I’ve needed to do to survive, but I’ve probably done a little too much.  That is, I’ve let my anxiety control my financial decisions.

Set aside plenty of money to keep yourself afloat, and try not to stress out too much.  Chances are good you can find money to keep going when you’re close to running out.  But when you have money in the bank, try to focus on building your startup.  Easier said than done, at least for me :).

3) Raising money is not success: until recently I assumed that success meant raising money.  Perhaps the Silicon Valley culture has rubbed off on me too much.  Raising money is not success.  In fact, it’s an incredible distraction from running your business.  The lure of getting meetings with big-shot investors is strong, but your time is probably better spent elsewhere.

Only raise money if you truly need it.  Come up with a rough 6-12 month plan for your startup and determine all the possible costs.  If those costs are too large and can’t be offset with revenue or personal funds, raise money.  Otherwise, don’t raise money.  It’s as simple as that.  Furthermore, the best time to raise money is when you aren’t raising money.  Build your business/product, not your pitch.

Plenty of awesome businesses started without investment, Atlassian and Github to name two.  Raising money is not success unless you truly need the money.

4) Raising money is not easy: a common assumption right now is that raising money is easy because there’s a lot of it out there.  If you have an easy time raising money it’s either because you’re awesome or because you have shitty investors.  Good investors will ask great questions and find holes in your business.  You’ll need to do a lot of selling and a lot of convincing.  And you’ll need to infect them with your energy and passion for success.

If/when you decide to fundraise, take it seriously.  Learn from every meeting, find mentors to help you with your pitch and strategy, and go into meetings prepared.  Don’t let a bad meeting get you down.  You’ll probably have more bad meetings than good ones.

5) Start fundraising with investors who know you well: a successful seed round starts with one good investor.  With one good investor all other meetings you’ll have will be easy.  When it’s time to raise money, find someone who knows your market well and has worked with you in the past — your former CEO, a friend who’s in the space, etc.  Get this first investor to commit $10-50k on terms you both agree on.  Then go pitch other investors.  Pitching an investor when money is already committed is much easier than otherwise.  The conversation goes from “please give us money” to “you can participate if you want.”  The latter is a far better position to be in.

Again, try to get $50k committed from investors who know you before you speak to a professional investor.  If you’re interested in learning more about raising a seed round, I’d suggest you read this.

6) Customer development is key: customer development is the most important thing to get right in the early days.  The best customer development is with a product, not a survey.  Get a prototype out there, get people using it, and become friends with those people.  Your early adopters will make a huge impact on the success of your company.  Get to know them, treat them well, and listen.  They’ll fall in love and they’ll tell all their friends.

The following three questions matter the most:

  1. Why do you use our service?
  2. Will you continue to use our service?
  3. Will you pay $XYZ for our service?

Know the answers to these questions before you take any idea seriously.

When determining what features to build and what directions to go, never start with “I think we should …”  Always start with “Customers want X so we should …”  What you think doesn’t matter — your intuition is probably wrong, unless you’re incredibly talented or you’re your own customer.  Your customers are all that matters.  Without them you have nothing.

7) Team matters, a lot: there are incredibly few people out there who can build a successful startup by themselves.  Furthermore, finding good co-founders isn’t easy.  Pick a great team before you enter anything risky — before you pay legal fees for incorporating, before you plan to pursue something for the long term.

Pick team members who you’ve worked with before.  Have a total of 2-3 cofounders, anything more is too complicated.  Do not assume your team will work out until it does.  Doing a startup with someone else is like having a child or getting married.  You’re entering a commitment and everyone needs to have the same expectations around success, failure, and day-to-day operations.  Everyone needs to feel like a part of the team.  Otherwise your team will fail to work well together.  And your startup will probably fail, too.

Everyone on your team should have complimentary roles.  You shouldn’t overlap too much in what you want your role to be.  For example, two of three co-founders shouldn’t want to be the CEO or CTO.  This is an early sign of a dysfunctional team.

8) Divide equity evenly amongst the founders: I can’t stress this enough.  Do not be a founder with someone if the equity isn’t split evenly.  Uneven splits almost never make sense.  You’re all going to be busting your asses for years on this crazy idea of yours.  One person doesn’t deserve more — I don’t care how much more work they’ve done to get things started.  Split things evenly.  No exceptions.  The success of the company rests on each of your shoulders equally.  Compensate yourselves equally, too.

If one of your founders isn’t comfortable with an even split, they probably don’t trust the rest of the founding team, which isn’t good.  Or maybe they feel entitled, which also isn’t good.

If one founder did more upfront work than the other founders, put them on an accelerated vesting schedule.  Don’t give them more equity.

