Bro, I Cryed For My Startup 

…When defeat overtakes a man, the easiest and most logical thing to do is to quit.

I was first hit by the failure bus a few years back–thus I made the decision to close the doors on my first big entrepreneurial venture:, an Indie music video site I created at my kitchen table.

In the end, the decision to cut my losses and close shop was made in a heartbeat. The light bulb finally went off in my head: It had to be done. Although the final decision to pull the plug came quickly, it was precipitated by months of struggling, massive server interruption, and analyzing the many factors that were just plain out of my control.

When the light bulb finally triggered, I cryed. I made up this huge lie, which I told to anyone that would ask about Ragtube, but in the end, I did not have the capital, nor technical chops to keep her running. I shut my computer, turned off the lamp, and freakin cried.

While there are many factors that contributed to Ragtube’s ultimate demise, I want to focus on the factors that truly helped me understand that it was time to walk away.

Missing the mark on volume projections. After almost 3 years in business, I wasn’t close to hitting my initial projections for daily traffic. It was easy at the beginning to blame the miscalculations on the lack of awareness on the net. I believed that even if my marketing was off, if I just adjusted my variable costs to match, I could get the exposure and be a household name. 

Then finally, it was time to admit my business model/plan/ideal were so far off, it was nearly impossible to over look them anymore. I really don’t want to get into everything that went wrong because that’s not why I wrote this.  I wrote this as a friend… a distant friend that wants to be honest with you.

When your expenses begin to exceed revenue,  [While its normal for a newly launched business to have expenses outpace sales, a business can’t surive forever if there is no profit.] you must be honest with yourself, and ask the question: Am I throwing money away? 

Another reality I discovered was after months and months of cutting costs and brainstorming marketing ideas to bring in more traffic, it was hard to feel motivated. Walking into work knowing the money is almost gone became painful–like I was starting to realize soon and very soon I may not have a place of employment. Partner meetings became stressful, as I racked my brains for ideas that might save a business I had grown to love so much. Hope was a wave we could ride only for so long.

That said, saying goodbye to the business, the people and physical location was very difficult. But like the sting that remains after a messy breakup, eventually the pain dissipates. Each time you tell the story, share what you’ve done and discover and rediscover how much you’ve learned, it becomes more clear that failure really isn’t the right word at all. Closure, maybe.

The doors are closed, but the lessons learned and experiences gained are forever ingrained. That is entrepreneurship and that can never be seen as failure.

Ok like I always write… hope you enjoyed the read, and if you feel I plagiarized some of the material, I probably did.

So tell someone about my blog and download my latest app: SurveyStud… in the App Store.

Eyes of a Venture Capitalists 

…what a Venture Capitalist wants to see in a pitch deck.

You only get 30 to 60 minutes in front of a Venture Capitalists (VC), so it’s critical the deck has structure–VC Structure.

It’s fair to say I’ve seen many pitches, and I can specifically recall sitting in a pitch thinking, why don’t this guy get to the bottom line. I get tired of seeing thesame miscalculated  presentation week after week–sorry just being honest.

Anyway lets get to the point. I put together what “I feel are critical points during a pitch.”

So the below 6 Slides are critical in a pitch:

          – SLIDE 1: Founders

          – SLIDE 2: Problem / Solution

          – SLIDE 3: Demo

          – SLIDE 4: Scalability / Defensibility

          – SLIDE 5: Distribution

          – SLIDE 6: Projections

Pitch Deck Slide #1 – Founders:  An inviting picture/image, the name of the company, and Management Team up front if you don’t know the investors ahead of time.

Pitch Deck Slide #2 – The Problem and Solution: 

– Problem: You want to move into the problem you are solving, pretty quickly. Skip the backstory, and get to the point – “The problem is X.” If there are multiple problems, focus on the largest and most immediate to start. Avoid jargon and acronyms…keep it straightforward and simple.

– Solution: Within the first couple of minutes, you should be through the introduction, and stated your problem. From there, you should be ready to show the solution, either live (mobile app), or in graphical format on your slide. Speak clearly and confidently.

