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Here's an awesome time-lapse video of Jeff Broderick, our lead designer, creating an icon for Test Flight App (similar to AppDrop, but for all apps, not just AppMakr apps.)
The sketch was provided by the Test Flight folks, and Jeff turned it into an icon. Pretty sweet stuff.
Here's an awesome time-lapse video of Jeff Broderick, our lead designer, creating an icon for Test Flight App (similar to AppDrop, but for all apps, not just AppMakr apps.) The sketch was provided by the Test Flight folks, and Jeff turned it into an icon. Pretty sweet stuff.
Like countless other Verizon MiFi users, I've been having terrible disconnect issues with the MiFi when it's in WiFi mode (it works fine in modem mode, but I hate modem mode - in WiFi mode you can share the connection with 5 users and you don't need to be running the VZ software, so it's much more usable... except for this vexing issue where the MiFi would disconnect & then reconnect from the VZ network every 30 to 90 seconds, basically making it unusable).
I wasn't alone with this problem - thousands (or tens of thousands?) of other MiFi users have been having it. In fact, there are countless posts on the Verizon Message Boards about this issue, like this one, and this one.
An especially good description of the problem was provided by Adam Tow on his personal blog.
I had previously called Verizon tech support, and after a painful escalation process to Tier 2 technical support, I was sent a new piece of MiFi hardware. This did not resolve the issue, and I put up with it for another 6 months.
Finally I got fed up, so I did what I do best: I contacted the CEO of Verizon and told him he had a problem on his hands. But why stop there? While I was at it, I contacted the entire Verizon executive suite. I've written before about how to get ahold of anybody in this blog about an AT&T issue, and this blog about trading up, and this blog about the secret to getting good press, so you should be able to discern from those blogs how I found the email addresses of everyone in the VZ executive suite. Here's the email I sent them:
Like countless other Verizon MiFi users, I've been having terrible disconnect issues with the MiFi when it's in WiFi mode (it works fine in modem mode, but I hate modem mode - in WiFi mode you can share the connection with 5 users and you don't need to be running the VZ software, so it's much more usable... except for this vexing issue where the MiFi would disconnect & then reconnect from the VZ network every 30 to 90 seconds, basically making it unusable). I wasn't alone with this problem - thousands (or tens of thousands?) of other MiFi users have been having it. In fact, there are countless posts on the Verizon Message Boards about this issue, like this one, and this one. An especially good description of the problem was provided by Adam Tow on his personal blog. I had previously called Verizon tech support, and after a painful escalation process to Tier 2 technical support, I was sent a new piece of MiFi hardware. This did not resolve the issue, and I put up with it for another 6 months. Finally I got fed up, so I did what I do best: I contacted the CEO of Verizon and told him he had a problem on his hands. But why stop there? While I was at it, I contacted the entire Verizon executive suite. I've written before about how to get ahold of anybody in this blog about an AT&T issue, and this blog about trading up, and this blog about the secret to getting good press, so you should be able to discern from those blogs how I found the email addresses of everyone in the VZ executive suite. Here's the email I sent them: Daniel, Ajay, Marni, Marquett, Margaret, I'm sure you're all very busy. I hope you can take a moment to handle an issue from a longtime customer. I'm writing you about a HUGE issue with your Verizon MiFi product that many users are having, yet tech support seems to be at a loss about how to fix. The Verizon MiFi constantly disconnects when in WiFi mode. It's unusable. And I'm not the only one with this problem. Adam Tow (a producer of WSJ's All Things Digital) wrote an in-depth blog about this problem: http://www.tow.com/2010/04/30/verizon-mifi-disconnects-constantly-in-wifi-mode/ I'm cc'ing Adam on this email to see if he has any updates. And there are even numerous threads about it on your own discussion boards: http://community.vzw.com/t5/Broadband-Netbook-MiFi-Devices/mifi-constantly-disconnects/m-p/124168 Can you please tell me what you're doing to remedy this problem? I'm about to move to Sprint's 4G network, I'm so frustrated by the performance issues, which have been ongoing over the past 18 months. DROdio _______________________Daniel Ruben Odio-Paez t: @DROdio PS - Can you beat my time of 0:50 in the F1 GeekSpeed Challenge? For good measure, I found Adam Tow's email address, and cc'd him on the email. I had realized he's actually the senior producer for web & multimedia of the All Things D site published by the Wall Street Journal. I don't know if that encouraged the VZ Executive suite to respond to me or not (and in fairness to Adam, he had no idea I was doing this, so he was probably pretty surprised to be cc'd on the email, although he took it in stride and vouched for the fact he too was having the MiFi disconnect issue), but the next day, I had 3 senior Verizon representatives call me to try to help resolve my issue. And the good news is, it was in fact resolved quickly by Verizon, so kudos for their "executive SWAT response team" acting quickly (if anyone at VZ reads this, I just wish your front-line tech support people were able to handle these issues so they didn't have to be escalated). And the solution? Pretty simple, actually - you have to update the MiFi firmware. That can only be done on a PC, according to the VZ rep, so if you only have a Mac, you'll have to find a PC onto which you can update the firmware. It should go from version "135" to version "159" by the time you're done. Here's the exact email from the VZ rep: Mr. Odio-Paez and Mr. Tow, We believe we have isolated your issue. Our technician recommends upgrading the firmware on the MiFi devices. The upgrade will need to be implemented via a PC, and is bundled with the new VZAccess Manager 7.3.11 available at the following link www.vzam.net. Please let me know if you have any issue with upgrading the devices, as I realize the machines are Mac's. If this becomes the case, we can work through another solution. Thank you, and I look forward to hearing from you soon. Now, my MiFi doesn't disconnect constantly, and it's actually usable again. I hope you can find some success with this firmware upgrade as well, and this is also a reminder not to settle - when you have a problem, do whatever you need to do to trade up until you find a solution, even if it means emailing the CEO of Verizon to get what you need.
As part of my Fundraising Cribsheet series of blogs to help entrepreneurs raise money more quickly and efficiently, I interviewed today George Zachary, a Venture Capitalist with Charles River Ventures. CRV is very well known out here in Silicon Valley, as is George, who's been in the business for 15+ years.
Previously, I interviewed Naval Ravikant of AngelList, and interviewed Shai Goldman of Silicon Valley Bank, and I participated on a panel about the differences raising an angel round vs. a Series A round. Before the end of 2010, I'll be writing in-depth about the 14 weeks my co-founder Sean and I spent raising $1MM for AppMakr, so subscribe to my blog (top right corner) if you'd like to get more in-depth updates as I share them.
Before I started the interview with George, I tweeted a request for questions, and Shai responded with a question about George's outlook for 2011 and any impending bubbles, which I asked George during the interview below.
In this awesome 45 minute interview, George touched on a range of topics, including:
As part of my Fundraising Cribsheet series of blogs to help entrepreneurs raise money more quickly and efficiently, I interviewed today George Zachary, a Venture Capitalist with Charles River Ventures. CRV is very well known out here in Silicon Valley, as is George, who's been in the business for 15+ years. Previously, I interviewed Naval Ravikant of AngelList, and interviewed Shai Goldman of Silicon Valley Bank, and I participated on a panel about the differences raising an angel round vs. a Series A round. Before the end of 2010, I'll be writing in-depth about the 14 weeks my co-founder Sean and I spent raising $1MM for AppMakr, so subscribe to my blog (top right corner) if you'd like to get more in-depth updates as I share them. Before I started the interview with George, I tweeted a request for questions, and Shai responded with a question about George's outlook for 2011 and any impending bubbles, which I asked George during the interview below. In this awesome 45 minute interview, George touched on a range of topics, including: The best way to pitch George an idea, including what he loves, and what he hates What areas he considers hot right now, and would be willing to fund today Consistent mistakes he sees entrepreneurs making in their businesses, and when pitching VCs Why the Valley has a culture of giving "polite no's" and what he does differently Whether an entrepreneur he has passed on should be persistent and follow up with him How best to interact with investors once they've funded you What the lack of exits & IPOs means for the VC landscape What an entrepreneur should do to get favorable terms from VCs, and how the terms can be affected by other factors like valuations Why CRV is doing small angel-type investments ($100k-range) and how it's paying off What George's outlook is for 2011, and what George calls the "angel bubble" How you can contact George directly, and what he likes to see when you do so And a lot more. Lots of great stuff in this interview, so enjoy it; I hope it's helpful. Please post any comments in the thread below and if I get enough interest and/or interesting questions/comments, I'll follow up with him to get you answers. And a huge thank-you to George for being such an awesome and amazing VC to our company, and to the Valley in general. The fact that he took 45 minutes out of his day to give entrepreneurs access to the wealth of knowledge he has says a lot about him and CRV. Here's the video:
Yesterday Shai Goldman of Silicon Valley Bank hosted and moderated a fundraising panel for the popular SD Forum organization, a Bay area non-profit created to foster innovation, entrepreneurship and leadership within the Silicon Valley ecosystem.
As somebody new to the Bay area myself, I was flattered to be invited by Shai to be a panelist, along with Ken Singer, the CEO of Ondeego, which recently raised $3.3MM.
The result was a lively panel with many questions from the audience surrounding the learning that Ken and I had as we raised angel and venture money in the Valley.
In the video I spoke highly of AngelList (you can watch a related interview with Naval, one of the AngelList founders), I gave my top tips for hiring technical talent (which I've never given publicly before), and I spoke openly about the mistakes I made, and what I would do differently if going through it again. I also interviewed Shai on the topic recently.
My participation on this panel was part of a series of blogs I'll be writing through the end of the year on our 14 weeks spent fundraising, in an attempt to help other entrepreneurs shortcut the process. If you'd like to read my upcoming posts on the topic, in which I'll go into great detail, please subscribe to this blog (top right). I'd also welcome any comments anyone has on fundraising tips, especially the decision points between choosing convertible debt vs an equity round.
