Do More Faster

by Brad Feld

  After our funding, instead of investing in the product features to deliver on EventVue directly driving people to events (hindsight: mistake), we immediately went out and tried to sell the social network tool to conference organizers. We had one-off victories by landing a few customers over the next nine months that kept us going. We had to invest product resources in rebuilding the site to handle the load from one or two high-attendee events. However, because we were basically calling on friends of friends who ran events to be our customers, we didn’t learn what event organizers in general wanted or how to acquire them as customers in a scalable way with the “private social network product.”

  We then realized that the combination of a small price point (side effect of a nice-to-have value prop) and a long sales cycle (event organizers start planning their events six months or more beforehand) was difficult to overcome. It meant that if we were to continue to do a direct enterprise sales model, we’d need to go after the big boys in the event industry—major tech publishers with hundreds of events. We hoped that with one signature we could get dozens of events. We made progress here and while we signed on some large customers, but we never got the “enterprise-wide deal” that we hoped for.

  As the deals for the enterprise accounts began to drag on and on, we finally decided to do what we should have done much earlier. We decided to make our first major product pivot.

  We never fully committed to the product pivot (hindsight: another mistake) and continued to sell our EventVue Community product for revenue to buy us more time. We began to notice that users of the community product actually enjoyed using our “chatter” feature that had somewhat real-time tweets about the conference. Since our product pivot was not working, we decided to simplify and focus EventVue on real-time conversation for events.

  We relaunched EventVue to be “best way to discuss events in real time” but unfortunately, we have not seen enough traction to make us want to keep working on this. It really is too little, too late.

  Our Deadly Strategic Mistakes

  We tried to build a sales effort too early, with too weak of a product after initial financing.

  We waited too long to address the “nice to have” problem.

  We went after an enterprise sales model with a nonrecurring, small price.

  We didn’t make EventVue self-serve to let anyone come and get it.

  Our Deadly Cultural Mistakes

  We didn’t focus on learning and failing fast until it was too late.

  We didn’t care about or focus enough on discovering how to market EventVue.

  We made compromises in early hiring decisions, choosing expediency over talent and competency.

  Gary Vaynerchuk (“Gary Vee”) stops by the Alexa Accelerator powered by Techstars and joins Aviel Ginsberg in celebrating the right things.

  Chapter 44

  Be Specific

  Brad Feld

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

  A company I have a small investment in has been struggling to get the most recent version of their software shipped. A few weeks ago, I ran into the CEO, who grabbed me and said, “We are almost ready to go live.” I looked at him and said, “When is the release?” His answer was “Friday.”

  I gave him a Bronx cheer and said, “When on Friday?” He looked at me like I was an alien. I clarified—”Do you mean 12:01 a.m. on Friday, 4:59 p.m. on Friday, or 11:59 p.m. on Friday?” I then clarified some more: “And I mean in Mountain Time.” We agreed that 11:59 p.m. on Friday was a good time (which they missed, but they got it out a few days later).

  This CEO and his company suffered from one of the major mistakes in software development: not sticking to an exact schedule for product releases. Making that mistake frustrates customers and tarnishes your brand.

  At my first company (Feld Technologies), our client base got to the point where we were often doing multiple releases of different software on a weekly basis. We were a custom software company but used a very traditional software engineering approach for our projects. For a long time, we used dates to mark releases (for example, “Friday”). After way too many 11:59 p.m. releases when our clients were definitely not sticking around the office to wait for us and missed FedEx deadlines (this was back when you had to FedEx the disks to the clients in another state because modems were too slow to transmit the files), we learned that a release has to have both a date and a time. We also learned that the external release is, at the minimum, the date plus one more day after the internal release, especially on systems with live data. No surprise here, but we also figured out that the only appropriate days of the week for a release are Tuesday, Wednesday, or Thursday. I’ll let you guess as to why this is.

  As I work with new startups and first-time entrepreneurs, I see people making the mistake of setting fuzzy release dates, and they have to learn this lesson over and over again. I think it’s just going to be part of the endless education of new software entrepreneurs that you never really learn until you are in the real world. It’s important to be specific, not just concerning release dates, but also for everything that you commit to doing.

  Chapter 45

  Learn from Your Failures

  Fred Wilson

  Fred is a managing partner at Union Square Ventures and is an investor in companies including Twitter, Zynga, and Foursquare. Fred has been a Techstars mentor since 2008.

  You can’t let your failures define you—you have to let them teach you. You have to let them show you what to do differently next time.

  —Barack Obama, in his “back to school speech”

  What President Obama said is so true. Unfortunately, it took me a while to learn that lesson.

