About Mobility

A quick announcement about two great resources that are available to Central Texas entrepreneurs who are starting or who had started a business (a start-up) and need some help or direction.

First my friend Hall Martin who runs the Austin Entrepreneur Network (http://austinentrepreneurnetwork.org) is organizing a “Startup Business Class” on September 15 of 2009. But access to the course is limited. Note that admission into the course will be determined by the unique value of your business proposition, your ability to communicate said value, and your commitment to making the business a success. To apply go to http://austinentrepreneurnetwork.org/application. More information is below. Hall is a long-time member of the Austin angel community and is always helping those who are starting their own technology startups.

Also, for those technology entrepreneurs who live in San Antonio (and I would guess Austin too), my very good friend Dean McCall has just started the Idea Finishing School (http://www.ideafinishingschool.com). Their goal is to provide expert advice on technology, marketing, business structure and investment capital for many “early stage” companies. Dean who is the co-founder of Ideagin, LLC, is a technology catalyst, a “connector” and dear friend; it is great to see him taking such leadership role in the technology community helping startups.

So there you go, two great resources for entrepreneurs in Central Texas…

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The Entrepreneur Startup & Growth Course: From Ideation to Funding

So you have a good idea, maybe a team of people that believe in that idea, and possibly even some money in the bank. So what are you going to do now to turn that idea into a full-blown business reality?

Some of the questions you need to ask yourself are:
* Can I articulate this idea?
* Is it unique?
* Will people pay for it?

AEN’s Entrepreneur Startup and Growth course helps you answer these and other crucial questions that must be addressed before you can turn a good idea into a good business.

Attendees will receive:

* Eight (8) two-hour classroom sessions – held once a week – covering critical topics on starting and funding a company.
* Two one-on-one mentoring sessions, focused on refining your Executive Summary and Fast pitch.
* A complete course book, with presentation slides, work assignments, and reference materials.

You should apply if:

* You have a business concept under development.
* You have started a business but don’t know where to go next.
* You have an established business but need funding to take it to the next level.

Internal vs. external pressures impact the (potential for) success of your startup in different ways.

I’ll argue that internal pressures are the worst… how do I know? I’ve learned this the *hard way*. But remember that what doesn’t kill you makes you stronger; never forget that.

When building a startup, external forces are not the worst of your enemies. Competition? Who cares? Bring it on! The economy and funding? What about IT infrastructure? Nah, don’t worry — today is very cheap to build and run your venture. People/resources? Yes, that too is available and with reasonable/negotiable terms and expectations. Guy Kawasaki writes a good summary about this new economy on his Building 43 interview by Scoble The new economics of entrepreneurship.

And I’ll argue that external pressures such as competition or potential for competition are great incentives, for example, to go to market, fast.

But it is the internal forces, the struggles within — and especially the inter-personal forces, such as lack of balance, openness and trust… ah, those are the forces that might keep you from winning. Those are forces for you to watch out for… Those are your worst enemies, and believe or not, are all within, very close to you. Otherwise, the company will kill itself from the inside; which is the worst (and stupidest) way to die…

This is why the team composition, from management and down is so important on a startup. Keep the team small, to the minimal. Cut the excess; or better, avoid excess — if you need a specific resource but deep inside you know it is not a match for your startup, bring the person as a contractor. And be open and be fair and be balanced.

If I were to put a totally non-scientific chart on this, it would look as follows:

…which in summary translates to “internal forces increases the threat levels for your company”.

Related to this topic see a couple of great pieces by Paul Graham:

• Why Start a Company in a Bad Economy
• How Not to Die
• How To Do What You Love

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P.S. This essay is part of what might become a series of related essays based on written notes on startups from previous life; notes that I thought I should share. I will be compiling these under the On Startups page on my weblog. And I’ve to admit that publishing these notes, which I recently re-discovered, is at times a bit “painful” in different ways; but hey, life goes on…

Great read Why Start a Startup in a Bad Economy by Paul Graham.

Which means that what matters is who you are, not when you do it. If you’re the right sort of person, you’ll win even in a bad economy. And if you’re not, a good economy won’t save you. Someone who thinks “I better not start a startup now, because the economy is so bad” is making the same mistake as the people who thought during the Bubble “all I have to do is start a startup, and I’ll be rich.”

You have to agree. If the entrepreneur has what it takes, he/she will succeed anyhow in good and bad economies. If he/she don’t have what it takes regardless of the economy, will fail anyways.