Yesterday Shai Goldman of Silicon Valley Bank hosted and moderated a fundraising panel for the popular SD Forum organization, a Bay area non-profit created to foster innovation, entrepreneurship and leadership within the Silicon Valley ecosystem. As somebody new to the Bay area myself, I was flattered to be invited by Shai to be a panelist, along with Ken Singer, the CEO of Ondeego, which recently raised $3.3MM. The result was a lively panel with many questions from the audience surrounding the learning that Ken and I had as we raised angel and venture money in the Valley. In the video I spoke highly of AngelList (you can watch a related interview with Naval, one of the AngelList founders), I gave my top tips for hiring technical talent (which I've never given publicly before), and I spoke openly about the mistakes I made, and what I would do differently if going through it again. I also interviewed Shai on the topic recently. My participation on this panel was part of a series of blogs I'll be writing through the end of the year on our 14 weeks spent fundraising, in an attempt to help other entrepreneurs shortcut the process. If you'd like to read my upcoming posts on the topic, in which I'll go into great detail, please subscribe to this blog (top right). I'd also welcome any comments anyone has on fundraising tips, especially the decision points between choosing convertible debt vs an equity round. Here's the video: Here's a transcript of the video: (learn how & why I do this) Shai Goldman SVB Mobile Fundraising Event Shai- Good morning, alright we are going to get started here, just a few quick remarks and we will get into the panel. My name is Shai Goldman with Silicon Valley Bank I am here tonight, we are the host. Just a quick overview of SVB we've been around for almost 30 years and we are a commercial bank focusing on technology companies anywhere from Venture back start-ups to public technology companies. We have offices across the country but also globally in the UK, Israel, China and India. My role is really working with pre-venture back companies in the Bay Area helping them with the fundraising process which is what we will be discussing tonight. We have a few sponsors tonight PWC, DLA and Microsoft they help make this happen. So those are quick remarks on the co-chair addition to SVB we have a co-chair at ST forum it's really a a long term position, I I've been there for four years. A quick overview of ST forum is it's a non-profit organization based in the Bay Area our focus is providing advice and content for technology companies based in the Bay Area so its a ST forum event that's mainly it. Also, cell phones if you could put those on vibrate, I'll do the same, I have one or two myself. So we have like an hour, an hour and 15 minutes um mostly Q&A, I have a few questions for the panelist but its really based on what you guys want to discuss. The primary topic really is the fundraising processes, talk about which channel (.....) what stage are they, where they were at when they raised a round of financing. Both CEOS are in the mobile space so if theres enough time we will get into discussion around the trends of mobility. We had a third CEO scheduled her name is Karmia at Busy Bees but she is closing a business tonight so she couldn't make it unfortunately but we still have two great panelist so with that we will get in to it. So we have Daniel over here from AppMakr, we have Ken with Ondeego. So a first time of raising a round of financing or a VC round of financing from what I understand so lets get off to a few questions and I will let you guys drive the conversation. It will be helpful to know how much you raised, when did you raise money but first what do you guys do, when did you raise money and how much. Guest- what are the name again Shai- It's Daniel with AppMakr Ken - I am Ken with Ondeego, were changing our name because you wont be able to spell it. It is Ken Singer, when you get money you get to spend it on re-branding, right? Guest- What is the new company name? Ken- I don't know we hired someone else for that. Daniel- I hear AppMakr is a great name Ken- yeah it is but I hear it's taken. So we are about 3 ½ years old which makes it kind of an old company that tried to get series A financing we raised 3.3 million about a month and half ago from Blue Run Ventures which is a great VC fund we are very mobile focused that was one of the reasons why we chose them we had other VC's that were interested we tried to go the strategic route, find the right partner in terms of market (...) Guest- What is the element of of (....) Ken- We have an enterprise app store to help a company deploy different applications to their employees regardless of whether its for a tablet or for a phone and uh once you deploy it through our system you get to manage the applications so you know who has it what versions they have. If they decide to leave the company with their iPhone but has your application on it you can remotely wipe the data application. Daniel- Hi guys, my name is Daniel Odio, I am actually Co-founder and COO of a company called PointAbout, AppMakr is our product that we launched in January. PointAbout is based out of Washington DC and in fact I was also based out of Washington DC until just this summer. I drove the car across the country to the Valley here over the summer. I am an East Coast entrepreneur that has decided along with our team that the place to be is the West Coast to launch a product company and that's what we've done. We've set up office in SoMa. We've got about 30 people and we are about 2 ½ years old. We started doing professional services so PointAbout was named by Fast Company as one of the top 3 enterprise app creation companies. Things like iPad apps, Andriod, mobile web for large clients fortune 1,000 clients like GM and Disney. We are all product guys in fact we are all web guys and we really wanted anybody to be able to make an app so we had been architecting this thing called AppMakr for the last year and ½ and we launched it in January. We saw tremendous growth it's been doubling every 45 days it's been used to build 1% of all the apps in the app store including used by large brands like Newsweek, National Geographic, PGA Tour, Congress, Coast Guard and a lot of small brands that you've never heard of like soccer coaches and bands and so we did a Angel Round of 1 million bucks from some West Coast Angles. I've got a lot that I can tell you, a lot of learning especially as an East Coast entrepreneur who are coming to the West Coast. I tell ya, you guys have this culture out here that's very subtle but I learned all about it. All in the process of raising funds over the summer. I will be happy to talk about that, but I do have a question for everyone here because really I am here for you. I mean, can you just raise your hands, is anyone here looking to raise money, like I am very curious, ok so thinking about it. Is anyone in the process of raising right now? Ok, a few are. Who in here has raised either an Angel or an institutional round. A couple of you, I think that you guys are just as well qualified as we are to speak to this issues and possibly more so. I would encourage you to speak up while we are going through this tonight. Hopefully, there will be a lot of learning here that's what I am here for. Guest- when did you close your round? Daniel- Just in October, we had a big funding party, which by the way we did it with a $500.00 budget at the end of October. Guest- That was the Angel round you raised? Daniel- Yeah that was the Angel round, so Mitch Kapor, Charles River Ventures, George Zachary and Bill Tai, Kima Ventures which is a French super Angel, Brain McClendon who's a VP at Google and a bunch of others. I could rattle off a whole list if you want to hear it but it's basically about 10 Silicon Valley Angels. Shai- So the challenge that I see with a lot of start-ups is that when they go out and pitch money too early which is also (....) and ambiguous so maybe we sort of set the standard by what state was your company when (....) raise that first round of capitol. (........) Ken- I actually not the case that you could ever be too early as a company, your market can be too early so if the VC thinks that the market it here and your product or your company is not quite there but you are the best horse in the race they will fund you because they believe the market is here. That is what the goal is they think they can fix everything else. The market they cant fix they cant force customers to buy if they are not ready so if your company if not ready yet I still suggest going out and one of the things an advisor of mine used to tell me even you are not looking for money always go and meet a VC every quarter so you get practice. You really want to stay engaged with the language the way that they look at information because VC's calculate things quite differently than the rest of humanity that's why they are (....) people. Guest- So I want to ask you just to generalize for just a second. You said if the market is ready... Define readiness of a market. Ken- They VC has to agree the market is ready. And it's weird, you have to go with their psychology. Its not how good you are, how good your technology is its when they believe the market is ready. You will hear this term- product market fit- a lot. If the VC's are good, they will use that term , it means does your product in the market actually have found each other. Like, do people understand what they would be buying if they heard about you, are they asking for it. There is this little interesting dance between the market, the people who will be paying for your stuff and you what you're offering. If the VC's feel there is a fit then you will have a lot of VC's interested. Now you might just have (...) and that's what you see a lot of companies who are just complete crap who get funded because someone believed the market was ready and they threw a bunch of money on it and made that company be ready to service that market. So, you know if you get a lot of no's from VC's it may not be how great you are as a entrepreneur, as a team or your product, or your product might be stoic. It may just be that they do not believe the market and what you're offering are matching for whatever reason. (..........) Guest- So do they think the market is ready now...or do they think the market will be ready in 6 to 12 months when your product is going to be out there? Ken- That depends on the VC, some VC's will look for whats going to be ready 6 months from now. They are very cutting edge, they are very early stage, they want to make sure that you will be ready for the next wing. A lot of VC's are while they say that they are early stage, they are really not. They are followers, if you look at some of their portfolio companies, you'll see that they bet on the 2nd horse they'll be, guys that invested in say...umm ....uh , I don't know....uh Friendster which was the first social network and then you'll see some that Feebo the second or third horse, because they've seen someone out there already doing it they think there's gotta be a market. Shai- So Let's talk specifics so what was the stage of your company, and what did you have done, did your particular VC feel the market was ready Ken- We had customers, so... Shai- Talk through that (....) Ken- So we, we started out three years ago , similar to actually, we had exactly the same business we built applications for enterprises and um we sold an enterprise application to Anheuser Busch which was amazing client of mine, we built there sales tool application location. If you guys are familiar with the beer industry, it's incredibly screwed up in the U.S. Breweries are not allowed to sell directly into a bar in the states so if this multi billion industry there sales guys can not even step into a bar to sell. It's just not legal, so they have all these wholesalers that do the selling for them and give them as much information about the alcohol content, the availability and hope to God that they are going to sell it right because in certain states you can only sell 6% of beer, you can only sell certain beers that are constructed a certain way theres a lot of these regulatory rules that prohibit you from selling county to county. So they spend millions of dollars trying to put all of this information into these guys hands of the beer sell guys, it's really sophisticated. But, they carry Blackberry's so they had us build an app that we could put this information right at their fingertips so we built this for them and they spent a lot of money on the app we were really thrilled they spent a lot of money on this. We delivered it, it was great, it was exactly what they want but how do we get this out to our guys. What do you mean use your web server and just push it out, no they said - we cant even communicate with our wholesaler and sales team in certain states so, we need a system to deploy it out. So that's where we changed gears with building applications to managing (...) and that was actually when we talked to the top 3 VC's who we were negotiating with. That was the major mark of the (...) that they identified, that we pivoted and we saw the markets change. That's what they're looking for right, the three top VC's that we ended up getting term sheets from we met with each one no more than 5 times. OK, and we raised 3.3.million and in total we were offered about 4.5million from the VC's. For someone to offer to give you 4.5 million-5 million dollars having only met you 5 times they have to go through a certain series of credibility checks and that they are comfortable handing you a check. Because I'm telling you it's awesome. Your bank account at your