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How to know when to leave your startup

Original post by Penelope Trunk via VB

My third startup is Brazen Careerist.

When I started building the brand of Brazen Careerist around the year 2000, I talked about ideas like job hopping as a way to build a solid career, and I warned that generation Y’s entry into the workforce would be a total shock to employers. I was labeled a heretic and a moron.

But pretty quickly, people started thinking I was right. And I started making $15,000 a speech to discuss these ideas.

The intoxication of being on a trend, and knowing how to monetize it and being excited about being right, that’s what makes someone do a startup. So I picked up two partners, I launched Brazen Careerist, and quickly, Mashable called us the number-one social networking site for Gen Y. We were on a roll.

We raised money. We launched products, we pivoted 20 times. We were due to raise more money right after the markets crashed. So of course we couldn’t raise money. And of course I did what all startup founders do when they run out of money: I had a shit fit. And then I had a nervous breakdown.

But the thing is, in a startup, everything moves at warp speed, even a nervous breakdown. So I recovered fast, convinced investors to put in more money. And we kept going.

That cycle happened twice. Which is normal. Because startups are hell, and a startup is the perfect convergence of a brilliant idea and a founder just crazy enough to stick with it through anything.

At that point, I was exhausted. And I had to figure out: When is it time for a founder to step down? So I went through a time of personal assessment, which taught me a lot about when you know it’s time for a founder to leave:

Financial exhaustion
I had funded the idea with my own money for a few years before I launched Brazen Careerist as a social recruiting platform. I ruined my credit, I cashed out my 401K (don’t ever do this!) and I lost a baby sitter because she was appalled that we didn’t have any food in the refrigerator.

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October 27, 2011 | Techmeetups

Entrepreneurship Myth: You Require An MBA to Start-up

Original post by Guest Author via Pi

You hear this debate more often than not on coffee tables and amongst want-to-be entrepreneurs. Without being too diplomatic my take on this is ‘NO’ you don’t need one to start up and that has absolutely nothing to do with me being a non-MBA J

In more cases than not, ignorance is bliss. When I started off, I didn’t know a thing about how to make a business plan, how to manage cash flows, valuations and DCF, term sheets, employment contracts, product IPRs nothing! The only thing I had was passion and the fire to make a difference and to create value, and I never experienced a need of going to a B-School to come this far.

Just the other day I met a management grad at one of the start up events and I happened to strike a conversation with him. He had an idea around which he wanted to build a business but he was reluctant to even start off the same since he had been thinking more about the cash flows and business plans rather than focusing on the idea, prototyping it and getting it out in the market. And this case of over thinking and over analyzing runs really deep amongst almost all management grads I come across.

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October 23, 2011 | Techmeetups

Startup tips: 5 great tools for freelancers (and small businesses)

Original post by MIKE via blog.crowdspring

What is a freelancer if not a small business? Just like small businesses, freelancers must engage in marketing, manage payables and receivables and other accounting tasks, perform HR functions, direct production, and plan strategy.1. Planning and strategy.There are lots of great tools and apps out there that will help you to plan and execute great strategy for your freelance career or business, but the greatest tool you can use is knowledge. The Harvard Business Review is probably the leading publication for business and their an online journal contains thousands of articles nonbusiness theory, practice, and technique. The current issue of HBR includes articles which can provide great value to freelancers, such as “Stop Procrastinating…Now,” “Customer Loyalty in the Twitter Era,” and “he Secret to Dealing With Difficult People: It’s About You.”2. Marketing. The single greatest marketing tool that a freelancers can use is standing directly in front of you: your clients. Happy customers talk, and when they talk about you or your business, the people they speak to listen. The typical freelancer will receive well over half of their new clients through word of mouth, and strong WOM builds business. Wikipedia defines it thus, “Customer relationship management (CRM) is a widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. Two great resources are Salesforce and Zoho.com. These two online resources allow you to plan and manage marketing campaigns, manage lead generation, automate sales management, perform inventory and customer support functions, and analyze and visualize customer data.

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October 19, 2011 | Techmeetups

“The Business of Big Data” at Strata Conference New York

“The Business of Big Data” at Starta Confernce New York

Original post by Olaf Kowalik via blogs.waggeneredstrom

I recently attended the O’Reilly Strata conference in New York which was themed “the business of data”. It was an incredibly inspirational week focused on the way big data is changing our world. I was most impressed by the variety of professions and activities that were represented in both speakers and attendees—scientists, government officials, software developers, marketers, designers, and infrastructure professionals. During the conference I saw firsthand the huge opportunities in “making data work” and creating value by using data more creatively and effectively.

There were too many presentations over the course of the five days to summarize all the fantastic content, but a handful of key themes were particularly relevant to the work we do with our clients:

Data provides a competitive advantage – Many presenters demonstrated that data is immensely effective for improving people’s lives, developing new products, and reinventing existing offerings. Unfortunately, where there is profit, abuse often follows—there is a thriving business in illegal data.

Data Science is a new, old profession – Although “data science” is all the rage now, it’s been around as long as data has been recorded and analyzed. The difference today, of course, is that the amount of data thrown off from on-line and real-world activities is so massive because of our hybrid real/virtual world. Software tools and infrastructure, many of which were highlighted during the week, are becoming more and more powerful and can assist in finding patterns and drawing conclusions.

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October 8, 2011 | Techmeetups

Design is becoming a competitive advantage for startups

Original post by VentureBeat

Technical founders have already become prerequisites in the world of tech startups. Now get ready for the designer founder. The combination of this new duo is going to change the world of tech forever.