  When I first started out in the venture capital business, I was afraid to make a mistake. Once I started investing and taking board seats myself, I worked super hard to avoid losing money. I went for almost a decade without making a losing investment.

  Then, in the aftermath of the Internet bubble, the wheels came off the bus. We wrote off close to 20 investments in the span of two years from late 2000 to late 2002. It was devastating on many levels.

  But when I look back on my career, it is not the successes that I think back on most. It is the failures, and particularly those two years when everything that could go wrong did go wrong.

  When my partner, Brad Burnham, and I started Union Square Ventures in 2003, we laid out a roadmap for what kind of firm we wanted to create, what kind of investments we’d make, and how we thought the Internet was going to evolve. That work was largely a result of the lessons we both had learned in the aftermath of the bubble, with a healthy dose of failure in our past.

  I think embracing failure is one of the things that makes this country such a great place to do business in. In many parts of the world, if you fail once, you are done. People won’t touch you with a 10-foot pole. But here in the United States, it’s almost a badge of honor, as President Obama explained in the quote above.

  When we meet with entrepreneurs, I’m always interested in their failures. And most people have them; you just have to dig a bit to find them. If someone has failed and taken the time to learn from it, I think that’s a big positive. It makes us even more excited to back them the next time.

  So, don’t hide your failures. Wear them as a badge of honor. And most of all, learn from them. 1

  Startup founders in session.

  Note

  1Fred’s essay originally appeared on his blog at avc.com.

  Chapter 46

  Quality over Quantity

  Andy Smith

  Andy was the cofounder and CEO of DailyBurn, the premier fitness social network for detailed tracking, online accountability, and motivation. DailyBurn raised $500,000 from angel investors after completing Techstars in 2008. They were acquired by IAC in 2010. Andy is currently on the Board of Urban Engine in Huntsville, Alabama.

  Feature creep. The sound of those words should scare you to death.
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  If you are a technical founder, please listen carefully: You don’t need to build a bunch of new features to make your startup successful. Trust me, I know.

  Both of the founders of DailyBurn (we were called Gyminee while we were at Techstars) are technology geeks. Naturally, our instinct is to always look at our product, see what is missing, and try to quickly build the next killer feature that will magically get all of our users to convert to paying users. It’s a problem facing all startups, but especially startups that are filled with developers.

  Most technical founders have the skills to quickly build a ton of features. It isn’t hard for us to bang out some code and get the thing up and running on a website within hours. But many of these features don’t matter and often detract from the product.

  So, what is the secret behind building useful, meaningful features?

  First, focus on ease of use. Your site and your new features have to be very easy to use and graphically appealing. If you try to rush out a ton of features, it will not look good and will result in an unpolished and hard-to use-product. One of the things we are most proud of about DailyBurn is that we’ve made the product look good while being very easy to use. We realize that a site to track your workouts and food intake isn’t an earth-shattering idea and that there are a lot of sites out there trying to do the same thing we do. The reason we have been able to grow is because we make it as easy as possible for users to track their fitness on our site.

  Next, build one thing well. If you try to build every feature that comes to mind, the result will be an unfocused product with no chance of success. When we started DailyBurn we focused on one thing and one thing only—a social workout tracking tool that lets you track actual results. We did that one thing well, got an audience, and then listened to our users. User after user screamed for food and nutrition tracking, so we took our time and built high-quality nutrition tracking. Now our food-tracking tool is even more popular than our workout tracking tools because we focused on quality.

  Finally, listen to some, but not all, of your users. User feedback is good, but don’t listen to all of it. We had so many early requests for features (and we still get hundreds a day) that we would have drowned if we tried to implement a fraction of them. You have to be willing to say no to your users.

  Want to know a secret? The next new big feature you are working on will only convert a marginal number of new users to paying users and will not be your big ticket to acquisition next week. In fact, that big feature you are working on right now might be a complete bust and you could lose users. Measure the impact of every new feature so you’ll know for sure what kind of effect each of them has.

  Focus on quality—not just quantity. And make something that makes you (not just your mom) proud.

  The quality over quantity approach has governed Techstars’ expansion to other cities. When Techstars started in Boulder, we didn’t know if it would work. After the first year, we had lots of inquiries from other entrepreneurs and angel investors about starting up a Techstars program in other cities in the United States. We considered this, decided we had a lot to get right about the program before we were ready to expand, and decided only to do a Boulder program in the second year.

  Andy Smith presents Gyminee (now DailyBurn) at Techstars Boulder 2008 Demo Day.

  Source: Photo Courtesy of Wade Simmons.