bank went from near zero to this incredibly huge number it was amazing. I mean they literally just dumped the money in and you could just run off to Cabo and spend it all they have to figure out that you are trusted to give this money to, and so for 5 meetings not any of them lasting more than 2 hours they've gaged that your business is a good fit. That there is an opportunity there, that you are the right person, or that maybe your team is the right team and not necessarily just you. That you will be able to deliver the results that they're looking for, right. So Based on that, they have to look for those markers. The biggest marker every single one pointed to was that you pivoted when you saw the market change. So in your pitches that you make I would encourage you to show your thinking. Why you made the decisions that you did because they are accessing what kind of decisions, when given a certain decision, what direction you'll go. Do you listen to your market, do you listen to much, do you change too frequently. There are trying to gage how you think. So I have to say that was why we had every single VC that were really interested in coming back and said ok you've actually identified the market when you saw it, now show us more of that (..) execute. Daniel- I think there is also specific to mobile there's some you know, I always say that mobile is like flight. Flight for thousands of years humans have wanted to be able to fly through the air and no one has been able to do it. It had a really bad rap, I mean those that doubted it was possible just like mobile. Mobiles been along time coming and then the iPhone came out iin 2007 and it was like the Wright Brothers, it was a seed change. It was figured out and so I do think that the institutional inventors now see this huge opportunity that is ready and right but pre iPhone it was a very hard slog. We weren't in that world but you were so Im sure you have some war stories about that. Also, I am a huge fan of the whole lean start-up mentality, Im sure that most of you are familiar with Paul Graham. My brother went through Y Combinator so I got to watch this idea of being Ramen Noodle profitable and getting just a little bit of money and testing and reiterating and repeating, I do think that there are a lot of people that think I am going to go out and talk to a VC when really they should just be trying to get a minimum viable product out there and get feedback on it. I think that a VC is there to put fuel on the fire but is not there to start the fire. We went through that also, we didn't know if we were going to raise an A round or a C round when we first started and not to put to fine of a point on it but we met with some very large VC's when I first came out here. You know I'm new to the Valley so this was my first time raising money so it's a very humbling experience and you know I am not shy about admitting to all the mistakes that I made but we to not put to fine of a point on it- we blew our load to large VC's early on and we ended up deciding to take an Angel round instead the Angels were very excited about what we were doing. They were ready to move quickly the VC's weren't. They weren't excited enough about it. In fact we ended up figuring a lot of things out over the summer about our business that I think if we've waited to talk to these large, I'm talking literally if you can think of a top tier VC when I first got here, I had meetings lined up with all of them. I wish that I hadn't done it that way, I wish that I had gone out and maybe started with a B set I don't know if that would have been the right way necessarily but maybe talked to more Angels at the beginning for our business specifically because its kind of hard to go back these VC's that have said no or more likely they just wont return your call which is even worse. Guest- Can you kind of go through the process of how you met the Angels and how you found the ones that (...) to you Daniel- I highly recommend AngelList, who in here knows about AngelList? So like, a quarter of you or less. It's amazing these two guys Naval Ravikant and Bobat Nivi, who goes by Nivi, started this thing called AngelList, I am not a big fan of angel groups where you go and you pitch to a group of angels. I'm not convinced that they interested in really investing a lot of the time, maybe they are just looking for something to do. But there is this one exception, AngelList and I don't know why this is free, I don't know why they don't take equity, it's literally amazing. We raised 54½% of the money we raised including people like Mitch Kapore who's unbelievable who came through AngelList. It is these guys these two guys had this company called Venture Hacks and they've both been successful investors in the past and they wanted to create a market place for investing. They started AngelList, it's been in the press a lot lately, I think its AngelList.co they'll joke that they couldn't afford the m Angel.co, right it's Angel.co and you pitch to AngelList, if you get accepted then they will put you out on the AngelList they have created this whole platform. I mean it really is turning into this electronic trading system almost where they are consolidating all these angels so you put your pitch on the AngelList and then if they approve it, they will send it out to the network and the angels that are interested will contact you and then you'll have meetings with them directly. So it's not an angel group as much as it's accessing one place to a bunch of angles. It's awesome, it really is phenomenal. I mean just the people that are on there are the top angels in the world. Shai- Whats your point as to why it works, have you seen a few iterations of this? Most exchanges are trying to charge one side or the other and they have some sort of angle to want to do it. AngelList is not charging either side, there's no real angle other than they are trying to get into the best deal themselves. They want to make sure that the best deals come across this list so they can see them. Daniel- It's the best thing that has happened to entrepreneurs raising angel money that I've experienced. Guest- When did you promote your yourselves? Daniel- It took us 14 weeks to raise the million bucks. I also had a lot of, so there's a couple of key pieces of learning. One is, things that we did and things that I wish I would've done, and we can go over through if you guys want to hear them. There's 4 co-founders to PointAbout and we decided that one of us would handle the fundraising process which I think is a good idea. It's very distracting, I basically did nothing except for fund raise for 14 weeks. Which is 3 months, so I am glad that the other co-founders were still running the business because it would have just stopped dead in it tracks. So that's one thing that I think we did well. I wished that we had timed it better in terms of us not raising over the summer which I don't recommend, I don't know what is the best time to do it but definitely not the summer time. Shai- Well the summer time and the winter time are the worse, after Thanksgiving things are basically shut down. July and August are the same. Daniel- So I guess Spring and Fall are the best times to do it. Shai- September and January are probably the best times. Daniel- And then we also did a convertible note, which looking back on it I'd probably tell you to do an equity round, like a price round. Not a convertible note, do you guys know the difference between the two? I don't want to get into a lot of detail here but, a convertible note is a (..) that converts into equity. There are a lot of angels that said no because it was a convertible note. Now, I spoke earlier to the culture and in the Valley here, let me just tell you, there are professionals at saying no and you wont even know why they are saying no- unless they say yes, then it's a no. You know you'll hear my sister is having open heart surgery, you know all the reasons that people come up with. You're just never willing to trust the reason, it's like ok so it's not a yes, then it's a no. So I don't know if they were saying well I would have done it if it were a price round if that's truthful or if they weren't interested enough in the business. But I do think that the reasoning for convertible notes is to get it done quickly and we weren't able to get our note done quickly. It took us 14 weeks, and so because of that I wish we would have done a price round because it would have taken just as long and it potentially less time because so many people were into the note structure. That's one thing, also out here on the West Coast everybody wants an valuation cap on the not which by the way no body on the East Coast mentioned that at all so it's very much a West Coast thing its probably going to move East but maybe it's there now. The first meeting I had with and angel he asked what the valuation cap was and I don't know if you guys know about valuation caps I wont go into a lot of detail but basically it kind of protects the angel, if they are giving you a loan now and you do your series A at some crazy high valuation they end up with a really small piece of equity even though they took a lot of risks early on. Valuation cap protects them, it gives them a maximum series of dilution basically. So even if you are able to do an A round at a very high valuation there not getting screwed and there is an issues where a convertible notes tend to cause angels to act against the entrepreneurs best interest, I haven't experienced that personally and I have had other entrepreneurs say they have experienced it, which might be a function of the angels but there are situations where the angel is negotiating against you to make a super high valuation especially if there is no valuation cap because they don't want to end up with a really small chunk. So I guess the last kind of major piece of learning is I find that I mean, angels are people, they're very easily influenced especially by press. We had a couple great press announcements and I noticed that every time we had a tech crunch story the interest would spike. So I wish that we would have coordinated a better market regarding our press strategy to describe what we are doing as a company during the time that we were raising money because I think that could have shortened the ultimate time that it took. So like time out, product and press releases, that sort of thing. So those are a couple of differences. Shai- Ken, you raised a VC round - how many firms did you talk to, to get to the final firm. (...) Ken- Yeah actually, to follow-up with what he was saying, I would take a couple of days to work on the mechanics of financing before you guys do anything just because what he said is all true and its all wrong at the same time. When a VC comes in, they could re-write everything , literally every contract that you have ever signed with anybody they can say that doesn't work. That valuation that you just did with your angel round that's not going to happen. They are going to give you money and you could re-write contract at that point. So with that said, I am not seeing a VC ever to do that at that level but they can. They can ask you to change the valuation of your previous angels. One of the reasons we talked to a VC is because the angels just wouldn't go along with it, it just so depressed the value and the valuation that they can do that. I guess the only advice I can give you is just try to stay within the industry norms as much as possible. One of the other things when a VC looks at you, they can look at how obscure or weird your deal building structure has been up to that point. There's a lot of hygiene factors that go in and how many investors did you bring in, what kind of various terms did you give the different angels. How involved are the angels, so a lot of those things go into the calculation of how a VC comes in to see whether again, if you made good decisions or if you surround yourself with good people. We were really fortunate to have very active angels that weren't really well known, and you guys have probably seen the blogs theres a lot of Kayne West type of deals on twitter slamming each other, if you have an angel investor who focuses more on themselves than on your business, that's a sign that you don't want to buy that because you remember it's a 2 way relationship. Those people are great at marketing you because they are creative marketing themselves, right. So if that's the value you're looking for in an angel then those guys might be it. If your business requires that kind of marketing than those kinds narcissistic behaviors can be a benefit to you. But if you are in the enterprise base, which we are, we need to be more buttoned up and professional and we needed the angels who could get us into those conversations, we chose that. I don't know what kind of businesses you guys are in but I would recommend is be as authentic to your business as possible. I mean that all the way through, from the angels and the VC's that you chose to the employees that you bring on the location of your office, all of those things need to be consistent because what you're trying to do is tell a story that will help your business and any quirky thing that deviates from the story is a distraction. Daniel- Let me ask you a quick question, because I here to learn to and I haven't done the A round so- what part was wrong? What did I get wrong from what I said? Ken - No, I am just saying that you can go into any VC and if they don't like the terms that you had with your angels they can say you if you want (...) Daniel- Yeah, but I am talking more about the angel themselves seem to be turning down convertible note structures because they were worried