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Just Build It!

I recently got a question from an aspiring entrepreneur trying to figure out the right steps for starting his tech company. He seemed very deliberate about taking the correct approach. He’d been thinking about his idea for two years, staying updated on his market and getting feedback from various sources including two top accelerators.

He said he was moving towards building their MVP but first wanted to know what’s most important to investors about a go-to-market strategy. For example, should he target a niche market first or go after a larger market right away?

Here’s my response to him, with some minor changes from my original text:

  • Don’t build your business for investors
  • Build your business to enable maximum growth in the next 1, 5, 10 years
  • You said you’ve had the idea for two years and watched the market evolve. Markets will continue to evolve. Have a thesis for what direction your market will go but START NOW. If you really want to build a startup you need to just start BUILDING. Perform small experiments along the way, make mistakes, learn from them, and adjust accordingly.
  • I’m not necessarily telling you to quit your job and just go for it with no funding or market proof. Build it in your spare time if you need to. Plenty of successful companies start that way.
  • Starting out in a niche market is fine as long as you have a plan to dominate that niche and then expand into larger markets or additional segments
  • You’ve already gotten feedback from two legit orgs I know – take what feedback makes sense and make it part of your initial strategy
  • A startup isn’t a linear line from beginning to success. It’s a messed up, twisty, jumbled path that’s filled with mostly frustrating, humbling experiences interspersed with a win or two if you’re both good and lucky.
  • Make sure you’re solving a massive pain point. Not a mild headache, a huge migraine. Get some feedback from potential customers to validate this. If the feedback doesn’t validate it, maybe you need to change your idea.
  • Strive to be 10x better than any other solution to the migraine you’re solving
  • Feedback is critical but investors shouldn’t determine your go to market strategy. Think about investors when you’re putting your investor materials together (pitch deck and exec summary). Have a super compelling story, exceptional team, and hopefully some early revenue traction or at least an awesome MVP. These days it can be hard to raise capital for ideas unless you have a stellar track record.

The main point is: Just Build It! Yes you need to research your market, competition, and customers. Do it quickly. And once that feedback validates your thesis, build it! Then get feedback on what you’ve built, iterate and keep building. That’s what entrepreneurs do!

The Right Kind of Coachable

You often hear about the importance of founders being “coachable”, but what does that mean? Does it mean they should follow advice from anyone who seems more knowledgable? Bryce Roberts blogged about being coachable not malleable. A CEO needs to view feedback like any data that’s relevant to their startup: it should be quickly analyzed, filtered, and acted upon only if warranted. CEOs please always remember: it’s your business. If you try to follow everyone’s advice, your business won’t exist very long. At the same time, you should be open to quality advice. So what’s the right kind of “coachable”?

1) First: Be Open to Direct Feedback

Sounds easy, right? Turns out it can be difficult to hear someone call your baby ugly. The trick is to listen, ask relevant follow up questions, and avoid debating. And listen some more. If you’ve met with 25 potential mentors and dismissed every piece of feedback, you probably weren’t open to it in the first place. Keep an open mind and don’t take it personally.

2) Filter the Feedback

Expect conflicting advice from different mentors. At Techstars we call this “mentor whiplash”. You shouldn’t try to follow all of the advice – that would be a mess – but nor should you dismiss it all. Filter it, and hopefully what’s left is actionable advice that sets your startup on the right path. Sometimes you’ll have data and objective advisors to guide you; other times you’ll have to trust your gut. Analyze it, take control and set a definitive direction.

3) Nurture a Continuous Feedback Loop

Great mentors are magic, and once you engage them the best thing to do is keep them engaged. The mentor-mentee relationship is like any other: it needs to be nurtured and it’s up to the mentee to do that. Meet regularly and continue to ask for feedback. I love it when I talk to CEOs who went through Techstars five years ago and still meet with their lead mentors every month. Again, it doesn’t mean you should act on every bit of advice – they’re all data points – just listen and be judicious.

Being coachable isn’t enough – it’s important to be the right kind of coachable. You can be strong and confident while soliciting advice, it just takes practice. Your startup will thank you.


Those 3 Little Words I Love to Hear: “I don’t know.”

Hey startup founders, let me save you the suspense: you don’t know everything. You never will. And no reasonable person expects you to. Even when you’re talking to investors, customers, or partners. 

Yes you should be as knowledgable about your business as humanly possible. You should research the hell out of every scrap of study, article, blog post, speech, interview and tweetstorm relating to your technology, market and competition. But invariably there will be questions you don’t know the answers to. What should you say if someone asks you?

“I don’t know.” That’s what you should say. Be honest. It’s okay. 