9) “Business people” fight an uphill battle: I don’t mean to discourage you, but your path to success is harder and longer than those who can build a product on their own.  Try to find a technical co-founder.  Unfortunately that’s the best advice I can give you.

10) Seek out advice and mentorship: make friends who are also entrepreneurs.  Find good advisors/mentors and meet with them regularly.  Try to work around other startups, either by camping at a friend’s office, or by paying for coworking space.

11) Balance passion, skill, and opportunityyou will succeed if you do something you love, something you’re good at, and something that has opportunity.  Try to build a startup that has a little of each of these.

12) Keep learning: you’ll never know all the answers.  After you read this post you’ll know more about the early startup process.  But when you finally get there you’ll have endless other things to learn.  Be ready for this.  Try to love the opportunity of learning something new.  Keep reading, and stay hungry for knowledge.

13) You might need to search a while for the right startup: I spent most of a year soul searching, building products and staying busy.  It took me nine months to find MemCachier, my current project that I’m in love with.  Don’t expect that after you quit your job you’ll know exactly what to build.  Stay busy, and ship as many products as you can while you’re in the experimentation phase.  You’ll find the right startup eventually.  And when you do, you’ll be so happy you spent time searching for it.

14) The best reason to get investment is for growth: investors want to invest in success.  Investing in a company without traction is risky.  Investing in a company that has traction and wants to see huge growth is less risky and very exciting.  There are plenty of good reasons to get investment.  But growth is the best reason.

15) Understand what type of investor you want: do you want an investor with good connections?  A trophy investor?  Someone with operational experience in your market?  Or do you just want money?  Understand what type of investor will help your business succeed and look for investors that fit the bill.

16) Starting a company is the most rewarding thing I’ve ever done: this whole process has been absolutely unbelievable.  There have been lots of hardships: my personal relationships have suffered, I’ve dried up nearly all of my financial holdings, my net income for the year is -$40,000, I hardly buy or indulge in anything, and I’ve been highly stressed for almost an entire year.  Yet I wouldn’t trade this last year for anything.  For the first time in my life I’ve found work that I love, which is truly difficult to do.  I’ve pursued my life long dream.  And I couldn’t be happier about it.  It’s all worth it.

Questions? I’m more than happy to answer them.  Write a comment and I’ll get to it soon.

One Year, Six Products: What I’ve Built and Learned

Exactly one year ago I quit my job with the dream of starting a technology company.  I didn’t have a plan except to work hard and learn.  Yet I could have used a lot of advice in the early days, which is why I’m writing to you today.  My hope is that the below advice will help guide some of you if and when you make the decision to quit your job and pursue a startup.

I have two blog posts summarizing the year and the six products I’ve built.  The first — the post you’re reading right now — is a telling of what I’ve done, what products I’ve built and what I’ve learned from each.  The second — which I’ll post tomorrow (UPDATE: here it is) — is a summary of advice for others who are in a similar position as I was a year ago.

1) FoneDoktor: Android App for Optimizing Performance

FoneDoktor was my first project after quitting my job.  I spent 2-3 months working three days a week on the project, spending the remaining two days on whatever I wanted.  I worked out of my living room, where I setup a comfortable home office.  FoneDoktor was my first mobile app, and really my first consumer app since college.  I had a ton of fun getting back into the consumer side of things and learning Android.  I decided to stop working on it after the first version was released.  I still see a lot of potential for FoneDoktor, but at the time my desires shifted to the next project.

During those two extra days per week, I built two partial products — a Craigslist search tool and a celebrity photo browser powered by Twitter.  I never launched either of them.  However, both helped in the soul searching process while I figured out what startup I wanted to pursue.

Lessons learned from FoneDoktor:

  • Android was a lot of fun.  I wrote getting started instructions
  • Consulting is a great way to support yourself while you’re looking for a startup to pursue full time.  You can pay the bills and have the flexibility to explore and soul search
  • Working from home is incredibly productive, at least for me.  But be sure to make an effort to get out of the house and interact with others
  • Don’t let consulting work monopolize your time.  Make sure you work on your own projects, too

2) TownSquared: Ning++

TownSquared was a startup I worked on for about five months with my good friend, Eric.  He’d kill me for describing it as Ning++, but that’s more or less what we were trying to do. We incorporated the company together and eventually decided to part ways despite our mutual belief in the product’s potential.  We’re still great friends, though, and I’m glad we didn’t let business get in the way of that.  TownSquared was great for a number of different reasons:

  • I got decently good at Rails and Javascript
  • All my backend work was accompanied by a beautiful frontend, courtesy of Eric
  • I pitched a good amount of big-name investors
  • I got my first taste for how hard startups are
  • I saw first hand what happens throughout the seed funding process
  • I was exposed to the incorporation process
Five months of living expenses, an incorporation, and a trip to New York for investor meetings greatly reduced my personal runway.  But the whole process was totally worth it.  I’m closer friends with Eric than I ever was.  And for the first time in my life, I pursued my very own startup, a dream I’ve had for as long as I can remember.