about that Ken- I actually had that as well, I had one angel that told us that he wants a price round that Daniel- We had a ton of angel say that, so I don't know if that was true or not, I was referring more to the angels themselves, like I wonder if you could actually get a price round done more quickly than a convertible note even though the whole reason is because you can get it done more quickly. I had a lot of angels say they didn't like notes. Ken- We did a note that was priced. You could have a hybrid model where you can say that you're calculating the value of the note to be X but when a VC comes along they'll say that's really rich so we're just going to change the mechanics of it and if you're not on board than we cant take your money. Guest- In the software world, I think the rise of angels in the last year or so comes from the belief they have that you might not need an A round and they wont get wiped out by the VC's. Software is a lot less expensive to produce that it used to be and hardware bio tech are. When you talk to your angels, Dan, how many of them talk about the possibility that you would not need an A round, and that hope you would get cashful positive with this one investment Daniel- That's a very good point because to your point just to explain, if you do a convertible note and you never raise- the note converts upon an A round based on certain terms- so if you never do the A round technically, you can just pay them back, you can pay back the loan and if course no angel is in the business to give out loans, they want to see big exits. It didn't come up as often as I thought it would. It came up a couple times the way that it did come up is our law firm is Cooley which has been a great law firm but the paperwork that they put together did not have a conversion into equity clause upon acquisition and we actually were have way through the note we had about ½ the investors signed up when a very astute legal council saw that there wasn't a clause and if were to get acquired it would convert into equity. Without that clause, we could just pay the note back and we were even aware of this either so when they asked for it, we put it in and thought it the right things to do and put it in retroactively to the others that have come into the note as well. I probably would have been hanged if we hadn't so I think it was the right thing to do but there that a super important clause that I think if you look inside yourself honestly as a entrepreneur you would not want angry angels you would want it to get converged upon at acquisition. Our stock (...) where it didn't have that. Guest- how long do you expect that seed round to last and if its a year are you going to look for VC funding, would you start it all again? Daniel- We're in a little bit of strange position because we, so , on the East Coast we tried to start a company by pushing a piece of rope up hill, I mean it really is, especially in DC except for professional services which is very to be a consultant for the government or whatever the case may be, we have a professional services group that's doing very well on the East Coast and so because of that we can manage our cash flow a little bit better than a standard star-up that's relying on completely on the funding- its probably going to last us about a year and in 6-9 months we are going to have to get this machine started back up again. However, one interesting thing is that we had a couple of institutions, Triple Point Ventures and Charles River Ventures both came in on this angel round and they did with the intent of being involved in the A round. Who knows if that will happen there great so I hope it does they've been great but its been interesting to see the VC's feeling like that to start taking small bets in these convertible or angel rounds so that they can be close to the start-up for the A rounds which I think is how they are feeling. Guest- Just one other, with multiple angels in the seed round what's it like- is it like herding cats? Daniel- It hasn't been because there is no board seed so we don't have to deal, that's a beautiful thing not having to deal with a board. Guest- that's weird right? Daniel- No, for angel rounds its not weird, for an A round you'll have to give up board seats. So it really hasn't been that bad, there is a spectrum of interest level in terms of being, like Warren Hellman is an investor but he is completely passive versus Kima Ventures who are very interested and being very active and so one of things that we had to do, we had to actually create RSS feeds for the angels of industry news and company news, so we let them latch on to as much of it as they want and we do awesome meeting every Monday and they can be as involved as they like to be but we're also trying to make it so its not like herding cats, you know we have 11 total angels in our round it could get really dicey if we had to answer to all of them. Guest- and your based out of Washington, DC, there are some VC- definitely angels in NY- what compelled you to look for your seed round here in the Valley, why did you feel like that was the right place for your company to even move here? Daniel- The cliche that you always hear are really true- angels, VC's- we tried raising money on the East Coast and we couldn't we got close to a term sheet but the terms are so (...) just from the conversations that we had. Out here people are willing to take chances they are like 6 months ahead of East Coast folks, East Coast VC's I've found tend to be more analytical and data oriented, they want to see numbers even when we were doing this angel round we had a couple of East Coast contacts from being out there that we got included in the conversations and they were asking to see things that none of the West Coast guys were asking for. Things that we should have and do have an idea about like, whats your revenue going to look like over the next 60 months, but really the reality is we are all guessing and no body knows, right. Out here it's more, I want to meet the team, I want to understand your vision, I want to know where you're going and if I should bet on you, I think what Ken said is really true. Out here its finding horses to bet on, I find that on the East Coast- its show me your numbers, and maybe we'll talk. Guest- Related to a personal experience I've had there was somebody that had a contact on the East Coast just like you did, then they came to pitch here on the West Coast they wound up getting funding out here, and the person I introduced them to what he said was- I like your idea but it is 5 years behind you, you work on this side- we will relocate on your people you have from the East Coast to the West Coast because what they had the team structure that they had they were willing to relocate them and that is how fast they move that stuff. They were looking at the team and ways to implement it. Daniel- I think its a shame really because I mean really if we raise our hands- who here is from the East Coast, It's like a quarter of you or even more, I wish it weren't that way but the only thing I regret about coming out here is that I didn't do it 10 years ago. Guest- so I have a question about the service aspect, does your start-up now take a back seat to a service business, having that as like the main source of funding, I mean you said before you got funding, even possibly now do you drop your clients. Daniel- it's a very good question and you know I would not recommend do what we did because there is this difficulty in focus, not robbing Peter to pay Paul we had Disney as a client, we had to pull people off one side of the company to finish with this very large client that we wanted to make happy. We've navigated past that I think largely all the founders are focused on the product, moving all the founders out here 2 of the 4 of us are already out here the others are coming we've introduced PNL separation completely different PNL's the services side is growing organically on its own so all of the convertible note money is going to product. Different leadership, different employees, different brands but it was like going through a dark forest to get out into the sunny meadow it cost us a lot in terms of momentum and time and I wouldn't do it that way. I would start here on the West Coast with an idea and get it funded. Guest- Yeah, that's what I was facing. Daniel- Theres one entity, and by the way- just explaining this to an angel takes 5 minutes and you're losing valuable time rights, that's another reason not to do it this way. Our corporate entity which is PointAbout Inc. it has a product AppMakr which is a brand, its not its own entity, so technically the convertible note was in the overall company which has this services group this product so if were to spin off services or whatever we end up doing we running the 2 separate PNL's right now but its part of one entity but people who invested in the note would benefit from that. Guest- but the services prove there's a business. Daniel- Yeah, and some angels love the fact that we have both because it keeps our nose under the tent with the enterprise we're doing very large enterprise mobile projects that we can see what enterprise's need so that's nice but its not worth the distraction, I wouldn't do it again. Guest- so theres mixed reactions to that then? Daniel - Oh yeah. Some of wanted it gone and some of them loved the stability that it brought and the insight that it brought. Then Microsoft paid us a bunch of money to create AppMakr for Windows phone which BTW is going to coming out by the end of the year. As a product company, Microsoft windows phone doesn't have any traction right now, its new, so we would have never put that on the product road map but because we have a services group they were able to create AppMakr for Windows phone and then we can productize it. There are benefits that we're seeing from it. There's a lot of great synergies but I also say everything comes at a cost, the cost was high. Shai- Its very a typical just to make that point. You hardly see (...) comes in funding (....) that ones that we see come through the Bay Area as far as financing, you hardly see (.......) Daniel- Its because they usually don't survive, you just have to be really lean and if the 4 founders really all didn't like each as people theres no way we could have done this. It;s a lot like Elon Musk says, eating glass and staring into the abyss, its actually Bill Lees saying, one of our investors. Shai- more questions? Guest- whats the perspective of angels or million dollar rounds on salaries? Daniel- Do you have any thoughts on that? Ken- No, I went from getting no aid for about a year and ½ to actually seeing a pay check, you know what it is- It depends on the VC or the angel about how you spend your money and test them out on this talk about how frugal you are and if they are like oh that's awesome, then keep the salary really low. Its actually to your benefit to keep them low across the board but if you really need to get, just pay your self enough that you can get by. If you're angel funded, once you get VC funded you'll have to bring on people from industry who know what to do in marketing or product and you have to pay them market and when you pay them market it's tough not to pay yourself market. If your angel funded just keep it as minimal as possible, the money goes away really quickly. Even if you're spending 20-30K a month that's like a (...) right? Shai- what do you think, engineering talent Ive seen on blog posts for the couple of months about finding key talent. What are you paying your top engineers? Daniel- I don't know if I want to necessarily give exact figures, but to answer this really fast I've heard exactly what Ken said but then I've also heard and we had some investors say- if you cant pay yourself market rate salaries then you really don't have a business. To proof that you have a business you need to be paying market rate salaries, we paid ourselves a little ten we paid ourselves a little more its not market, if you don't read Paul Grahams essays, I highly recommend them, theres one on being Ramen Noodle profitable, I know he is a very polarizing figure out here I happen to love him, he is awesome. I highly recommend Paulgraham.com he has about 20 or 30 essays for entrepreneurs that are just phenomenal he goes into some detail about this exact topic. Ken- I think when you're angel funded, I mean right before you get angel and right when you get it, you really don't have a business, right? You're trying to build something into a business and you're probably not (....) positive that's why you need money. One of the markers that I say people look for is dedication and passion, what one of the ways to look at that is are you willing to forgo gratification which is a paycheck for much greater gratification later its way a way they can say this guy is in it to win it. Theres that and I've heard the same thing, some VC's like our VC's right now are saying- I don't want you to think about what you're going to eat today because you don't have the money because I want you to be focused on the business so pay yourself. Theres different schools of thought there. Daniel- I am all about very pragmatic tips, like I am a very pragmatic lean start-up kind of guy. On the hiring topic, I don't think its appropriate to give out exact salaries but I have two tips one is, as I'm sure you guys know- its impossible to find talent out here in the Bay Area so we've become very good at in-sourcing like finding people in Texas. Our lead designer is from Texas, we relocated him here. It's a little easier for us because we have the DC office so we are kind of used to finding talent outside. Here's my number