But it is not just about the entrepreneur having what it takes; it is about the whole package: the ideas + monetization plan for it + the people/team + the reality of things + timing.

We are in some bad times, but there is money out there. Funds will continue to be distributed, yes very carefully, but will continue. As long as your solution goes beyond cool, provides value and again there is a monetization plan and reality, and the company doesn’t kill itself from the inside, you will be fine.

It is not the external forces your worst fear, your worst concern. But the internal forces is what you must watch out for; the forces from within. I’ve learned that the hard way. The people and the principles are the foundation of the company. The technology is the easy part.

There is always something new to learn. And remember that what doesn’t kill you, makes you stronger.

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Great set of slides by Jason Calacanis — the three most important factors in predicting the next big thing.

| View | Upload your own

Josh Kopelman (Redeye VC blog and managing Director of First Round Capital) wrote a piece titled Depending on pending… where he argues about the importance of patents w.r.t. barriers to entry vs. focusing on going to market first:

Most people don’t realize that the average software patent will take many years from initial application to issuance. (According to the USPTO, software patents have the longest backlog of any type of patent. In 2005 the backlog was almost four years…and it has grown larger since then).

Given that a patent needs to be issued before it can be enforced, and given that it takes 4+ years for a patent to issue, you can’t really call it an effective “barrier” to entry. Before you can even consider enforcing the patent, your company has already succeeded or failed in the marketplace. And by the time you try to close the “patent door” to the barn, the horse has not only left the barn, it has probably died of old age.

Yes, patents alone won’t do the trick as barrier to entry, but it is part of the barrier to entry equation, and innovation companies must protect their IP, and that is the responsibility of the CTO. The following is the comment that I left on Josh’s blog:

The role of the CTO; to envision, anticipate, create and execute the technology roadmap, and protect the related IP. This is a must do, but must not take your company into a tangent and preclude execution and go to market. Expensive and long process it is, a must do, and at the end of the game, what your company had protected might not be inline with the company’s “new” technology/business direction. But that is the role of the CTO, to understand this… A tricky balance and race, for technology companies and startups.

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Investors don’t invest based on the state of the economy. Investors invest in people, technologies, potential opportunities. It is all about taking calculated risks…

Assuming that you have something of interest and with great potential, if an investor is hesitant on investing in your startup, it is because there is just too much risk associated with your deal… You don’t have the right set of people, and/or there are no (sufficient) barriers to entry, and/or your company isn’t properly structured. Or maybe your investor community just “suck”; not all investor communities are created equal (i.e. not all investor communities get it).

But don’t give up… Remember that raising money is a very slow, painful, and adaptive process, and that the second idea is always the important one.

Related to this see What Bubble? VCs Still Pouring Money Into Web 2.0.

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From Founders at Work:

“Over the years, I’ve learned that the first idea you have is irrelevant. It’s just a catalyst for you to get started. Then you figure out what’s wrong with it and you go through phases of denial, panic, regret. And then you finally have a better idea and the second idea is always the important one.”

     Arthur van Hoff, Cofounder, Marimba (and other companies)

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Blyk is a startup company. What they are doing seems pretty cool. They have an interesting management team, ex-Nokias and other. That said, I’ve seen and experienced startups that are management heavy. But Blyk is an extremely management-heavy startup… 30 folks? That seems way to high for a startup. I wonder what’s the ratio of management-to-developers there? Not to mention the impact on other areas such as investors, dilution, the development/tech team, etc…

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A great read by Paul Graham, How Not to Die:

So I’ll tell you now: bad shit is coming. It always is in a startup. The odds of getting from launch to liquidity without some kind of disaster happening are one in a thousand. So don’t get demoralized. When the disaster strikes, just say to yourself, OK, this was what Paul was talking about. What did he say to do? Oh, yeah. Don’t give up…

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I want to congratulate my friend Mark Young, and his team, who recently raised $4.5 Million Investment from Benchmark Capital on their 1st round of funding.

His company, Numobiq Inc. has been pretty much stealth for a while, are going after the mobile applications and services and platform market. From their website:

Numobiq has created a revolutionary software platform that turns every mobile handset into a smartphone. Its technology solution adds intelligence to the network, a consumer-friendly experience to the handset, and an array of features and functionality that surpass today’s most advanced offerings. Best of all, it works across hundreds of mobile handsets to deliver a common, highly personalized user experience.