Of course, it’s always good to follow it up with a qualifier. If it’s a question about a fact, it’s usually good to say something like “… but I’m going to find out and I’ll let you know as soon as I do.” (Note the “I” in the qualifier vs. delegating it to someone else.) If it’s a question about one of the million future scenarios that may or may not occur in your market, then maybe “… but thanks for bringing that up. I hadn’t considered that but will give it some thought and get back to you.” Then do that. 

Now you’re thinking: “I can’t say that! It’ll make me sound weak, stupid, like I’m a bad founder!”

No it won’t. It’ll make you sound honest and interested in figuring out the answer. 

If instead of saying “I don’t know” you try to wing it with an answer on the spot, how do you think you’ll sound? Probably somewhere between bad and barely mediocre. 

In this age of false-confident, self-promoting “experts”, it’s the honest, humbly confident, and curious that stand out as quality leaders. Investors, customers, and partners want to have faith in you. Be as informed as you possibly can all the time – don’t ever cut corners on that. But admitting you don’t know something shows integrity and also real confidence. Saying you’re interested in figuring it out shows curiosity. Those are a hell of a lot better than bluster and bullshit. 

(For more on the relationship between confidence and competence, see an awesome Brad Feld post here.)

I’d much rather invest in a founder that is confident enough to say “I don’t know” once in a while. Because admitting you don’t know everything really shows you know something. 

Unlock the Magic of Mentors

Teamwork and Leadership with education symbol represented by two human heads shaped with gears with red and gold brain idea made of  cogs representing the concept of intellectual communication through technology exchange.

Startups are hard. Challenges and obstacles are everywhere and founders need all the help they can get.

But what if there were people that wanted to help? People with hard-earned experience who wanted you to learn from their mistakes. Because they love helping startups, no strings attached. Sounds amazing, right?

That’s the magic of mentors! And every founder should have them. At Techstars, our programs are 100% mentor-driven. Each program has 80-100 mentors and we push our companies to identify several program mentors who can spend at least an hour per week with them. I love talking to Techstars alumni who still meet regularly with their program mentors years after graduating from Techstars.

So how can you find amazing mentors and what should you look for?

First: Know What You Need Help With

Make a list of the top areas you need help with. For example: fundraising, marketing, product development, or distribution. Then seek out experts in those areas. Be targeted rather than seeking general business advice.

What To Look For in a Mentor

Great mentors advise startups just because they love to help. They don’t start the conversation by asking how much equity they’ll get. Techstars has this really cool list called the Mentor Manifesto. It’s a set of values and characteristics we want our program mentors to have. Here are a few:

  • Expect nothing in return (you’ll be delighted with what you do get back)
  • Be responsive
  • Clearly separate opinion from fact
  • Guide, don’t control
  • Provide specific actionable advice, don’t be vague
  • Be challenging/robust but never destructive

Where To Find Amazing Mentors

Be proactive and put yourself out there! Start with your network. Get warm intros whenever possible. One method is to connect with fellow entrepreneurs who are at least 2-3 years ahead of you. Some experienced investors can be great mentors, separate from any investing. Also, don’t be shy about reaching out cold to potential mentors if you have some things in common – industry, hobbies, even where you went to college. Anything that can be a foundation for a potential relationship.

Where should they be located?

Technically they can be anywhere and Skype with you, but I’m a big advocate of having local mentors whenever possible. There’s just no substitute for grabbing a coffee or beer every week or two.

How to initially engage mentors 

It’s easier than you think. Simply reach out and say you’re looking for feedback on “x” (something in their wheelhouse) and ask them to grab a coffee or beer. Don’t ask them to be a mentor right away. Meet with them a few times. If after that you have a great connection and think they’d be an amazing mentor for you, ask if they’d be open to meeting on a regular basis.

Don’t pursue someone just because they’re a big name. Find someone who can give their time and provide you with relevant, specific advice. Mentors are for you and your business, not for PR purposes.

How to build the relationship 

Keep meeting and sending updates! It’s up to you to keep the relationship going. Ideally, set a recurring time to meet. Continue to have specific asks. Mentors are usually very busy people – don’t let it go cold!

How many mentors do you need?

I get this question a lot. At Techstars we recommend 2-3 “lead” mentors as the sweet spot. However many it is, you need enough time to meet with them every 1-2 weeks. Each should bring something different to the table. Don’t collect mentors; be choosy and strategic.

How it might evolve

Over time, a mentor may continue on as your mentor; you could add them as a formal advisor; they may invest in your company; and sometimes the relationship becomes reciprocal.

Great mentors are invaluable to founders and can make the startup journey a lot less painful. They can be part business advisor, sounding board, and counselor. The best ones last a lifetime. Once you unlock the magic of mentors you’ll wonder how you ever got by without them!

The Most Valuable Startup Resource

 

As an entrepreneur, what’s your most valuable resource?

Your colleagues? Your network? Ideas? Money? Time?