one tip for hiring, I've never actually told this to anyone before but I think Facebook is about shut my account down for doing it so I probably don't have very long left, so I'll give it to you guys so you can try it. I go to LinkedIn and I look for key words like, Objective C or Android, or whatever the case might be and you know everybody does that which is fine, but here's is what I don't do, I don't try to message them through LinkedIn because nobody answers answers instead I have an assistant look up there name on Facebook and send them a Facebook message and the response rate is 10 times the LinkedIn response rate because people don't typically get spam if you want to call it, solicitation emails about jobs on Facebook. That's my top hiring tip like I said, I think Facebook is about to keep me from doing it anymore. Guest- And they will shut you down, why? Daniel- They sent me an email saying that I was sending too many emails out. Too many messages. Guest- that was before today? Daniel- it is amazingly effective, like I cant even tell you how good it is. So good luck with that. Guest- The topic tonight, is avoiding problems, and raising money or something like that. Have either of you turned down a check from an angel? What are some of the criteria that would cause you to do so. Ken- If you can sense they are going to be a pain in the ass, and you can tell. I mean it probably helps to know if they have the same instincts that you do about the business. If they are in it for the same reasons you are. If they are completely coin operated, then you just have to know that, right, if that's something you can work with, then great if that's something that you might have issues with because you're leading a revolution and you're passionate about something and its not just about money and its about changing the world and this person is completely coin operated, then its not going to be a fit. Ive turned down money twice, I turned down a VC that we gave a tentative yes to and then it turned out that the relationship probably wouldn't have worked out. Guest- Was it too quick of a yes? Ken- What do you mean? Guest- Was it oh you're awesome, I'm in!! Daniel- like take their money as fast as you can. Ken- it depend on if you did a really good job on articulating what you do and why you're doing it and they believe in all of that stuff. It might be that you're really good. Right, or you know, my one piece of advice when you're fund raising is that while they're looking at you you're going to be pitching to someone and they are actually pitching to you. Turn the tables around, right. I think my most successful meetings were times when I were hypercritical about the fund and about the people in the room. At that point I had already hammered out my presentation and practiced it with about ½ dozen VC's. I knew that the presentation worked, I knew that the messaging was in line with what was going on with market so at that point I could just kind of play and so I'd meet with these VC's and turn the tables around and be like so, you know having taking a look at what we're doing do you think this fits within your portfolio and the way that they would answer it to see what companies they identified that they thought would be a good fit for us to talk to that might be good relationships or why they are investing in us, they didn't have a very good answer. I was just kind of you know, go after them like why are you even interested in this investment. Ive even had one VC say because we know that this other company is interested, this other firm. I was like that's a reason, and you know its like thank you, I'm kind of done, right. You got to turn and be evaluating them because you're going to be married to these guys. Right, and they will position themselves as the guys that can get you the furthest along and you got to believe that. I gotta tell you, you're gonna have, we've got great VC's but we've already had times where battling it out about what is the best strategy and you need to have that with someone that you really respect, and that they respect you and you get to and end point where you're both satisfied. If you have a partner that is all about one thing like money, make money, money and you might have other things going on its not going to be a fun time and you might not last. Just be evaluating them. Daniel- I think I've got 2 thoughts which are, I agree, 1 is we have not turned any money down we didn't have the opportunity to do so. We were going after everybody that we could. We did have DC venture capitol firm that asks us for things that the West Coast firms didn't ask for. One thing they asked for was to be able to observe board meetings and we just decided that we didn't want to deal with that yet. There will come a time when we will have to and we want the beautiful luxury of not having to yet. We did say no to that and they said well they've never invested in a company that they haven't observed and we said ok, there are plenty of guys on the West Coast that will do it. The second thought is that I always try to think in terms of there's a cost to everything. Theres a cost to all of us sitting here theres something that you cant be doing tonight because you're here. I hope the cost is worth it. I would say, I would hope that if there is somebody that you're thinking about taking money from but you're not sure about, you can think what the costs are and then change the terms a little bit, I don't what you can do to try and mitigate those costs but I think really entrepreneurs are able to anticipate mitigate the costs well. So maybe its not saying no its saying yes but only under these conditions and I don't know what they would be I think it would depend make them be the ones that say no is I guess is kind of what my thought about it would be. Shai- we've got time for a few more questions so... Guest- to the board observer point, I'm an attorney and have spent a fair amount of time helping companies raise money if you're talking to a venture fund and if they have any pension money they are required to have what are called management rights, they are required to be a board observer in order to legally give you money and stay within the pension rules, Daniel- maybe that was the case Guest- so that I would interpret and when I said that, if they cant give money to people who don't give them observer rights without risking being in violation and so if you hear that from people it doesn't necessarily mean they're going to micro-manage you or that they are going to be over bearing they're just honoring a legal requirement that they have Daniel- to that point, I think maybe its a West Coast sophistication of setting entity's up. Charles River Ventures is a very well known fund I'm sure they've got pension money but I imagine that they set there structure up in a way where they have this thing called the quick start program. Guest- I've worked in venture funds and I've represented dozens of companies and it is absolutely standard Daniel- right, no, no no I'm not saying that's its not I'm just saying that some how Charles River Ventures was able to figure out a way to put money into our company without making that request. I imagine it's through a different legal entity a different structure where they make small bets so maybe its just that this East Coast firm didn't have the sophistication to set themselves up that way. All I know, if that's what happened. Guest- but, but, but (......) Shai- hold on, we have a few more questions, please. Guest- I am curious especially since you came from out of the area how did you target and I knwo you that you talked about being on AngelList and in some sense (....) but clearly almost ½ your stuff came from other sources. How did you actually target people and the angels you wanted (......) Daniel- So I was very lucky, I mean this is very specific example but I think it holds generally. I really believe in building a personal brand, I think that we should all be spending time building personal brands and that's separate from the company brand but its you as an entity. I define social media as getting information that's in your head out of your head and into the hands of people that can use it in beneficial ways to me that is social media its all about this knowledge that's captured up here and sharing it. I capture content everywhere I go, Im capturing content here today and I am going to put it up on my blog and I hope that instead of 40 people us all being able to benefit from it you know 40,000 can benefit from it and that's part of me always prioritizing creating a personal brand. I think since I've done that I've been lucky and you have these coincidences happen like James Hong, who is a creator of hotornot.com very well known in the area was looking for a way to put a laptop on a stationary exercise bike and I had made a blog about how I did that. I went to Home Depot and I made this stand and its totally a coincidence but its kind of not, I spent the time to capture that content and put it up on the blog and he saw it and he IM'ed me and asked me how I did it and we had a conversation and when I came out here I was bale to call him up and say hey James can you get me some intros and he did and he was phenominal and so its things like that being prepared to be lucky type of thing, I think that by creating a personal brand and capturing content and talking about whats in your head there are a lot of people that would love to hear about whatever you're thinking about. I just think that leads to really good outcomes. So that's how we got the non AngelList money was through connections like that, very happen stance, I couldn't tell you how to reproduce it Guest- so you were'nt actively searching (....) Daniel- I was actively searching but dig the well before you need to drink the water, right. Like, I had already formed these connections with people on the West Coast like James Hong that I was able to tap into. Shai- one more question back there Guest- yeah, so both of you had service businesses as well as exsisting customers you're probably getting more customers on board, Im curious if you guys had a plan B that didn't involve raising money, or maybe there was a part of you that wished you know that you could keep all the equity to yourself and grow it internally boost rapid, I was just curious as to if either of you had a plan B Ken- oh boy, No. I've been in the valley for about 12 years and I havent really seen many companies do a plan B generally it involves VC money if you want to grow it into a pretty big company right and so all of our angels who were early we had like 3 years ago about 4 angels the agreement was we were going to try to blow this out. (....) with that kind of framework we never really thought about you know could we turn this into a services play forever, right. One of the things that we were faced with was that at first we were the only ones there 3 years ago to build applications for some of these companies big companies in the Mid West and then we started getting asked to bid for contracts for companies that I'd worked with in the past, they would be like oh we came across a couple of these Indian firms and this Bulgarian firm and they were like bidding a 3rd of what you're bidding. Like, this is not a good sign, right and so we figured OK this is we've got to find a different thing to do and our plan B was to actually just shift our business completely if you can call it a plan B. I think its a viable strategy if you have the team and the investors who will go with you into a services play. If that's where you think the market is and where you can be successful but for us we had people who were like look we gave you money to nail this, you gotta go do it or just fold up shop. Daniel- I definitely believe in failing quickly. Failing quickly and if its not going to work go onto the next thing as quickly as you can Guest- you mentioned about how you found angels through AngelList but I was just curious how you went about getting connected to angels. Ken- angels for me, I kind of used unknown angel networks so like theres ethnic groups out there that have like and interest groups that all kind of talk to each other So if you're familiar with like theres about 30,000 Germans in the Bay Area a lot of them are connected into the money and some how I got connected to that when I was in college somehow I knew one German who knew a bunch more and so I got connected into this weird little angel part SAP part all these kind of German guys and then they also did a lot of business with Israelis and so I got connected with this whole group of Israeli investors as well so I know in the Valley more than 50% of the start-ups here are started by people who are not born in the US so they've got to get money from somewhere there's a lot of communities out there that are looking to help young entrepreneurs so you don't have to be of that ethnic group obviously, I'm not German I've tried to pick it up, I cant even speak but there are small groups out there that if you can connect with them they're incredibly valuable. If you have a consumer concept and publicly some of you have these super angels are really useful because they can get you access to Facebook and to other companies that they've invested in and get you the buzz but if you're building a business around enterprise or you know something that doesn't require that kind of buzz there are other networks out there you know and using LinkedIn is a great way, that's a brilliant idea to go through Facebook and I am going to have to use that, you know with angels if you live here you're probably only one connection away from an angel investor and angel investors know each other