Pitch Deck Slide #3 – Demo: We are now in the Information Age.  You should not pitch a product… specifically an app, without a demo.

Pitch Deck Slide #4 – Scalability and Defensibility:  At this point, the VC is thinking, “I’m interested in this, or not.” This is another side that should be high-level, without getting too deep into details. Prove two things: show that your product is scalable, and show that it is defensible (can’t be easily copied). Nothing impresses VCs more than founders who show that they are really smart, and are on to something that not many people know about yet.

Pitch Deck Slide #5 – Distribution:  It’s really about communicating how you’re getting to market; this slide shows you have taken the time to research what the best method(s) will be for getting your offering out into the world. A lot of incubators and accelerators today will spend time with their member companies to assemble a proper distribution strategy.

Pitch Deck Slide #6 – Projections: Keep it to one slide, with 2-3 years of revenue projections. Top line operating expenses. Most importantly, what does the cash burn look like, and what’s the head count? Avoid going into a five year model at the early stages. Keep it simple…VCs are only going to remember a few key numbers.

Unfortunately, as a reminder there is no such thing as a “perfect” pitch deck because pitch decks are always being refined and tweaked to optimize for the immediate audience to whom the deck is being presented. In other words, one size does not fit all when it comes to a pitch deck.  BUT one thing I do believe, if you have a demo of your product/app… that means more than any slides you could ever put together. Something to think about…

As always if it seems I may have plagiarized, heck I probably did… BUT I ask that you forgive me, leave a comment, and have a nice day.

Startup Hustle, Scale, and Culture

…So you want to scale your company and maintain that startup feeling

The more you expand, however, the more difficult it is to maintain that startup feel, to sustain the uniqueness that once defined your company’s culture and climate. Now, as a larger company, accountability has increased, there’s an array of different personalities to manage, and you want to ensure each employee is happy, productive and is the right fit for the job role so you can maintain the right scale to match the current demand.

Sounds easy, right? Not so much. Here’s the dilemma: What got you “here” won’t get you “there” — at least, not the same processes, or means by which your company produces output. However, the principles of trust, communication and teamwork will.

In reviewing the challenge that lies before you in terms of growing the company while preserving its culture, there are myriad intangibles to consider. To turn those unknowns into something more palpable, use the following guideline to gain a better understanding of what can be preserved, what cannot, and how you and your company can stay relevant:

1. Clean house: 

What worked in terms of productivity three years ago is obsolete today for the simple fact that technology has changed, which suggests that the tools and systems used to lead people must change.

Whether it’s three people, 20 people, or 100, each team size necessitates its own individual management approach. Matching the inputs of human capital with their intended outputs requires different processes and management styles at each stage of the growth game.

2. Save yourself:

The principles that govern your brand and the values upon which you initially founded your startup are enduring beliefs that never grow old. Values and behaviors such as service, humility, communication and feedback only serve to improve the company and keep it alive.

In other words, will a new process build trust or deplete it–then ask yourself why!

3. Merge the two 

Scaling isn’t easy. It’s almost as if you’re starting from scratch because what works with 100 employees is completely different than what works with 1,000. Keep it simple by building upon the very elements that sparked your desire to start a business.

As always if you like what you read live a comment.

If it seems I plagiarized any of this… ha I may have.  

Regardless leave a comment

Are India Startups Serious Business… 

…Are India’s tech startups serious businesses or will they just fade away when the funding stops

The other day, I came across an article on Rahul Yadav, who was CEO of a startup named till he was sacked by the board. 

I must admit the interview is old, having being conducted in 2015–However, there is one part of it which offers an interesting insight into what is wrong with Indian startups. At one point in the conversation, Yadav confesses that he doesn’t like ‘Excel sheets. “He says that when they were meeting potential investors, if the investor asked for Excel sheets, they would just drop that investor.”

Strange enough if any investor turned out to be the sort who was interested in discussing such things, these entrepreneurs just stopped talking to him and moved on to someone else. As Yadav says, with a sly smile at one point in the interview, that when an investor wanted too much detail, he knew it wouldn’t work out. 

