Do More Faster

by Brad Feld

  Chapter 30

  The Mentor Manifesto

  David Cohen

  David is a cofounder and the co-CEO of Techstars.

  I’ve been running Techstars for a dozen years now and I’ve watched 200 classes of companies interact with thousands of mentors. Because of that mentorship (focused on amazingly talented companies), we’ve seen those companies go on to raise about $7 billion in funding (averaging about $4.2 million for each of the 1,700 companies post Techstars). In that time, I’ve witnessed thousands of mentor interactions from some of the best entrepreneurs and investors on the planet. I’ve also seen mentors and entrepreneurs misunderstand the nature of the mentor relationship, and squander huge potential.

  What does it mean to be a great mentor? What rules and behaviors lead to great mentorship? The Mentor Manifesto enumerates a set of mentor behaviors that lead to the best results. When mentors do these things, relationships blossom and companies flourish. When they don’t, it’s often a struggle.

  Here’s what entrepreneurs can and should demand from their mentors. And here’s what mentors should consider if they want to build effective relationships with the entrepreneurs they’re working with.

  The Mentor Manifesto

  Be Socratic. No entrepreneur really wants to hear about your past accomplishments. Ask questions that engage and challenge the entrepreneur. It’s about them, after all.

  Expect nothing in return—not an equity position, not a board seat, not free products. The basis of the mentor–entrepreneur relationship is not monetary, but trusted advice. However, if you approach mentorship with no expectations, you’ll be delighted with what you get back!

  Be authentic and practice what you preach. If you talk about integrity, then show integrity. If you preach hard work, then work hard yourself. Enough said.

  Be direct. Tell the truth, however difficult. Nothing builds trust like honest communication.

  Listen. If you’re doing most of the talking and telling all the stories, you’re not being a mentor.

  The best mentor relationships eventually become two-way. You have to give first to receive.

  Be responsive.

  Adopt at least one company every single year. Experience counts.

  Clearly separate opinion from fact.

  Hold information in confidence.

  Clearly commit to mentor or do not. Either is fine. But agreeing to mentor and then not following up is both hurtful and a time waster.

  Know what you don’t know. Say “I don’t know” when you don’t know. “I don’t know” is preferable to bravado or bad advice.

  Guide the entrepreneurial process, don’t control it. Teams have to make their own decisions and mistakes. So, guide them, but never tell them what to do. Avoid saying “What you should do . . . ” or “What I would do if I were you . . . ” when working with entrepreneurs. After all, it’s their company, not yours.

  Accept and communicate with other mentors who get involved. Other mentors may have great advice for you or the team.

  Be optimistic.

  Provide specific, actionable advice. Don’t be vague. Remember that building a company is messy, chaotic, and fraught with uncertainty. Adding some vague advice to the task list can set the entrepreneurs back days, weeks, or months.

  Be challenging to the ideas you hear and robust and thoughtful in what you share. It’s better to be instructive than destructive.

  Have empathy. Remember that startups are hard.

  Thanks to Jon Bradford and Brad Feld for helping me think about the Mentor Manifesto and for contributing ideas to it.

  Brad has also delved further into many of these points on his blog, Feld Thoughts. Search for “mentor” on feld.com to check them out.

  Chapter 31

  Define Your Culture

  Greg Gottesman

  Greg is a cofounder and managing director of Pioneer Square Labs. He is one of the founding investors in Techstars Seattle and was instrumental in helping Techstars figure out how to expand geographically (Seattle was Techstars third location after Boulder and Boston).

  Over the past decade, I have become convinced that the three most important factors in determining the success of a startup are the team, the product or service, and the market (timing and size). Take an A + entrepreneur, with a great idea for a new product or service, at the right time, and about as fast as you can publish a tweet, you’ll have a success brewing.

  I recently added another factor to the must-have list: the right startup culture. Add a dose of bad culture to a team of superstars, a killer product, and a good market opportunity, and the result is almost always death by a thousand backstabs.

  What defines a great startup culture?

  Justice Potter Stewart’s “I know it when I see it” standard seems particularly apt here, but not actionable.1

  I’ve attempted to define the characteristics of a great startup culture. I was aiming for a top 10 but ended up with a baker’s dozen (because in life it’s hard to beat a free bagel).

  No politics. In great startup cultures, everybody is giving everyone else credit. Ideas are judged on merits, not on who came up with them. People feel comfortable that they will get their due. In not-so-great startup cultures, everyone wants to make sure everyone else knows what he or she did, even if he or she didn’t do it.

  It’s not a job, it’s a mission. Redfin’s CEO Glenn Kelman likes to talk about how invigorating it can be once you realize that you don’t have to be doing what you are doing. Great startup cultures are composed of people who could be doing a hundred other things, but actually choose to work themselves silly over the particular product or service their company is building. These cultures are often centered around the belief that the company is working on something important. In not-so-great startup cultures, people are there for the money, the equity, the title, the location—you name it—but not for the mission.