To quote Daniel Pink in his book A Whole New Mind,

The last few decades have belonged to a certain kind of person with a certain kind of mind—computer programmers who could crank code, lawyers who could craft contracts, MBAs who could crunch numbers. But the keys to the kingdom are changing hands. The future belongs to a very different kind of person with a very different kind of mind—creators and empathizers, pattern recognizers, and meaning makers. These people—artists, inventors, designers, storytellers, caregivers, consolers, big picture thinkers—will now reap society’s richest rewards and share its greatest joys.

Although we agree with Daniel Pink’s quote and premise, we are by no means diminishing the role of the technical founder. We’re huge advocates of engineers/hackers (aka technical founders) and believe their “in-house” talents are crucial in this new tech renaissance. Our position here is to highlight the importance and opportunity of the emerging technical and design founder duo. We strongly believe that both are equally important!

High-concept, high-touch mentalities in tech startups are a winning proposition. When founders seek out talent these days, most of them (at least in our experience) are looking for designers as much as for engineers. This is mainly because, more often than not, it is the technical founders who are starting companies, and they realize that creating an exceptional user experience is a competitive advantage. Adding “Design Founders” to the mix is a potential “black swan:” hard to predict, highly improbable, and will change the world— potentially redefining the high tech landscape.

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October 8, 2011 | Techmeetups

My talk at Founder Fuel Fall 2011: Ok, you are a CTO now… what did you get yoursfelf into?

Original post by Sylvain Carle via A Frog In The Valley

Slides from my talk last Tuesday as a mentor in the Founder Fuelaccelerator program.

Ok, you are a CTO now…

View more presentations from Sylvain Carle

October 6, 2011 | Techmeetups

Want to know your users better? Run your own analytics!

Original post by Dwipal Desai via blog.theicebreak

Theicebreak is all about understanding relationships. It makes sense then that we would want to ensure that we have a strong understanding of who we are in a relationship with—our user base.

To do so, we focus on tracking every feature and function through cohort analysis, as championed by Fred Wilson, Dave McClure, Eric Ries’ lean startup movement and others.

There are now a couple of services that provide easy tools to do so for startups, including everyone’s favorites…Mixpanel and KISSMetrics. We tried them all, but immediately hit some crucial limitations of these online platforms:

We have multiple interfaces (web, mobile, API) and we would have to individually integrate with analytics on each one. A way to solve this is to integrate on the server side.
We wanted to combine this data with other attributes—for example, break down a certain feature by male vs. female users, or married vs engaged couples.
We needed to be able to run custom queries and reports based on the data in a simple way.
This data is private and very important for the company, and we would like to “own” it.
It should be inexpensive

Most of the analytics services (except the really expensive/complex ones) are typically focused on implementing the tracking in Javascript or other front-end APIs. Some of them do support server-side logging, but it’s limited.

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October 1, 2011 | Techmeetups

Customer Value and Your Lean Start-Up

If you’re currently in the process of securing funds for your lean tech start-up, it is vital to show others how your venture is creating customer value. If you can, do this by showing revenue growth. Focus not on the total revenue generated—as this will usually be a minimal figure—but instead demonstrate that the revenue that there is, is being generated by each and every customer who’s engaging with your software. A hockey-stick shape graph displays this well, especially if it plots active customers per month together with total revenues per month. If those two values correlate, this demonstrates that your business is growing and creating value simultaneously.

Demonstrate that your generated revenue is of a sufficient level by comparing it to the fully-loaded cost of customer acquisition. If the revenue figure is substantially bigger than this cost, you’re heading in the right direction. If you are not yet at a level of monetization that makes these indicators worth using, try using a cohort analysis. This alternative indicator tracks the increases in software- product engagement over a period of time.

This is how it works—a cohort’s aggregate performance will usually decrease as time passes, because people dropping out is the natural course of things. After this initial drop-off, however, high-engagement software then experiences a small “tail” in the upwards direction. This indicates that consumers are being drawn back to your software more and more frequently—they’ve tried to escape but your software package engages people at such a rate that these wannabe drop-offs keep being pulled back in by their network’s social media invites and the like.

If this indicator is also of no use to you, consider graphing important conversion percentages over a period of time. If the changes in conversion are in tandem with the steps you’ve taken to improve your software, this demonstrates that you’re increasing the yield on each cohort.

Visible analysis of customer value is not only useful to potential investors, but also useful to you as a company. Some of the benefits that accompany this type of analysis include identification of what you do differently to your competitors—and whether it works or not—as well as the extent of the price premium you can reasonably expect to sustain over and above your competitors. And of course, a major advantage to looking at your current value to the customer is that it helps you to see how you can improve your software to increase customer value. The more customer value you offer, the more funds investors will be willing to offer you.

September 5, 2011 | Techmeetups

What Makes an Entrepreneur? LinkedIn Data Offers a Clue

Original post by Katherine Noyes via PCWorld

Ask 10 people what it takes to be an entrepreneur and you’ll probably get 10 different answers. Ask LinkedIn, on the other hand, and you’ll get a pretty detailed picture complete with schools to attend, companies to start off with and places to live.

That’s because LinkedIn recently did an analysis of the 120 million public profiles on its network and zeroed in on the people who are entrepreneurs. From there, it looked at a raft of data about those people as compared with the average LinkedIn user, ultimately painting a fairly detailed portrait of the typical startup founder.

I had a chance to speak yesterday with Monica Rogati, a senior data scientist at LinkedIn. Think you can predict what a typical entrepreneur looks like? You may have a few surprises coming.

Tech Degrees at the Top

LinkedIn picked out the entrepreneurs from the rest of its member profiles by zooming in on a few key things. Specifically, it focused on those who identify themselves as founders or cofounders of U.S. companies that were created after the year 2000 and that currently have between two and 200 employees. Small law, consulting and real estate firms were excluded from this data set, as were limited liability companies.

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September 5, 2011 | Techmeetups