All crucial, but this one tops the list:

Your pool of mental energy. 

Just like the physical energy required to run a marathon, you need a big ol’ pool of mental energy for the psychological demands of building a business. It’s common sense but often de-prioritized amidst the startup whirlwind. It’s a prerequisite. It’s what makes everything possible.

When your pool is full you can take on the world. When it’s drained maybe you can go through the motions but your company needs way more than that. And if it’s drained too much of the time, there’s the ever-present risk of depression and complete burnout.

Things that can fill your pool: positivity, a healthy lifestyle, helping others, amazing friends and coworkers, getting awesome results by focusing on key tasks.

Things that drain your pool: negative thoughts like resenting your competition, taking poor care of yourself, engaging in flame wars, team drama. Really anything that detracts from the laser focus on your mission.

Be aware of your pool and guard it closely. Don’t let yourself or others drain it. If you treat it like the precious resource it is, amazing things can happen!

How Do Great CEOs Handle Setbacks?

One of my favorite quotes is “Life is 10% what happens to you and 90% how you react to it.” (It’s a paraphrase of a Charles Swindoll quote.)

Think about that. Feels empowering, right?

I know and work with a quite a few CEOs. It always strikes me how the great ones react to difficult situations. I’m talking about really stressful stuff like repeated rejection from investors, missing payroll, cofounders leaving, or major pivots.

I’ve blogged before about founders being mentally prepared for anything because shit will happen, guaranteed. But how do great CEOs react when things actually go south? Here’s what I’ve learned from them:

Do:

– Analyze it. What just happened? What caused it to go bad? How can it go better next time? Don’t be a slave to your emotions. Make a list. This is your business, so be businesslike about it. Only then can you …

– Learn from it. Avoid the vicious cycle of the same issues happening over and over. And use that knowledge to salvage the situation/relationship if at all possible.

– Be accountable. What could you personally have done to get the results you wanted? Sometimes there’s not much else you can do, but you’d be surprised how often the answer is “Yeah, I guess I could’ve done ‘x’.” CEOs who aren’t accountable will fail. It’s that simple.

– Be honest and fair. Everyone gets their ass kicked. Keep your integrity no matter what.

– Stay in tune with your passion! Never forget why you started your business and why you’re on a mission. If you’re not passionate about it nobody else will be.

Don’t:

– Blame others. Maybe this happens because people are scared of being wrong and looking like a screwup. Good news: Everyone is wrong and screws up on a regular basis ‘cause we’re all human! Give yourself a break and accept that you’ll make plenty of mistakes.

– Get discouraged. Crappy stuff will happen. Getting discouraged is contagious and if you make a habit of it your team’s morale will sink.

– Get angry. Anger is sometimes a defense mechanism because it’s easier to feel angry than disappointed in yourself. But it’s counterproductive to your mission and robs you of creative, positive energy. If you feel your blood boiling take a break, a walk, meditate, anything to cool down and regain your perspective.

– Panic. I’ve seen CEOs completely change their strategy after a lost deal or one bad meeting with someone they respect. Stay confident in your mission! If you stay cool and focused, so will your team.

– Burn bridges. Get used to rejection – it’s part of startup life. Even if someone says no, maintain the relationship and don’t write anyone off. You’ll gain respect as a leader by being professional when you don’t get what you want. Also it can be great for your business: sometimes today’s “no” becomes tomorrow’s “yes”.

Startups are freakin’ hard and as CEO you’ll be challenged more than you thought possible. But you control much more than you think. 90% of life is how you react. Your move.

What Does a Mission Look Like?

A couple days ago Micah Baldwin was kind enough to pay us a visit in KC at the Sprint Accelerator powered by Techstars. It was awesome. He covered lots of topics, and one was the importance of being on a mission. To succeed as a founder you must have the passion, the drive, a mission because startups are so fucking hard you’re gonna need every ounce of conviction to get through the tough times. And I agree 100%.

It got me thinking: what should “being on a mission” look like? Working 16 hours a day, seven days a week? To me that’s obsession, mission’s vampire cousin that sucks the life from you and your loved ones. How about a 40-hour work week, spending every night and weekend with friends and the fam? Nice thought, but it instantly puts you behind your competitors who are busting their asses every day to win.

Brad Feld also spoke to our startups about some of the same things. His main topic was work-life, and he was very careful not to call it “work-life balance”. I’ve seen some founders put illogical limits on their hours – like no more than 50/week – because they see “work-life balance” everywhere. There’s no perfect work-life balance in a startup. The reason why both Brad and Micah came up with certain strategies – doing one thing for yourself each day; giving yourself some time first thing in the morning – is because they know from experience startup life is a shit-ton of work. And you should want to put in the time. But if you completely ignore yourself or loved ones you’ll eventually implode.