Now there’s nothing unusual about this attitude. This has been a time-honoured tradition of Indian promoters since long before these digital days — avoid investors who are interested in too much detail, just look for a greater fool instead. However, I do feel that in the domain of technology startups, this attitude arises from a fundamentally different premise. 

They seem to firmly believe that as long as they have enough scale, that’s great, even if they are losing money on each transaction. This seems to be a widespread belief among Indian startups–yet the opposite view, that a business is a business and cannot defy the basic logic of sales, expenses, profit and loss for too long, is seen as something that doesn’t apply to new, technology-based businesses. 

So based on the article I wonder why India’s zombie startups reach their logical end sooner rather than later. 

NDA… Can Be BullSh*t 👀 

…In early stages of a discussion asking for an NDA (non-disclosure agreements) often signals you’re a rookie, and or new to the game

So let’s explore the mechanics of the NDA, or the rationale for trying to get people to sign.

A lot of entrepreneurs for some reason think “if I get them to sign the NDA, then I can reveal some of my secrets because the NDA will protect me.”–Bro this is so far from the truth.  Its just so fuck’n wrong.  If you are a normal startup then cash is an issue.  So if cash is an issue how are you going to fight this in court?

You have to take them to court, and spend a absorbent amount of cheddar defending, and proving a lot of details which you may or may not have… at the end of the day, the one question I have, can you sustain the onslaught of legal fees?

BUT lets say we divide the type of information you might conceivably disclose to an outside party into two categories:

          – Cat 1:  Trying To Do

          – Cat 2:  Going To Do

So let’s look at Cat 1: Trying To Do. This information should not be kept secret. You have more to gain by disclosing information than trying to protect it (in most cases). One of the biggest problems startups face is that they invest time/energy/money into an idea under the false premise that they will be the first/only company in that market within a given window of time. In most cases, this is simply not true. By talking to people (that you trust), and discussing your idea, you’ll get a better sense of who is out there doing likert things. Some of these could be competitors – but some could also be partners, customers, acquirers, etc. 

Also if you have a fear – that revealing the idea will cause a bunch of people to hear about it, recognize its brilliance and then pursue the idea themselves shake that shit loose. It will halt you from exploring all options.

Now let’s look at Cat 2: Going To Do. Truth is with or without an NDA in place, you are not going to share everything about your idea–I have talked to a gang of entrepreneurs, and key deliverables are/is always missing; sad thing about it, I’m the guy with the check book, and they always seem to forget the “secret sauce.” They are so worried that people like me will steal the ideal–they often talk themselves out of a deal.  WTF!

I believe between the two categories Cat 2: Going To Do requires an NDA. BUT it’s only valuable if you are willing to actually share the “secret sauce.”

So what am I saying:

     – “SHARE” Cat 1: Trying To Do, as early in the process as possible… No NDA is required.

    – “DO NOT SHARE” Cat 2: Going To Do, unless you are willing to be 100% honest, and need help from the person you are speaking with… NDA is required.

Startup Introduction Risk

“George, dude, can you introduce me? 

I have little experience with raising money. I had done it only once, for a startup that we had shutdown and later restarted with the remaining capital. Yet, I am often asked to help with fundraising. I love helping.

After talking to many entrepreneurs, a common theme emerges. The theme is best illustrated by this incident from a few days ago.

Someone I studied with at the university 20 years ago, whom I have not seen afterwards, recently asked me this question (paraphrased from German):

While other similar requests aren’t coming in such a familiar form (which I don’t mind), they do share a common trait: I don’t/barely know them and they ask me to introduce them to local big shots.

Let me clarify that I’ve never met Mr/Mrs Big Shot and if it’s any indication, they doesn’t follow me on Social Media. However, I often do know the person I’m asked to bridge to. Yet, for me to introduce you to anyone, I first must know you well. So I can vouch for you. In no other circumstances I can make an introduction. Regardless how cool your project is.

So… 10 years ago I was assembling PCs at a computer store in Darmstadt, Germany. A guy I knew from playing basketball told me he was looking for a job. So I spoke with another guy I knew, and I brought him in for an interview and he started working shortly afterwards.