Lessons learned from TownSquared:

  • Get out and talk to other entrepreneurs – working in a closed area with your team gets lonely and cramped
  • Don’t incorporate a C corporation until you absolutely have to — usually when you decide to raise money.  A LLC is much cheaper, easier, and faster
  • It’s hard to build a product for many months without launching.  Try to launch something quickly and iterate — you’ll feel better about yourself when you see progress
  • Don’t pick a team because your skills overlap.  Pick a team because you work well together
  • Your team doesn’t need to have all the necessary skills for long-term success.  Build a team for short term success and hire for the rest later
  • New York is a great place to do a startup — the city is amazing, the investors we met were awesome and energetic, and the entrepreneurs are passionate and fun.  (we didn’t actually work out of New York)

3) CriticallyIn: Events that need Critical Mass

CriticallyIn was an idea I had that I totally believed could be big.  With my newly acquired Rails and Javascript skills, I learned Bootstrap and built the product in three weeks.  I got the idea because I had two events I wanted to plan that fit CriticallyIn perfectly: a zoo animal bar crawl and a mock Tour de France style mountain-top celebration.

I didn’t give CriticallyIn a fair shot at success, mostly because I had doubts about its growth potential.  CriticallyIn would need to compete with both Facebook and Eventbrite in the mindshare of the consumer, and the product isn’t distinguished enough from the other two to become a serious contendor.  That said, I had an awesome time building the product and have no regrets whatsoever.  I pitched a few investors, too, and learned even more about the fundraising process.

Lessons learned from CriticallyIn:

  • Do your homework before you talk to investors: understand who your competitors are and will be, what the market size is, and how you’ll gain market traction
  • Doing a startup by yourself is strictly harder and more lonely than doing a startup with co-founders
  • Try to validate your idea before you build it.  The product only took me three weeks to build.  Some early validation would have saved time
  • Bootstrap is awesome if you’re someone like me with zero front-end skills

4) BreakStreak: Helping You get into a Routine

BreakStreak is an idea I saw a lot of promise in as well, but the product itself was more ambitious than I was willing to take on — it would have required a mobile app, website, and complex logic.  So I built a totally fake product as an experiment.  Some of my friends were upset with me for leading them on, but overall I’m very pleased with the outcome of BreakStreak.  I learned that BreakStreak was a good idea, but my product vision was off by a long shot.  And I only wasted two days figuring this out!

Lessons learned from BreakStream:

  • Customer development is everything — find out what customers want and what they’re willing to pay for.  Figure this out before anything else
  • Figure out the best way to get good customer development — usually surveys aren’t good enough.  Building a fake product was very effective for me
  • Don’t wait for a lot of customer feedback to make a decision.  Chances are good you’ll never have enough customer feedback
  • Start with a minimum viable product, get it out quickly, and continue customer development as you iterate.  A fake product is about as minimum as you can get

5) CharmRoom: Your New Way to Discover Beauty

CharmRoom is a product I built for a friend’s startup as a consultant.  Unfortunately I can’t talk about it because it’s still in a closed beta, but I had a great time building it.  I worked on CharmRoom while I got MemCachier (explained below) off the ground.

Lessons learned from CharmRoom:

  • Consulting is a great way to sustain yourself while you get through the early days of a startup (which in my case is what I was doing with MemCachier)
  • Try to consult for someone who’s better than you at something.  In my case, the CEO of CharmRoom has given me a ton of great advice and perspective on business in general, fundraising and negotiation

6) MemCachier: A Managed Memcache for the Cloud

MemCachier is the sixth product I’ve worked on this year.  I’m pursuing it full time with David and Amit.  We incorporated in April and have been working our asses off ever since.  I’ve been having the time of my life, too.  I’m writing code, creating marketing material, discussing and deciding on company strategy, negotiating with partners, talking to customers and working with an awesome team.  We’re growing fast and trying our best to keep up.  I couldn’t be happier.

This year has been about finding what startup I want to build.  I’ve struggled to figure out what I truly love, and what I’m truly good at.  MemCachier, I’ve learned along the way, is in a space that I both love and am good at.  It’s the perfect blend of opportunity, passion, and expertise, all packaged up in a company that I love building.