  Intolerance for mediocrity. Great startup cultures are psychically rewarding for A players and thoroughly awful for those who are not pulling their weight. Instead of performing to the least common denominator, great startup cultures quickly reject those who are not meeting a high bar. Those who remain revel in the fact that they are surrounded by colleagues who are as good as, or, in many cases, better than they are. Not-so-great startup cultures? They keep the mediocre around.

  Watching pennies. Great startup cultures make every dollar count. Expenses are viewed with the same kind of discretion as they are on the home front. The beauty of the Amazon.com making-doors-into-desks tradition was not that it was cheaper (it probably wasn’t), but rather the mentality it engendered that Amazon was a place that didn’t waste money on fancy furniture. In its early days, Intrepid Learning Solutions used to give out “Scrappy Awards” to employees who demonstrated superhuman abilities to save money. The CEO won an award for renting a U-Haul and personally picking up and then bringing in a free conference table from a local company that was moving. A cost-conscious attitude can be cool and, in great startup cultures, contagious.

  Equity-driven. Great startup cultures create a sense that everyone on board is building something significant, an enterprise that will be valuable in the long term. Employees want a piece of that future. Less optimal cultures are focused almost entirely on short-term cash incentives. That’s not to say that short-term cash incentives are bad; in many cases, they can be helpful in driving toward short-term goals. But when employees are focused solely on cash and not the least bit interested in equity, that’s a sign that they may have lost faith in the business.

  Perfect alignment. Great startup cultures are well aligned. The strategy makes sense and is aligned with the vision. People are doing what they are good at and in the right roles. Every employee, from the CEO to the office manager, is on the same page. In a not-so-good startup culture, things are in disarray, people are in the wrong roles, or they’re working at the wrong things.

  Good communication, even in bad times. Transparent communication
is a hallmark of a great startup culture. No one is confused about the vision and where the company is headed. Communication is open and free-flowing. Hard issues are addressed directly, not ignored. Every startup goes through ups and downs. The tendency is to not want to share bad news, mistakes, or lost opportunities. In great startup cultures, communication to all stakeholders increases during the down times. In not-so-good startup cultures, bad news is tightly held by a few people.

  Strong leadership. The founder of a startup should be the “cultural soul” of the company. A good leader takes that responsibility seriously and leads by example. The quote by former secretary of state and army general George Marshall in David McCullough’s book, Truman, says it all: “Gentlemen, enlisted men may be entitled to morale problems, but officers are not. I expect all officers in this department to take care of their own morale. No one is taking care of my morale.”

  Mutual respect. In not-so-great startup cultures, the business people think the technical folks are more interested in cool technology than in building what the market wants. The technical side of the house thinks the business side isn’t smart enough (or technical enough) to understand what the market wants. The architects look down on the developers who look down on QA. The sales team thinks marketing isn’t doing its job in generating leads. Everyone thinks the sales team is overpaid and should be selling more. In great startup cultures, everyone shares a mutual respect for what each party brings to the table and celebrates wins from wherever they come. Heated but healthy debate leads to decisions that are accepted, even if not everybody agrees with them.

  Customer-obsessed. Great startup cultures are maniacally focused on defining who the customer is, what the customer wants and needs, and what the customer will value enough to pay for now. It starts well before a single line of code is written. These cultures value talking to as many potential customers as possible before a product is conceived. They make customer feedback a key part of the process once the product or service is delivered. Great startup cultures are rarely surprised by customer issues because they are proactive and process-oriented about understanding everything they can about their customers.

  High energy level. You can feel it when you walk into a great startup culture. The room has energy. There’s a buzz. Doors are open. Whiteboards are filled with hieroglyphics, notes, thoughts, processes, to-do lists, and even a joke or two. People are getting stuff done. Meetings are short and to the point. You might trip over a dog.

  Fun. Startups should be fun, but in the not-so-good startup culture, the best days are paydays. In great startup cultures, everyone reinforces that fun is happening, even if it isn’t at that particular time. Employees tell their friends how much fun they are having. Whining is unwelcome.

  Integrity. Great startup cultures do not cut corners. They maintain the highest integrity in the way they treat customers, handle employee issues, write code, and go about their daily business. They have integrity when it is easy and when it is hard. This kind of integrity should not be confused with lacking toughness. Integrity means having a team with enough confidence in what it is building, and then delivering to customers, that cheating in any form or even just going halfway, is unacceptable.

  There you have it—the characteristics of great startup cultures. The funny thing is, these characteristics are all choices—yours!2

  Once you go beyond the founders and the first few employees, the culture of your new business will quickly start to develop. Most of the mentors in Techstars have been involved in starting more than one company and every one of them will tell you that there were many things they learned about creating a startup culture from mistakes they made, things they ignored, or issues they overlooked in their first business. While Greg’s baker’s dozen of the characteristics of a great startup culture may not be exactly right for you, coming up with your own list, being explicit about what matters with every person who joins your team, and continuing to live by those characteristics will go a long way toward helping you create a great company.