  While the first year of Techstars was great, the second year was phenomenal. Once again, we received many inbound inquiries about starting Techstars in other cities. We encouraged other folks to do this themselves, open sourced the Techstars program by sharing our ideas, documents, and approach, but decided to stay focused in Boulder.

  Along the way, we were approached by Bill Warner about doing a Techstars program in Boston. Given Brad’s long history in Boston, we were a lot more comfortable with this than with trying to start up a program in a city we didn’t know. And Bill was the definition of quality—we knew that if he were involved, our effort would be serious and well executed. So, we decided to branch out, and opened the second Techstars program in Boston in our third year.

  After the third Boulder program and the first Boston program, we were inundated with requests for programs in additional cities. We thought hard about this, realizing that if we wanted to expand faster, it was conceivable that there was the demand for at least 50 Techstars programs in the United States alone. While we saw many other programs getting started, we were really concerned about quality. As a result, we decided that it was always going to be more important to us to do a high-quality job and help create a high percentage of great startups than it would be to go after quantity.

  Our focus on quality has generated other interesting opportunities for Techstars, some of which—such as the Global Accelerator Network—have had broad impact. By continuing to focus on quality, we say no to a lot of opportunities, but when we decide to go after something, we are confident we can do it well. We think all startups should think this way.

  Chapter 47

  Have a Bias Toward Action

  Ben Casnocha

  Ben is an entrepreneur and author of the books My Startup Life: What a (Very) Young CEO Learned on His Journey Through Silicon Valley, The Alliance: Managing Talent in the Networked Age, and The Start-Up of You: Adapt to the Future, Invest in Yourself, and Transform Your Career. He cofounded and is a partner at Village Global, a $100 million venture capital fund. He has been a Techstars mentor since 2007.

  Learning experts agree that learning by doing is the best way to learn something. When you do something—when you pick up the phone and talk to a potential customer, launch a prototype, or send out the first brochure—you learn infinitely more than if you think about doing it in the abstract. The best way to test the validity of a business idea is to start the business and quickly gauge market feedback.

  The best entrepreneurs have internalized learn-by-doing. As my friend Josh Newman says, there are only two steps to entrepreneurship: start, and keep going—and you lose most people at the first step. That’s because talk is easy. Writing business plans is easy. Chatting about your business idea with friends at a party is easy. Taking an action—starting, doing—is hard.

  It’s hard because when you take action, it may turn out to have been the wrong action. Fine. When you have a bias toward action, it means you are constantly making decisions, and some of those decisions will surely have bad outcomes. But good decisions can have bad outcomes. Intel founder Andy Grove says the key to business success is to make lots of decisions and correct course very quickly when you realize you’re wrong. Always be acting with confidence, but always be ready to iterate and evolve your thinking if you discover you made the wrong move.

  It’s hard because you’ll play games with yourself. Sometimes you might think, “If I wait just a little bit longer, I’ll get more information that will allow me to make a better decision.” No! General Colin Powell told his commanders in the army that he expected them to make decisions on only 40% of available information, not wait until they had 100% of the information. Consider this when you next think you need more time to figure out whether you should start your business, launch the new product, or pick up the phone and call that CEO you respect.

  Megan Sweeney captures the insights around Techstars.

  It’s hard because self-discipline is hard. To take an action requires the self-discipline to actually sit down and do a thing. So, let others discipline you. Tell friends and family what you plan to do and ask them to hold your feet to the fire. External accountability works wonders.

  But don’t take it from me.

  Herb Kelleher, the founder of Southwest Airlines, says, “We have a strategic plan. It’s called doing things.” As an entrepreneur, you should substitute “business plan” in place of “strategic plan.”

  Bill Parcells, a former NFL football coach, posts a sign in the locker room before every game: “Blame Nobody. Expect Nothing. Do Something.” Even the most elite athletes in the world ne
ed to be reminded to do stuff!

  Mark Twain said, “We regret the things we don’t do more than the things we do.” The question “I wonder what would have happened if . . . ” hurts more than a bad outcome.

  So, what are you waiting for?

  Theme Four: Product

  From an outsider’s perspective, startups are often synonymous with their products. After all, that’s the only connection most people will ever have to your company. Therefore, if your product sucks, your company sucks. We are certain you’ll agree that many of products, at least on the Internet, suck. You do the math.

  We often talk about one of the common startup killers at Techstars—making a product for which there is no interested market. Techstars accepts just 1% of the startups that apply, and we choose the best of the best. But even in this select group we find that at least one-third of those startups are attempting to build a product that they want, or that no one wants, instead of what the market wants. Every year, this is one of the key things that happens at Techstars—products get dropped, and new ones are born. You can’t hide from a lack of market at Techstars. It stalks you and threatens to kill you.