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Lessons learned from MemCachier (so far):

  • Raising money takes a long time.  It’s a full time job.  The process will distract you from running your business.  Spend as little time fundraising as possible
  • Investor meetings will beat you up; investors are good at picking holes in your business.  Don’t let them get you down.  But listen to their feedback
  • Raising money is not success.  Plenty of companies get started without investment.  Ask yourself if you really need money.  If you don’t need any, don’t raise any.  Be honest with yourself — you’ll have an easy time convincing yourself that you need money
  • Institutional investors aren’t the only option.  Depending on your capital needs, money can come from banks, the government, friends and family, Kickstarter and probably other places I’ve never heard of
  • Strive to find early adopters that love your product.  Constantly interact with them and learn why they use your service.  Give them small tokens of appreciation for their help (e.g., Amazon gift cards).  MemCachier’s early adopters have been incredibly helpful
  • Being cash-flow positive is a big deal in the investment community (that is, when your costs not including salaries are lower than your revenues)
  • When you find the right business to build, you’ll know.  I’ve had doubts about each product I’ve spoken about in this post, except for MemCachier
  • Again, don’t necessarily incorporate a C corporation.  A LLC or something similar works for many businesses.  Figure out what you need and make a decision.  C corporations are expensive to incorporate.  But you can’t raise money with a LLC

THANKS

I want to thank a number of people that have helped me along the way.  I couldn’t have had such a great year without your help and support.  Thank you, thank you, thank you.  Your friendship and support is a constant energy in my life that I’m incredibly grateful for.

  • Christophe for your constant advice, friendship, and help
  • Nutron for your movies and UI/UX skillz.  Next time I won’t let you beat me gokarting
  • Jen for your love, support, and cooking :)
  • Eric for your worldly analysis.  Oh and for your friendship, too :p
  • Amit and David for putting up with me
  • Dad, Mom, Carly and Peter for always being there
  • Zoo for your kindness, positive energy, and fun attitude.  And for putting up with me
  • Ashley for Tia’s and the Family Dinner tradition
  • Kimball for your generosity regardless of my lameness
  • Ryan for setting the pace on those dirty uphills
  • All my Mission Cycling buddies for forcing me off my computer a few times a week
  • Hodges for all your marketing insight, even though you’re an asshole
  • Dror for your patience while I pitch 100 ideas to you at once
  • Omer for your frankness.  I owe you a hot chocolate
  • Dust for an excuse to go to Kansas.  Stoked you’re back in CA!
  • Todd for your technical advice and ice skating dates
  • ATM for kanyezone.com — without it I may not have survived
  • Andrew for your athletic inspiration and BBQ ribs.  You’ll kill Ironman Switzerland this weekend!
  • Glenn and Jay for always being huge inspirations and role models.  Jay, I’m still comin’ for ya on Hawk Hill
  • Whit for your patience and endless advice
  • Umed for your energy and negotiation tactical advice
  • Andy for your great soul-searching advice during those times when I didn’t know what to do
  • And everyone else I’m forgetting — friends, family, coworkers, cycling buddies.  THANK YOU

Here We Go Again – Introducing MemCachier

The last nine months have been a practice in self discovery — I’ve been keeping myself busy trying out startup ideas, consulting, and talking to investors and other entrepreneurs.  I’m pleased to say that the search has been postponed for now.  I’m working on MemCachier, a better memcache for Heroku.  And I’m working on it for the long run.  We’re going to turn MemCachier into a thriving business, and I’m stoked for the opportunity!

MemCachier provides a caching service to web developers that gives them an easier, cheaper way to scale their website.  Currently it’s available as an addon in Heroku.  Nerd stuff, I know.  But the reality is that I’m a nerd and I’m good at nerd stuff.  I couldn’t be more excited.  I’m working with Amit and his lab mate, David – the three of us make a great founding team.

Amit started building MemCachier about six months ago.  He launched it in private, then public beta on Heroku.  And earlier this week we launched into general availability.  Times are very exciting, and I’m stoked to have been invited by Amit to work on this with him.  My primary responsibilities will be on the business/company side of things, although I expect I’ll write a little code here and there as well.

MemCachier isn’t an entirely new concept — memcached has been around for a long time for websites who manage their own servers.  But memcached hasn’t yet been offered as an easy, managed solution in the cloud.  Enter MemCachier: the primary goal is to make caching easy for developers.

Anyway, I thought I’d update you guys with what I’ve been working on.  If any of you use a cache in Heroku, EC2, or anywhere, I’d LOVE to get your feedback.