After about two weeks, he didn’t show up to work one day. And then the next day. And I didn’t see him anymore. He vanished. I wasn’t responsible for it, yet, it forever stained my ability to recommend new recruits to the store. And the store owner was never shy reminding me of it.

Funny side note: I ran into the guy ten years later at a party in Houston, Texas. Where he explained that his family made a sudden move to America a few weeks after he had started working at the store.

We laughed at it and we’re close friends ever since. He is an awesome guy. But back then, he screwed me over while teaching me a valuable lesson.

“You are always taking a risk when making an introduction. If the intro is a waste of time, it’ll affect your own reputation, putting your social capital at risk. Do it too often and you are out of the networking game.”

The only way to mitigate that risk is to know both parties well to ensure it is indeed a valuable match.

Another thing at the early phase of your project, everything depends on you, the founder. Nothing else matters. Your pitch deck isn’t enough to assess your ethics, commitment, your ability to attract talent, lead the team or handle a crisis.

You can not showcase these skills in a 30 minutes Skype call. Your self-selling statements peppered with todays’ buzzwords won’t establish your credibility.

“I’m a future thinking kinda guy, building a VR enabling IoT. Main focus is AI based on deep learning of big data”

It often just does the exact opposite.

Lesson I learned, if I cannot vouch for you, what do you want me to say? Here is a dude I met, and he is working on a cool project? What do you think Mr/Mrs Big Shot will do? Drop everything and call you? What do you think it will do to my credibility as a connector?

However, if you do possess the above qualities, plenty of people should be able to attest to it. Those are the people in your network, people you worked with before. Only they can make meaningful and valuable intros for you. Everything else is noise. Asking a random person to introduce you is asking them to add more noise to a system of already low signal-to-noise ratio.

And if someone agrees to introduce you without writing two meaningful paragraphs about you, then chances are, you won’t see any benefit from that intro. As their intros are rarely taken seriously anyways.

What I’m saying bruh research the person you looking to be introduced to. Then, find the best person in your network that can connect the dots for you. The connector should already know you well, so don’t sell yourself. Instead, sell them the benefits both sides may reap in case of a successful match. Your connector will be happy to take the credit for a great match and gladly intro you.

F’d Up Credit… Bruh

Man it’s 100% not easy to find money to start a business if your credit is F’d up. But it can be done. Here are some ways you may be able to get the money you need to get your startup off the ground. 

Note, all is not lost if your personal credit is F’d up!

Most startups usually find some type of money for their business – be it from personal savings, retirement accounts or loans from friends and family. But they usually don’t have funding necessary to launch and tend to struggle with their money.

Plus, F’d up credited (or even no credit) will make it hard for tech/business owners to get unsecured working capital for items like marketing, payroll, supplies blah blah blah.

I personally believe whatever liquid capital a business owners has walking into a new venture should be used for the overall development and growth of the business – it’s essentially like putting in your own venture capital. However this method of allocation usually leaves little if not ‘no’ additional money for other items businesses need for their operations to include tools and machinery to provide their goods or services, inventory, rent, or even office equipment including computers, copiers or even vehicles – items used in the day-to-day life of all businesses. But there are other ways business owners can get these items even if the entrepreneur has F’d up credit.

For unsecured working capital, business owners can use numerous social lending (Kiva and blah blah blah) sites. Social Lending is essentially where jokers borrow and lend to each other. Money for these sources tends to be easier to get. Furthermore rates of these types of loans are usually lower than traditional bank lending. 

Also something you need to know, some lenders on social lending sites tend to weed out borrowers through credit, race, and geographic profiling (thats another conversation trust me) – leaving many new startups in limbo.

So basically my over all point–even with F’d up credit there are ways to get money for your startup.

***Side note: Download then rate my App– SurveyStud in the App Store.

Startup Death March… Fu*k Me!

It’s the dream of every internet startup founder to sell their company for millions of dollars.

But not everyone can make a quick buck like Facebook founder Mark Zuckerberg or the investors of Instagram who recouped enormous amounts of money on their original investments.