  Notes

  1Justice Potter Stewart’s famous line came up when the Supreme Court tried to define “pornography.”

  2Greg’s article originally appeared in techflash.com and has been lightly edited here.

  Chapter 32

  Two Strikes and You Are Out

  Brad Feld

  Brad is a partner at Foundry Group and one of the cofounders of Techstars.

  I live my life by a simple rule that I call the “Screw Me Once” rule. I permit everyone I work with to screw me over once. When this happens, I confront them, forgive them, and move on. However, if they screw me over a second time, then I’m done with them. Forever.

  While the definition of “screw me” is vague, I put it in the category of deceitful or immoral behavior. The phrase “screw me” is deliberately aggressive and hostile in this context; behavior that qualifies to be labeled “screw me” is also deliberately aggressive and hostile.

  I don’t consider someone letting me down, not following through on a commitment, or failing at something as falling into this category. Failure is a fundamental part of entrepreneurship and I embrace it as part of the process. I fail often, and I expect people whom I work with to fail also—either dramatically, or in lesser ways such as not following through on commitments. That’s the startup life, and I accept that.

  There are other behaviors that are not good, but don’t warrant a “screw me” label. For example, there’s systemic behavior where the person doesn’t correct themselves, such as an inability to get closure on things, or a regular mismatch between the expectations that one sets and what one delivers. Those behaviors become problems for me, but they are not in the screw me category. Instead, those types of behaviors will decrease my desire to work with the person, lower my expectations about what will be accomplished, and make me cautious about my own engagement with them. But it won’t cause me to be done with them, since, with coaching, they can be corrected.

  Brad Feld explains the two- strike rule.

  If you lie to me, deceive me, purposefully hurt me (or someone I care about), do something I consider immoral, or do something that is illegal, that’s one strike. However, I view addressing any of those behaviors as my responsibility because many people don’t realize they’ve done this, or don’t realize the potential impact and implications of their behavior. I try to be emotionally clear in my reaction—dispassionate, but not passive; direct, but not hostile; specific, yet not accusatory. I’m looking for honest communication, especially if people are unaware of their behavior.

  Occasionally, my approach to directly address a behavior simply doesn’t work. In these cases, I just disengage and assume I’m not going to be able to develop a substantive relationship with that person. In my experience, however, a deep and thoughtful conversation usually ensues, which also serves to build a much stronger relationship or at least the potential for one.

  Once the issue is resolved, I’m in a happy place again and don’t ever think twice about whatever issue caused it. However, like a yellow card in soccer, you only get to trigger the screw me rule once. If it happens again, we’re done. Forever.

  I’ve handed out plenty of yellow cards and received a few myself. Yes, the two-strike rule applies to me, too! In a number of cases, my strongest relationships are with people who have gotten yellow cards. Fortunately, the list of people who have gotten the equivalent of a red card from me is very short.

  I have known Brad for well over a decade and we have had our share of ups and downs at Techstars. We’ve had things work out beyond our imagination, and things tank worse than we could have foreseen. Through it all, though, Brad’s focus on relationships first, and forgiving people for egregious lapses in judgment and character, is a lesson that every entrepreneur would be wise to emulate. Yes, people will fail, they will disappoint you, and they may even be deceitful. But working through the toughest of issues can lead to a healthier relationship and a brighter future.

/>   Founders who sold their company in the past year participate in our gold shirt ceremony at FounderCon. Each founder receives a numbered shirt, which now numbers into the hundreds.

  Chapter 33

  Karma Matters

  Warren Katz

  Warren was the cofounder of MÄK Technologies, a company that makes distribution simulation software, and was a founding investor in Techstars Boston. He has been a Techstars mentor since 2009 and is now the managing director of the Techstars Autonomous Technology Accelerator with the U.S. Air Force.

  As you go through life, you wind up hanging out with family (mostly no choice), lovers (surprisingly little choice as well), friends (a lot of choice here), and business acquaintances (less choice). You also have a spectrum of things you do to live (work, earn money, pay bills) and things you live to do (wild sex, fixing cars, fishing, restoration of architectural millwork). The very luckiest among us get to hang out with the people we really like (whether by birth or choice) and do the things we really love (retire early, have a lifestyle job, have a hobby that pays the bills, or enjoy a perfectly directed career). Most people are not so lucky. They are forced to do things they don’t like and spend time with people they’re not thrilled with in order to subsidize their preferred pursuits.

  Business and making money are usually, and unfortunately, necessary evils that tend to push people toward spending more time with those they don’t like and doing things they don’t want to do so they can maximize the freedom that more money can provide. Also, in business, when one person gives something to another that results in an increase in remuneration (a raise, an introduction to a new customer, a recommendation), there is inevitably the sense of debt or payment owed for such favor. This is one of the main differences between business relationships and personal relationships: the accrual of indebtedness and how those debts are viewed.