Interesting…

Note that I have no inside to Numobiq, but I am going to try to guess what they are up to… and maybe it is a client-side runtime (in Java) to run widget-like applications authored using traditional web technologies, such as JavaScript. The runtime + their platform is what “makes dump phones smarter”…

Congrats my friend!

Related to this see Numobiq, makes dumb phones smarter (VentureBeat)

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A very interesting read by Jeff Fedor titled CTO Handbook — How to care for and feed your CTO describes the various characteristics and personalities of CTOs.

Jeff covers three types of CTOs:

• The Technical Founder - the person that wrote the code that got the company off the ground. Has sweated to give the alpha/beta/product life and as a result any criticisms are effectively received/interpreted as “Your baby is ugly! Now where’s your Corn Flakes so I can piss in them too!” Is never far from code.
• The Visionary - sometimes seen as the flake without any “real” deliverables. Is never far from a whiteboard. Can write code but shouldn’t.
• The Figure Head - parachuted in, probably did or was associated with something impressive in a semi-related industry. Doesn’t know most of the company but is on a first name basis with most flight crew. Is never far from PowerPoint.

Where do I fit? Funny, I think it is a combination of all the above, except that I do know my shit, and I do have deliverables, I didn’t parachute in, and I don’t take (or try not to take) things personal when criticized But I will let others tell me what they think…

In my view, a good CTO in one who is touch with the technological realities of his/her industry sector, and the intersection of such technologies with the company’s business goals. A good CTO is one that has great vision, and is great at strategy, both short and long-term, but also is very much in touch with the reality and limitations of things. A good CTO is one who knows how to convert a vision into reality, of course with the help of its peers and people. A good CTO is one who is good at articulating (verbally, written) the vision both internally and externally, one who knows his/her stuff (how to make it happen), one who is a great at technology evangelism, who drives technology change and adoption, who knows when to build vs. buy, what to research and what to protect, and for the case of a founder CTO, in addition it must be a hands-on individual very much so…

Related to this:

• More on CTOs or was that Moron CTOs? (follow-up article/post by Jeff)
• What To Say To A Roomful of CTOs
• Hiring a VP of Engineering or CTO For Non-Techie (First Time) Founders

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ReadWriteWeb has a very good article that anyone starting or heading a Startup should read… see 36 Startup Tips: From Software Engineering to PR and More!

Below I have added some Startup-tips of my own that complements the ones above. The list quickly grew to 50. Some of these tips are from a founder’s perspective, others from a manager’s perspective, while others from a product development perspective (not in any particular order):