As startup Founders, we are constantly focused on making sure our fledgling companies have enough runway to grow. We believe that if the company’s bank account runs out, the company goes bankrupt and it’s game over.

But that’s not always true. It’s often not until your personal bank account runs to zero that your startup is truly done for.

The fact is that startups don’t truly go bankrupt until their Founders go bankrupt. The problem is that Founders are often so focused on the startup’s finances that they overlook their own ability to stay afloat in the process. I call this the “death march,” or the amount of time that you can stay alive and fed, regardless of the health of your business.

I learned about the death march when I started my first company, which went from a humble launch out of my apartment, to fancy new offices, to a very humble return back to my apartment.
I realized, by moving the operation back to my apartment and drastically cutting costs, I could keep myself going indefinitely– from that position, I could take time to rebuild the company. It wasn’t fun, but it taught me that if I could keep the death march extended, I could still move my business forward.
The death march is critical to the success of your business. It may be noble to forgo all personal income in order to help your business, but it will crush you in the end. Your business can go a month without any activity; you can’t go a month without eating.

As long as you’re still eating, you have the ability to operate the business. You can still talk to customers, investors, and the press. You can still get up every day and keep the spirit of the business alive, albeit in a reduced form.

That matters in a startup, because there are often times when the business is a fraction of what it should be, but it’s at least around long enough to blossom again. Your understanding that there could be a day when your business may walk the death march is often the core of your business’s health.  I write this because a realistic understanding that it can all go away makes you think strategically day in day out.

There’s nothing that says that the income you rely on has to come from your actual startup. Founders use all kinds of methods to keep themselves fed while keeping their businesses alive.
One of my favorite recollections comes from venture capitalist Fred Wilson, who tells the story of the Founders of Airbnb getting really creative to maintain their personal runway.

During the 2008 presidential elections, the Founders of Airbnb went to the Democratic National Convention in Denver to raise money by selling boxes of “Obama O’s” and “Cap’n McCains” for $40 apiece. They raised $25,000 in short order. The boxes that they didn’t sell, they ate in order to save money on food.

That anecdote comes from a company that has since raised over $1Billion (ha I really don’t know but it helps my point) in funding. They got creative. They sensed the death march and realized they needed to do something to keep the company alive– doing whatever you need to do to keep the lights on personally – including eating your own product – so that your business can live to see another day. Nice!

Avoiding the death march may mean consulting on the side, working a part time job, or reducing your expenses drastically.

The longer you can keep yourself fed, the longer you have to figure out how to solve those problems. It’s OK that you are the only employee during this time. It’s not always ideal, but it means someone is still at the wheel long enough to figure out the next step. 

 App Business

What makes a successful mobile app? What factors increase conversion on mobile?

There are a lot of little factors that build up to a really successful mobile app, but the most important aspect to focus on is the user. The app stores have done a great job of creating transparency between the users and the brands, communicating the customer’s wants and needs to app developers. At SurveyStud, Inc, we may represent the brands when we are creating their app, but it’s ultimately the brand’s responsibility to understand their customer and determine how they can provide value to that customer. More than any other platform, mobile is a highly consumable channel, so brands are missing out if they are not giving their user the best mobile experience.

Creating a native experience that is separate from the mobile site is one of the best ways to ensure conversion. Among the brands that embrace native mobile, we consistently see their apps having 2-5x the per-user conversion rate compared to the accompanying mobile sites. However, this is not to say that apps are superior in importance. They don’t work against each other, but rather serve a different audience. Mobile sites are for the casual or unfamiliar customer, while apps are for the most loyal customers and those looking for a more convenient or personal way to interact with a brand. Brands that mimic or frame the mobile site and call it an app are not satisfying the desire of those key users.

Conversion factors for customers

 Additionally, it’s important to use what the device and software gives you. A common misconception in the mobile world is that you have to create these crazy features and do something that’s never been done before, but the success truly comes from the actual products. If you understand that your products are your bread and butter, this platform will offer the best and fastest way for your customer to consume your products. In the end, don’t dilute the content in any way, stick to the basics, give the customers what they need and create a beautiful native experience.