and they are all inner-connected so find someone who, I'll give you my recomendation is find someone who's going to believe in you one angel who will be your super angel who will be kind of your bead and have them mentor you and have them walk you through their network of investors and friends because they'll meet up every month or so and they'll talk about investments that they've made or whatever is going on but find that one guy that one who will take you under their wing and introduce you to the community and that's exactly what happened to us is that this one investor really believed in me and then kind of tried to shave off the rough edges and help develop me into an entrepreneur that he would not be embarrassed to introduce to his friends, you know he did somewhat of a good job I guess and learn from this person, right and that's my biggest recommendation because that person will make sure that you don't get into too much trouble that you wont get into terms that suck. We had one VC that when we were looking for money where the terms were incredibly bad and he was like, look you would embarrass me if you even took these terms to my network of friends that are investors here so you know you can do it but I'm telling you that it would look really bad on all of us. Daniel- One other hack that i can tell you about this is using the public AngelList site I'm sure if Nivi and Naval hear about this they're not going to be happy about it but it's nothing illegal so I'll just go ahead and just share it on AngelList you can search for angel names so the idea is you can search for (...) and learn about that specific angel but what they havent done is they havent shut it down so if you just put in one letter like the letter S which happens to be in almost everyones profile it will return all the angels on AngelList right, so just a website of every single angel on AngelList, because theres a filter right, the idea is that you submit to AngelList and then those angels contact you but if you could know who all of them are maybe you could just find ones that share an interest, you went to the same school or you know something that ties you together so if you just type the letter S on the angel.co site it will return a list of all angels Nivi and Naval- if you see this you should probably shut that off but use it while you can. And then look through the profiles of all the angels and try to find a connection, I'd say that's a great way to start i think theres 500 angels on that list now and its unbelievable the size of that network so you'll surely find 50 that share some kind of passion of the industry or your background, where you worked, school or whatever the case might be and strike up a conversation with them Ken- are you guys having difficulty raising angel money right now? Guest- yes Ken- why is that? Guest- I'm not sure, Ive got a really good angel but he only makes investments occasionally so he wont lead Daniel- thats an excuse, like seriously, if its not a yes then its a no, thats a no. I'm telling you guys in the Valley, you're crazy out here like he just said no to you and he just said it in a really polite way thats what I heard having gone through this. Guest- but he keeps putting me in front of a bunch of people Daniel- that's because he wants someone else to say yes so he doesn't have to be the first guy that says yes, like if they're really excited about it they'll jump at it so I think the real issue is and I don't know anything about you or your business so I could be speaking out of school but try and do something that they get really excited about and if they're not getting excited enough about it maybe that's an indication that you need to go back to the drawing board and iterate and test more because I mean literally George Zachary is an awesome example, he and Bill Lee were the first guys to believe in us and they in the first meeting were like yes, lets do it, this looks awesome lets do it and they didn't care about what anyone else thought or what anyone else said they were just so excited about what we were doing that they said yes right away on the first meeting I think if anyone is excited enough they will find a way to do it. No matter what limitations they otherwise have. It's just a polite way of saying no. Shai- one last question guest- this is a question about a whole lot of investors invested in a small company, the practical question is what value do each of those investors provide, obviously (..) lets say 5 or so invest do all of them add value , how does that actually all play out in records Daniel- I think if you're super over subscribed you can kind of architect well I want this angel because he's got these connections or this angel knows the industry we were not able to do that I think we ended up with a phenomenal list a list that we are very proud of to share but it was through a lot of rejections and it was not through this master plan it was just a lot of grinding the pavement and hard work and lots of follow up so I don't know if you have a better answer Ken- it varies right, just because the nature of our business we switched into becoming an enterprise play and so our super angel had come from that business come from Intel, kind of looked at other companies while he was at Intel so he is on the board at several companies and invests with his friends that are on the boards so we were really lucky and we got an angel who was a CFO at a company in the UK and we've got another who was a CIO of a major telecom in Europe. We were able to cherry pick people for their skill set and there money that came with it. We had a luxury of choosing because we had this one guy that kept spoon feeding us money. You hit this milestone it will be an indication that you're going the right way, I'll give you a little money and introduce you to this other person and as you build credibility and trust with the network they start opening themselves up and the network up to you. Its like Facebook if you have your friends, then you have this extended network of friends you're investors will have a close knit group of maybe 4 or 5 angels but beyond that they'll have maybe dozens of acquaintances that they've never done a deal with before but if the deal is strong enough they might introduce you to them the more you can pr .
A reminder of how awesome the lowly 3 way power plug adapter my wife and I carry in our bags can be. We were at LAX today and all the charging ports were full. We each whipped one out and had a few new friends in no time. You can find these for about $1 at any hardware store. Makes me wonder why companies don't give branded versions out at CES - maybe we'll do that this year. Who wants one?!
Today I attended the GigaOm Bunker Session titled "Is App TV Coming Next?"
If you know me, you know that I believe strongly in capturing content. I believe that within 20 years, humanity will be capturing most, if not all, of its content. To me, it's a shame that we produce content which then gets lost, only to be stored inside the heads of the people who where physically present. If we're ever to make a leap in learning past what each individual can experience, we need to have a collective framework where people can learn quickly by sharing in experiences others have had. In short, I believe it should be a basic human right to capture the content you've experienced, and share it with whomever you want.
To many people, that can be a very scary idea. What if someone is having a private conversation with you, and you capture and share it with the world? And although these are very real issues, to me, they are issues that can be solved. The benefit so far exceeds the cost of figuring these issues out that it's a no-brainer (see our experiences with Stargate as an example). In fact, there are opportunities for creative entrepreneurs to find ways of easing the world into the idea of capturing and sharing content in ways that people are culturally comfortable with and that maintain people's sense of privacy.
Today I had a typical experience that highlights how far we have to go before the capturing of content is accepted. I was attending GigaOm's session on AppTV, and setting my Kodak Zi8 camera up, as I often do, to capture the session. That's when Surj Patel of GigaOm came up and told me I couldn't record the session. When I asked him why, he told me to "fuck off". Pretty distressing attitude.
Today I attended the GigaOm Bunker Session titled "Is App TV Coming Next?" If you know me, you know that I believe strongly in capturing content. I believe that within 20 years, humanity will be capturing most, if not all, of its content. To me, it's a shame that we produce content which then gets lost, only to be stored inside the heads of the people who where physically present. If we're ever to make a leap in learning past what each individual can experience, we need to have a collective framework where people can learn quickly by sharing in experiences others have had. In short, I believe it should be a basic human right to capture the content you've experienced, and share it with whomever you want. To many people, that can be a very scary idea. What if someone is having a private conversation with you, and you capture and share it with the world? And although these are very real issues, to me, they are issues that can be solved. The benefit so far exceeds the cost of figuring these issues out that it's a no-brainer (see our experiences with Stargate as an example). In fact, there are opportunities for creative entrepreneurs to find ways of easing the world into the idea of capturing and sharing content in ways that people are culturally comfortable with and that maintain people's sense of privacy. Today I had a typical experience that highlights how far we have to go before the capturing of content is accepted. I was attending GigaOm's session on AppTV, and setting my Kodak Zi8 camera up, as I often do, to capture the session. That's when Surj Patel of GigaOm came up and told me I couldn't record the session. When I asked him why, he told me to "fuck off". Pretty distressing attitude. In fairness, he did come up to me to apologize later, but his attitude highlights how far we have to go before capturing content is culturally OK. I do understand that it's GigaOm's business model to put content behind a pay wall, and that's fine. I would argue that allowing audience members to capture some content would increase the subscriber base. It exposes more people to the brand, and a professional, edited recording will always be better and more engaging than a blogger with his flip-style camera. I was disappointed by Surj's myopic view of the value of capturing content, and his aggressive response when I asked him why that was his policy. And I post this blog not to embarrass him, but because I believe in the importance of allowing people to capturing content. I'm sure some of you will disagree with me, and I welcome your comments below. As an aside, I've had similar things happen before, where groups were surprised I wanted to capture content (never so aggressively, though), and those groups have literally thanked me later and said "you were right, it provided a lot of value to us that you captured the content" after they saw the increase in interest in their brand from the video. Here's the video of Surj telling me to 'fuck off':
I've been meaning to write this post for a while now, and a recent post by Bill French of iPadCTO spurred me into action.
It's been interesting to experience the changing definition of an "app".
The most popular definition of an "app" is native software that typically runs on a smartphone, and most commonly the iPhone. It's compiled software built using ObjectiveC in X Code, an Integrated Development Environment (IDE) for Mac OS X. If it sounds complicated, that's because it is - developers who have the ability to build "apps" are in high demand these days.
But the line that defines an app is being massively blurred. Take for example, OpenAppMkt, run by my friend Teck Chia, which packages "web apps" into an "app store". These aren't apps in the traditional sense -- in fact they're just websites packaged up to look and feel like native apps.
But what Teck and many others are doing gets to a fundamental tenet of the allure of apps: while you browse the web, you don't own the web. Being on the web is a very nomadic experience. You visit your favorite sites, then you visit other sites, but there's very little sense of ownership on the web.
I just sat down with Shai Goldman, a Director at Silicon Valley Bank. My interview with Shai is the second in a series of interviews I'm doing to help entrepreneurs raise funds in the Valley. (The first one was with Naval Ravikant of AngelList) As someone who's new to the valley myself, I've found the experience to be interesting, engaging and yet complicated in very subtle ways. I'm hoping to help others who have the will and desire navigate Valley politics and culture more quickly and effectively through these blog posts. Consider it a "pulling back of the curtain" so to speak, to the extent I'm able to do so.
Having a chance to capture some content with Shai was great - he has been a phenomenal resource for us. We were lucky to have chosen Silicon Valley Bank as our bank (on the recommendation of our lawyer, Mike Lincoln of Cooley Godward), so we had a pre-existing relationship with SVB. That came in handy when we opened our San Francisco office of AppMakr and I was able to contact Shai through the existing SVB relationship.
Although Shai hasn't announced this to many people yet, he'll be moving to NYC in January for a while, so if you're looking to get connected, you only have a few months left to do so!