1. Keep the company small for as long as you can. Keep it small yet effective.
2. Delay funding as much as you can. Bootstrap if you can. This is hard. Make sure you have a working product and customers, and maximize your valuation first. But get funding, and be prepared to be diluted.
3. Be good at build vs. buy/partner; do not re-invent the wheel.
4. Know your stuff. Trust your team members. Be positive. Follow your common sense.
5. Be prepared to make sacrifices, many, of all kinds.
6. Be prepared to deal with change. Lots. Be prepared to do what needs to be done to pay the bills (and the payroll) — reselling other people’s products, consulting services, dilute, other.
7. Do not outsource your core IP development. Protect your IP.
8. Use a lawyer.
9. Build a strong management team: from business and sales, to finance, to marketing, to technology. Delegate. Concentrate on what you are best at, use your team for what they are best at. Keep an open communication channel.
10. Be very clear about things, and have employment agreements. Very early and pre-funding stage, this doesn’t matter as much, as long as you trust your partners. If you don’t trust them, you shouldn’t be there in the first place. For all employees, regardless of company phase, an employment agreement an NDA must be in place.
11. Egos can kill a company.
12. Be prepared to give up your position if that is what is required to run the company (for example, to receive funding, or just because you found a more experienced person for the position). Giving up your position not necessarily means giving up control or your position of influence.
13. Make sure your business is scalable: from its people, to the business and revenue models, locally, across-regions, and at the right time, globally.
14. Hire right. I can’t emphasize this enough. This means hiring A+ people. Hire Startup people. Hire people who can deal with change. Hire people who love what they do, and want to make an impact. Try to hire people who are smarter/better than you; create a balanced team. Hire people who you can trust. Hire people who can extrapolate (and fill in the blanks) from you what you say or intend.
15. Having A+ players in your team means more discussions, more convincing to do, more disagreements, and more agree to disagree to do — it is the way it is when having smart people around you. Be patient.
16. Understand your limitations and hire the right folks to address those limitations.
17. Hire students if you can.
18. As a company, contribute, give back, and help minimize the digital-divide. This doesn’t have to be with cash: your personal time/touch is worth more than money.
19. Running a business is not a democracy.
20. Fire/let-go people when you have to. This is not easy, but is a must. Don’t be an ass when you have to do it and treat people with respect.
21. Document everything.
22. If you are a technical person, like I am, find the right business folks for your team, ones who gets it. Find an A+ business development / sales person. Unless you have met A+ sales people before, you really won’t know what an A+ sales person is. So leverage your network, your investors, your friends to find that sales and business development person who gets it, and who comes with better ways of positioning and selling the stuff you are developing.
23. Move fast, always. Fast understanding of issues, problems, pains to solve, the industry you are in, the people you are dealing with. Make fast, intelligent decisions. Go fast to market. Fix it or make it better/prettier later. Consider building your products in phases.
24. Make sure requirements are produced (by business-side) and captured. Be prepared to hand-hold business during this process; they will have critical input and will/must “own” the process, but may not know how to capture it. Be prepared to “own” this process with them to ensure requirements are properly produced/captured. Be prepared to deal with changes. Use an iterative and interactive and disciplined approach. Schedule a weekly meeting for this. Be prepared to decide and negotiate what makes it by when.
25. Validate everything with business folks — if it can make money directly or indirectly, and it doesn’t distract from the main vision, go for it.
26. Educate the business folks. Learn from the business folks.
27. Have a design that allows you to put demos together fast: for example, quickly changing the look/feel/branding (UI) of your product.
28. Use proper abstractions and separation in your design. Leverage web-standards and best-practices.
29. Have a planned infrastructure with development, test and a production environments.
30. Keep growth, scalability and availability in mind. Do capacity and deployment planning.
31. Use a fast/agile/realistic development process. Use source control. Use a Wiki for internal use. Use bug-tracking. Do project management. Have weekly meetings on this (or more or less depending on phase). Be flexible. Use an iterative and interactive approach. Be disciplined. Deliver!
32. Make beautiful designs. Write beautiful code.
33. Document, and use clean diagrams, and document the code itself.
34. Don’t write evil code/functionality. Respect privacy. Don’t SPAM.
35. Use a graphic designer/artist — first impressions do matter.
36. Innovate. Create cool things. Make meaning.
37. Build your product as a platform. Use/publish services-on-the-web. But keep it simple.
38. Measure, collect, analyze, apply lessons-learned.
39. Support mobility in your product.
40. Run a Pilot. For this you must have working code and a working end-to-end system, and potential clients or end-users who will help you validate the product concept and business model. Also, define ahead of time the goals for the pilot (both technical and business), and how to capture/measure the success of the pilot. Also, you will need to have some money put aside to run the pilot itself (for the infrastructure). If all goes well, then go for funding.
41. Yes, leverage the community for PR purposes!
42. PR-wise, keep the world abreast of how your company is doing. Make (meaningful) announcements about important milestones, product and partnership, and your people.
43. Be a good leader. Be a good coach. Delegate.
44. Listen, don’t interrupt.
45. Empower your people. Let them be.
46. Promote your people. Have them participate and contribute to the industry (such as an open source project), allow them to speak in conferences, write papers, and lead. Announce their accomplishments in your company news page and weblog.
47. Create a working environment that is open, communicative, research-like, fun and flexible.
48. Budget for prototyping for new ideas — encourage new ideas.
49. Block bi-weekly time for one-on-ones for your employees — this is their meetings, not yours. If they don’t want to meet, that’s OK, don’t meet. But the time must be blocked/available anyways.
50. Recognize your people, internally (and externally when appropriate; see above)

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Hilarious…

[Via FSJ]

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Guy Kawasaki writes The Top Ten (Sixteen) Lies of Lawyers, a good fun read (especially if you have to deal with attorneys)… On this topic I will add the following though:

–> Keep lawyers and your business separate…

One of Guy’s points to watch out for is when you are told by an attorney firm the following:

“Our firm is really excited about what you’re doing, so we’d like to invest in your company too.”

But the above, while tempting (since it seems as a way to save $ — legal is one area your startup will spend lots of cash so to protect the founding team, the investors, and other), is a no-no; same as “deferring” legal expenses in lieu of “stocks/ownership”. Above will create a biased (conflict of interest) legal team, one that you need unbiased, with 100% clear vision, when it matters the most.

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