In order for a mobile app to truly succeed, you must have a customer engagement strategy in place. Be sure that every new user fully understand the value of your app with a comprehensive onboarding strategy. Focus on keeping your users engaged with your app with personalized push notifications. When users truly enjoy engaging with your app, it will be successful.

 At SurveyStud, we are always trying to gather user feedback and improve the app experience, but at the same time, we want to be exploring new variations and better ways of doing things. This is where our growth team comes in. The team will gather feedback from user interviews, the app store, and feedback forms on the app, as well as track press reports and compile analytics on what people tend to use the most. Every week, they take all of that information and turn it into real features and functionalities that users are demanding. The road to validation is much faster this way because we are following a user need, and the risk of failure is much lower. Additionally, by following the guidelines that Apple and Android provide to us, we can give the users something they understand and are familiar with, rather than trying to be too unique and creating an experience they won’t like.

 Push notifications are one great way to personally communicate with customers in a manner that can’t be duplicated on a desktop. Push is therefore one of the best ways to retain customers and increase loyalty, and brands who aren’t using push will notice their app usage declining over time. With m-commerce, we always have to continue to personalize and communicate with the user. 

What advice do you have for companies thinking about creating a mobile app?

My advice for companies is to give their app the time it really deserves and to never treat it as something that can be launched and then forgotten. This is a tool that is going to build relationships and engagement with customers in a deeper way than ever before, and it’s the most important tool you have to show how much you care about your customers. A mobile or desktop site can pass as being a generic, identical experience for every user, but when the app is not personalized to them, they take notice and stop coming back. Take your app seriously and be ready to learn how to improve every day.

It’s an extremely exciting time to be a part of the mobile space. The app market is growing rapidly, new tools and innovations are being created every day, and more and more users are discovering the brilliance of today’s smartphones. If your company has ever considered developing a mobile app in order to grow your brand and engage with your loyal customers, now is certainly the time to start. You won’t regret it.

Eye of an Investor: Know This!

The question reminds me that most of the web buzz around investment is about what happens with high-tech and high-growth angel and venture capital investment. That, however, is a very small subset at the very top of the investment pyramid. There’s not enough information floating around about what investment looks like for the rest of the world.

So here’s a simple primer on the basics of business investment for startups:

1. Everything in startups is on a case-by-case basis. The things I discuss in this post are generally true, but there are always exceptions.

2. Investment normally implies ownership. The hypothetical $50K investment would buy a percentage of ownership in your company.

3. How much ownership the investment is worth is determined by dividing the amount of the investment by the value of the company. A $50K investment buys 50 percent ownership of a company worth $100K, 20 percent ownership of a company worth $250K, and 5 percent ownership of a company worth $1 million.

4. There are laws governing who can invest and how you can seek investment in your company. Make sure you check with an attorney on this. The terms “friends and family” and “angel investment” are legally significant.

5. Standard startup investment gets a return only when the startup company generates actual liquid money for its owners by selling its shares. Since it’s all case-by-case, you could offer investors dividends or some other drip compensation, but that’s not the standard. The standard is that the investors make their money when they can sell their ownership shares for a whole lot more than the $50K that they originally invested. Angel investors want to believe that their investment can grow 10x or even 100x in 3-5 years, because investing in startups is very risky and therefore angel investors must get a very high rate of return on a successful investment to make up for the losses they incur with startup failures.

6. Return relates to risk. If you have a low-tech, low-growth business, maybe you can attract friend and family investors who will be satisfied with an annual dividend or something similar (and small). That’s unusual.

7. Always compare the investment in your company to what the investor would get with much less risky investments like certificates of deposit or mutual funds. All startups are risky. Investors should expect a higher payoff.

8. Sometimes people invest in a startup for non-monetary reasons, like family support.

So what is the answer to that specific question about the $50K investment? I can’t answer without knowing what the company is, to evaluate its growth prospects, chance of eventual exit, and so forth. But it starts with the assumption that the investment will mean selling a share of your company.