Here's the video:
I just sat down with Shai Goldman, a Director at Silicon Valley Bank. My interview with Shai is the second in a series of interviews I'm doing to help entrepreneurs raise funds in the Valley. (The first one was with Naval Ravikant of AngelList) As someone who's new to the valley myself, I've found the experience to be interesting, engaging and yet complicated in very subtle ways. I'm hoping to help others who have the will and desire navigate Valley politics and culture more quickly and effectively through these blog posts. Consider it a "pulling back of the curtain" so to speak, to the extent I'm able to do so. Having a chance to capture some content with Shai was great - he has been a phenomenal resource for us. We were lucky to have chosen Silicon Valley Bank as our bank (on the recommendation of our lawyer, Mike Lincoln of Cooley Godward), so we had a pre-existing relationship with SVB. That came in handy when we opened our San Francisco office of AppMakr and I was able to contact Shai through the existing SVB relationship. Although Shai hasn't announced this to many people yet, he'll be moving to NYC in January for a while, so if you're looking to get connected, you only have a few months left to do so! Here's the video: Here's a transcript of the video: (learn how & why I do this) Shai Goldman of Silicon Valley Bank re: Entrepreneurism in the Valley Daniel- I am here with Shai Goldman of Silicon Valley Bank, who is awesome by the way. You've been a real asset to our company and we are much appreciative and glad to be a Silicon Valley Bank clients. Can you just tell us a little bit about what you do at SVB. It seems like you've got a pretty awesome role there. Shai- Yeah, I probably have one of the better jobs in the community. Essentially part of my job is to create a community of entrepreneurs and to really foster that community. We are a commercial bank so we are providing banking services for start-ups, what we are trying to do is create a community around that and try to add value along the way. Some of the value that we do is connect start-ups to investors and also bring other like minded start-ups together to share war stories and talk about the challenges about their particular sector. We do a lot of those things, we also do match making and also events just for start-ups. Some of those things are educational and it's really just a free value at a service and we feel that if you give back to the community that they will stick with us for the long run. We really want to establish long term relationships with start-ups. I cover the anything essentially anything web based- mobile, consumer Internet, gaming, digital media, software as a service- as long as the start-up is in that sector, I try and help them with all the things that I have mentioned. I have colleagues that cover the other sectors clean tech, life science, hard ware infrastructure and enterprise software. Daniel- So your job is basically to know everybody in Silicon Valley? Shai- Yes, I go to a lot of the conferences and events. To an extent I am the face of the organization at the early stage the at the pre-venture back stage. The goal is that people know who I am and that I represent SVB and if they have anything they can get a hold of me. Daniel- That's cool. You put on a lot of events, you are doing something in a couple of weeks, a panel. I know you just did a panel the other day. Are these for knowledge transfer and learning or what goals do you have when you do these things? Shai- It's a combination of things. We will do 25 events in the bay area just for start-ups. It's all free so there is no charge. It's a mix of things, we will do pitch events where start-ups can present to VC's. We just had one of those last week, we had 40 companies presenting to about 140 VC's. Daniel- Do those pitch events actually work? Let's just be completely honest here. Do the VC's who go are they actively investing? We didn't do any pitch events, the only similar thing that we did was AngelList which I think is different. What do you think about the pitch events? Shai- There are a few different variations of pitch events. The goal of our event is to get start-ups to meet 3 or 4 quality investors that they didn't know before. That is the goal, it's hard to say you are going to pitch at this event and you will get funding. What I will say is- there are quality entrepreneurs in the room, there will be quality VC's in the room and that we hope that something happens out of that. The goal is for the VC's if they can meet 1 or 2 quality companies. If the entrepreneur can meet 3 or 4 quality VC's then those are a success for us. We have had clients close on funding from that event. I wouldn't say that it is a very high % but I would say that its maybe 5% of the companies who have presented and met their VC at the table. Daniel- It's like an awareness. Shai- Yes, and we also have a lot of clients from across the country that come to the Bay Area that do not have access to Bay Area VC's. If you are a Bay Area start-up you will have easier access to Bay Area VC's. If you are from Seattle, Philly or Boston etc they may not be as successful out there but if you come here and meet those VC's, that is a good win win for them. Also, a lot of things happen if you meet a VC and they like what you are doing, they may pass on that company but say hey I have three other VC buddies who I think this will be a fit. So they are actually helping to make other introductions, it's almost like a multiplier effect. That actually happens, sometimes it is hard to track because the company may not be pitching for money right now, they are pitching for money 6-9 months down the road. Daniel- Do they pitch at these events, even though they are not actively looking for funding at that moment? Shai- Yes. There is a lot of blog posting around this sort of you want to create a relationship with a VC before you are out there pitching. You want to start building that relationship and build that trust. You also want to show that you can hit some milestones that you say you are going to. They get to know you along the way. That happens a lot of times, you don't want to do that with too many investors but you can cherry pick 4 or 5 folks that you want to maintain those relationships. Once you are ready the VC is up to speed, the trust is already established and they are ready to pull the trigger. People use the dating analogy and a sort of that is true. Maybe not at much so on those seed stage, if you raise money through AngelList or maybe a smaller round it comes together pretty quickly. At least I have found. Daniel- What is pretty quickly, days, weeks, months? Shai- If you can close on funding from the time you pitch your first VC or Angel investor until the money is in the bank, the whole round is in the bank, legal docs and everything, I think 3 months is pretty quick. You don't see that very often. Especially if you are raising a smaller seed round, we have a lot of investors who are trying to corral other folks, different buyers and if you do prefer notes its easier and its less legal documentation. If its a full blown round it is a lot more process. Daniel- What do you think about convertible note verses A rounds, actual equity rounds, do you have any thoughts? There seems like there is a lot of talk about the pros and cons of those. Do you see companies doing one or the other and do you think they shouldn't be doing that and doing something else? Shai- Personally or as an organization for us it doesn't really matter if its convertible notes or a price round. Because we are looking to broaden the banking services so it doesn't really change that prospective. The trend that I am seeing on the seed stage or that million dollar round the majority are convertible notes. It all depends on what sort of investor you are going after. the larger VC funds that are 200million and larger, from what I have seen from our clients those are usually prices rounds. Sometimes you get more of the hybrid you get a larger VC to do 500k and then it is augmented by Angels. That can be a convertible note. It seems to me that on many occasions the entrepreneur decides which direction they want to go and which way they are more comfortable with. If they say I am going to do a convertible note, its either you like it or you don't. It depends on how much leverage you have it depend on how hot the deal is sometimes you cant make that call as an entrepreneur. You see all the blog post that say oh the round came together in 3 days and we decided the evaluation and we decided who is in and who's out. That's not the norm, most rounds don't come together like that. The blog posts say that and entrepreneurs see them and think a round came together quickly it sets the wrong expectation for them. If you look at the average entrepreneur that is not the process. It is much more complicated, its a much longer process, its not that easy most of the time. Daniel- It was a very eye opening experience for us the first time out here in the Valley and it took us 14 weeks, about 3 months. Shai- And that's good because you are a company that was coming from out of town. If you are an established entrepreneur and you are part of the circuit and you have these circles of entrepreneurs, different sectors, it's almost clubby, cliquish as well. That definitely happens in the Valley. When you come from out of town and no one knows who you are really its much more challenging to raise a round. For you to come from out of town and you guys were more established you had more revenue and more traction which is good. Typically its much more complicated and a lot harder process to come here, get established, create your own brand and then raise that round of financing. Daniel- Lets talk about that for a second because you were nice enough to meet with me when I was first here in town. I think that was a big reason of why we were able to get into those circles and get to know those people. What do you recommend for companies that aren't in the Bay Area but are thinking of coming. Should they contact you, get an account with SVB, are there other people like you that people who don't know anyone should come and meet? Do you usually meet with companies that you don't know? What should someone do who is new to The Valley? Shai- I think it depends on what sector you are in. There are small circles of entrepreneurs and VC's that depend on what sector you are in. They all sort of get to know each other so depending on what sub-sect you are in you have to figure out who that small circle of people is in the Bay Area. Try and break into that circle somehow. You have a lot of those facilities like the one we are in today SOMACentral. This is a great place to get plugged in to other entrepreneurs. I am sure plenty of VC's come up here and hang out because you have quality companies. You have Dogpatch and Kicklabs, NextSpace you have a bunch of co-working places where entrepreneurs can meet other folks and get plugged in pretty quickly. Especially in San Francisco, the whole SOMA area has so much activity in it. I always suggest for entrepreneurs that come from out of town and they are in the consumer Internet mobile digital media space even SASS companies to come into to SF hang out in SOMA. You can meet tons of people that way. I think the co-working facilities are a great way way to go. Then you have just a plug for one our clients- Start-up Digest, you get a lot of traction. There are so many events that take place in the Bay Area that make it every unique. Every night are 4 or 5 events that you can go to. If you are an entrepreneur and you only events, it can be over whelming. You think well which one do I go to, do I go to the crappy ones or the high quality ones. I think guys that started Digest help you weave through that list of all the events. I think as an entrepreneur you should be going to events every night of the week. I think it is good to be plugged in but you also want to be working doing your coding, building your product, hiring that sort of thing. Sometimes you hear of these guys that are going to every event out there and some investors might be thinking well why are these guys at every event, doesn't he have stuff to do? You sort of have to be careful around that, pick and choose what events. Your time is valuable. Of course at SVB we do a lot of of our own events we are pointing to that eco-system so if you try to connect to certain investors or certain entrepreneurs we can probably help out with some introductions and get you situated. We can let you know who the good core facilities, here are the events that I go to that I think are a good fit, here's our events that you can check out for free. I think its some what easy to get plugged in to the Bay Area as long as you make a concentrated effort to do that and to ask people. I think people in the Bay Area are really friendly its true. Not in other geographies but here I think most entrepreneurs are really friendly and they want to help you , make sure you succeed and will open doors for you. Daniel- Speaking of that, you see a lot of start-ups in all stages from the very beginning I can imagine through funding. What are some things that you see start-ups not doing well, what kind of mistakes do you see them making? Are there trends, things that you wish that start-ups would do differently to make it more successful. Shai- Some of these are more simplistic. Put them together a pitch deck or how to fund raise. If you are a first timer you don't really know what the processes of fund raising are. There are a lot of blog posts around it so you can get a little more educated. Actually once you are going though that process yourself it's a lot different than reading a blog post. Figuring out the fund raising process is challenging because there are some investors that will take meetings but are not actively investing. Part of what I try to do for my clients is tell them the investors that I know are active and that are a fit for them. Let them know they should prioritize those investors. Create that tiered approach of which folks to go to first, you can actually narrow down the fund raising process by knowing who is actively investing in your sector and your stage. I see a lot of investors that just take meetings with anyone and entrepreneurs taking meetings with investors that aren't really fit. Then you are just spinning your wheels because you spend in hour in the meeting, prep time, drive time you are basically spending 3 hours in one meeting. Then you have all the follow up stuff. I think the fund raising process