(Aside: the main reason I love listening to Brad and Micah is their 100% honesty. No bullshit, no ulterior motives. Pure awesome.)

So it makes sense that if you’re hell-bent on startup success, 40-50 hours a week isn’t gonna cut it and 100 will likely destroy you. Somewhere in between, find the maximum possible workload that lets you maintain your health and relationships. If you can do this – great! You only have 1,000 other things you need to get right.

Now get back to your mission!

Say What You Do

I talk to a lot of startups that have really cool products. But sometimes it feels like a game of 20 questions trying to figure out exactly what the product does. What’s the problem being solved? How? For whom? Bigger than a breadbox?

Save the suspense and get to the point quickly. I guarantee very few people want the backstory, buzzwords, or your personal journey to enlightenment.

They want to know, in the simplest way possible, what your product does.

I’m delighted when I hear a clear, concise elevator pitch. Check out this excellent video segment on how to do an elevator pitch by my awesome colleague Nicole Glaros.

So the next time anyone asks what you do, tell them. Quickly and simply. The good news: if they really like it there will be plenty of time for your personal journey.

Changing the World with Techstars

I’m extremely excited and honored to join the Techstars family as Managing Director of the new Sprint mobile health accelerator in Kansas City. My background is in IT and healthcare, and I’ve been a part of four different startups so it’s a great fit. For me the icing on the cake is the Techstars culture. I spent a day in Boulder getting to know the awesome team and came away convinced this is where I belong. I was all in.

Health has always been a passion for me. Beyond my addiction to the gym, my 8+ years at UnitedHealth Group provided an insider view of the healthcare system. From pharmacy to disease management to wellness programs, there are countless opportunities for technology to improve the health of consumers, and by extension the healthcare system itself.

The numbers are sobering. U.S. spending on healthcare costs is forecast to reach $4.4 trillion by 2018, and 75% of that is on preventable chronic diseases. Only 15-20% of prescription medications are taken as prescribed. The stats go on and on.

But it’s much more than numbers. It’s about helping people live healthier, happier lives. Have you ever known someone who significantly improved their health? They become sunnier, more energetic, and look and feel younger. If technology can help millions undergo this change, it would be truly transformative for society.

I’m psyched to play a small role in making the world a better place. And I’m even more excited that we’re doing this from the heart of Silicon Prairie. Kansas City has a strong and growing entrepreneurial community supported by world class infrastructure and companies. Techstars and Sprint recognized this and decided to take it to another level. The momentum will only continue to build. 

The accelerator is perfectly located in the Crossroads district, a burgeoning hub for startups, innovation, and the arts. Together Techstars, Sprint, and the community are a powerful force, one that’s going to improve people’s lives and help great entrepreneurs do amazing things.

Wanna really change the world? Make it healthier!

Sh*t Will Happen. Guaranteed.

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In our personal lives, we know shit happens. Unexpected events occur from time to time. Great, painful, weird, horrifying. Life has a way of sucker punching that smug grin right off our collective face.

But many founders aren’t prepared for how often this happens at startups. “We have ample funding, a great team, and a killer product strategy – what could possibly go wrong?”

Everything. No seriously. Everything. Except for those of you that are really smart, have an ivy league MBA and an awesome business plan with a detailed section on risk.

Just kidding, you’re screwed too.

Here’s the thing about risks: they’re inherently unknown, possible future hazards we may or may not encounter. Stop fixating on your business plan. Odds are Chaos Theory will describe the path of your business much better than any plan. And as Brad Feld wrote, business plans are an historical artifact. It’s about to get real.

Examples? Anything you can think of. Critical bugs in version 1.0, then again in 1.01, and 1.1. Your market changes. Your lead developer flees the country. You get sued. Manufacturing costs triple. You get hacked. You get sued again. And that could be just the first six months.

Fortunately founders are becoming increasingly transparent about these realities. Ben Milne of Dwolla wrote a really nice lessons learned post. Nait Jones of Aglocal described what he learned during his rookie year as CEO. These are smart, driven entrepreneurs with talented teams and top tier funding. Yet their humbling experiences are the rule, not the exception.

Diana Kander from the Kauffman Foundation gave a funny and smart speech at Big Omaha about the similarities between having a baby and launching a startup (she was six months pregnant at the time). While her main point was to caution against rushing from idea phase right into execution, the subtext included a great parallel between babies and startups: you’ll never be fully prepared for them because you have no idea what’s gonna happen. As a parent and past founder, I say hell yeah.

Just know that unforeseen shit will happen to your business, and it won’t be pretty. Your startup will not be Neil Patrick Harris giving himself a high five. It’ll be Alan Garner getting sucker punched by Mike Tyson. Over and over. Hopefully you won’t be wearing a smug grin when it happens.