can be more simplified by just talking to different resources around there. Also, a lot of folks go out and try and raise a round too early so they are not really ready. You have to gauge and talk to people, other entrepreneurs and maybe service providers who know know what VC's are looking for. If you are raising that 1M dollar round of financing, you've got to be at certain milestones. I see some entrepreneurs go out to market too early. Thinking of yeah I can raise 1M dollars, then spend three months trying to pitch and then they figure out they are too early. I then I have told them that I thought they were too early, you should probably get a few more milestones so you have to gauge where you are as a company. Daniel- It also seems that it has a lot to do with who you if you've done if you've had an exit before, then it seems like investors would be much more likely to believe in you the person with an idea versus having to show traction. Shai- If you have a good background a sort of pedigree it's not even a necessary exit or other start-ups you've worked on but it's if you're at Google, Facebook or Twitter and you are a certain level than that has to cloud around that. It's a mix of that and also what start-ups you've worked on but sometimes you have a lot of first time entrepreneurs who raise the majority of rounds financing there at a seed stage, there first time entrepreneurs. It's not like they have a huge track record but they get to know who you are and whether you're credible and people are always judging you. Anytime you're meeting with an investor or even another entrepreneur or they don't really know you in the first 30 seconds they start judging, ok is this guy legit, should I spend more time with him. Daniel- It does seem like it happens in the first like you are saying in the first 30 seconds that I've heard of investors say that they know within the first minute whether they are going to invest in the deal or not. Shai- Yes, part of it is just your presence. It's your presence, your personality.... Daniel- So what should an entrepreneur do to have a better presence? Is it self confidence, is it being passionate? Shai- I think its a combination of those two things. Having that self confidence and being passionate. I go through a lot of pitches with entrepreneurs just coaching them and giving them feedback about you should change this slide or you want to maybe not say those certain things. Some entrepreneurs I meet with are just not passionate, if you are working on this start-up everyday, every minute of your life, you should be pretty excited about it. You should be leading forward in the meeting and be really passionate, maybe standing up going to the white board and sometimes I don't see that. Also, people have different personalities, maybe its geared more towards engineers but some engineers are not really out going. Maybe not just the engineers but some folks are more technical and maybe not the most outgoing. For the CEO you have to get over that, part of just going to events and getting comfortable with who you are, getting comfortable talking to people and just being out there. Some people have it and some people don't but I think you can work on it even though you may not be the most personable person. I think you can be calm and still have a good presence and you can come off as really educated and an expert in that particular field. Some folks just lack that sort of confidence and its critical. Daniel- So work on putting yourself out there, speaking in front of others, being passionate about what you do. Shai- When I started at SVB, I was right out of college, I was 22 years old. I started consciously going to mixer events. I was outgoing to a certain extent but I wasn't outgoing in those sort of situations. I just forced myself to go to a lot of different events and just getting more comfortable talking to people, saying the right things and gaging if someone was interested in what you're talking about or just moving onto the next conversation. I even did Toast Masters, I hate public speaking. Daniel- Would you recommend Toast Masters? Shai- Yes, I thought it was great. Now I feel a lot more confident in doing public speaking, it's not just talking in front of a room of 200 people it could be 5 people. If you're pitching to a VC it could be a partnership and if you don't have the confidence level and you're not projecting appropriately. It just makes you look bad. You gotta work on that if you are self conscience and you don't have the skills you can build those skills. Daniel- I've also been involved in Toast Masters in the past, not out here though. I assume there are some great Toast Masters groups out here in the Valley. Shai- There are everywhere. You have to find the one that is sort of a fit for you because they have different personalities some are more sector focused. There are different geographies, I thought it was a good resource. Daniel- So for anybody who hasn't been to Toast Masters it's a public speaking organization where you can practice public speaking. Shai- Yep. Daniel- What are some of your favorite blogs? You've mentioned blogs a bunch of times , do you have ones that you read on a regular basis? Shai- I do yes, Mark Susters Both Sides of The Table, I read that frequently. I thought he has some really good posts. Dave McClure he posts not as frequently but he has some interesting things. Daniel- Some fiery ones when he does. Shai- It's entertaining but they are also some good points there. Brad Felt and Fred Wilson, and then some of the regular media ones like Tech Crunch, Venture Beats, Gigam, I read those things. Daniel- Anything else that you want to convey, things that you see entrepreneurs doing that they shouldn't be, any other thoughts, things that are important? Shai- I think one thing that's really important a lot of folks are talking about is sort of founder issues. Ive seen a couple of start-ups in the past year where the marriage, divorce essentially there are two co-founders and they split up at the really early stage, as they raise that seed round or series A round. I'm not saying it happens frequently, but it is happening and folks don't talk about that in the blog posts. If you re one of the co-founders you probably don't want to talk about it in public but its happening. In part is knowing who you are going into business with a lot of the time this split happens when the company is pivoting, you both agree on where you're going initially and then it doesn't work out. Everyone is talking about leaving the start-up and pivoting, trying and testing that sort of thing. A lot of times they are going in different directions and then the founders disagree on which direction to go. Either go left or go right, so its hard to walk through that unless you are in that situation. People do split up in that really early stage. A couple of other start-ups that I know the founders broke up because one didn't have the necessary skill set to scale the business potentially. I am not sure if that was the other co-founders choice or if that was the investors decision or influence. That sort of thing happens somewhat frequently or they do happen but folks just don't talk about it. I am not sure what the answer is but I think folks who have done business together, you see a lot of companies where there's two engineers they've worked together for two or three years and they have gone through different integrations of the product at Google and they've worked at very stressful situations together in the same group. They know how each one works or they went to school together and they worked on projects together. Daniel- Like junior or senior year. Shai- Yes, I think those folks- it seems like its less challenging because they have gone through that. Suppose you find co-founders that they met maybe 12 months ago through a friend of a friend or at another event, I am not saying they cant be successful, maybe they just will be faced with more challenges. I think having a long history together is important. I think investors look at that as well, investors look at the team and how long they've worked together, what the track record is working together. Daniel- I think we got that question in every single pitch we went to. How did you guys meet, how long have you known each other, it seems like its on an investors minds. Shai- But you had you and your brother. Daniel- Well yeah, my brother Sam is out here is well but the co-founders we've been together for 3 years now. We've worked a lot of those kinds of things out and I can totally imagine how it can be an issue when you are just meeting somebody. I totally get that. I wish there was some kind of a group or a place that frustrated co-founders could go to and try and get support but I don't know of anything. Shai- I have thought about doing private dinners around but it doesn't matter. Folks who have gone through that process of breaking up being willing to talk about it in a somewhat public open setting maybe 10-12 people, if anyone would be interested in doing that. Daniel- Contact Shai if you are in that situation and maybe if you are interested you can set it up. You are going to New York so we are going to lose you out in the Valley for at least a while right? Shai- Yes, I am going to New York in January. Daniel- Alright, so if you're watching this before January and you want to talk to Shai, you better get on it because we only have a few months. Shai- I will be back though. I will be building that bridge between the Bay Area and New York for start-ups. Daniel- That's cool. So there is a lot happening in New York it seems like. Shai- There is. The level of productivity in the last 18 months has really increased and there are questions about whether or not it is sustainable or not because I think New York has gone through these fluctuations of where you get a lot of start-ups and then it sort of dissolves and it gets really quiet for a while. They haven't really had a period where its 5 or 10 years of sustainable growing number of start-ups but in the last 18 months that's taken place its still not 4 or 5 years but there are things around New York that are happening that I think will enable that 4 or 5 year period to take place. That will create some exits, those exits create wealth for the founders who will then invest in other start-ups, who will then create another start-ups because now the second time CEO or founder so its on top of each other and part of it is just the funding that is available now in New York where a couple of years ago there was a reduced amount of funding available. We have the New York firms and then you have the Boston firms that are coming into New York and are very aggressive. Then you have the Bay Area firms and then you have the up and down the Eastern corridor folks in the DC area that are flying to New York so you have a lot of interest of the VC prospective to do deals in New York and those are being done. We have the capital that's a critical ingredient. Daniel- It's interesting to kind of watch a Silicon Valley type of environment try to be jump started in a forum that seems like New York has a good, I mean there must be a trend in your are getting shipped out to New York. Something must be happening out there. Shai- Yes, I think it speaks to what is happening in New York. Me moving out there is not an East Coast, West Coast thing or New York is better than Boston or better than the Bay Area or Seattle whatever it is just that things are happening there. We need to have increased presence in New York and it is really exciting, I think the city still needs that sort of major exit. If you are looking at what is happened to the Bay Area over the last 20-30 years there is always these huge exits. Which then create other entrepreneurs, other investors, engineering talent, most recent one was Google back in 2004-2005 I think that was when IPO was. IPO has really supported this eco-system the last 5 years . Daniel- Its a retro-cycle. Shai- We have all these super Angels, Angels actively investing this pool of engineers that now Facebook has taped into that Twitter has taped into and a bunch of other start-ups have taped into. It seems like New York still needs a huge exit which will create more wealth, more entrepreneurs. Daniel- Well good luck out there. I am sure it will go well and thanks for spending the time to help educate other entrepreneurs. It's a little passion of mine so I really appreciate you spending the time. Shai- Thanks, I really appreciate it. Daniel- Alright, cool. .
I've written before about the importance of playing a computer like an instrument. Employing many small efficiency tips on a laptop will add up to copious amounts of time over the span of a year (let alone the span of your working life in front of a computer!) I've calculated that playing a computer as an instrument can literally create one week (about 40 hours) each year in efficiency gains. So learn these tricks and then take an extra week of vacation!
Now, to quantify a standard against which we can benchmark people's skill at playing a computer like an instrument, I'm challenging anyone to beat me in the F1 GeekSpeed Challenge.
Here's how it works:
I get people all the time who tell me they'd like to be entrepreneurs. Often they have this wistful look in their eyes, as if to say "I would but..." and the "but" is often the list of obligations that is keeping them from doing it. Family. Mortgage. Kids. Job. Etc.
I've devised a litmus test to help those people, and anyone else, figure out if they really do have what it takes to be an entrepreneur. It's easy, costs $100 or less, and you can do it in one afternoon. Think of it as being an entrepreneur with no strings attached; no long-term obligations. You'll find after this experience that you're hooked and you love it, and you want more of it, or that being an entrepreneur isn't for you.
So here's the litmus test: Go to Costco (if you don't have a membership, a friend surely does) and buy one of their discount ticket packs. You can find these for restaurants, museums, ski lift tickets, movie tickets, football games, golf courses, spas, and gyms. Pick the one you're most familiar with. Then, go out and sell them for more than you bought them for, and see how much margin you can make. It's that easy.
In fact, it doesn't even really matter if you only make a few dollars doing this - it's the experience of buying the items at one price, then selling them for more, dealing with inventory, convincing people to buy what you have to sell, etc. that matters.
Here are a few examples & ways you could do it: